It has been about a month since the last earnings report for Qorvo (QRVO). Shares have lost about 10.3% 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 Qorvo due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Qorvo, Inc. before we dive into how investors and analysts have reacted as of late.
Qorvo Q2 Earnings Surpass Estimates, Revenues Rise Y/Y
Qorvo reported strong second-quarter fiscal 2026 results, with both adjusted earnings and revenues surpassing the respective Zacks Consensus Estimate.
The company reported revenue growth year over year due to healthy demand in the Advanced Cellular Group (ACG) and High Performance Analog (HPA) segments. Solid momentum in the aerospace, defense and data center vertical is a tailwind. Management’s restructuring initiative in the Connectivity and Sensors Group (CSG) segment to improve prospects and profitability is a positive.
Net Income
On a GAAP basis, the company reported a net income of $119.6 million or $1.28 per share against a net loss of $17.4 million or a loss of 18 cents per share in the prior-year quarter. Top-line growth and lower operating expenses boosted the bottom line during the quarter.
Revenues
Net sales during the quarter were $1.05 billion from $1.04 billion in the prior-year quarter. Industry-wide transition to DOCSIS 4 is driving demand for Qorvo’s broadband amplifiers. Demand for Qorvo’s base station small signal devices also remains strong. It is also witnessing healthy traction in the radars, drones, enterprise and AI data centers, smartphones and wearables verticals. The top line beat the Zacks Consensus Estimate of $1.02 billion.
Segmental Performance
High Performance Analog (HPA) contributed $174.6 million in revenues compared with $148.3 million in the year-ago quarter, largely driven by solid revenues in the defense and aerospace business. In power management, the company continues to boast a strong presence in the consumer electronics sector. The growing demand for DOCSIS 4.0 hybrid power doublers is supporting the growth of the infrastructure business.
Revenues from CSG were $106.9 million compared with $146.8 million in the year-earlier quarter. A delayed ramp-up for the ultra-wideband product from a major customer is impacting the revenue. Net sales in ACG were $777 million, up 3.4% year over year, backed by growth in the premium smartphone segment.
Other Details
Non-GAAP gross profit declined to $526.2 million from $492 million, with respective margins of 49.7% and 47%. Non-GAAP operating expenses decreased to $273.5 million from $279.8 million a year ago. Non-GAAP operating income was $252.6 million compared with $212.2 million in the year-ago quarter.
Cash Flow & Liquidity
As of Sept. 27, 2025, QRVO had $1.1 billion in cash and cash equivalents and $1.54 billion of long-term debt. The company generated $84 million in net cash from operating activities in the quarter, with a free cash flow of $42.2 million.
Outlook
For third-quarter fiscal 2026, the company expects revenues of $985 million (+/- $50 million). Non-GAAP gross margin is projected to be within 47%-49%. Non-GAAP earnings are likely to be about $1.85 per share (+/- 20 cents).
Non-GAAP net income was 208.3 million or $2.22 per share compared with $179.8 million or $1.88 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 19 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 8.97% due to these changes.
VGM Scores
At this time, Qorvo has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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, Qorvo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Qorvo, Inc. (QRVO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
