01—Abstract
Summary
Summary of the 10-K filed November 17, 2023. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. (Nasdaq: SWKS) reported net revenue of $4,772.4 milliona for fiscal 2023 (year ended September 29, 2023), down 13.0% from $5,485.5 million in fiscal 2022.
The decline was driven primarily by lower demand for mobile products from smartphone customers in the Android ecosystem and for connectivity solutions in consumer and enterprise markets. Gross profit fell 19.1% to $2,107.3 millionb, with gross margin declining to 44.2% from 47.5%, and net income decreased to $982.8 million, or $6.13 diluted earnings per share, from $1,275.2 million, or $7.81 per diluted share in fiscal 2022. The company generated cash from operations of $1,856.4 million, up from $1,424.6 million, mainly due to favorable working capital changes of $988.5 million.
It repaid $900.0 millionc of debt, paid dividends of $405.2 million, spent $210.3 million on capital expenditures, and repurchased $175.3 million of stock. Cash, cash equivalents, and marketable securities rose to $738.5 million, and $2.0 billion remained available under the January 31, 2023 stock repurchase program. Total debt outstanding was reduced, with $300.0 million remaining under the Term Loans at year end and no borrowings under the $750.0 million Revolver.
Investors should note that Apple accounted for 66% of net revenue in fiscal 2023, up from 58% in fiscal 2022, and the company recorded $47.5 milliond of impairment charges on long-term supply capacity deposits due to reduced overall market demand. The filing also flags that the Inflation Reduction Act's 15% corporate alternative minimum tax takes effect in fiscal 2024, and that capitalized research and development expenses increased taxes payable.
02—Key points
Key Highlights
- Net revenue declined 13.0% to $4,772.4 million, driven mainly by weaker demand from Android smartphone customers and connectivity solutions for consumer and enterprise markets.
- Gross margin fell to 44.2% from 47.5%, with gross profit down 19.1% to $2,107.3 million, reflecting lower unit volumes, $47.5 million in supply capacity deposit impairments, and lower average selling prices.
- Net income was $982.8 million, or $6.13 per diluted share, versus $1,275.2 million, or $7.81 per diluted share, in fiscal 2022.
- Operating cash flow rose to $1,856.4 million, supported by $988.5 million of favorable working capital changes, funding $900.0 million of debt repayments and $405.2 million of dividends.
- Quarterly dividends totaled $2.54 per share for fiscal 2023, and a $0.68 per share dividend was declared on November 2, 2023.
- Apple accounted for 66% of net revenue in fiscal 2023, compared with 58% in fiscal 2022, highlighting significant customer concentration.
- Total debt declined to $1,292.3 million, and $2.0 billion remained available under the stock repurchase program that runs through February 1, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Skyworks Solutions kept $0.21.
- Revenue$4.77B100.0%
- Cost of revenue−$2.67B55.8%
- Gross profit$2.11B44.2%
- Operating costs−$982.3M20.6%
- Operating income$1.13B23.6%
- Interest, other & tax−$142.2M3.0%
- Net income$982.8M20.6%
Where FY2023 revenue went
$4.77B- Cost of revenue: $2.67B, 56% of revenue
- Net income: $982.8M, 21% of revenue
- R&D: $606.8M, 13% of revenue
- SG&A: $314.0M, 6.6% of revenue
- Other operating costs: $61.5M, 1.3% of revenue
- Interest, other & tax: $142.2M, 3.0% of revenue
Kept 21% as net incomeOther operating costs $61.5M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed November 17, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $4.77B$5.49B | −13.0% |
| Cost of Revenue | $2.67B$2.88B | −7.5% |
| Gross Profit | $2.11B$2.60B | −19.1% |
| R&D Expenses | $606.80M$617.90M | −1.8% |
| SG&A Expenses | $314.00M$329.80M | −4.8% |
| Operating Expenses | $982.30M$1.08B | −8.8% |
| Operating Income | $1.13B$1.53B | −26.3% |
| Interest Expense | $64.40M$47.90M | +34.4% |
| Net Income | $982.80M$1.28B | −22.9% |
| EPS (Basic) | $6.17$7.85 | −21.4% |
| EPS (Diluted) | $6.13$7.81 | −21.5% |
| Shares Outstanding (Basic) | 159.40M162.40M | −1.8% |
| Shares Outstanding (Diluted) | 160.30M163.30M | −1.8% |
05—Questions
Frequently Asked Questions
How much did Skyworks' revenue and profitability decline in fiscal 2023?
Net revenue fell 13.0% to $4,772.4 million from $5,485.5 million. Net income decreased to $982.8 million from $1,275.2 million, and diluted EPS fell to $6.13 from $7.81. Gross margin contracted to 44.2% from 47.5%.
How dependent is Skyworks on Apple?
Apple, through distributors, contract manufacturers, and direct sales, accounted for 66% of net revenue in fiscal 2023, up from 58% in fiscal 2022 and 59% in fiscal 2021. Three largest accounts receivable balances comprised 83% of gross receivables at year end.
How is the company returning capital to shareholders?
Skyworks paid $405.2 million in dividends in fiscal 2023, or $2.54 per share, and repurchased $175.3 million of stock. A $0.68 per share quarterly dividend was declared on November 2, 2023, and $2.0 billion remained available under the January 31, 2023 repurchase program.
What is the company's debt position and liquidity?
Skyworks repaid $900.0 million of debt during fiscal 2023. Year-end debt included $500.0 million of 2026 Notes, $500.0 million of 2031 Notes, and $300.0 million of Term Loans. The $750.0 million Revolver was undrawn, and cash, cash equivalents, and marketable securities totaled $738.5 million. The company repaid another $150.0 million of Term Loans on October 4, 2023.
What tax and regulatory changes could affect future results?
The Inflation Reduction Act imposes a 15% corporate alternative minimum tax effective in fiscal 2024, and the company is evaluating its impact on the effective tax rate. Required capitalization of research and development expenses for U.S. tax purposes has increased taxes payable and reduced near-term cash flows. Export restrictions, including Entity List additions affecting Chinese customers, have also negatively affected sales.
06—Continue