Qorvo, Inc.

Qorvo, Inc. is a global leader in the development and commercialization of technologies and products for wireless, wired, and power markets, organized into three operating 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. Qorvo's business model involves designing, developing, manufacturing, and marketing products and solutions for leading U.S. and international OEMs and ODMs, as well as providing foundry services to defense primes and other defense and aerospace customers. A significant portion of Qorvo's revenue is concentrated with a few large customers, with Apple Inc. accounting for approximately 50% ¹ of total revenue in fiscal year 2026 and 47% ² in fiscal year 2025, and Samsung Electronics Co., Ltd. accounting for 10% ³ of total revenue in both fiscal years 2026 and 2025. These major customers primarily purchase RF solutions for mobile devices.

The High Performance Analog (HPA) segment is a leading global supplier of RF, analog mixed signal, and power management solutions, serving defense and aerospace, infrastructure, industrial and enterprise, and consumer markets. In defense and aerospace, HPA supplies RF products and compound semiconductor foundry and assembly services to the U.S. government, U.S. defense primes, and allies, focusing on phased array technologies for radar, electronic warfare, and communications systems. HPA's standard product portfolio includes high-power RF amplifiers, LNAs, switches, filters, phase shifters, mixers, multiplexers, attenuators, beamforming ICs, PMICs, and control ICs, along with fully integrated RF FEMs. Services include compound semiconductor foundry services, wafer processing, advanced packaging, and heterogeneous integration solutions. For infrastructure, HPA supports cellular base station OEMs with solutions for 5G migration and broadband infrastructure with products for DOCSIS 4.0 transition, such as high-output power doublers, drivers, and preamplifiers. In industrial and enterprise markets, HPA provides advanced power management and motor control solutions, including PMICs for AI-driven enterprise SSD power. In consumer markets, HPA offers configurable power management IP and PMICs for wearables, chargers, portable video processing devices, and motor control/battery management for appliances and tools. HPA revenue increased by $68.4 million ⁴ to $705.657 million ⁵ in fiscal 2026, up 10.7% ⁶ from $637.261 million ⁷ in fiscal 2025. Segment operating income for HPA increased by $80.461 million ⁸ to $189.356 million ⁹ in fiscal 2026, representing 26.8% ¹⁰ of revenue, compared to $108.895 million ¹¹ or 17.1% ¹² of revenue in fiscal 2025.

The Connectivity and Sensors Group (CSG) is a leading global supplier of connectivity solutions, with expertise in UWB, Matter, BLE, Zigbee, Thread, Wi-Fi, and cellular solutions for the IoT. CSG serves automotive, consumer, industrial and enterprise, and mobile markets. In automotive, CSG's solutions support V2X communications, advanced connectivity services, and secure car access, including UWB for Child Presence Detection and digital key access. Products include BAW filters, LNAs, switches, PAs, front end solutions, and UWB solutions, all meeting AEC-Q100 standards. For consumer and mobile markets, CSG addresses AR/VR, connected home, context awareness, gaming, and secure transactions with connectivity and accurate location solutions, leveraging UWB's radar capabilities. In industrial and enterprise markets, CSG solutions improve operational efficiency and worker safety through precise indoor navigation, virtual fences, and real-time asset tracking. CSG's product portfolio includes Wi-Fi RF front end solutions, multi-protocol (BLE, Zigbee, Matter, Thread) SoCs, UWB SoCs, and UWB SiP solutions. CSG revenue decreased by $50.867 million ¹³ to $421.654 million ¹⁴ in fiscal 2026, down 10.8% ¹⁵ from $472.521 million ¹⁶ in fiscal 2025. The segment reported an operating loss of $42.253 million ¹⁷ in fiscal 2026, an improvement from an operating loss of $55.842 million ¹⁸ in fiscal 2025.

The Advanced Cellular Group (ACG) is a leading global supplier of advanced cellular solutions for smartphones, wearables, laptops, tablets, and other devices, primarily serving the mobile market. ACG's portfolio includes highly integrated RF modules, ET RF PMICs, antenna tuners, filters, and switches, leveraging multiple manufacturing processes and packaging technologies. ACG addresses the complexities of 5G devices, which operate over a wide range of frequencies and require solutions for efficiency, linearity, signal coexistence, signal integrity, and form factor. ACG revenue decreased by $57.983 million ¹⁹ to $2,551.206 million ²⁰ in fiscal 2026, a 2.2% ²¹ decrease from $2,609.189 million ²² in fiscal 2025. Segment operating income for ACG increased by $64.905 million ²³ to $667.352 million ²⁴ in fiscal 2026, representing 26.2% ²⁵ of revenue, compared to $602.447 million ²⁶ or 23.1% ²⁷ of revenue in fiscal 2025.

For the fiscal year ended March 28, 2026, Qorvo reported total revenue of $3,678.517 million ²⁸, a decrease of 1.1% ²⁹ from $3,718.971 million ³⁰ in fiscal 2025. Gross profit was $1,688.102 million ³¹, resulting in a gross margin of 45.9% ³², an increase from 41.3% ³³ in fiscal 2025. Operating income significantly increased to $411.424 million ³⁴ (11.2% ³⁵ of revenue) from $95.527 million ³⁶ (2.6% ³⁷ of revenue) in fiscal 2025. Net income per diluted share was $3.62 ³⁸ for fiscal 2026, compared to $0.58 ³⁹ for fiscal 2025. Cash provided by operating activities was $808.6 million ⁴⁰, up from $622.2 million ⁴¹ in fiscal 2025. Capital expenditures were $129.1 million ⁴² in fiscal 2026, down from $137.6 million ⁴³ in fiscal 2025. As of March 28, 2026, cash and cash equivalents totaled $1,219.0 million ⁴⁴. Total long-term debt was $1,549.154 million ⁴⁵ as of March 28, 2026, compared to $1,549.215 million ⁴⁶ as of March 29, 2025.

Year-over-year, total revenue decreased by $40.454 million ⁴⁷ or 1.1% ⁴⁸. This was driven by decreases in ACG revenue of $57.983 million ⁴⁹ and CSG revenue of $50.867 million ⁵⁰, partially offset by an increase in HPA revenue of $68.396 million ⁵¹. Gross margin improved from 41.3% ⁵² in fiscal 2025 to 45.9% ⁵³ in fiscal 2026, primarily due to ACG's strategy to reduce exposure to lower-margin Android smartphones and a favorable business mix within HPA. Operating income saw a substantial increase of $315.897 million ⁵⁴ or 330.7% ⁵⁵, largely due to higher gross margin and lower goodwill and intangible asset impairment charges, which decreased by $110.200 million ⁵⁶ or 57.2% ⁵⁷ from $192.569 million ⁵⁸ in fiscal 2025 to $82.369 million ⁵⁹ in fiscal 2026. Research and development expenses decreased by $21.587 million ⁶⁰ or 2.9% ⁶¹, and marketing and selling expenses decreased by $16.427 million ⁶² or 7.1% ⁶³.

During fiscal 2026, Qorvo initiated restructuring actions to reduce operating expenses and streamline its manufacturing footprint. This included the sale of its North Carolina fabrication facility for net proceeds of $36.8 million ⁶⁴, resulting in a net gain on sale of $7.9 million ⁶⁵. The company is transferring SAW filter production to its Texas facility. Additionally, Qorvo completed the sale of its MEMS-based sensing solutions business in the third quarter of fiscal 2026 for net cash proceeds of approximately $21.5 million ⁶⁶, resulting in a gain of $19.2 million ⁶⁷. The company also consolidated the CSG organizational structure to align resources and focus on a higher-margin portfolio. On October 27, 2025, Qorvo entered into a Merger Agreement with Skyworks Solutions, Inc., which was approved by stockholders of both companies on February 11, 2026. Merger-related costs for fiscal 2026 were approximately $23.5 million ⁶⁸.

Qorvo anticipates the proposed mergers with Skyworks Solutions, Inc. will be completed early in calendar year 2027. The consummation of these mergers is subject to required regulatory approvals, including certain antitrust and foreign investment approvals, and the satisfaction of other customary closing conditions. The U.S. Federal Trade Commission issued a Second Request for additional information on February 5, 2026, which extends the waiting period under the HSR Act until 30 days after both companies substantially comply, unless the period is voluntarily extended or terminated sooner.

The company's growth areas are explicitly tied to global connectivity trends and the proliferation of intelligent, data-intensive applications. In the High Performance Analog (HPA) segment, growth is expected from increased content and programs in defense and aerospace, driven by advancing modern warfare capabilities and increased defense spending across the U.S. and allied countries. Specific focus areas include the Golden Dome defense system, upgrades to legacy radar systems, the shift to new, higher frequency bands, and the trend of "one to many" smaller, more integrated networked platforms. HPA also sees opportunities in LEO SATCOM networks for enhanced connectivity. In the infrastructure market, data-intensive use cases like machine learning, industrial automation, robotics, and AR/VR are increasing demand for cellular and broadband networks, with a migration to 5G and DOCSIS 4.0. The company is developing Wi-Fi 8 front end solutions in alignment with market-leading chipset providers, indicating a future growth vector in advanced Wi-Fi standards.

Operationally, Qorvo is focused on enhancing efficiency and reducing capital intensity. The company completed the sale of its North Carolina fabrication facility in the fourth quarter of fiscal 2026 and is operating under a short-term supply agreement with the buyer until the transfer of SAW filter production to its Texas facility is complete. This is part of a broader manufacturing strategy to internally produce only the most differentiated elements, geographically align production, and leverage outsourced partners. The company also closed its assembly and test facility in Costa Rica in the third quarter of fiscal 2026, transitioning to external partners. These restructuring initiatives are aimed at reducing operating costs and streamlining the manufacturing footprint. The company expects to incur additional charges associated with the 2026 Restructuring Initiatives of approximately $10.0 million ⁶⁹ to $20.0 million ⁷⁰, primarily related to employee termination benefits.

Regarding capital allocation, Qorvo's capital expenditures were $129.1 million ⁷¹ in fiscal 2026, compared to $137.6 million ⁷² in fiscal 2025. The company repurchased approximately 6.6 million ⁷³ shares of its common stock for $536.7 million ⁷⁴ in fiscal 2026. As of March 28, 2026, approximately $416.2 million ⁷⁵ remains authorized for repurchases under the share repurchase program. The company suspended share repurchase activity following the execution of the Merger Agreement in the third quarter of fiscal 2026 but resumed in the fourth quarter of fiscal 2026 in accordance with the merger terms. Qorvo 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.

Management has explicitly flagged several structural headwinds and execution risks. The consummation of the mergers is contingent on various conditions, and failure to satisfy these or significant delays could negatively impact operating results and the company's ongoing business. 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. If the mergers are not completed, Qorvo may be required to pay a termination fee of $298.7 million ⁷⁶ to Skyworks, or Skyworks may be required to pay Qorvo a termination fee of $100.0 million ⁷⁷ under specific circumstances. The company also faces risks related to its dependence on several large customers, with Apple and Samsung accounting for a substantial portion of revenue. Changes in government trade policies, including tariffs and export restrictions, particularly between the U.S. and China, have limited and could continue to limit the ability to sell products to certain customers and suppliers.

Qorvo faces material risks including the uncertainty surrounding the consummation of its proposed mergers with Skyworks Solutions, Inc., which are subject to regulatory approvals and could be delayed or abandoned, potentially incurring a termination fee of $298.7 million ⁷⁸ payable by Qorvo or $100.0 million ⁷⁹ payable by Skyworks under specified circumstances. The company is highly dependent on a few large customers, with Apple Inc. and Samsung Electronics Co., Ltd. collectively accounting for approximately 59% ⁸⁰ of revenue in fiscal 2026, making it vulnerable to loss of share or demand fluctuations from these customers. Operational risks include reliance on third-party suppliers for components and services, which has increased due to recent manufacturing footprint consolidation, and the potential for poor manufacturing yields, which can significantly impact gross margins. Geopolitical and regulatory risks are substantial, particularly from international sales and operations, with sales to customers outside the U.S. accounting for approximately 37% ⁸¹ of revenue in fiscal 2026, and China alone representing approximately 13% ⁸² of total revenue. Changes in government trade policies, such as tariffs and export restrictions, especially those related to U.S./China relations, could materially affect sales and results of operations. Cybersecurity threats, including sophisticated cyber-attacks leveraging AI, pose a risk to IT systems and proprietary information, potentially leading to liability or disruption of critical business functions. The company is also exposed to interest rate risk on its revolving credit facility, foreign currency exchange rate fluctuations, and commodity price risk for precious metals used in manufacturing.

Management's message to shareholders emphasizes a strategic focus on long-term profitability and operational efficiency, particularly through restructuring initiatives and a shift towards higher-margin product portfolios. The company is actively pursuing a merger with Skyworks Solutions, Inc., which management anticipates will be completed early in calendar year 2027. This transaction is a key strategic priority, despite the ongoing regulatory review by the U.S. Federal Trade Commission, which issued a Second Request on February 5, 2026. Another strategic priority is the optimization of the manufacturing footprint, evidenced by the sale of the North Carolina fabrication facility and the closure of the Costa Rica assembly and test facility in fiscal 2026, aiming to reduce operating costs and streamline operations. Furthermore, management is committed to strategically narrowing its focus within segments like ACG and CSG to concentrate on flagship and premium tiers of smartphones and higher-margin connectivity solutions, respectively, as demonstrated by the decision to reduce exposure in the mass-market Android business.