Skyworks Q3 Earnings Top Estimates, Revenues Up Y/Y, Shares Rise

Skyworks Solutions SWKS reported third-quarter fiscal 2025 non-GAAP earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 7.26% and increased 9.9% year over year.

Revenues of $965 million increased 6.6% on a year-over-year basis and surpassed the consensus mark by 2.66%.

SWKS shares were up 4.98% in pre-market trading. Year to date, Skyworks shares have dropped 16.2% underperforming the broader Zacks Computer and Technology sector’s return of 11.8%.

SWKS’ Q3 Top-Line Details

Mobile revenues contributed nearly 62% to total revenues. Revenues increased 1% sequentially and 8% year over year, driven by strong sell-through at the company’s top customer and new product launches in Android. SWKS’ largest customer accounted for roughly 63% of revenues in the reported quarter.

Broad Markets, which includes edge IoT, automotive, industrial, infrastructure and cloud, grew 2% sequentially and 5% year over year.

SWKS Operating Details

Third-quarter fiscal 2025 non-GAAP gross margin expanded 110 basis points (bps) on a year-over-year basis to 46.5%. The margin expansion benefited from product mix and ongoing cost discipline.

Research & development expenses, as a percentage of revenues, increased 290 bps year over year to 20.7%.

Selling, general and administrative expenses increased 140 bps to 9.3% in the reported quarter.

Non-GAAP operating margin contracted 90 bps on a year-over-year basis to 23.3% in the reported quarter.

SWKS Balance Sheet & Cash Flow

As of June 27, 2025, cash & cash equivalents and marketable securities were $1.34 billion compared with $1.53 billion as of March 28.

As of June 27, 2025, the long-term debt was $995.4 million, up slightly on a sequential basis.

Cash generated by operating activities was $314.1 million in the quarter under discussion compared with $409 million in the prior quarter. Free cash flow was $252.7 million, with a 26.2% free cash flow margin.

Skyworks paid dividends worth $104 million in the reported quarter. The company raised dividend payout by 1% to 71 cents per share payable on Sept. 16.

Skyworks bought shares worth $330 million in the reported quarter.

SWKS Offers 4Q25 Guidance

For the fourth quarter of fiscal 2025, the company expects revenues between $1 billion and $1.03 billion. SWKS expects mid-single-digit sequential growth in Mobile. Broad Markets is set to grow again in the current quarter, with year-over-year trends accelerating and continued strength in bookings, backlog and channel sell-through.

Gross margin is expected to be roughly 47%, +/- 50 bps. Skyworks expects operating expenses between $235 million and $245 million.

Non-GAAP shares are expected to be $1.40 per share at the mid-point of the revenue range.

Zacks Rank & Stocks to Consider

Skyworks currently carries a Zacks Rank #3 (Hold).

MKS Inc. MKSI, DoorDash DASH and Lumentum LITE are some better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MKS shares have declined 11.8% year to date. MKS is set to report its second-quarter 2025 results on Aug. 6.

DoorDash shares have appreciated 52.3% year to date. DASH is set to report its second-quarter 2025 results on Aug. 6.

Lumentum shares are up 28.8% year to date. LITE is set to report its fourth-quarter fiscal 2025 results on Aug. 12.

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

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