It has been about a month since the last earnings report for Skyworks Solutions (SWKS). Shares have lost about 17% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Skyworks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Skyworks Q4 Earnings Top Estimates, Revenues Up Y/Y
Skyworks reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.76 per share, which beat the Zacks Consensus Estimate by 21.4% and increased 13.5% year over year.
Revenues of $1.1 billion increased 7.3% on a year-over-year basis and surpassed the consensus mark by 8.38%.
SWKS’ Q4 Top-Line Details
Mobile revenues contributed nearly 65% to total revenues. Revenues increased 21% sequentially and 7% year over year, driven by strong sell-through at the company’s top customer and continued growth in Android. SWKS’ largest customer accounted for roughly 67% of revenues in the reported quarter.
Broad Markets, which includes edge IoT, automotive, industrial, infrastructure and cloud, grew 3% sequentially and 7% year over year, driven by growth across edge IoT, automotive and data center.
SWKS Operating Details
Fourth-quarter fiscal 2025 non-GAAP gross margin was unchanged on a year-over-year basis at 46.5%.
Research & development expenses, as a percentage of revenues, increased 430 bps year over year to 20.3%.
Selling, general and administrative expenses increased 290 bps to 10.2% in the reported quarter.
Non-GAAP operating margin contracted 270 bps on a year-over-year basis to 24% in the reported quarter.
SWKS Balance Sheet & Cash Flow
As of Oct. 3, 2025, cash & cash equivalents and marketable securities were $1.39 billion compared with $1.34 billion as of June 27. As of the same date, the long-term debt was $995.8 million, up slightly on a sequential basis.
Cash generated by operating activities was $200 million in the quarter under discussion compared with $314.1 million in the prior quarter.
Free cash flow was $144 million, with a 13.1% free cash flow margin.
SWKS Offers Positive 1Q26 Guidance
For the first quarter of fiscal 2026, the company expects revenues between $975 million and $1.025 billion.
SWKS expects low- to mid-single-digit sequential decline in Mobile. Broad markets is set to grow again in the current quarter, with mid- to high-single digit growth on a year-over-year basis and accounting for 39% of revenues.
Gross margin is expected to be roughly 47%, +/- 50 bps. Skyworks expects operating expenses between $230 million and $240 million.
Non-GAAP shares are expected to be $1.40 per share at the mid-point of the revenue range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 6.54% due to these changes.
VGM Scores
Currently, Skyworks has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Skyworks Solutions, Inc. (SWKS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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