01—Abstract
Summary
Summary of the 10-Q filed January 31, 2024. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported net revenue of $1,201.5 milliona for the three months ended December 29, 2023, down from $1,329.3 million in the corresponding prior-year period.
The filing attributes the decline primarily to lower demand for non-mobile analog and mixed-signal products, partially offset by higher demand for mobile products from smartphone customers in the Android ecosystem. Gross profit fell to $506.6 millionb from $637.7 million, with gross margin of 42.2% versus 48.0% a year earlier, driven by unfavorable product mix, lower unit volumes, and lower average selling prices. Net income was $231.3 million, or $1.44 per diluted share, compared with $309.4 million, or $1.93 per diluted share, in the prior-year quarter.
Cash generation remained strong, with net cash provided by operating activities of $774.9 millionc. Cash, cash equivalents, and marketable securities rose to $1,047.6 million after the company repaid $300.0 million of Term Loans, paid $108.9 million in dividends, and spent $22.2 million on capital expenditures. The company had no borrowings outstanding under its $750.0 million Revolver, and it has $1.0 billion in senior notes outstanding ($500.0 million due 2026 and $500.0 million due 2031).
The Board declared a $0.68d per share quarterly dividend on January 30, 2024, and $2.0 billion remained available under the January 31, 2023 stock repurchase program, though no shares were repurchased in the quarter. The company also changed its accounting estimate for the useful lives of certain machinery and equipment, which reduced depreciation expense by $22.9 million and increased net income by $2.6 million, or $0.02 per diluted share. Restructuring, impairment, and other charges rose to $16.2 million, mainly from abandonment of a previously capitalized IPR&D project that carried a $16.1 million impairment charge.
02—Key points
Key Highlights
- Net revenue declined to $1,201.5 million from $1,329.3 million, driven mainly by weaker non-mobile analog and mixed-signal demand, partly offset by smartphone demand in the Android ecosystem.
- Gross margin fell to 42.2% from 48.0%, reflecting unfavorable product mix, lower unit volumes, and lower average selling prices.
- Net income was $231.3 million ($1.44 diluted EPS), compared with $309.4 million ($1.93 diluted EPS) a year earlier.
- Operating cash flow of $774.9 million was roughly flat year over year, supported by favorable working capital changes of $94.1 million, mainly from lower inventory.
- The company repaid $300.0 million of Term Loans, and it had no borrowings outstanding under the Term Loan Facility or the $750.0 million Revolver as of December 29, 2023.
- Cash, cash equivalents, and marketable securities increased to $1,047.6 million, and the Board declared a $0.68 per share dividend payable March 12, 2024.
- A change in the useful-life estimate for certain machinery and equipment reduced depreciation by $22.9 million, adding $0.02 to diluted EPS in the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Skyworks Solutions kept $0.19.
- Revenue$1.20B100.0%
- Cost of revenue−$694.9M57.8%
- Gross profit$506.6M42.2%
- Operating costs−$248.3M20.7%
- Operating income$258.3M21.5%
- Interest, other & tax−$27.0M2.2%
- Net income$231.3M19.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed January 31, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.20B$1.33B | −9.6% |
| Cost of Revenue | $694.90M$691.60M | +0.5% |
| Gross Profit | $506.60M$637.70M | −20.6% |
| R&D Expenses | $153.10M$163.90M | −6.6% |
| SG&A Expenses | $78.80M$84.50M | −6.7% |
| Operating Expenses | $248.30M$270.70M | −8.3% |
| Operating Income | $258.30M$367.00M | −29.6% |
| Interest Expense | $10.00M$16.90M | −40.8% |
| Net Income | $231.30M$309.40M | −25.2% |
| EPS (Basic) | $1.45$1.94 | −25.3% |
| EPS (Diluted) | $1.44$1.93 | −25.4% |
| Shares Outstanding (Basic) | 159.90M159.80M | +0.1% |
| Shares Outstanding (Diluted) | 161.00M160.20M | +0.5% |
05—Questions
Frequently Asked Questions
How did Skyworks' revenue and profitability change in the first quarter of fiscal 2024?
Net revenue decreased to $1,201.5 million from $1,329.3 million, and gross profit decreased to $506.6 million from $637.7 million. Net income fell to $231.3 million from $309.4 million, and diluted EPS was $1.44 compared with $1.93. The filing cites lower demand for non-mobile analog and mixed-signal products as the main driver, partly offset by smartphone demand in the Android ecosystem.
What drove the decline in gross margin?
The filing states that the decrease in gross profit was primarily the result of unfavorable product mix, lower unit volumes, and lower average selling prices. Gross margin was 42.2% of net revenue, compared with 48.0% in the prior-year quarter.
How strong is the company's liquidity and balance sheet position?
Cash, cash equivalents, and marketable securities totaled $1,047.6 million as of December 29, 2023. The company generated $774.9 million from operations and repaid $300.0 million of Term Loans during the quarter. It had no borrowings under the Term Loan Facility or the Revolver, and it has $1.0 billion in senior notes outstanding due in 2026 and 2031.
Did the company repurchase stock and what dividend was declared?
The company did not repurchase any shares under the January 31, 2023 stock repurchase program during the quarter, leaving $2.0 billion available. Dividends paid totaled $108.9 million in the quarter. On January 30, 2024, the Board declared a cash dividend of $0.68 per share, payable March 12, 2024, to stockholders of record as of February 20, 2024.
What one-time or non-routine items affected the quarter's results?
Restructuring, impairment, and other charges were $16.2 million, primarily from abandoning a previously capitalized in-process R&D project, which resulted in a $16.1 million impairment charge. Separately, a change in the useful-life estimate for certain machinery and equipment reduced depreciation by $22.9 million, increasing net income by $2.6 million, or $0.02 per diluted share.
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