Qorvo beats Q1 estimates as non-GAAP EPS jumps 78% to $1.64

Qorvo reported fiscal first-quarter revenue of $784.8 million, with non-GAAP diluted earnings per share of $1.64 beating analyst estimates and rising 78 percent from a year earlier.

"The Qorvo team delivered strong June quarterly financial results, supported by double-digit year-over-year revenue growth in D&A, infrastructure, and power, coupled with our successful pivot in ACG to higher value placements," Bob Bruggeworth, president and chief executive officer of Qorvo, said.

On a non-GAAP basis, gross margin expanded 880 basis points to 52.8 percent, while operating income reached $177.6 million. The HPA segment led growth with revenue of $206.3 million, up 50.1 percent year over year, driven by defense, aerospace and power demand. ACG revenue fell 16.6 percent to $476.6 million, and CSG declined 7.5 percent to $101.9 million.

Qorvo expects full-year fiscal 2027 non-GAAP diluted EPS above $7.00 and gross margin above 50 percent. The company has discontinued earnings conference calls and forward-looking guidance due to its pending transaction with Skyworks, leaving investors to assess progress through quarterly filings alone.

GAAP revenue of $784.8 million declined 4.2 percent from $818.8 million a year earlier, though the drop was less severe than the 9.7 percent decline analysts had projected. GAAP gross margin improved to 51.1 percent from 40.5 percent, and GAAP operating income rose to $96.8 million from $30.1 million. GAAP diluted EPS came in at $0.96, up from $0.27.

Non-GAAP operating income was $177.6 million, compared with $108.2 million in the prior-year period. The company generated $115.3 million in free cash flow during the quarter, and held $1.33 billion in cash and equivalents at quarter-end. Qorvo repurchased no shares during the period, and its diluted share count fell to 89.4 million from 93.8 million a year earlier.

Chief Financial Officer Grant Brown attributed the margin improvement to a shift in business mix within and across operating segments, reduced capital intensity and structural profitability gains. "Compared to the prior-year June quarter, non-GAAP gross margin expanded 880 basis points to 52.8 percent and non-GAAP EPS increased 78 percent to $1.64," Brown said.

The HPA segment posted operating income of $70 million, up 224 percent from a year earlier, with an operating margin of 33.9 percent. ACG operating income fell 16.9 percent sequentially to $108.5 million, while CSG swung to a $3 million operating profit from a $7.5 million loss.

Fiscal 2027 is a 53-week year, with the second quarter ending Oct. 3 including 14 weeks. The Skyworks transaction, announced earlier this year, has prompted Qorvo to suspend its customary earnings call format, limiting the detail available to analysts and investors beyond the press release.

The guidance raise signals management expects continued margin expansion despite the revenue headwinds in ACG and CSG. Investors will watch for regulatory developments on the Skyworks merger and Qorvo's next quarterly filing for updated segment trends.

This article is for informational purposes only and does not constitute investment advice.