Qorvo® (Nasdaq:QRVO), a leading global provider of connectivity and
power solutions, today announced financial results for the
Company’s fiscal 2023 third quarter ended December 31, 2022.
On a GAAP basis, revenue for Qorvo’s fiscal 2023 third quarter
was $743 million, gross margin was 36.1%, operating income was $9
million and loss per share was $0.16. On a non-GAAP basis, gross
margin was 40.9%, operating income was $99 million and diluted
earnings per share was $0.75.
Bob Bruggeworth, president and chief executive officer of Qorvo,
said, “The Qorvo team is operating well in navigating a challenging
environment and taking actions to position the Company for growth
and improved performance. We are introducing best-in-class products
and technologies, and our customers are recognizing us with design
wins, quality awards, and new and expanded programs. In the
December quarter, channel inventories declined, and we expect them
to continue to decline this quarter. In 2023 and beyond, the
secular trends in our businesses remain strong. Customers
increasingly require higher levels of performance, integration and
functional density to deliver successive improvements in
next-generation products.”
Strategic Highlights
- Began sampling integrated solution combining high voltage power
conversion PMIC with SiC power switches to control GaN RF high
power amplifier, reducing total solution size by up to 30% and
expanding content opportunity in D&A radar power systems
- Expanded SHIP (state-of-the-art heterogenous integrated
packaging) government contract to develop multichip modules
combining digital optical devices with Qorvo mixed signal RF
- Delivered multi-chip solution, including high-frequency BAW and
GaN PA, for LEO satellites and other aerospace applications and
secured new design wins supporting cellular-to-satellite links
- Commenced pre-production shipments of first integrated PA
modules (PAMs) to tier-one European infrastructure OEM for 5G
massive-MIMO base stations
- Began sampling next-generation infrastructure PAM, offering
market-leading efficiency for 5G massive-MIMO installations, to the
leading European infrastructure OEMs
- Sampled CATV power doubler amplifier maintaining linearity and
extending bandwidth to enable higher-throughput DOCSIS 4.0
capabilities with industry-leading power efficiency
- Expanded Wi-Fi content at Korea-based smartphone OEM to include
Wi-Fi 6E and Wi-Fi 7 and ramped Wi-Fi 7 FEMs for AP/routers for
smart home ecosystem customer
- Commenced sampling of 5 GHz and 6 GHz Wi-Fi 7 filters
leveraging Qorvo’s next-generation BAW process and enabling
worldwide Wi-Fi 7 frequency coverage
- Commenced volume shipments of MEMS-based sensors enabling
enhanced HMI experience in true wireless stereo earbuds, replacing
legacy capacitive touch sensor technology
- Commenced production ramp of multiple components in Korea-based
smartphone OEM’s flagship smartphone and secured multiple Android
design wins in support of 2023 devices
- Selected by North American Android OEM to supply multiple
solutions, including UWB, antenna tuning and BAW-based
antennaplexing, supporting 2023 smartphone launches
- Received Honor’s 2022 Golden Supplier Award and earned multiple
Vivo 2022 quality awards
Financial Commentary and Outlook
Grant Brown, chief financial officer of Qorvo, said, “We are
encouraged by the channel inventory consumption we saw in the
December quarter, and we expect channel inventories will continue
to be consumed in the March quarter. In addition to ongoing
alignment of supply and demand, we expect unit volumes across our
businesses will recover later this year, and we have secured
content gains in large customer programs, all of which will support
improved financial performance.”
Qorvo’s current outlook for the March 2023 quarter is:
- Quarterly revenue of $600 million to $640 million
- Non-GAAP gross margin of approximately 41%
- Non-GAAP diluted earnings per share in the range of $0.10 to
$0.15
See “Forward-looking non-GAAP financial measures” below. Qorvo’s
actual quarterly results may differ from these expectations and
projections, and such differences may be material.
Selected Financial Information
The following tables set forth selected GAAP and non-GAAP
financial information for Qorvo for the periods indicated. See the
more detailed financial information for Qorvo, including
reconciliations of GAAP and non-GAAP financial information,
attached.
|
|
SELECTED GAAP RESULTS |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended December 31, 2022 |
|
For the quarter ended October 1, 2022 |
|
Change vs. Q2 FY 2023 |
|
Revenue |
$ |
743.3 |
|
$ |
1,158.1 |
|
$ |
(414.8 |
) |
|
Gross profit |
$ |
268.1 |
|
$ |
538.9 |
|
$ |
(270.8 |
) |
|
Gross margin |
|
36.1 |
% |
|
46.5 |
% |
|
(10.4 |
) |
ppt |
Operating expenses |
$ |
259.3 |
|
$ |
277.4 |
|
$ |
(18.1 |
) |
|
Operating income |
$ |
8.7 |
|
$ |
261.6 |
|
$ |
(252.9 |
) |
|
Net (loss) income |
$ |
(15.9 |
) |
$ |
188.6 |
|
$ |
(204.5 |
) |
|
Weighted average diluted
shares |
|
100.9 |
|
|
103.7 |
|
|
(2.8 |
) |
|
Diluted EPS |
$ |
(0.16 |
) |
$ |
1.82 |
|
$ |
(1.98 |
) |
|
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended December 31, 2022 |
|
For the quarter ended October 1, 2022 |
|
Change vs. Q2 FY 2023 |
|
Revenue |
$ |
743.3 |
|
$ |
1,158.1 |
|
$ |
(414.8 |
) |
|
Gross profit |
$ |
304.2 |
|
$ |
570.2 |
|
$ |
(266.0 |
) |
|
Gross margin |
|
40.9 |
% |
|
49.2 |
% |
|
(8.3 |
) |
ppt |
Operating expenses |
$ |
205.7 |
|
$ |
232.5 |
|
$ |
(26.8 |
) |
|
Operating income |
$ |
98.6 |
|
$ |
337.7 |
|
$ |
(239.1 |
) |
|
Net income |
$ |
76.5 |
|
$ |
276.2 |
|
$ |
(199.7 |
) |
|
Weighted average diluted
shares |
|
101.6 |
|
|
103.7 |
|
|
(2.1 |
) |
|
Diluted EPS |
$ |
0.75 |
|
$ |
2.66 |
|
$ |
(1.91 |
) |
|
|
|
SELECTED GAAP RESULTS |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended December 31, 2022 |
|
For the quarter ended January 1, 2022 |
|
Change vs. Q3 FY 2022 |
|
Revenue |
$ |
743.3 |
|
$ |
1,114.0 |
|
$ |
(370.7 |
) |
|
Gross profit |
$ |
268.1 |
|
$ |
548.1 |
|
$ |
(280.0 |
) |
|
Gross margin |
|
36.1 |
% |
|
49.2 |
% |
|
(13.1 |
) |
ppt |
Operating expenses |
$ |
259.3 |
|
$ |
252.1 |
|
$ |
7.2 |
|
|
Operating income |
$ |
8.7 |
|
$ |
296.0 |
|
$ |
(287.3 |
) |
|
Net (loss) income |
$ |
(15.9 |
) |
$ |
216.3 |
|
$ |
(232.2 |
) |
|
Weighted average diluted
shares |
|
100.9 |
|
|
110.8 |
|
|
(9.9 |
) |
|
Diluted EPS |
$ |
(0.16 |
) |
$ |
1.95 |
|
$ |
(2.11 |
) |
|
|
|
SELECTED NON-GAAP RESULTS1 |
|
|
|
(Unaudited) |
|
|
|
(In millions, except for percentages and EPS) |
|
|
|
For the quarter ended December 31, 2022 |
|
For the quarter ended January 1, 2022 |
|
Change vs. Q3 FY 2022 |
|
Revenue |
$ |
743.3 |
|
$ |
1,114.0 |
|
$ |
(370.7 |
) |
|
Gross profit |
$ |
304.2 |
|
$ |
586.2 |
|
$ |
(282.0 |
) |
|
Gross margin |
|
40.9 |
% |
|
52.6 |
% |
|
(11.7 |
) |
ppt |
Operating expenses |
$ |
205.7 |
|
$ |
214.2 |
|
$ |
(8.5 |
) |
|
Operating income |
$ |
98.6 |
|
$ |
372.0 |
|
$ |
(273.4 |
) |
|
Net income |
$ |
76.5 |
|
$ |
330.4 |
|
$ |
(253.9 |
) |
|
Weighted average diluted
shares |
|
101.6 |
|
|
110.8 |
|
|
(9.2 |
) |
|
Diluted EPS |
$ |
0.75 |
|
$ |
2.98 |
|
$ |
(2.23 |
) |
|
1 Excludes stock-based compensation expense, amortization of
intangible assets, restructuring related charges, acquisition and
integration related costs, loss (gain) on assets, start-up costs,
loss (gain) on investments, other (income) expense and an
adjustment of income taxes.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with United States (U.S.) generally accepted accounting
principles (GAAP), this earnings release contains some or all of
the following non-GAAP financial measures: (i) non-GAAP gross
profit and gross margin, (ii) non-GAAP operating income and
operating margin, (iii) non-GAAP net income, (iv) non-GAAP net
income per diluted share, (v) non-GAAP operating expenses (research
and development; selling, general and administrative), (vi) free
cash flow, (vii) EBITDA, (viii) non-GAAP return on invested capital
(ROIC), and (ix) net debt or positive net cash. Each of these
non-GAAP financial measures is either adjusted from GAAP results to
exclude certain expenses or derived from multiple GAAP measures,
which are outlined in the “Reconciliation of GAAP to Non-GAAP
Financial Measures” tables, attached, and the “Additional Selected
Non-GAAP Financial Measures and Reconciliations” tables,
attached.
In managing Qorvo's business on a consolidated basis, management
develops an annual operating plan, which is approved by our Board
of Directors, using non-GAAP financial measures. In developing and
monitoring performance against this plan, management considers the
actual or potential impacts on these non-GAAP financial measures
from actions taken to reduce costs with the goal of increasing
gross margin and operating margin. In addition, management relies
upon these non-GAAP financial measures to assess whether research
and development efforts are at an appropriate level, and when
making decisions about product spending, administrative budgets,
and other operating expenses. Also, we believe that non-GAAP
financial measures provide useful supplemental information to
investors and enable investors to analyze the results of operations
in the same way as management. We have chosen to provide this
supplemental information to enable investors to perform additional
comparisons of our operating results, to assess our liquidity and
capital position and to analyze financial performance excluding the
effect of expenses unrelated to operations, certain non-cash
expenses and stock-based compensation expense, which may obscure
trends in Qorvo's underlying performance.
We believe that these non-GAAP financial measures offer an
additional view of Qorvo's operations that, when coupled with the
GAAP results and the reconciliations to corresponding GAAP
financial measures, provide a more complete understanding of
Qorvo's results of operations and the factors and trends affecting
Qorvo's business. However, these non-GAAP financial measures should
be considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP.
Our rationale for using these non-GAAP financial measures, as
well as their impact on the presentation of Qorvo's operations, are
outlined below:
Non-GAAP gross profit and gross margin. Non-GAAP gross profit
and gross margin exclude amortization of intangible assets,
stock-based compensation expense, restructuring related charges and
certain non-cash expenses. We believe that exclusion of these costs
in presenting non-GAAP gross profit and gross margin facilitates a
useful evaluation of our historical performance and projected costs
and the potential for realizing cost efficiencies.
We view amortization of acquisition-related intangible assets,
such as the amortization of the cost associated with an acquired
company’s research and development efforts, trade names, and
customer relationships, as items arising from pre-acquisition
activities, determined at the time of an acquisition, rather than
ongoing costs of operating Qorvo’s business. While these intangible
assets are continually evaluated for impairment, amortization of
the cost of purchased intangible assets is a static expense, which
is not typically affected by operations during any particular
period. Although we exclude the amortization of purchased
intangible assets from these non-GAAP financial measures,
management believes that it is important for investors to
understand that such intangible assets were recorded as part of
purchase price accounting and contribute to revenue generation.We
believe that presentation of non-GAAP gross profit and gross margin
and other non-GAAP financial measures that exclude the impact of
stock-based compensation expense assists management and investors
in evaluating the period-over-period performance of Qorvo's ongoing
operations because (i) the expenses are non-cash in nature, and
(ii) although the size of the grants is within our control, the
amount of expense varies depending on factors such as short-term
fluctuations in stock price volatility and prevailing interest
rates, which can be unrelated to the operational performance of
Qorvo during the period in which the expense is incurred and
generally are outside the control of management. Moreover, we
believe that the exclusion of stock-based compensation expense in
presenting non-GAAP gross profit and gross margin and other
non-GAAP financial measures is useful to investors to understand
the impact of the expensing of stock-based compensation to Qorvo's
gross profit and gross margins and other financial measures in
comparison to prior periods. We also believe that the adjustments
to profit and margin related to restructuring related charges and
certain non-cash expenses do not constitute part of Qorvo's ongoing
operations and therefore the exclusion of these items provides
management and investors with better visibility into the actual
revenue and actual costs required to generate revenues over time
and facilitates a useful evaluation of our historical and projected
performance. We believe disclosure of non-GAAP gross profit and
gross margin has economic substance because the excluded expenses
do not represent continuing cash expenditures and, as described
above, we have little control over the timing and amount of the
expenses in question.
Non-GAAP operating income and operating margin. Non-GAAP
operating income and operating margin exclude stock-based
compensation expense, amortization of intangible assets,
acquisition and integration related costs, gain or loss on assets,
asset impairments, start-up costs, restructuring related charges
and certain non-cash expenses. We believe that presentation of a
measure of operating income and operating margin that excludes
amortization of intangible assets and stock-based compensation
expense is useful to both management and investors for the same
reasons as described above with respect to our use of non-GAAP
gross profit and gross margin. We believe that acquisition and
integration related costs, gain or loss on assets, asset
impairments, start-up costs, restructuring related charges and
certain non-cash expenses do not constitute part of Qorvo's ongoing
operations and therefore, the exclusion of these costs provides
management and investors with better visibility into the actual
costs required to generate revenues over time and facilitates a
useful evaluation of our historical and projected performance. We
believe disclosure of non-GAAP operating income and operating
margin has economic substance because the excluded expenses are
either unrelated to ongoing operations or do not represent current
cash expenditures.
Non-GAAP net income and non-GAAP net income per diluted share.
Non-GAAP net income and non-GAAP net income per diluted share
exclude the effects of stock-based compensation expense,
amortization of intangible assets, acquisition and integration
related costs, gain or loss on assets, asset impairments, start-up
costs, restructuring related charges, certain non-cash expenses,
gain or loss on investments, other expense (income) and also
reflect an adjustment of income taxes. The income tax adjustment
primarily represents the use of research and development tax credit
carryforwards, deferred tax expense (benefit) items not affecting
taxes payable, adjustments related to the deemed and actual
repatriation of historical foreign earnings, non-cash expense
(benefit) related to uncertain tax positions and other items
unrelated to the current fiscal year or that are not indicative of
our ongoing business operations. We believe that presentation of
measures of net income and net income per diluted share that
exclude these items is useful to both management and investors for
the reasons described above with respect to non-GAAP gross profit
and gross margin and non-GAAP operating income and operating
margin. We believe disclosure of non-GAAP net income and non-GAAP
net income per diluted share has economic substance because the
excluded expenses are either unrelated to ongoing operations or do
not represent current cash expenditures.
Non-GAAP operating expenses (research and development and
selling, general and administrative). Non-GAAP research and
development and selling, general and administrative expenses
exclude stock-based compensation expense, amortization of
intangible assets and certain non-cash expenses (primarily
acquisition and integration related costs). We believe that
presentation of measures of these operating expenses that exclude
amortization of intangible assets and stock-based compensation
expense is useful to both management and investors for the same
reasons as described above with respect to our use of non-GAAP
gross profit and gross margin. We believe that acquisition and
integration related costs and certain non-cash expenses do not
constitute part of Qorvo's ongoing operations and therefore, the
exclusion of these costs provides management and investors with
better visibility into the actual costs required to generate
revenues over time and facilitates a useful evaluation of our
historical and projected performance. We believe disclosure of
these non-GAAP operating expenses has economic substance because
the excluded expenses are either unrelated to ongoing operations or
do not represent current cash expenditures.
Free cash flow. Qorvo defines free cash flow as net cash
provided by operating activities during the period minus property
and equipment expenditures made during the period, and free cash
flow margin is calculated as free cash flow as a percentage of
revenue. We use free cash flow as a supplemental financial measure
in our evaluation of liquidity and financial strength. Management
believes that this measure is useful as an indicator of our ability
to service our debt, meet other payment obligations and make
strategic investments. Free cash flow should be considered in
addition to, rather than as a substitute for, net income as a
measure of our performance and net cash provided by operating
activities as a measure of our liquidity. Additionally, our
definition of free cash flow is limited, in that it does not
represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt service and other contractual
obligations. Therefore, we believe it is important to view free
cash flow as a measure that provides supplemental information to
our entire statement of cash flows.
EBITDA. Qorvo adjusts GAAP net income for interest expense,
interest income, income tax expense (benefit), depreciation and
intangible amortization expense, stock-based compensation and other
charges that are not representative of Qorvo's ongoing operations
(including asset impairments, investment activity,
acquisition-related costs and restructuring-related costs) when
presenting EBITDA. Management believes that this measure is useful
to evaluate our ongoing operations and as a general indicator of
our operating cash flow (in conjunction with a cash flow statement
which also includes among other items, changes in working capital
and the effect of non-cash charges).
Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP
financial measure that management believes provides useful
supplemental information for management and the investor by
measuring the effectiveness of our operations' use of invested
capital to generate profits. We use ROIC to track how much value we
are creating for our shareholders. Non-GAAP ROIC is calculated by
dividing annualized non-GAAP operating income, net of an adjustment
for income taxes (as described above), by average invested capital.
Average invested capital is calculated by subtracting the average
of the beginning balance and the ending balance of equity plus net
debt, less certain goodwill.
Net debt or positive net cash. Net debt or positive net cash is
defined as unrestricted cash, cash equivalents and short-term
investments minus any borrowings under our credit facility and the
principal balance of our senior unsecured notes. Management
believes that net debt or positive net cash provides useful
information regarding the level of Qorvo's indebtedness by
reflecting cash and investments that could be used to repay
debt.
Inventory days on hand. Inventory days on hand is defined as (a)
average net inventory for the period, divided by (b) the result of
non-GAAP cost of goods sold for the period divided by the number of
days in the period.
Forward-looking non-GAAP financial measures. Our earnings
release contains forward-looking free cash flow, gross margin,
income tax rate and diluted earnings per share. We provide these
non-GAAP measures to investors on a prospective basis for the same
reasons (set forth above) that we provide them to investors on a
historical basis. We are unable to provide a reconciliation of the
forward-looking non-GAAP financial measures to the most directly
comparable forward-looking GAAP financial measures without
unreasonable effort due to variability and difficulty in making
accurate projections for items that would be required to be
included in the GAAP measures, such as stock-based compensation,
acquisition and integration related costs, restructuring related
charges, gain or loss on assets, asset impairments, gain or loss on
investments and the provision for income taxes, which could have a
potentially significant impact on our future GAAP results.
Limitations of non-GAAP financial measures. The primary material
limitations associated with the use of non-GAAP financial measures
as an analytical tool compared to the most directly comparable GAAP
financial measures are these non-GAAP financial measures (i) may
not be comparable to similarly titled measures used by other
companies in our industry, and (ii) exclude financial information
that some may consider important in evaluating our performance,
thus limiting their usefulness as a comparative tool. We compensate
for these limitations by providing full disclosure of the
differences between these non-GAAP financial measures and the
corresponding GAAP financial measures, including a reconciliation
of the non-GAAP financial measures to the corresponding GAAP
financial measures, to enable investors to perform their own
analysis of our gross profit and gross margin, operating expenses,
operating income, net income, net income per diluted share and net
cash provided by operating activities. We further compensate for
the limitations of our use of non-GAAP financial measures by
presenting the corresponding GAAP measures more prominently.
Qorvo will conduct a conference call at 5:00 p.m. ET today to
discuss today’s press release. The conference call will be
broadcast live over the Internet and can be accessed by any
interested party at the following URL: https://ir.qorvo.com (under
“Events & Presentations”). A telephone playback of the
conference call will be available approximately two hours after the
call’s completion and can be accessed by dialing 412-317-6671 and
using the passcode 13734866. The playback will be available through
the close of business February 8, 2023.
About Qorvo
Qorvo (Nasdaq:QRVO) supplies innovative semiconductor solutions
that make a better world possible. We combine product and
technology leadership, systems-level expertise and global
manufacturing scale to quickly solve our customers’ most complex
technical challenges. Qorvo serves diverse high-growth segments of
large global markets, including consumer electronics, smart
home/IoT, automotive, EVs, battery-powered appliances, network
infrastructure, healthcare and aerospace/defense. Visit
www.qorvo.com to learn how our diverse and innovative team is
helping connect, protect and power our planet.
Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and
in other countries. All other trademarks are the property of their
respective owners.
This press release includes "forward-looking statements" within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements about our plans,
objectives, representations and contentions, and are not historical
facts and typically are identified by use of terms such as "may,"
"will," "should," "could," "expect," "plan," "anticipate,"
"believe," "estimate," "predict," "potential," "continue" and
similar words, although some forward-looking statements are
expressed differently. You should be aware that the forward-looking
statements included herein represent management's current judgment
and expectations, but our actual results, events and performance
could differ materially from those expressed or implied by
forward-looking statements. We do not intend to update any of these
forward-looking statements or publicly announce the results of any
revisions to these forward-looking statements, other than as is
required under U.S. federal securities laws. Our business is
subject to numerous risks and uncertainties, including those
relating to fluctuations in our operating results; our substantial
dependence on developing new products and achieving design wins;
our dependence on several large customers for a substantial portion
of our revenue; continued volatility and uncertainty in customer
demand, worldwide economies and financial markets resulting from
the impact of the COVID-19 pandemic, conflict in Ukraine or other
macroeconomic factors; a loss of revenue if defense and aerospace
contracts are canceled or delayed; our dependence on third parties;
risks related to sales through distributors; risks associated with
the operation of our manufacturing facilities; business
disruptions; poor manufacturing yields; increased inventory risks
and costs, including under long-term supply agreements, due to
timing of customers' forecasts; our inability to effectively manage
or maintain evolving relationships with chipset suppliers; our
ability to continue to innovate in a very competitive industry;
underutilization of manufacturing facilities; unfavorable changes
in interest rates, pricing of certain precious metals, utility
rates and foreign currency exchange rates; our acquisitions and
other strategic investments failing to achieve financial or
strategic objectives; our ability to attract, retain and motivate
key employees; warranty claims, product recalls and product
liability; changes in our effective tax rate; changes in the
favorable tax status of certain of our subsidiaries; enactment of
international or domestic tax legislation, or changes in regulatory
guidance; risks associated with environmental, health and safety
regulations, and climate change; risks from international sales and
operations; economic regulation in China; changes in government
trade policies, including imposition of tariffs and export
restrictions; we may not be able to generate sufficient cash to
service all of our debt; restrictions imposed by the agreements
governing our debt; our reliance on our intellectual property
portfolio; claims of infringement of third-party intellectual
property rights; security breaches and other similar disruptions
compromising our information; theft, loss or misuse of personal
data by or about our employees, customers or third parties;
provisions in our governing documents and Delaware law may
discourage takeovers and business combinations that our
stockholders might consider to be in their best interests; and
volatility in the price of our common stock. These and other risks
and uncertainties, which are described in more detail under "Risk
Factors" in Part I, Item 1A. of our Annual Report on Form 10-K for
the year ended April 2, 2022 and Qorvo's subsequent reports and
statements filed with the Securities and Exchange Commission, could
cause actual results and developments to be materially different
from those expressed or implied by any of these forward-looking
statements.
Financial Tables to Follow
QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share data)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
December 31, 2022 |
|
January 1, 2022 |
|
December 31, 2022 |
|
January 1, 2022 |
Revenue |
$ |
743,281 |
|
|
$ |
1,113,957 |
|
|
$ |
2,936,696 |
|
|
$ |
3,479,556 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
|
475,230 |
|
|
|
565,864 |
|
|
|
1,754,468 |
|
|
|
1,763,727 |
|
Research and development |
|
149,472 |
|
|
|
154,435 |
|
|
|
486,204 |
|
|
|
464,891 |
|
Selling, general and administrative |
|
76,269 |
|
|
|
82,003 |
|
|
|
275,836 |
|
|
|
265,791 |
|
Other operating expense |
|
33,581 |
|
|
|
15,645 |
|
|
|
48,038 |
|
|
|
29,675 |
|
Total costs and expenses |
|
734,552 |
|
|
|
817,947 |
|
|
|
2,564,546 |
|
|
|
2,524,084 |
|
|
|
|
|
|
|
|
|
Operating income |
|
8,729 |
|
|
|
296,010 |
|
|
|
372,150 |
|
|
|
955,472 |
|
Interest expense |
|
(17,066 |
) |
|
|
(15,328 |
) |
|
|
(51,222 |
) |
|
|
(45,934 |
) |
Other income, net |
|
5,562 |
|
|
|
2,532 |
|
|
|
2,714 |
|
|
|
24,077 |
|
|
|
|
|
|
|
|
|
(Loss) income before income
taxes |
|
(2,775 |
) |
|
|
283,214 |
|
|
|
323,642 |
|
|
|
933,615 |
|
Income tax expense |
|
(13,156 |
) |
|
|
(66,951 |
) |
|
|
(82,074 |
) |
|
|
(112,537 |
) |
Net (loss) income |
$ |
(15,931 |
) |
|
$ |
216,263 |
|
|
$ |
241,568 |
|
|
$ |
821,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share,
diluted |
$ |
(0.16 |
) |
|
$ |
1.95 |
|
|
$ |
2.33 |
|
|
$ |
7.30 |
|
|
|
|
|
|
|
|
|
Weighted average outstanding
diluted shares |
|
100,943 |
|
|
|
110,810 |
|
|
|
103,812 |
|
|
|
112,415 |
|
QORVO, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES(In thousands, except per share
data)(Unaudited)
|
Three Months Ended |
|
December 31, 2022 |
|
October 1, 2022 |
|
January 1, 2022 |
|
|
|
|
|
|
GAAP operating income |
$ |
8,729 |
|
|
$ |
261,562 |
|
|
$ |
296,010 |
|
Stock-based compensation expense |
|
19,708 |
|
|
|
31,789 |
|
|
|
19,307 |
|
Amortization of intangible assets |
|
32,844 |
|
|
|
32,787 |
|
|
|
38,443 |
|
Restructuring related charges |
|
27,385 |
|
|
|
4,544 |
|
|
|
— |
|
Acquisition and integration related costs |
|
6,296 |
|
|
|
8,642 |
|
|
|
6,552 |
|
Loss (gain) on assets, start-up costs and other non-cash
expenses |
|
3,591 |
|
|
|
(1,627 |
) |
|
|
11,696 |
|
Non-GAAP operating income |
$ |
98,553 |
|
|
$ |
337,697 |
|
|
$ |
372,008 |
|
|
|
|
|
|
|
GAAP net (loss) income |
$ |
(15,931 |
) |
|
$ |
188,615 |
|
|
$ |
216,263 |
|
Stock-based compensation expense |
|
19,708 |
|
|
|
31,789 |
|
|
|
19,307 |
|
Amortization of intangible assets |
|
32,844 |
|
|
|
32,787 |
|
|
|
38,443 |
|
Restructuring related charges |
|
27,385 |
|
|
|
4,544 |
|
|
|
— |
|
Acquisition and integration related costs |
|
6,296 |
|
|
|
8,642 |
|
|
|
6,552 |
|
Loss (gain) on assets, start-up costs and other non-cash
expenses |
|
3,591 |
|
|
|
(1,627 |
) |
|
|
11,696 |
|
Loss (gain) on investments |
|
5,615 |
|
|
|
(967 |
) |
|
|
(672 |
) |
Other (income) expense |
|
(1,908 |
) |
|
|
1,629 |
|
|
|
(1,386 |
) |
Adjustment of income taxes |
|
(1,145 |
) |
|
|
10,814 |
|
|
|
40,223 |
|
Non-GAAP net income |
$ |
76,455 |
|
|
$ |
276,226 |
|
|
$ |
330,426 |
|
|
|
|
|
|
|
GAAP weighted average
outstanding diluted shares |
|
100,943 |
|
|
|
103,674 |
|
|
|
110,810 |
|
Dilutive stock-based awards |
|
664 |
|
|
|
— |
|
|
|
— |
|
Non-GAAP weighted average
outstanding diluted shares |
|
101,607 |
|
|
|
103,674 |
|
|
|
110,810 |
|
|
|
|
|
|
|
Non-GAAP net income per share,
diluted |
$ |
0.75 |
|
|
$ |
2.66 |
|
|
$ |
2.98 |
|
|
|
|
|
|
|
QORVO, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES(Unaudited)
|
Three Months Ended |
(in thousands, except
percentages) |
December 31, 2022 |
|
October 1, 2022 |
|
January 1, 2022 |
GAAP gross profit/margin |
$ |
268,051 |
36.1 |
% |
|
$ |
538,927 |
46.5 |
% |
|
$ |
548,093 |
49.2 |
% |
Amortization of intangible assets |
|
27,624 |
3.7 |
|
|
|
27,574 |
2.4 |
|
|
|
31,393 |
2.8 |
|
Stock-based compensation expense |
|
4,939 |
0.6 |
|
|
|
3,704 |
0.3 |
|
|
|
4,274 |
0.4 |
|
Restructuring related charges |
|
3,600 |
0.5 |
|
|
|
— |
— |
|
|
|
— |
— |
|
Other non-cash expenses |
|
28 |
— |
|
|
|
35 |
— |
|
|
|
2,426 |
0.2 |
|
Non-GAAP gross
profit/margin |
$ |
304,242 |
40.9 |
% |
|
$ |
570,240 |
49.2 |
% |
|
$ |
586,186 |
52.6 |
% |
|
Three Months Ended |
Non-GAAP Operating Income |
December 31, 2022 |
(as a percentage of sales) |
|
|
|
GAAP operating income |
1.2 |
% |
Stock-based compensation expense |
2.7 |
|
Amortization of intangible assets |
4.4 |
|
Restructuring related charges |
3.7 |
|
Acquisition and integration related costs |
0.8 |
|
Loss (gain) on assets, start-up costs and other non-cash
expenses |
0.5 |
|
Non-GAAP operating income |
13.3 |
% |
|
Three Months Ended |
Free Cash Flow (1) |
December 31, 2022 |
(in millions) |
|
|
|
Net cash provided by operating activities |
$ |
237.4 |
|
Purchases of property and
equipment |
|
(34.4 |
) |
Free cash flow |
$ |
203.0 |
|
(1) Free Cash Flow is calculated as net cash provided by
operating activities minus property and equipment expenditures.
QORVO, INC. AND
SUBSIDIARIESADDITIONAL SELECTED NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS(In thousands)(Unaudited)
|
Three Months Ended |
|
December 31, 2022 |
|
October 1, 2022 |
|
January 1, 2022 |
GAAP research and development expense |
$ |
149,472 |
|
$ |
168,164 |
|
$ |
154,435 |
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
10,343 |
|
|
10,445 |
|
|
8,706 |
Other non-cash expenses |
|
49 |
|
|
58 |
|
|
135 |
Non-GAAP research and
development expense |
$ |
139,080 |
|
$ |
157,661 |
|
$ |
145,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, 2022 |
|
October 1, 2022 |
|
January 1, 2022 |
GAAP selling, general and
administrative expense |
$ |
76,269 |
|
$ |
97,752 |
|
$ |
82,003 |
Less: |
|
|
|
|
|
Stock-based compensation expense |
|
4,426 |
|
|
17,640 |
|
|
6,327 |
Amortization of intangible assets |
|
5,220 |
|
|
5,213 |
|
|
7,050 |
Other non-cash expenses |
|
13 |
|
|
17 |
|
|
41 |
Non-GAAP selling, general and
administrative expense |
$ |
66,610 |
|
$ |
74,882 |
|
$ |
68,585 |
QORVO, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands)(Unaudited)
|
December 31, 2022 |
|
April 2, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
918,758 |
|
$ |
972,592 |
Accounts receivable, net |
|
367,636 |
|
|
568,850 |
Inventories |
|
857,277 |
|
|
755,748 |
Other current assets |
|
114,029 |
|
|
152,675 |
Total current assets |
|
2,257,700 |
|
|
2,449,865 |
|
|
|
|
Property and equipment,
net |
|
1,191,986 |
|
|
1,253,591 |
Goodwill |
|
2,770,146 |
|
|
2,775,634 |
Intangible assets, net |
|
567,375 |
|
|
674,786 |
Long-term investments |
|
24,218 |
|
|
31,086 |
Other non-current assets |
|
264,794 |
|
|
324,110 |
Total assets |
$ |
7,076,219 |
|
$ |
7,509,072 |
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
464,124 |
|
$ |
568,101 |
Other current liabilities |
|
149,466 |
|
|
107,026 |
Total current liabilities |
|
613,590 |
|
|
675,127 |
|
|
|
|
Long-term debt |
|
2,047,743 |
|
|
2,047,098 |
Other long-term
liabilities |
|
250,318 |
|
|
233,629 |
Total liabilities |
|
2,911,651 |
|
|
2,955,854 |
|
|
|
|
Stockholders’ equity |
|
4,164,568 |
|
|
4,553,218 |
Total liabilities and stockholders’ equity |
$ |
7,076,219 |
|
$ |
7,509,072 |
|
|
|
|
|
|
At Qorvo®Doug DeLietoVP, Investor Relations1.336.678.7968
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