Qorvo, Inc.

Qorvo is a global leader in the development and commercialization of technologies and products for wireless, wired and power markets, organized into three operating and reportable segments: High Performance Analog (HPA), Connectivity and Sensors Group (CSG), and Advanced Cellular Group (ACG). The company serves six primary end markets: automotive, consumer, defense and aerospace, industrial and enterprise, infrastructure and mobile. Global connectivity trends and the proliferation of more intelligent, data-intensive applications are increasing demand for technologies that efficiently increase data throughput, improve user experiences and enable new methods of human-machine interaction, which are increasing the demand for Qorvo's technologies and products.

The industry is highly competitive, characterized by rapid advances in technology and new product introductions. HPA competes primarily with Analog Devices, Inc.; Axiro Semiconductor Private Limited; MACOM Technology Solutions Holdings, Inc.; Monolithic Power Systems, Inc.; Renesas Electronics Corporation; Scientific Components Corporation (d/b/a Mini-Circuits); Silergy Corp; and Texas Instruments, Inc. CSG competes primarily with Broadcom Inc.; Murata Manufacturing Co., Ltd.; Nordic Semiconductor; NXP Semiconductors N.V.; Qualcomm Technologies, Inc.; RichWave Technology Corporation; Silicon Laboratories Inc.; Skyworks Solutions, Inc.; and Vanchip (Tianjin) Technology Co., Ltd. ACG competes primarily with Broadcom Inc.; Maxscend Microelectronics Co., Ltd.; Murata Manufacturing Co., Ltd.; Qualcomm Technologies, Inc.; Skyworks Solutions, Inc.; and Vanchip (Tianjin) Technology Co., Ltd. The company's competitiveness depends on its ability to improve products and processes faster than competitors, anticipate changing customer requirements, and successfully develop and launch new products while reducing costs.

Qorvo generates revenue primarily from the sale of semiconductor products, either directly to a customer or to a distributor, or at completion of a consignment process. A majority of revenue is recognized at a point in time, either on shipment or delivery of the product, depending on individual customer terms and conditions. Revenue from sales to distributors is recognized upon shipment of the product to the distributors (sell-in), and revenue from consignment programs is recognized at a point in time when the products are pulled from consignment inventory by the customer. Revenue recognized for products and services over time is less than 3% of overall revenue. The company sells its products worldwide both directly to customers and through a network of U.S. and foreign sales representative firms and distributors.

HPA is a leading global supplier of RF, analog mixed signal and power management solutions, primarily serving the defense and aerospace, infrastructure, industrial and enterprise, and consumer markets. In defense and aerospace, HPA is a leading supplier of RF products and compound semiconductor foundry and assembly services to the U.S. government, U.S. defense primes, U.S. allies and other customers, focusing on enabling phased array technologies for radar, electronic warfare and communications systems. HPA also supplies products for satellites and terminals to leading companies in low Earth orbit satellite communication networks. In the infrastructure market, HPA supports cellular base station OEMs with a broad portfolio of cellular infrastructure solutions and enables the transition to DOCSIS 4.0 with a broad portfolio of products. In industrial and enterprise markets, HPA's solutions leverage configurable power management IP, and in consumer markets, HPA provides PMICs for applications including wearables, chargers, portable video processing devices and solid-state drives. CSG is a leading global supplier of connectivity solutions, with broad expertise spanning ultra-wideband, Matter, Bluetooth Low Energy, Zigbee, Thread, Wi-Fi and cellular solutions for the IoT, serving the automotive, consumer, industrial and enterprise and mobile markets. CSG's connectivity product portfolio includes Wi-Fi RF front end solutions, multi-protocol system-on-a-chip solutions, UWB SoCs and UWB system-in-package solutions. ACG is a leading global supplier of advanced cellular solutions for smartphones, wearables, laptops, tablets and other devices, with a portfolio that includes highly integrated and functionally dense RF modules, envelope tracking RF PMICs, antenna tuners, filters and switches.

On October 27, 2025, Qorvo entered into an Agreement and Plan of Merger with Skyworks Solutions, Inc., pursuant to which Merger Sub I will merge with and into Qorvo, with Qorvo surviving as a wholly-owned subsidiary of Skyworks, and immediately following, the Surviving Corporation will merge with and into Merger Sub II. The stockholders of both Qorvo and Skyworks approved the Merger Agreement at each company's special meeting of stockholders on February 11, 2026. Consummation of the Mergers is subject to required regulatory approvals, including certain antitrust and foreign investment approvals, and the satisfaction of other customary closing conditions, and the company currently anticipates the Mergers will be completed early in calendar year 2027. Under the Merger Agreement, each share of Qorvo common stock will be converted into the right to receive 0.960 ¹ shares of Skyworks common stock and $32.50 ² in cash. The Exchange Ratio is expected to result in Qorvo's equityholders and Skyworks equityholders owning approximately 37% ³ and 63% ⁴, respectively, of the combined company. Under specified circumstances, each of Qorvo and Skyworks will be required to pay the other party a termination fee of $298.7 million ⁵, and under other specified circumstances, Skyworks will be required to pay Qorvo a termination fee of $100.0 million ⁶. During fiscal 2026, the company repurchased 6.6 million ⁷ shares of its common stock for $536.7 million ⁸, compared to repurchases of 4.0 million ⁹ shares for $358.8 million ¹⁰ in fiscal 2025. As of March 28, 2026, approximately $416.2 million ¹¹ remains authorized for repurchases under the share repurchase program. In the fourth quarter of fiscal 2026, the company completed the sale of its North Carolina fabrication facility for net proceeds of $36.8 million ¹², resulting in a net gain on sale of $7.9 million ¹³. In the third quarter of fiscal 2026, the company sold its MEMS-based sensing solutions business for net cash proceeds of approximately $21.5 million ¹⁴, resulting in a gain of $19.2 million ¹⁵. Merger-related costs for fiscal 2026 were approximately $23.5 million ¹⁶, primarily related to legal and professional fees.

Revenue decreased 1.1% ¹⁷ in fiscal 2026 to $3,678.5 million ¹⁸, compared to $3,719.0 million ¹⁹ in fiscal 2025, resulting from decreases in ACG and CSG revenue, partially offset by an increase in HPA revenue. Gross margin for fiscal 2026 was 45.9% ²⁰, compared to 41.3% ²¹ in fiscal 2025, driven by the strategy within the ACG segment to reduce exposure to lower margin, mass-market Android smartphones, as well as favorable business mix within the HPA segment. Operating income was $411.4 million ²² in fiscal 2026, compared to $95.5 million ²³ in fiscal 2025, driven by higher gross margin and lower goodwill and intangible asset impairment charges. Net income per diluted share was $3.62 ²⁴ for fiscal 2026, compared to net income per diluted share of $0.58 ²⁵ for fiscal 2025. Operating activities in fiscal 2026 generated cash of $808.6 million ²⁶, compared to $622.2 million ²⁷ in fiscal 2025. Capital expenditures were $129.1 million ²⁸ in fiscal 2026, compared to $137.6 million ²⁹ in fiscal 2025.

A major growth vector is the proposed merger with Skyworks Solutions, Inc., which is expected to create a combined company where Qorvo's equityholders and Skyworks equityholders will own approximately 37% ³⁰ and 63% ³¹, respectively. The transaction is anticipated to close early in calendar year 2027, subject to regulatory approvals and other customary closing conditions. In defense and aerospace, growth is driven by the increase in defense spending across the U.S. and allied countries, with focus areas including the Golden Dome defense system, upgrades to legacy radar systems, the shift to new, higher frequency bands, and the trend of 'one to many' involving a greater number of smaller, more highly integrated and scalable networked platforms. Additional opportunities include increases in EU and allied defense funding in ground-, airborne-, ship-, and space-based platforms. HPA also supplies products for satellites and terminals to leading companies in low Earth orbit satellite communication networks where investment is increasing globally.

Another growth vector is the transition to DOCSIS 4.0 in broadband infrastructure, which Qorvo is enabling with a broad portfolio of products including high-output power doublers, drivers, preamplifiers, return amplifiers, voltage-controlled attenuators, digital step attenuators, switches and voltage variable equalizers. In the infrastructure market, the migration to 5G increases capacity, expands coverage and lowers the cost per bit of data, and Qorvo supports cellular base station OEMs with a broad portfolio of cellular infrastructure solutions. In Wi-Fi, new standards such as 802.11ax (Wi-Fi 6 and Wi-Fi 6E) and 802.11be (Wi-Fi 7) are enhancing performance, increasing range and capacity and enabling new use cases, and Qorvo has begun development for Wi-Fi 8 front end solutions in alignment with market leading chipset providers. In automotive markets, new use cases including vehicle-to-everything communications, advanced connectivity services and secure car access are supporting the migration to more connected, more intelligent vehicles, increasing the content opportunity across multiple connectivity and sensing technologies, including cellular, V2X, Wi-Fi, satellite radio and UWB.

The company's gross margin improved to 45.9% ³² in fiscal 2026 from 41.3% ³³ in fiscal 2025, driven by the strategy within the ACG segment to reduce exposure to lower margin, mass-market Android smartphones, as well as favorable business mix within the HPA segment. The company has implemented restructuring initiatives to reduce operating expenses, streamline its manufacturing footprint and accelerate its focus on long-term profitability objectives. The 2026 Restructuring Initiatives include closing the North Carolina fabrication facility and transferring SAW filter production to the Texas facility, as well as consolidating the CSG organizational structure. The company expects to incur additional charges associated with the 2026 Restructuring Initiatives of approximately $10.0 million ³⁴ to $20.0 million ³⁵, primarily related to employee termination benefits.

The company's manufacturing strategy is to internally produce only the most differentiated elements of its products, geographically align production with customers and suppliers, and leverage the scale, capabilities, and cost effectiveness of outsourced partners. Recent efforts to consolidate the manufacturing footprint include the divestitures of assembly and test operations in China and Costa Rica and the sale of the North Carolina fabrication facility. In the fourth quarter of fiscal 2026, the company completed the sale of its North Carolina fabrication facility and is operating under a short-term supply agreement with the buyer until it completes the transfer of SAW filter production to its Texas facility. The company closed its assembly and test facility in Costa Rica in the third quarter of fiscal 2026 and transitioned to external partners. As of March 28, 2026, the company employed approximately 5,200 ³⁶ full and part-time employees in 23 countries.

Research and development expense was $726.1 million ³⁷ in fiscal 2026, compared to $747.7 million ³⁸ in fiscal 2025. Capital expenditures were $129.1 million ³⁹ in fiscal 2026, compared to $137.6 million ⁴⁰ in fiscal 2025. As of March 28, 2026, approximately $416.2 million ⁴¹ remains authorized for repurchases under the share repurchase program. The company has never declared or paid any dividends on its common stock and currently intends to retain any future earnings to invest in the growth and operation of its business and does not intend to pay any dividends for the foreseeable future.

The company faces headwinds from changes in government trade policies, including the imposition of tariffs and export restrictions, which have limited and could continue to limit its ability to sell or provide products to certain customers and suppliers. The tariffs imposed by the U.S. are increasing the cost of importing foreign sourced components and equipment to its U.S. facilities, and China's reciprocal tariffs may harm demand for products from customers in those regions. The company also faces risks from the loss of a large customer or loss of share at a large customer, as its two largest end customers accounted for an aggregate of approximately 59% ⁴² of revenue in fiscal 2026. Additionally, the company is subject to risks from international sales and operations, including global and local economic, social and political conditions, currency controls and exchange rate fluctuations, and compliance with laws and regulations that differ among jurisdictions.

The company faces risks related to the consummation of the Mergers with Skyworks, which is contingent upon the satisfaction of a number of conditions that may be outside of its or Skyworks' control, including the expiration or early termination of the applicable waiting period under the HSR Act and the approval of the Mergers under certain other antitrust and foreign investment regimes. Efforts to complete the Mergers could disrupt relationships with third parties and employees, divert management's attention, or result in negative publicity or legal proceedings. The company also faces risks from fluctuating demand that could cause underutilization of its manufacturing facilities, as well as risks associated with the operation of its manufacturing facilities, including the ability to adjust production capacity in a timely fashion and the significant fixed costs of operating the facilities.

The consummation of the proposed merger with Skyworks is contingent upon regulatory approvals, and failure to complete the merger could result in significant costs and management distraction, with termination fees of $298.7 million ⁴³ payable by either party under specified circumstances. The company depends on several large customers for a substantial portion of revenue, with its two largest end customers accounting for approximately 59% ⁴⁴ of total revenue in fiscal 2026, and the loss of a large customer or loss of share could have a material adverse effect. Changes in government trade policies, including the imposition of tariffs and export restrictions, have limited and could continue to limit the company's ability to sell products to certain customers, particularly in China, where sales to customers located in China accounted for approximately 13% ⁴⁵ of revenue in fiscal 2026. The company faces risks from fluctuating demand that could cause underutilization of its manufacturing facilities, which have significant fixed costs, and it has experienced overcapacity situations in the past. The company is subject to risks from international sales and operations, with approximately 37% ⁴⁶ of revenue from customers outside the U.S., and any weakness in the Chinese economy or heightened tensions between the U.S. and China could materially and adversely affect the business.

Management's message emphasizes the company's position as a global leader in technologies and products for wireless, wired and power markets, organized into three segments: HPA, CSG, and ACG. The key strategic priorities for the period ahead include completing the proposed merger with Skyworks Solutions, Inc., which was approved by stockholders of both companies on February 11, 2026, and is anticipated to close early in calendar year 2027. Another priority is executing the strategy within the ACG segment to reduce exposure to lower margin, mass-market Android smartphones and narrow focus to the flagship and premium tiers of smartphones, which contributed to a gross margin improvement to 45.9% ⁴⁷ in fiscal 2026 from 41.3% ⁴⁸ in fiscal 2025. The company is also focused on restructuring initiatives to reduce operating expenses, streamline its manufacturing footprint, and accelerate its focus on long-term profitability objectives, including the closure of its North Carolina fabrication facility and the consolidation of the CSG organizational structure. Management highlights that operating income increased to $411.4 million ⁴⁹ in fiscal 2026 from $95.5 million ⁵⁰ in fiscal 2025, driven by higher gross margin and lower goodwill and intangible asset impairment charges, and that net income per diluted share was $3.62 ⁵¹ for fiscal 2026, compared to $0.58 ⁵² for fiscal 2025.