01—Abstract
Summary
Summary of the 10-Q filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported net revenue of $1,046.0 milliona for the three months ended March 29, 2024, down from $1,153.1 million in the year-earlier quarter, with the filing attributing the decline primarily to lower demand for non-mobile analog and mixed-signal products.
For the six months, net revenue was $2,247.5 millionb versus $2,482.4 million. Gross margin compressed to 40.2% of net revenue for the quarter (45.7% a year earlier), which the company attributed to unfavorable product mix, lower unit volumes, and lower average selling prices. Net income was $183.3 million, or $1.14 per diluted share, compared with $232.8 million, or $1.46 per diluted share, a year earlier.
Operating income fell to $189.2 millionc from $273.3 million. Cash flow and balance sheet metrics were stronger. Cash, cash equivalents, and marketable securities totaled $1,221.3 million at quarter end, up $482.8 million from September 29, 2023.
Operating cash flow for the six months was $1,075.2 milliond, and the company repaid $300.0 million of Term Loans, leaving no borrowings under the Term Loan Facility or the $750.0 million Revolver. Inventory fell to $835.5 million from $1,119.7 million at fiscal year-end. The company paid $218.0 million in dividends for the six months and declared a $0.68 per share quarterly dividend on April 30, 2024.
No shares were repurchased under the $2.0 billion authorization during the period. Depreciation expense was reduced by a change in the estimated useful lives of certain machinery and equipment, which increased net income by $4.3 million for the quarter and $6.7 million for the six months. The filing reports that disclosure controls were effective as of March 29, 2024, and that there were no material changes to internal control over financial reporting.
02—Key points
Key Highlights
- Net revenue declined 9.3% to $1,046.0 million for the quarter and 9.5% to $2,247.5 million for the six months, driven primarily by lower demand for non-mobile analog and mixed-signal products.
- Gross profit fell to $420.3 million for the quarter, a 40.2% gross margin versus 45.7% a year earlier, reflecting unfavorable product mix, lower unit volumes, and lower average selling prices.
- Net income was $183.3 million ($1.14 diluted EPS) for the quarter, compared with $232.8 million ($1.46 diluted EPS) in the prior-year quarter.
- Cash, cash equivalents, and marketable securities rose to $1,221.3 million, up $482.8 million from September 29, 2023, after $300.0 million of Term Loan repayments.
- Operating cash flow was $1,075.2 million for the six months, versus $1,185.1 million a year earlier, with inventory decreasing to $835.5 million from $1,119.7 million.
- A change in the estimated useful lives of certain machinery and equipment reduced depreciation by $18.9 million for the quarter and $37.7 million for the six months, increasing net income by $4.3 million and $6.7 million respectively.
- The Board declared a $0.68 per share quarterly dividend on April 30, 2024, and $2.0 billion remained available under the stock repurchase program with no repurchases made during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Skyworks Solutions kept $0.18.
- Revenue$1.05B100.0%
- Cost of revenue−$625.7M59.8%
- Gross profit$420.3M40.2%
- Operating costs−$231.1M22.1%
- Operating income$189.2M18.1%
- Interest, other & tax−$5.9M0.6%
- Net income$183.3M17.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed May 1, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.05B$1.15B | −9.3% |
| Cost of Revenue | $625.70M$625.70M | 0.0% |
| Gross Profit | $420.30M$527.40M | −20.3% |
| R&D Expenses | $154.40M$148.20M | +4.2% |
| SG&A Expenses | $76.80M$79.00M | −2.8% |
| Operating Expenses | $231.10M$254.10M | −9.1% |
| Operating Income | $189.20M$273.30M | −30.8% |
| Interest Expense | $7.10M$18.90M | −62.4% |
| Net Income | $183.30M$232.80M | −21.3% |
| EPS (Basic) | $1.14$1.46 | −21.9% |
| EPS (Diluted) | $1.14$1.46 | −21.9% |
| Shares Outstanding (Basic) | 160.40M159.10M | +0.8% |
| Shares Outstanding (Diluted) | 161.40M159.90M | +0.9% |
05—Questions
Frequently Asked Questions
How did Skyworks perform financially in the second quarter of fiscal 2024?
Net revenue was $1,046.0 million, down from $1,153.1 million a year earlier, and operating income was $189.2 million versus $273.3 million. Net income was $183.3 million, or $1.14 per diluted share, compared with $232.8 million, or $1.46 per diluted share, in the prior-year quarter.
Why did gross margin decline?
The company attributed the decline in gross profit to unfavorable product mix, lower unit volumes, and lower average selling prices. Gross profit as a percentage of net revenue was 40.2% for the quarter, compared with 45.7% in the prior-year quarter.
How strong is the company's liquidity and balance sheet?
Cash, cash equivalents, and marketable securities totaled $1,221.3 million at March 29, 2024. The company repaid $300.0 million of Term Loans during the six months, and as of quarter end had no borrowings outstanding under its Term Loan Facility or its $750.0 million Revolver, which expires July 26, 2026. Long-term debt was $993.6 million under its Senior Notes.
Did the change in useful lives of equipment affect reported results?
Yes. The company extended the expected useful lives of certain machinery and equipment by up to two years, which decreased depreciation expense by $18.9 million for the quarter and $37.7 million for the six months. This increased net income by $4.3 million and $6.7 million, and diluted EPS by $0.03 and $0.04, respectively.
What are the company's capital return plans?
The Board declared a cash dividend of $0.68 per share on April 30, 2024, payable June 11, 2024. Dividends paid for the six months totaled $218.0 million. No shares were repurchased during the quarter, and $2.0 billion remained available under the January 31, 2023 stock repurchase program, which expires February 1, 2025.
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