Qorvo (QRVO) Q2 2025 earnings summary

Executive summary

• Revenue for Q2 FY2025 was $1.047 billion, up 18% sequentially but down 5.2% year-over-year, with all segments showing double-digit sequential growth; non-GAAP gross margin was 47% and non-GAAP EPS was $1.88, both above guidance midpoints.

• GAAP net loss was $17.4 million (loss per share $0.18), impacted by a $96.5 million goodwill impairment and restructuring charges related to the silicon carbide business.

• The company is shifting focus from lower-margin entry-tier Android to higher-value flagship and premium segments, while investing in growth areas like defense, aerospace, automotive, and connectivity.

• Strategic actions include cost reductions, operational streamlining, factory consolidation, and evaluating the exit of the silicon carbide business.

• Net cash provided by operating activities increased to $127.8 million, with free cash flow at $94.8 million.

Financial highlights

• Revenue was $1.047 billion, down 5.2% year-over-year but up 18% sequentially, exceeding guidance midpoint.

• Non-GAAP operating expenses were $280 million, including $7 million for digital transformation.

• Free cash flow was $94.8 million; cash and equivalents at quarter end were $1.10 billion.

• Operating income was $9.7 million (0.9% margin), down from $151.4 million year-over-year; non-GAAP operating income was $212.2 million.

• Repurchased $81 million of stock at an average price of $110 per share during the quarter.

Outlook and guidance

• Next quarter revenue expected at ~$900 million ± $25 million, non-GAAP gross margin ~45%, and non-GAAP EPS between $1.10 and $1.30.

• Fiscal 2025 revenue and gross margin anticipated to be slightly down year-over-year, mainly due to unfavorable mix in Android smartphones.

• Non-GAAP operating expenses for December quarter projected at ~$265 million.

• Long-term gross margin target remains 50%+, with near-term margins pressured by Android mix shift.

• Management expects continued pressure from smartphone mix shifts and price erosion, but sees growth in Wi-Fi, automotive, and connectivity.