News: Microelectronics
4 August 2025
Qorvo quarterly profits grow year-on-year as it sheds low-margin business
For its fiscal first-quarter 2026 (ended 28 June 2025), Qorvo Inc of Greensboro, NC, USA (which provides core technologies and RF solutions for mobile, infrastructure and defense applications) has reported revenue of $818.8m, down 5.8% on $869.5m last quarter and 7.7% on $886.7m a year ago. However, it well exceeds the $750–800m guidance, driven by broad-based demand.
“The momentum we are seeing in both revenue and bookings is being driven primarily by robust underlying demand and meaningful content expansion,” says senior VP & chief financial officer Grant Brown.
About 41% of revenue came from Qorvo’s largest customer (in four product categories: antenna tuners, high-performance filters and switches, integrated modules and envelope tracking power management), with continued strong unit volumes across existing platforms and more than 10% year-on-year content growth on the ramping platform.
By business segment, Qorvo’s total revenue comprised:
- Advanced Cellular Group (ACG) $571.2m, down 1.6% on last quarter’s $580.3m and 11.1% on $642.3m a year ago, as Qorvo continues to shift away from lower-margin mass-tier Android 5G business. Specifically, Android revenue fell 18% year-on-year to about $240m, with China-based Android revenue down 29% to just under $100m. “While we’ve seen limited tariff-related inventory buffering at a few customers, we believe these effects are modest and secondary to the underlying demand drivers and Qorvo-specific content growth reflected in our outlook,” says Brown.
- Connectivity & Sensors Group (CSG) $110.2m, down 4.1% on $114.9m a year ago but up 8.8% on last quarter’s $101.3m. “We supported Wi-Fi access points and flagship smartphones with Wi-Fi 7 front ends while also aligning with market-leading chipset providers to develop next-generation solutions for Wi-Fi 8,” says president & CEO Bob Bruggeworth. “CSG is also leveraging our ultra-wideband and Matter portfolio to scale new use cases and diversify revenue.” Qorvo was awarded an ultra-wideband design win for a leading automotive OEM based in Japan and secured an ultra-wideband win in support of the world's leading EV manufacturer. For automotive asset tracking, Qorvo was selected to supply an automotive OEM based in South Korea with ultra-wideband tags (which enable OEMs to enhance operational efficiencies as cars are manufactured and transported). In consumer markets, Qorvo secured a Wi-Fi 7 design win in augmented reality glasses. This is a growth category, and Qorvo is also supplying Wi-Fi 6 and Wi-Fi 7 FEMs for a leading US-based supplier of AR glasses and VR goggles.
- High-Performance Analog (HPA) $137.4m, down 26.9% on last quarter’s $187.9m but up 6.1% on $129.5m a year ago, due to durable year-on-year growth in defense & aerospace (HPA’s largest business) being supported by increasing content and sharply rising defense spending (by both the USA and allies, boosted by Qorvo’s expanding position in high-priority programs). Additionally, infrastructure business is benefiting from the industry’s transition to DOCSIS 4.0, where Qorvo is a leading supplier of broadband amplifiers.
On a non-GAAP basis, gross margin was 44%, up on 40.9% a year ago, and at the top end of the 42–44% guidance. “We have actively managed our product portfolio and pricing strategies to reduce our exposure to mass-tier Android 5G,” says Brown. “We have positioned the company to benefit from growth in defense & aerospace, which is margin-accretive given the high-mix, low-volume nature of the business. We’ve divested or exited margin-dilutive businesses. And finally, we continue to manage manufacturing costs aggressively while consolidating our factory footprint,” he adds.
“Since last year, we have exited base-station PAMs [power amplifier modules], divested our silicon carbide business [comprising $30m of annual revenue], pivoted from legacy [low-margin] Android programs [comprising $150–200m of annual revenue], ramped higher-value product categories, begun a sales process related to our MEMS force-sensing business [which is incurring about $5m of operating expenses per quarter] and pursued a broad set of actions to optimize our global factory network,” notes Bruggeworth. “Most recently, we transitioned gallium arsenide (GaAs) wafer production from our [underloaded] Greensboro, North Carolina fab to our Hillsboro, Oregon fab.”
Operating expenses in fiscal Q1/2026 were $251.8m, reduced from $264.5m a year ago, due mainly to R&D expenses being cut from $174.9m to $165.1m.
Net income is up on $83.5m ($0.87 per diluted share) a year ago to $86.5m ($0.92 per diluted share, far exceeding the $0.50–0.75 guidance).
During the quarter, operating cash flow was $182.9m (more than doubling from $81.1m a year ago). Capital expenditure was $37.5m. Free cash flow was hence $145.4m (more than tripling from $42.9m a year ago).
During the quarter, cash and equivalents rose by $144.3m, from $1021.2m to $1165.5m. The firm has $1.549bn of long-term debt outstanding and no near-term maturities.
Net inventory balance was $638m, a slight reduction on $641m last quarter and a decrease of $89m from $727m a year ago.
“We are undertaking a broad set of initiatives to structurally enhance profitability, and we are already seeing the positive effects of these strategic actions,” notes Bruggeworth.
Outlook:margins to be boosted by closure of fab in Greensboro, North Carolina
For fiscal second-quarter 2026 (to end-September 2025), Qorvo expects revenue of $1.025bn, plus or minus $50m. “We expect sequential growth and margin expansion to be supported by increases in Qorvo content and unit volumes in large customer programs,” says Bruggeworth. Gross margin should grow to 48–50% (at the mid-point, a 200 basis-point improvement on 47% a year previously).
Providing an additional tailwind to margin, last quarter Qorvo decided to close its packaging, assembly & test facility in Costa Rica, which will be completed in early calendar 2026 as the firm moves production and completes the sale of the facilities.
“To build on this, we are announcing the closure of our Greensboro fab [in North Carolina] and transfer of our SAW [surface acoustic wave] filter production to our Richardson, Texas fab,” says Bruggeworth.
“The closure of a wafer fab requires more time than the closure of a packaging, assembly & test location, and we currently expect the associated cost efficiencies to benefit non-GAAP gross margin beginning late in fiscal 2027,” says Brown. “To transfer our SAW filter production out of North Carolina, we have begun to bring up a new production line in our Texas location and we’ll be working closely with customers to ensure a seamless transition,” he adds.
Operating expenses in fiscal Q2/2006 are expected to rise to $265m, plus or minus 3%, reflecting higher incentive-based compensation, given the expected outperformance during the first half of the fiscal year, foreign exchange (FX) headwinds related to the weak US dollar, and the impact of tariffs. OpEx also includes $5m from start-up of the SAW filter line in Texas. Diluted earnings per share should rise to $2.00, plus or minus $0.25.
“For fiscal Q2, our guidance reflects strong execution and demand across multiple end markets while factoring in our current views on macroeconomic and geopolitical dynamics,” notes Brown.
“These improvements demonstrate the actions being undertaken across our product portfolio, business segments, and manufacturing footprint that will enable us to improve profitability as we advance through fiscal 2026 and into fiscal 2027,” says Brown.
For full-year fiscal 2026, Qorvo expects OpEx from start-up costs for the Texas SAW line of $10–20m, with minimal expense continuing into fiscal 2027.
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