QRVO Q4 Deep Dive: Strategic Portfolio Shifts Drive Margin Gains Amid Android Decline

Communications chips maker Qorvo (NASDAQ: QRVO) met Wall Streets revenue expectations in Q4 CY2025, with sales up 8.4% year on year to $993 million. The company expects next quarter’s revenue to be around $800 billion, coming in 88,732% above analysts’ estimates. Its non-GAAP profit of $2.17 per share was 16.4% above analysts’ consensus estimates.

Is now the time to buy QRVO? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Qorvo’s fourth quarter results were met with a negative market reaction, despite the company meeting Wall Street’s revenue expectations and outperforming on non-GAAP earnings per share. Management attributed the quarter’s mixed reception to a deliberate reduction in lower-margin Android business and the impact of memory pricing and availability, which pressured mass-tier smartphone demand. CEO Robert Bruggeworth highlighted the benefit of these actions, noting, “We are reducing exposure to lower-margin segments while continuing to serve Android's premium and flagship tiers.”

Looking into the next quarter, Qorvo’s guidance reflects ongoing headwinds from reduced Android exposure and seasonality at its largest customer, partially offset by strength in its defense and aerospace segment. Management emphasized that improving gross margin will depend on a more profitable business mix and operational efficiency. CFO Grant Brown stated, “The biggest gains in gross margin for the moment are coming from business mix, especially as HPA becomes a larger percentage of the total.”

Key Insights from Management’s Remarks

Management credited improved profitability to the strategic exit from lower-margin Android products and continued growth in high-performance analog (HPA) and connectivity solutions.

• Android business downsizing: Qorvo intentionally accelerated its exit from low-margin Android smartphones, resulting in a sharper decline in segment revenue but positioning the company for higher margins in future quarters.
• Flagship customer dynamics: The company saw double-digit revenue growth at its largest customer, supported by strong content gains in flagship devices, though future revenue is expected to remain flat due to shifts in product awards and dual sourcing.
• Automotive and Wi-Fi expansion: The connectivity segment benefited from initial production orders for automotive ultra-wideband programs and the rollout of Wi-Fi 7 and Wi-Fi 8 solutions, expanding Qorvo’s reach in industrial and enterprise applications.
• HPA segment momentum: High-performance analog experienced growth across defense, aerospace, and infrastructure markets, fueled by new program wins and increasing RF content in applications such as satellite communications and data centers.
• Operational streamlining: The closure of the Costa Rica facility and consolidation of manufacturing in the United States contributed to reduced capital intensity and improved operational efficiency, supporting the company’s long-term margin targets.

Drivers of Future Performance

Qorvo’s outlook for the coming quarters is shaped by its ongoing portfolio mix shift, cost discipline, and strategic focus on higher-margin markets.

• Reduced Android exposure: Management expects further revenue declines in the Android segment as it exits lower-margin tiers, with the aim of supporting gross margin expansion and a more resilient business model in future periods.
• Growth in defense and aerospace: The high-performance analog business is projected to become a larger revenue contributor, benefiting from government spending, new program adoption, and increasing demand for RF content in next-generation defense and satellite systems.
• Margin improvement focus: Ongoing restructuring, manufacturing consolidation, and a shift toward higher-value products are expected to drive gross margins above 50% over the next year, though management cautioned that utilization rates and broader market volatility remain risks.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will watch (1) the pace and profitability of Qorvo’s exit from low-margin Android products, (2) the ramp-up in defense and aerospace revenue contribution as HPA becomes a larger part of the portfolio, and (3) ongoing operational efficiencies from manufacturing consolidation and restructuring. The trajectory of Wi-Fi 8 and automotive programs will also be important markers for sustained growth.

Qorvo currently trades at $73.99, down from $77.01 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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