Skyworks Solutions, Inc. Q4 FY2025 earnings call

• Reflected on three straight quarters of solid execution with revenue and non-GAAP EPS exceeding expectations. • Streamlined sales and marketing teams, appointed new executive for global sales, and welcomed new CFO. • Announced consolidation of Woburn facility to improve cost structure. • Announced combination with Qorvo, a transformative deal. • Mobile results strong with 21% sequential revenue growth and 7% year-over-year, driven by healthy sell-through, richer product mix, and Android growth. • Broad Markets had solid quarter with broad-based demand in edge IoT, automotive, and data center. WiFi 7 adoption accelerating, automotive design activity robust with new record run rate, and data center recovery continuing.

Skyworks delivered revenue of $1.1 billion. Mobile represented 65% of total revenue, with revenue up 21% sequentially and 7% year-over-year. Broad Markets grew 3% sequentially and 7% year-over-year, representing 35% of total revenue. For the full fiscal year, $1.1 billion of free cash was generated, representing a 27% free cash flow margin. Gross profit was $511 million with a gross margin of 46.5%, operating income was $264 million with an operating margin of 24%, net income was $264 million, and diluted earnings per share was $1.76.

• First quarter of fiscal '26 expected revenue between $975 million to $1.025 billion. • Mobile anticipated to decline low to mid-teens sequentially. • Broad markets expected to be up slightly sequentially, representing 39% of sales and up mid- to high single digits year-over-year. • Gross margin projected to be approximately 46% to 47%. • Operating expenses expected between $230 million and $240 million. • Free cash flow expected to remain solid in fiscal '26 but below fiscal '25 due to lower expected revenue base and normalized working capital trends.

Q: Harsh Kumar asked about what changed to cause outperformance relative to previous prognosis.

A: Philip Brace said it was a combination of better units and mix benefit.

Q: Harsh Kumar asked about streamlining sales.

A: Philip Brace said they recruited a new executive, put product marketing functions back into business units for better alignment.

Q: Christopher Rolland asked about mergers/divestitures and diversification.

A: Philip Brace said the Qorvo deal adds scale and diversification, customer concentration should go down.

Q: Christopher Rolland asked about optimism on Android.

A: Philip Brace said they focus on the premium part of the segment valuing integration and performance.

Q: Hadi Orabi asked about revenues excluding largest customer and China exposure.

A: Philip Carter said broad markets strength drove growth outside largest customer, Philip Brace said they focus on premium space in China and don't participate in unprofitable lower SP handsets.

Q: James Schneider asked about long-term structural growth rate of broad markets.

A: Philip Brace said he sees it as a double-digit grower driven by WiFi 7, automotive connectivity, and infrastructure/cloud opportunities.

Q: James Schneider asked about OpEx growth rate.

A: Philip Carter said no major step-ups, just normal inflation and discipline.

Q: Edward Snyder asked about accounts receivables and mix/units.

A: Philip Carter said AR is normal due to revenue timing, Philip Brace said it was all of the above (better mix, units, content).

Q: Peter Peng asked about mix in largest customer.

A: Philip Brace said it was all of the above.

Q: Peter Peng asked about Broad Markets growth buckets.

A: Rajvindra Gill said growth led by WiFi 7, strong automotive pipeline, and data center recovery.

Q: Craig Ellis asked about executive team and seasonality.

A: Philip Brace said he's happy with current team, Philip Carter said normal seasonality and no repeat of inventory tailwind for free cash flow next year.