- Delivers Revenue of $1.153 Billion
- Posts GAAP Diluted EPS of $1.46 and Non-GAAP Diluted EPS of
$2.02
- Generates Quarterly Operating Cash Flow of $411.7 Million
Skyworks Solutions, Inc. (Nasdaq: SWKS), an innovator of
high-performance analog and mixed signal semiconductors connecting
people, places and things, today reported second fiscal quarter
results for the period ended March 31, 2023.
Revenue for the second fiscal quarter of 2023 was $1.153
billion. On a GAAP basis, operating income for the second fiscal
quarter was $273.3 million with diluted earnings per share of
$1.46. On a non-GAAP basis, operating income was $386.1 million
with non-GAAP diluted earnings per share of $2.02.
“Despite a challenging macro backdrop, the fundamentals of our
business remained strong in the second quarter with solid
profitability and robust cash generation,” said Liam K. Griffin,
chairman, chief executive officer and president of Skyworks. “At a
higher level, we are driving operational efficiency while
leveraging our leading-edge technologies and world-class
manufacturing capabilities to capture new opportunities across an
expanding set of customers.”
Second Fiscal Quarter Business Highlights
- Delivered Sky5® platforms supporting Samsung’s premium and mass
tier smartphone launches
- Enabled enhanced Power-over-Ethernet functionality with Cisco
for enterprise networks
- Launched tri-band, Wi-Fi 6E and Wi-Fi 7 gateways for CommScope
and ASUS
- Secured 5G platforms with a market leader in mobile
computing
- Shipped programmable timing solutions to the top U.S. satellite
provider
- Enabled small cell infrastructure deployments with a Japanese
telecommunications company
- Leveraged our expanding industrial product suite with a top
smart meter company
- Captured EV on-board charging content with a top European
automotive supplier
- Ramped key automotive digital radio products with a leading
Korean automotive OEM
Third Fiscal Quarter 2023 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.
“Looking ahead to our third fiscal quarter of 2023, we
anticipate revenue to be between $1.050 billion and $1.090 billion
with non-GAAP diluted earnings per share of $1.67 at the midpoint
of our revenue range,” said Kris Sennesael, senior vice president
and chief financial officer of Skyworks.
Dividend Payment
Skyworks’ board of directors has declared a cash dividend of
$0.62 per share of the Company’s common stock, payable on June 20,
2023, to stockholders of record at the close of business on May 30,
2023.
Skyworks’ Second Quarter 2023 Conference Call
Skyworks will host a conference call with analysts to discuss
its second quarter fiscal year 2023 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 (888) 886-7786 (domestic) or (416) 764-8658 (international),
Conference ID: 13999857.
Playback of the conference call will begin at 9 p.m. EDT on May
8, 2023, and end at 9 p.m. EDT on May 15, 2023. The replay will be
available on Skyworks’ website or by calling (877) 674-7070 (North
America) or (416) 764-8692 (international), Conference ID:
999857.
About Skyworks
Skyworks Solutions, Inc. is empowering the wireless networking
revolution. Our highly innovative analog and mixed signal
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, defense, entertainment and gaming, industrial,
medical, 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® market
index (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 information relating to future
results and expectations of Skyworks (e.g., certain projections and
business trends, as well as plans for dividend payments).
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
the susceptibility of the semiconductor industry and the markets
addressed by our, and our customers’, products to economic cycles,
including a sustained or higher level of inflation and the current
heightened risk of recession; our reliance on a small number of key
customers for a large percentage of our sales; the availability and
pricing of third-party semiconductor foundry, assembly and test
capacity, raw materials, supplier components, equipment and
shipping and logistics services, including limits on our customers’
ability to obtain such services and materials; the risks of doing
business internationally, including increased import/export
restrictions and controls (e.g., our ability to sell products to
certain specified foreign 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 geopolitical conditions in the
countries in which we, our customers or our suppliers operate,
including the war in Ukraine; delays in the deployment of
commercial 5G networks or in consumer adoption of 5G-enabled
devices; the volatility of our stock price; 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; reduced flexibility in
operating our business as a result of the indebtedness incurred in
connection with the transaction with Silicon Laboratories Inc.; 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; the effects of the COVID-19 pandemic on business
conditions in our industry and the potential for the uncertain
duration, severity and future impact of the pandemic, including as
a result of more contagious variants of the virus that causes
COVID-19, to result in significant disruptions to our business
operations, as well as negative impacts to our financial condition;
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 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)
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
Net revenue
$
1,153.1
$
1,335.6
$
2,482.4
$
2,846.0
Cost of goods sold
625.7
698.0
1,317.4
1,493.6
Gross profit
527.4
637.6
1,165.0
1,352.4
Operating expenses:
Research and development
148.2
160.7
312.0
311.9
Selling, general, and administrative
79.0
83.0
163.5
165.1
Amortization of intangibles
3.8
21.9
25.7
55.2
Restructuring, impairment, and other
charges
23.1
4.7
23.5
7.1
Total operating expenses
254.1
270.3
524.7
539.3
Operating income
273.3
367.3
640.3
813.1
Interest expense
(18.9
)
(11.4
)
(35.8
)
(22.3
)
Other income (expense), net
5.4
(1.8
)
6.0
(0.5
)
Income before income taxes
259.8
354.1
610.5
790.3
Provision for income taxes
27.0
48.3
68.3
84.6
Net income
$
232.8
$
305.8
$
542.2
$
705.7
Earnings per share:
Basic
$
1.46
$
1.87
$
3.40
$
4.29
Diluted
$
1.46
$
1.86
$
3.39
$
4.27
Weighted average shares:
Basic
159.1
163.7
159.5
164.4
Diluted
159.9
164.4
160.1
165.4
SKYWORKS SOLUTIONS,
INC.
UNAUDITED RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES
Three Months Ended
Six Months Ended
(in millions)
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
GAAP gross profit
$
527.4
$
637.6
$
1,165.0
$
1,352.4
Share-based compensation expense [a]
7.5
6.3
10.2
14.9
Acquisition-related expenses
—
—
—
7.3
Amortization of acquisition-related
intangibles
41.7
39.4
85.7
81.8
Non-GAAP gross profit
$
576.6
$
683.3
$
1,260.9
$
1,456.4
GAAP gross margin %
45.7
%
47.7
%
46.9
%
47.5
%
Non-GAAP gross margin %
50.0
%
51.2
%
50.8
%
51.2
%
Three Months Ended
Six Months Ended
(in millions)
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
GAAP operating income
$
273.3
$
367.3
$
640.3
$
813.1
Share-based compensation expense [a]
40.9
55.7
90.4
106.1
Acquisition-related expenses
0.9
1.8
9.1
11.0
Amortization of acquisition-related
intangibles
45.5
61.2
111.3
137.0
Settlements, gains, losses, and
impairments
19.0
0.2
19.1
2.4
Restructuring and other charges
6.5
4.7
7.2
7.1
Non-GAAP operating income
$
386.1
$
490.9
$
877.4
$
1,076.7
GAAP operating margin %
23.7
%
27.5
%
25.8
%
28.6
%
Non-GAAP operating margin %
33.5
%
36.8
%
35.3
%
37.8
%
Three Months Ended
Six Months Ended
(in millions)
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
GAAP net income
$
232.8
$
305.8
$
542.2
$
705.7
Share-based compensation expense [a]
40.9
55.7
90.4
106.1
Acquisition-related expenses
0.9
1.8
9.1
11.0
Amortization of acquisition-related
intangibles
45.5
61.2
111.3
137.0
Settlements, gains, losses, and
impairments
19.4
0.7
19.9
3.3
Restructuring and other charges
6.5
4.7
7.2
7.1
Tax adjustments
(22.9
)
2.4
(42.5
)
(15.1
)
Non-GAAP net income
$
323.1
$
432.3
$
737.6
$
955.1
Three Months Ended
Six Months Ended
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
GAAP net income per share, diluted
$
1.46
$
1.86
$
3.39
$
4.27
Share-based compensation expense [a]
0.25
0.34
0.56
0.64
Acquisition-related expenses
0.01
0.01
0.06
0.07
Amortization of acquisition-related
intangibles
0.28
0.37
0.70
0.83
Settlements, gains, losses, and
impairments
0.12
—
0.12
0.02
Restructuring and other charges
0.04
0.03
0.04
0.04
Tax adjustments
(0.14
)
0.02
(0.26
)
(0.10
)
Non-GAAP net income per share, diluted
$
2.02
$
2.63
$
4.61
$
5.77
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, and amortization of acquisition-related intangibles. 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 Expense - 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 and Amortization of
Acquisition-Related Intangibles - including such items as, when
applicable, fair value adjustments to contingent consideration,
fair value charges incurred upon the sale of acquired inventory,
acquisition-related expenses, and amortization of acquired
intangible assets 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.
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.
Restructuring and Other 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.
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
2023 fiscal year (“Q3 2023”). 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 2023 GAAP diluted earnings per share to a
forward-looking estimate of Q3 2023 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
2023 (other than estimated share-based compensation expense of
$0.20 to $0.30 per diluted share, estimated amortization of
intangibles of $0.25 to $0.30 per diluted share and certain tax
items of -$0.10 to -$0.20 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 $0.15 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
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
Cost of goods sold
$
7.5
$
6.3
$
10.2
$
14.9
Research and development
17.4
27.3
45.3
50.2
Selling, general, and administrative
16.0
22.1
34.9
41.0
Total share-based compensation
$
40.9
$
55.7
$
90.4
$
106.1
SKYWORKS SOLUTIONS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
As of
(in millions)
March 31, 2023
September 30,
2022
Assets
Cash, cash equivalents, and marketable
securities
$ 1,061.4
$ 586.8
Accounts receivable, net
685.0
1,094.0
Inventory
1,257.0
1,212.1
Property, plant, and equipment, net
1,496.3
1,604.8
Goodwill and intangible assets, net
3,498.3
3,621.4
Other assets
843.7
754.7
Total assets
$ 8,841.7
$ 8,873.8
Liabilities and Equity
Accounts payable
$ 165.8
$ 274.2
Accrued and other liabilities
952.1
941.5
Debt
1,990.9
2,189.1
Stockholders’ equity
5,732.9
5,469.0
Total liabilities and equity
$ 8,841.7
$ 8,873.8
SKYWORKS SOLUTIONS,
INC.
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months Ended
Six Months Ended
(in millions)
March 31, 2023
April 1, 2022
March 31, 2023
April 1, 2022
Cash flow from operating
activities
Net income
$ 232.8
$ 305.8
$ 542.2
$ 705.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Share-based compensation
40.9
55.7
90.4
106.1
Depreciation
99.1
98.5
198.4
192.6
Amortization of intangible assets,
including inventory step-up
51.4
65.9
123.4
153.3
Deferred income taxes
(27.1)
0.4
(57.0)
6.4
Asset impairment charges
17.0
—
17.0
—
Amortization of debt discount and issuance
costs
1.3
1.0
2.0
2.0
Other, net
2.1
0.5
2.2
1.4
Changes in assets and liabilities:
Receivables, net
79.1
(24.1)
409.0
(41.9)
Inventory
6.4
(86.9)
(49.4)
(51.4)
Accounts payable
(6.9)
15.4
(94.7)
15.0
Other current and long-term assets and
liabilities
(84.4)
(39.3)
1.6
(114.7)
Net cash provided by operating
activities
411.7
392.9
1,185.1
974.5
Cash flow from investing
activities
Capital expenditures
(45.3)
(126.7)
(108.9)
(222.5)
Purchased intangibles
(7.3)
(8.2)
(15.1)
(14.0)
Purchases of marketable securities
(107.3)
(49.0)
(270.4)
(78.6)
Sales and maturities of marketable
securities
53.8
67.4
65.1
100.7
Receipts from the sales of property,
plant, and equipment
0.1
—
0.1
—
Net cash used in investing
activities
(106.0)
(116.5)
(329.2)
(214.4)
Cash flow from financing
activities
Repurchase of common stock — payroll tax
withholdings on equity awards
(0.7)
(3.5)
(32.6)
(83.6)
Repurchase of common stock — stock
repurchase program
(9.1)
(418.0)
(175.3)
(687.4)
Dividends paid
(98.7)
(91.2)
(198.0)
(183.7)
Net proceeds from exercise of stock
options
—
0.8
1.1
2.6
Proceeds from employee stock purchase
plan
15.5
15.5
15.5
15.5
Payments of debt
(200.0)
—
(200.0)
(50.0)
Net cash used in financing
activities
(293.0)
(496.4)
(589.3)
(986.6)
Net increase (decrease) in cash and cash
equivalents
12.7
(220.0)
266.6
(226.5)
Cash and cash equivalents at beginning of
period
819.9
876.4
566.0
882.9
Cash and cash equivalents at end of
period
$ 832.6
$ 656.4
$ 832.6
$ 656.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230508005230/en/
Media Relations: Constance Griffiths (949) 231-4207
Investor Relations: Mitch Haws (949) 231-3223
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