Qorvo Beats Q1 Earnings Estimates Despite Y/Y Lower Revenues

Qorvo, Inc. QRVO reported strong first-quarter fiscal 2026 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate.

The company reported a revenue contraction year over year due to a net sales decline in the Advanced Cellular Group (ACG) and Connectivity and Sensors Group (CSG) segments. However, solid demand trends in multiple end markets, including defense, aerospace, power management, Wi-Fi and smartphones, partially cushioned the top-line growth in this quarter.

Net Income

On a GAAP basis, the company reported a net income of $25.6 million or 27 cents per share compared with $0.4 million or break-even earnings in the prior-year quarter. Despite lower revenues, GAAP earnings improved largely due to lower costs of goods sold and operating expenses and an income tax benefit in the reported quarter. 

Non-GAAP net income was $86.5 million or 92 cents per share compared with $83.5 million or 87 cents per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 30 cents.

Revenues

Net sales during the quarter declined to $818.8 million from $886.7 million in the prior-year quarter. Despite significant improvement in inventory levels, demand in various end markets has yet to recover fully, which has impeded revenues. Macroeconomic headwinds also adversely impacted the top line. Nevertheless, during the quarter, the company secured major design wins for low-band, mid-high-band and ultra-high-band paths, as well as mid-high secondary transmit, antenna tuning, discrete filters and Wi-Fi 7 front-end modules that offer unmatched flexibility in power management and efficiency. The top line beat the Zacks Consensus Estimate of $775 million.

Segmental Performance

High Performance Analog (HPA) contributed $137.4 million in revenues compared with $129.5 million in the year-ago quarter, largely driven by solid revenues in the defense and aerospace business. Strength was broad-based and included applications such as manned and drone-based airborne radar, space-based radar, Satellite Communications, Electronic Warfare and missile defense systems. The company secured new product orders for several large domestic and international ground-based radar systems. The transition from legacy mechanical systems to active electronics scanning systems is driving growth in the defense and aerospace business. In power management, the company continues to boast a strong presence in the consumer electronics sector. Healthy traction in automotive also cushioned the top line. The growing demand for DOCSIS 4.0 hybrid power doublers is supporting the growth of the infrastructure business.

Revenues from CSG were $110.2 million compared with $114.9 million in the year-earlier quarter as an automotive customer delayed a ramp-up for ultra-wideband product. Net sales in ACG were $571.2 million, down 11.1% year over year, due to a fall in Android revenues.

Other Details

Non-GAAP gross profit declined to $360 million from $362.7 million, with respective margins of 44% and 40.9%. Non-GAAP operating expenses decreased to $251.8 million from $264.5 million a year ago. Non-GAAP operating income was $108.2 million compared with $98.1 million in the year-ago quarter.

Cash Flow & Liquidity

As of June 28, 2025, QRVO had $1.17 billion in cash and cash equivalents and $1.55 billion of long-term debt. The company generated $182.9 million in net cash from operating activities in the quarter, with a free cash flow of $145.4 million.

Outlook

For second-quarter fiscal 2026, the company expects revenues of $1.025 billion (+/- $50 million). Non-GAAP gross margin is projected to be within 48%-50%. Non-GAAP earnings are likely to be about $2.00 per share (+/- 25 cents).

Zacks Rank & Stock to Consider

Qorvo currently has a Zacks Rank #3 (Hold). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Arista Networks Inc. ANET is scheduled to release second-quarter 2025 earnings on Aug. 5. The Zacks Consensus Estimate for earnings is pegged at 65 cents per share, suggesting a growth of 25% from the year-ago reported figure.

Arista has a long-term earnings growth expectation of 14.8%. Arista delivered an average earnings surprise of 11.8% in the last four reported quarters.

Akamai Technologies, Inc. AKAM is slated to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at $1.55 per share, indicating a 1.9% decline from the year-ago reported figure.

Akamai has a long-term earnings growth expectation of 8%. Akamai delivered an average earnings surprise of 4.8% in the last four reported quarters.

Pinterest, Inc. PINS is set to release second-quarter 2025 earnings on Aug. 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, implying a growth of 17.2% from the year-ago reported figure.

Pinterest has a long-term earnings growth expectation of 33.3%. Pinterest delivered an average earnings surprise of 0.5% in the last four reported quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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