01—Abstract
Summary
Summary of the 10-K filed November 23, 2022. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported net revenue of $5,485.5 milliona for the fiscal year ended September 30, 2022, up 7.4% from $5,109.1 million in fiscal 2021, driven primarily by the Infrastructure and Automotive business of Silicon Laboratories Inc. acquired in July 2021 and by demand for 5G and advanced Wi-Fi products, partly offset by lower demand for mobile products from smartphone customers in China.
Gross profit was $2,604.3 millionb (47.5% of net revenue, versus 49.2% in fiscal 2021), and operating income was $1,527.0 million, compared with $1,612.7 million in fiscal 2021. Net income was $1,275.2 million, or $7.81 per diluted share, compared with $1,498.3 million, or $8.97 per diluted share, in fiscal 2021. Cash generated from operations was $1,424.6 million, down from $1,772.0 million, mainly due to unfavorable working capital changes of $523.7 million, including higher inventory and deposits with suppliers.
The company repurchased 6.5 million shares for $886.8 millionc, spent $489.4 million on capital expenditures, and paid $373.1 million in dividends. Cash, cash equivalents, and marketable securities fell to $586.8 million. Total debt outstanding carried by the company included $1.5 billion of senior notes and $700.0 million of term loans, and a $750.0 million revolver was undrawn at year end.
Apple accounted for 58% of net revenue in fiscal 2022, and the filing notes that customer concentration, COVID-19-related supply chain constraints, China-related export restrictions, and the expected increase in the effective tax rate in fiscal 2024 are key risks. The filing also states that the Board declared a quarterly cash dividend of $0.62d per share payable December 13, 2022.
02—Key points
Key Highlights
- Net revenue rose 7.4% to $5,485.5 million, driven mainly by the Silicon Labs Infrastructure and Automotive acquisition and demand for 5G and advanced Wi-Fi products.
- Net income declined to $1,275.2 million from $1,498.3 million; diluted EPS was $7.81 versus $8.97.
- Gross margin was 47.5% of net revenue, compared with 49.2% in fiscal 2021, with R&D rising 16.1% to $617.9 million.
- Cash provided by operations fell to $1,424.6 million from $1,772.0 million, mainly due to a $523.7 million unfavorable working capital change.
- Returned capital to shareholders through $886.8 million of buybacks (6.5 million shares) and $373.1 million of dividends; $1.1 billion remained under the repurchase authorization.
- Apple represented 58% of net revenue in fiscal 2022, a significant customer concentration risk.
- The company expects its effective tax rate to increase in fiscal 2024 due to the Inflation Reduction Act's corporate alternative minimum tax, and R&D capitalization rules begin in fiscal 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Skyworks Solutions kept $0.23.
- Revenue$5.49B100.0%
- Cost of revenue−$2.88B52.5%
- Gross profit$2.60B47.5%
- Operating costs−$1.08B19.6%
- Operating income$1.53B27.8%
- Interest, other & tax−$251.8M4.6%
- Net income$1.28B23.2%
Where FY2022 revenue went
$5.49B- Cost of revenue: $2.88B, 53% of revenue
- Net income: $1.28B, 23% of revenue
- R&D: $617.9M, 11% of revenue
- SG&A: $329.8M, 6.0% of revenue
- Other operating costs: $129.6M, 2.4% of revenue
- Interest, other & tax: $251.8M, 4.6% of revenue
Kept 23% as net incomeOther operating costs $129.6M · 2.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed November 23, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.49B$5.11B | +7.4% |
| Cost of Revenue | $2.88B$2.60B | +11.0% |
| Gross Profit | $2.60B$2.51B | +3.7% |
| R&D Expenses | $617.90M$532.30M | +16.1% |
| SG&A Expenses | $329.80M$322.50M | +2.3% |
| Operating Expenses | $1.08B$899.70M | +19.7% |
| Operating Income | $1.53B$1.61B | −5.3% |
| Interest Expense | $47.90M-$13.40M | +457.5% |
| Net Income | $1.28B$1.50B | −14.9% |
| EPS (Basic) | $7.85$9.07 | −13.5% |
| EPS (Diluted) | $7.81$8.97 | −12.9% |
| Shares Outstanding (Basic) | 162.40M165.20M | −1.7% |
| Shares Outstanding (Diluted) | 163.30M167.00M | −2.2% |
05—Questions
Frequently Asked Questions
How did Skyworks perform financially in fiscal 2022?
Net revenue grew 7.4% to $5,485.5 million, but operating income fell to $1,527.0 million from $1,612.7 million and net income fell to $1,275.2 million from $1,498.3 million. Higher R&D, amortization of acquired intangibles, and a lower gross margin contributed to the decline.
What drove the revenue increase?
The filing attributes the increase primarily to the Acquisition of Silicon Labs' Infrastructure and Automotive business in the fourth quarter of fiscal 2021, which supports high-growth segments such as automotive, industrial and motor control, power supply, 5G infrastructure, and data center. Demand for 5G and advanced Wi-Fi products and higher content per device also contributed, partly offset by lower smartphone demand in China.
How strong is the company's liquidity position?
Cash, cash equivalents, and marketable securities totaled $586.8 million at September 30, 2022, down $440.3 million from a year earlier. Total debt included $1.5 billion of senior notes and $700.0 million of term loans, while the $750.0 million revolver had no borrowings outstanding. The company states that its cash, operating cash flow, and revolver are expected to meet its requirements.
What are the main risks highlighted for investors?
The filing highlights customer concentration, with Apple at 58% of net revenue and one customer above ten percent in each of the last three fiscal years; COVID-19 supply chain disruptions; China-related trade and export restrictions, including Entity List additions; semiconductor industry cyclicality; and the financial impact of the Silicon Labs acquisition debt and covenants.
What is the capital return policy and what changes are expected in taxes?
The company paid a quarterly dividend of $0.62 per share declared in November 2022, totaling $2.30 per share for fiscal 2022, and repurchased $886.8 million of stock under a $2.0 billion program expiring January 26, 2023. The filing states that beginning in fiscal 2023 R&D expenses must be capitalized for U.S. tax purposes, which it expects to increase taxes payable and reduce cash flows, and that the effective tax rate is expected to rise in fiscal 2024 due to the Inflation Reduction Act.
06—Continue