- Delivers Record Second Quarter Revenue of $1.172 Billion, up
53% Y-o-Y
- Posts GAAP Diluted EPS of $1.95, up 84% Y-o-Y; Non-GAAP Diluted
EPS of $2.37, up 77% Y-o-Y
- Generates GAAP Operating Margin of 32.0%; Non-GAAP Operating
Margin of 37.6%
- Drives Record Quarterly Operating Cash Flow of $616
Million
Skyworks Solutions, Inc. (Nasdaq: SWKS), an innovator of
high-performance analog semiconductors connecting people, places
and things, today reported second fiscal quarter results for the
period ended Apr. 2, 2021.
Revenue for the second fiscal quarter of 2021 was $1.172
billion, up 53% year over year and exceeding consensus estimates.
On a GAAP basis, operating income for the second fiscal quarter was
$374.7 million with diluted earnings per share of $1.95. On a
non-GAAP basis, operating income was $440.1 million with non-GAAP
diluted earnings per share of $2.37.
“Skyworks’ record second quarter results reflect sustained
leadership across a rapidly expanding set of end markets and
customers, supported by our cutting-edge technologies and
world-class manufacturing facilities,” said Liam K. Griffin,
president and chief executive officer of Skyworks. “Importantly,
our broad markets portfolio continues to gain momentum, with strong
sequential and year-over-year growth.
“Moving forward, our core business combined with our pending
acquisition of the Infrastructure and Automotive business of
Silicon Labs position Skyworks to capture an outsized portion of
the opportunities that lie ahead.”
Second Fiscal Quarter Business Highlights
- Expanded the reach of our Sky5® portfolio across premium and
mid-tier 5G smartphone launches at Samsung, Oppo, Vivo, Xiaomi and
other leading OEMs
- Partnered with NETGEAR to deploy Wi-Fi 6 and 6E routers
- Launched Wi-Fi 6 gateways at Deutsche Telekom, Nokia and
Altice
- Shipped home security solutions to Xfinity
- Captured design wins at Google Nest for smart audio
devices
- Delivered cellular IoT modules to Quectel and Gemalto
- Ramped innovative, new audio platforms powering gaming headsets
at Microsoft and Sony
- Leveraged our wireless infrastructure portfolio to deploy MIMO
base stations with Ericsson and Nokia
- Delivered telematics and infotainment solutions to Volkswagen,
LG and GM OnStar
Third Fiscal Quarter 2021 Outlook
We provide earnings guidance on a non-GAAP basis because certain
information necessary to reconcile such guidance to GAAP is
difficult to estimate and dependent on future events outside of our
control. Please refer to the attached Discussion Regarding the Use
of Non-GAAP Financial Measures in this press release for a further
discussion of our use of non-GAAP measures, including
quantification of known expected adjustment items.
“Based on robust demand for connectivity solutions in mobile and
broad markets, we expect continued momentum and year-over-year
growth into the June quarter,” said Kris Sennesael, senior vice
president and chief financial officer of Skyworks. “Specifically,
in the third fiscal quarter of 2021, we anticipate revenue to be
between $1.075 billion and $1.125 billion with non-GAAP diluted
earnings per share of $2.13 at the midpoint of our revenue range,
representing revenue growth of 49% and non-GAAP diluted earnings
per share growth of 70%, compared to the third fiscal quarter of
2020.”
Dividend Payment
Skyworks’ board of directors has declared a cash dividend of
$0.50 per share of the Company’s common stock, payable on June 8,
2021, to stockholders of record at the close of business on May 18,
2021.
Skyworks’ Second Quarter 2021 Conference Call
Skyworks will host a conference call with analysts to discuss
its second quarter fiscal 2021 results and business outlook today
at 4:30 p.m. EDT. To listen to the conference call via the
Internet, please visit the investor relations section of Skyworks’
website. To listen to the conference call via telephone, please
call (833) 714-0912 (domestic) or (778) 560-2690 (international),
Conference ID: 7877227.
Playback of the conference call will begin at 9 p.m. EDT on Apr.
29, 2021, and end at 9 p.m. EDT on May 6, 2021. The replay will be
available on Skyworks’ website or by calling (800) 585-8367
(domestic) or (416) 621-4642 (international), Conference ID:
7877227.
About Skyworks
Skyworks Solutions, Inc. is empowering the wireless networking
revolution. Our highly innovative analog semiconductors are
connecting people, places and things spanning a number of new and
previously unimagined applications within the aerospace,
automotive, broadband, cellular infrastructure, connected home,
industrial, medical, military, smartphone, tablet and wearable
markets.
Skyworks is a global company with engineering, marketing,
operations, sales and support facilities located throughout Asia,
Europe and North America and is a member of the S&P 500® and
Nasdaq-100® market indices (Nasdaq: SWKS). For more information,
please visit Skyworks’ website at: www.skyworksinc.com.
Safe Harbor Statement
This news release includes “forward-looking statements” intended
to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, without limitation, information
relating to future results and expectations of Skyworks (e.g.,
certain projections and business trends, as well as plans for
dividend payments and share repurchases). Forward-looking
statements can often be identified by words such as “anticipates,”
“expects,” “forecasts,” “intends,” “believes,” “plans,” “may,”
“will” or “continue,” and similar expressions and variations or
negatives of these words. All such statements are subject to
certain risks, uncertainties and other important factors that could
cause actual results to differ materially and adversely from those
projected and may affect our future operating results, financial
position and cash flows.
These risks, uncertainties and other important factors include,
but are not limited to: the effects of the global COVID-19 pandemic
and the measures taken to limit COVID-19’s spread on our business
operations, including reduced shift staffing in certain of our
manufacturing facilities, as well as potential other disruptions to
our business, including but not limited to the suspension or
restriction of operations at our facilities and third-party supply
chain disruptions, that could result from social distancing
measures, employee quarantines, restricting certain employees from
working or additional actions that may be taken by us, our
suppliers and partners or governmental authorities in the
jurisdictions in which we operate in an effort to contain the
COVID-19 pandemic; the susceptibility of the semiconductor industry
and the markets addressed by our, and our customers’, products to
economic downturns, including as a result of the COVID-19 pandemic;
our reliance on a small number of key customers for a large
percentage of our sales; delays in the deployment of commercial 5G
networks or in consumer adoption of 5G-enabled devices; risks
related to the transaction with Silicon Labs, including the ability
to close the transaction, the ability to obtain the necessary
financing arrangements, the ability to successfully integrate the
assets acquired and employees transferred, and the risk that we may
not realize the anticipated benefits from the transaction; the
risks of doing business internationally, including increased
import/export restrictions and controls (e.g., our ability to sell
products to Huawei Technologies Co., Ltd. and certain of its
affiliates, as well as other specified entities, only pursuant to a
limited export license from the U.S. Department of Commerce),
imposition of trade protection measures (e.g., tariffs or taxes),
security and health risks, possible disruptions in transportation
networks, fluctuations in foreign currency exchange rates, and
other economic, social, military and geo-political conditions in
the countries in which we, our customers or our suppliers operate;
the volatility of our stock price; declining selling prices,
decreased gross margins, and loss of market share as a result of
increased competition; our ability to obtain design wins from
customers; changes in laws, regulations and/or policies that could
adversely affect our operations and financial results, the economy
and our customers’ demand for our products, or the financial
markets and our ability to raise capital; fluctuations in our
manufacturing yields due to our complex and specialized
manufacturing processes; our ability to develop, manufacture and
market innovative products, avoid product obsolescence, reduce
costs in a timely manner, transition our products to smaller
geometry process technologies, and achieve higher levels of design
integration; the quality of our products and any defect remediation
costs; our products’ ability to perform under stringent operating
conditions; the availability and pricing of third-party
semiconductor foundry, assembly and test capacity, raw materials
and supplier components; our ability to retain, recruit and hire
key executives, technical personnel and other employees in the
positions and numbers, with the experience and capabilities, and at
the compensation levels needed to implement our business and
product plans; the timing, rescheduling or cancellation of
significant customer orders and our ability, as well as the ability
of our customers, to manage inventory; our ability to prevent theft
of our intellectual property, disclosure of confidential
information, or breaches of our information technology systems;
uncertainties of litigation, including potential disputes over
intellectual property infringement and rights, as well as payments
related to the licensing and/or sale of such rights; our ability to
continue to grow and maintain an intellectual property portfolio
and obtain needed licenses from third parties; our ability to make
certain investments and acquisitions, integrate companies we
acquire, and/or enter into strategic alliances; and other risks and
uncertainties, including, but not limited to, those detailed from
time to time in our filings with the Securities and Exchange
Commission.
The forward-looking statements contained in this news release
are made only as of the date hereof, and we undertake no obligation
to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.
Note to Editors: Skyworks and the Skyworks symbol are trademarks
or registered trademarks of Skyworks Solutions, Inc., or its
subsidiaries in the United States and other countries. Third-party
brands and names are for identification purposes only and are the
property of their respective owners.
SKYWORKS SOLUTIONS,
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
(in millions, except per share
amounts)
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
Net revenue
$
1,171.8
$
766.1
$
2,681.8
$
1,662.2
Cost of goods sold
593.4
390.5
1,341.7
842.3
Gross profit
578.4
375.6
1,340.1
819.9
Operating expenses:
Research and development
130.7
113.2
252.3
220.8
Selling, general, and administrative
70.2
58.6
136.9
114.0
Amortization of intangibles
2.8
3.1
5.5
6.3
Restructuring, impairment, and other
charges
—
1.2
—
2.0
Total operating expenses
203.7
176.1
394.7
343.1
Operating income
374.7
199.5
945.4
476.8
Other income, net
0.8
3.5
0.9
4.9
Income before income taxes
375.5
203.0
946.3
481.7
Provision for income taxes
50.5
21.9
112.0
43.6
Net income
$
325.0
$
181.1
$
834.3
$
438.1
Earnings per share:
Basic
$
1.97
$
1.07
$
5.05
$
2.58
Diluted
$
1.95
$
1.06
$
5.00
$
2.56
Weighted average shares:
Basic
165.0
170.0
165.2
170.1
Diluted
166.8
171.1
166.9
171.3
SKYWORKS SOLUTIONS,
INC.
UNAUDITED RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES
Three Months Ended
Six Months Ended
(in millions)
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
GAAP gross profit
$
578.4
$
375.6
$
1,340.1
$
819.9
Share-based compensation expense [a]
12.7
7.2
19.1
11.4
Amortization of acquisition-related
intangibles
3.7
5.9
6.7
11.8
Settlements, gains, losses, and
impairments
—
(4.5
)
—
(9.9
)
Non-GAAP gross profit
$
594.8
$
384.2
$
1,365.9
$
833.2
GAAP gross margin %
49.4
%
49.0
%
50.0
%
49.3
%
Non-GAAP gross margin %
50.8
%
50.2
%
50.9
%
50.1
%
Three Months Ended
Six Months Ended
(in millions)
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
GAAP operating income
$
374.7
$
199.5
$
945.4
$
476.8
Share-based compensation expense [a]
56.4
40.2
100.8
73.8
Acquisition-related expenses
1.9
1.0
1.8
1.2
Amortization of acquisition-related
intangibles
6.5
9.1
12.3
18.1
Settlements, gains, losses, and
impairments
0.6
(2.2
)
1.8
(7.8
)
Restructuring and other charges
—
1.1
—
2.0
Non-GAAP operating income
$
440.1
$
248.7
$
1,062.1
$
564.1
GAAP operating margin %
32.0
%
26.0
%
35.3
%
28.7
%
Non-GAAP operating margin %
37.6
%
32.5
%
39.6
%
33.9
%
Three Months Ended
Six Months Ended
(in millions)
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
GAAP net income
$
325.0
$
181.1
$
834.3
$
438.1
Share-based compensation expense [a]
56.4
40.2
100.8
73.8
Acquisition-related expenses
1.9
1.0
1.8
1.2
Amortization of acquisition-related
intangibles
6.5
9.1
12.3
18.1
Settlements, gains, losses, and
impairments
1.0
(1.2
)
2.8
(6.8
)
Restructuring and other charges
—
1.1
—
2.0
Tax adjustments
4.4
(1.8
)
3.7
(8.2
)
Non-GAAP net income
$
395.2
$
229.5
$
955.7
$
518.2
Three Months Ended
Six Months Ended
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
GAAP net income per share, diluted
$
1.95
$
1.06
$
5.00
$
2.56
Share-based compensation expense [a]
0.34
0.23
0.61
0.43
Acquisition-related expenses
0.01
0.01
0.01
0.01
Amortization of acquisition-related
intangibles
0.04
0.05
0.07
0.11
Settlements, gains, losses, and
impairments
—
(0.01
)
0.02
(0.04
)
Restructuring and other charges
—
0.01
—
0.01
Tax adjustments
0.03
(0.01
)
0.02
(0.05
)
Non-GAAP net income per share, diluted
$
2.37
$
1.34
$
5.73
$
3.03
SKYWORKS SOLUTIONS, INC. DISCUSSION
REGARDING THE USE OF NON-GAAP FINANCIAL MEASURES
Our earnings release contains some or all of the following
financial measures that have not been calculated in accordance with
United States Generally Accepted Accounting Principles (“GAAP”):
(i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating
income and operating margin, (iii) non-GAAP net income, and (iv)
non-GAAP diluted earnings per share. As set forth in the “Unaudited
Reconciliations of Non-GAAP Financial Measures” table found above,
we derive such non-GAAP financial measures by excluding certain
expenses and other items from the respective GAAP financial measure
that is most directly comparable to each non-GAAP financial
measure. Management uses these non-GAAP financial measures to
evaluate our operating performance and compare it against past
periods, make operating decisions, forecast for future periods,
compare our operating performance against peer companies, and
determine payments under certain compensation programs. These
non-GAAP financial measures provide management with additional
means to understand and evaluate the operating results and trends
in our ongoing business by eliminating certain non-recurring
expenses and other items that management believes might otherwise
make comparisons of our ongoing business with prior periods and
competitors more difficult, obscure trends in ongoing operations,
or reduce management’s ability to make forecasts.
We provide investors with non-GAAP gross profit and gross
margin, non-GAAP operating income and operating margin, non-GAAP
net income, and non-GAAP diluted earnings per share because we
believe it is important for investors to be able to closely monitor
and understand changes in our ability to generate income from
ongoing business operations. We believe these non-GAAP financial
measures give investors an additional method to evaluate historical
operating performance and identify trends, an additional means of
evaluating period-over-period operating performance and a method to
facilitate certain comparisons of our operating results to those of
our peer companies. We also believe that providing non-GAAP
operating income and operating margin allows investors to assess
the extent to which our ongoing operations impact our overall
financial performance. We further believe that providing non-GAAP
net income and non-GAAP diluted earnings per share allows investors
to assess the overall financial performance of our ongoing
operations by eliminating the impact of share-based compensation
expense, acquisition-related expenses, amortization of
acquisition-related intangibles, settlements, gains, losses, and
impairments, restructuring-related charges, and certain tax items
which may not occur in each period presented and which may
represent non-cash items unrelated to our ongoing operations. We
believe that disclosing these non-GAAP financial measures
contributes to enhanced financial reporting transparency and
provides investors with added clarity about complex financial
performance measures.
We calculate non-GAAP gross profit by excluding from GAAP gross
profit, share-based compensation expense, acquisition-related
expenses, amortization of acquisition-related intangibles, and
settlements, gains, losses, and impairments. We calculate non-GAAP
operating income by excluding from GAAP operating income,
share-based compensation expense, acquisition-related expenses,
amortization of acquisition-related intangibles, settlements,
gains, losses, and impairments, and restructuring-related charges.
We calculate non-GAAP net income and diluted earnings per share by
excluding from GAAP net income and diluted earnings per share,
share-based compensation expense, acquisition-related expenses,
amortization of acquisition-related intangibles, settlements,
gains, losses, and impairments, restructuring-related charges, and
certain tax items. We exclude the items identified above from the
respective non-GAAP financial measure referenced above for the
reasons set forth with respect to each such excluded item
below:
Share-Based Compensation - because (1) the total amount of
expense is partially outside of our control because it is based on
factors such as stock price volatility and interest rates, which
may be unrelated to our performance during the period in which the
expense is incurred, (2) it is an expense based upon a valuation
methodology premised on assumptions that vary over time, and (3)
the amount of the expense can vary significantly between companies
due to factors that can be outside of the control of such
companies.
Acquisition-Related Expenses - including such items as, when
applicable, amortization of acquired intangible assets, fair value
adjustments to contingent consideration, fair value charges
incurred upon the sale of acquired inventory, and
acquisition-related expenses because they are not considered by
management in making operating decisions and we believe that such
expenses do not have a direct correlation to our future business
operations and thereby including such charges does not necessarily
reflect the performance of our ongoing operations for the period in
which such charges or reversals are incurred.
Restructuring-Related Charges - because these charges have no
direct correlation to our future business operations and including
such charges or reversals does not necessarily reflect the
performance of our ongoing operations for the period in which such
charges or reversals are incurred.
Settlements, Gains, Losses, and Impairments - because such
settlements, gains, losses, and impairments (1) are not considered
by management in making operating decisions, (2) are infrequent in
nature, (3) are generally not directly controlled by management,
(4) do not necessarily reflect the performance of our ongoing
operations for the period in which such charges are recognized,
and/or (5) can vary significantly in amount between companies and
make comparisons less reliable.
Certain Income Tax Items - including certain deferred tax
charges and benefits that do not result in a current tax payment or
tax refund and other adjustments, including but not limited to,
items unrelated to the current fiscal year or that are not
indicative of our ongoing business operations.
The non-GAAP financial measures presented in the table above
should not be considered in isolation and are not an alternative
for the respective GAAP financial measure that is most directly
comparable to each such non-GAAP financial measure. Investors are
cautioned against placing undue reliance on these non-GAAP
financial measures and are urged to review and consider carefully
the adjustments made by management to the most directly comparable
GAAP financial measures to arrive at these non-GAAP financial
measures. Non-GAAP financial measures may have limited value as
analytical tools because they may exclude certain expenses that
some investors consider important in evaluating our operating
performance or ongoing business performance. Further, non-GAAP
financial measures are likely to have limited value for purposes of
drawing comparisons between companies as a result of different
companies potentially calculating similarly titled non-GAAP
financial measures in different ways because non-GAAP measures are
not based on any comprehensive set of accounting rules or
principles.
Our earnings release contains forward-looking estimates of
non-GAAP diluted earnings per share for the third quarter of our
2021 fiscal year (“Q3 2021”). We provide this non-GAAP measure to
investors on a prospective basis for the same reasons (set forth
above) that we provide it to investors on a historical basis. We
are unable to provide a reconciliation of our forward-looking
estimate of Q3 2021 GAAP diluted earnings per share to a
forward-looking estimate of Q3 2021 non-GAAP diluted earnings per
share because certain information needed to make a reasonable
forward-looking estimate of GAAP diluted earnings per share for Q3
2021 (other than estimated share-based compensation expense of
$0.25 to $0.35 per diluted share, estimated amortization of
intangibles of $0.02 to $0.04 per diluted share and certain tax
items of -$0.05 to $0.05 per diluted share) is difficult to predict
and estimate and is often dependent on future events that may be
uncertain or outside of our control. Such events may include
unanticipated changes in our GAAP effective tax rate, unanticipated
one-time charges related to asset impairments (fixed assets,
inventory, intangibles, or goodwill), unanticipated
acquisition-related expenses, unanticipated settlements, gains,
losses, and impairments, and other unanticipated non-recurring
items not reflective of ongoing operations. The probable
significance of these unknown items, in the aggregate, is estimated
to be in the range of $0.00 to $0.10 in quarterly earnings per
diluted share on a GAAP basis. Our forward-looking estimates of
both GAAP and non-GAAP measures of our financial performance may
differ materially from our actual results and should not be relied
upon as statements of fact.
[a]
The following table summarizes the expense
recognized in accordance with ASC 718 - Compensation, Stock
Compensation (in millions):
Three Months Ended
Six Months Ended
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
Cost of goods sold
$
12.7
$
7.2
$
19.1
$
11.4
Research and development
24.0
17.2
44.3
32.0
Selling, general, and administrative
19.7
15.8
37.4
30.4
Total share-based compensation
$
56.4
$
40.2
$
100.8
$
73.8
SKYWORKS SOLUTIONS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions)
April 2,
2021
October 2,
2020
Assets
Cash, cash equivalents, and marketable
securities
$
1,423.6
$
980.0
Accounts receivable, net
499.0
393.6
Inventory
739.8
806.0
Property, plant, and equipment, net
1,396.6
1,249.5
Goodwill and intangible assets, net
1,228.9
1,243.3
Other assets
446.5
434.3
Total assets
$
5,734.4
$
5,106.7
Liabilities and Equity
Accounts payable
$
276.2
$
226.9
Accrued and other liabilities
745.9
715.6
Stockholders’ equity
4,712.3
4,164.2
Total liabilities and equity
$
5,734.4
$
5,106.7
SKYWORKS SOLUTIONS,
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended
Six Months Ended
(in millions)
April 2,
2021
March 27,
2020
April 2,
2021
March 27,
2020
Cash flow from operating
activities
Net income
$
325.0
$
181.1
$
834.3
$
438.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Share-based compensation
56.4
40.2
100.8
73.8
Depreciation
79.8
80.5
158.2
160.3
Amortization of intangible assets
9.5
11.3
17.5
22.7
Deferred income taxes
(2.9
)
0.2
(3.6
)
1.1
Other, net
—
2.1
—
2.1
Changes in operating assets:
Receivables, net
190.8
59.2
(105.4
)
97.7
Inventory
(27.2
)
(44.9
)
61.8
(37.0
)
Accounts payable
(18.6
)
(6.5
)
3.7
(13.2
)
Other current and long-term assets and
liabilities
2.9
(42.8
)
33.5
(66.8
)
Net cash provided by operations
615.7
280.4
1,100.8
678.8
Cash flow from investing
activities
Capital expenditures
(140.8
)
(60.7
)
(259.8
)
(171.9
)
Purchased intangibles
(1.6
)
(0.2
)
(5.9
)
(0.2
)
Purchases of marketable securities
(208.7
)
(47.3
)
(308.1
)
(178.8
)
Sales and maturities of marketable
securities
247.2
152.2
358.9
214.4
Net cash provided by (used in)
investing activities
(103.9
)
44.0
(214.9
)
(136.5
)
Cash flow from financing
activities
Repurchase of common stock — payroll tax
withholdings on equity awards
(3.6
)
(2.0
)
(51.3
)
(28.7
)
Repurchase of common stock — stock
repurchase program
—
(283.8
)
(195.6
)
(358.0
)
Dividends paid
(82.6
)
(74.9
)
(165.6
)
(150.0
)
Net proceeds from exercise of stock
options
4.4
8.3
7.1
43.3
Proceeds from employee stock purchase
plan
12.7
12.2
12.7
12.2
Net cash used in financing
activities
(69.1
)
(340.2
)
(392.7
)
(481.2
)
Net increase in cash and cash
equivalents
442.7
(15.8
)
493.2
61.1
Cash and cash equivalents at beginning of
period
617.2
928.2
566.7
851.3
Cash and cash equivalents at end of
period
$
1,059.9
$
912.4
$
1,059.9
$
912.4
View source
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Skyworks Solutions (NASDAQ:SWKS)
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