Qorvo Q4 Earnings Surpass Estimates, Revenues Decline Y/Y

Qorvo, Inc. QRVO reported strong fourth-quarter fiscal 2025 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 drop in the Advanced Cellular Group (ACG) and Connectivity and Sensors Group (CSG) verticals. However, solid demand trends in multiple end markets, including defense, aerospace, power management, WiFi and smartphones, partially cushioned the top-line growth in this quarter.Net IncomeOn a GAAP basis, the company reported a net income of $31.4 million or 33 cents per share compared with $2.7 million or 3 cents per share in the prior-year quarter. Despite lower revenues, GAAP earnings improved largely due to lower operating expenses and an income tax benefit in the reported quarter. Non-GAAP net income was $133.3 million or $1.42 per share compared with $135.5 million or $1.39 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 41 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) For fiscal 2025, Qorvo reported a GAAP net income of $55.6 million or 58 cents per share against a net loss of $70.3 million or a loss of 72 cents per share.Qorvo, Inc. Price, Consensus and EPS Surprise Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. QuoteRevenuesNet sales during the quarter declined to $869.5 million from $941 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 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 $852 million.  For fiscal 2025, total revenues were $3.72 billion compared with $3.77 billion in fiscal 2024.High Performance Analog contributed $187.9 million in revenues compared with $164.6 million in the year-ago quarter, largely driven by record 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 $101.3 million compared with $122.8 million in the year-earlier quarter, missing our estimate of $122.2 million.Net sales in ACG were $580.3 million, down 11.2% year over year, due to seasonal dynamics. However, the top line beat the Zacks Consensus Estimate of $537.8 million.Other DetailsNon-GAAP gross profit declined to $398.7 million from $400.4 million, with respective margins of 45.9% and 42.5%. Non-GAAP operating expenses declined to $246.8 million from $253.2 million a year ago. Non-GAAP operating income was $151.8 million compared with $147.2 million in the year-ago quarter.Cash Flow & LiquidityAs of March 31, 2025, QRVO had $1.02 billion in cash and cash equivalents and $1.55 billion of long-term debt compared with respective tallies of $1.03 billion and $1.55 billion in the prior-year period. The company generated $199.2 million in net cash from operating activities in the quarter, with a free cash flow of $170.7 million.OutlookFor first-quarter fiscal 2026, the company expects revenues of $775 million (+/- $25 million). Non-GAAP gross margin is projected to be between 42% and 44%. Non-GAAP  earnings per share are likely to be in the range of 50-75 cents.QRVO’s Zacks RankQorvo currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesInterDigital IDCC is scheduled to release first-quarter 2025 earnings on May 1. The Zacks Consensus Estimate for earnings is pegged at $2.05 per share, indicating a decline of 42.74% from the year-ago figure. Bandwidth Inc. BAND is scheduled to release first-quarter 2025 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at 29 cents per share, indicating an improvement of 7.41% from the year-ago figure. Light and Wonder LNW is scheduled to release first-quarter 2025 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $1.17 per share, indicating an improvement of 25.81% from the year-ago figure.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. 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