Qorvo, Inc. (NASDAQ:QRVO) reported financial results for the Company’s fiscal 2023 third quarter ended December 31, 2022.

Qorvo, Inc. (NASDAQ:QRVO) ended higher 4.48% and complete the day at $113.53. The total number of shares changed hands during the day was 2,847,896 shares. After opening at $109.26, the stock hit as high as $114.52. However, it traded between $75.38 and $144.31 over the last twelve months. Qorvo® (Nasdaq:QRVO), a leading global provider of connectivity and power solutions, today declared 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.

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.

Michael Bond

Michael Bond

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