01—Abstract
Summary
Summary of the 10-Q filed February 5, 2025. Cited figures are marked; the original filing is the authoritative source.
Skyworks Solutions, Inc. reported net revenue of $1,068.5 milliona for the three months ended December 27, 2024, down from $1,201.5 million in the corresponding prior-year period, which the company attributed primarily to a decrease in demand for its mobile products.
Gross profit was $441.9 millionb versus $506.6 million, and net income was $162.0 million, or $1.00 per diluted share, compared with $231.3 million, or $1.44 per diluted share, a year earlier. Research and development expense rose to $176.4 million from $153.1 million, reflecting increased investment in new technologies and products. Cash flow and liquidity remained solid.
Cash provided by operating activities was $377.2 millionc, and cash, cash equivalents, and marketable securities totaled $1,754.8 million at quarter end, up $180.7 million from September 27, 2024. The company paid dividends of $112.5 million and made no share repurchases during the quarter. The Board approved a new $2.0 billion stock repurchase program on February 4, 2025, running through February 3, 2027, and declared a $0.70 per share quarterly dividend.
Leadership transition and outlook were also notable. Philip Brace was appointed President and CEO effective February 17, 2025, succeeding Liam K.
Griffin, with transition-related charges of approximately $20.0 milliond. The company stated that beginning in the fourth quarter of fiscal 2025 it expects revenue to be negatively impacted by a decrease in market share at a significant customer, and that foreign taxes are expected to increase in fiscal 2025 due to changes to its Singapore tax holiday.
02—Key points
Key Highlights
- Net revenue fell to $1,068.5 million from $1,201.5 million, driven primarily by lower demand for mobile products.
- Gross profit declined to $441.9 million from $506.6 million, reflecting lower unit volumes, unfavorable product mix, and lower average selling prices.
- Net income was $162.0 million, or $1.00 per diluted share, versus $231.3 million, or $1.44 per diluted share, in the prior-year quarter.
- Research and development expense increased to $176.4 million from $153.1 million, with the effective tax rate rising to 14.9% from 8.1%.
- Cash, cash equivalents, and marketable securities reached $1,754.8 million, supported by $377.2 million in operating cash flow.
- A new $2.0 billion stock repurchase program was approved February 4, 2025, and a $0.70 per share dividend was declared.
- Philip Brace succeeds Liam K. Griffin as CEO effective February 17, 2025, with about $20.0 million in transition charges; the company expects a decrease in market share at a significant customer beginning in Q4 fiscal 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Skyworks Solutions kept $0.15.
- Revenue$1.07B100.0%
- Cost of revenue−$626.6M58.6%
- Gross profit$441.9M41.4%
- Operating costs−$260.8M24.4%
- Operating income$181.1M16.9%
- Interest, other & tax−$19.1M1.8%
- Net income$162.0M15.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed February 5, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.07B$1.20B | −11.1% |
| Cost of Revenue | $626.60M$694.90M | −9.8% |
| Gross Profit | $441.90M$506.60M | −12.8% |
| R&D Expenses | $176.40M$153.10M | +15.2% |
| SG&A Expenses | $82.60M$78.80M | +4.8% |
| Operating Expenses | $260.80M$248.30M | +5.0% |
| Operating Income | $181.10M$258.30M | −29.9% |
| Interest Expense | $6.80M$10.00M | −32.0% |
| Net Income | $162.00M$231.30M | −30.0% |
| EPS (Basic) | $1.01$1.45 | −30.3% |
| EPS (Diluted) | $1.00$1.44 | −30.6% |
| Shares Outstanding (Basic) | 160.40M159.90M | +0.3% |
| Shares Outstanding (Diluted) | 161.40M161.00M | +0.2% |
05—Questions
Frequently Asked Questions
Why did Skyworks' revenue decline this quarter?
Net revenue decreased to $1,068.5 million from $1,201.5 million, driven primarily by a decrease in demand for the company's mobile products. The company also noted that beginning in the fourth quarter of fiscal 2025, it expects revenue to be negatively impacted by a decrease in market share at a significant customer.
How did profitability change compared with the prior-year quarter?
Gross profit fell to $441.9 million from $506.6 million, and the gross margin was 41.4% versus 42.2%. Net income declined to $162.0 million from $231.3 million, or $1.00 per diluted share versus $1.44. The company attributed the gross profit decline to lower unit volumes, unfavorable product mix, and lower average selling prices.
How strong is Skyworks' cash position and cash generation?
Cash, cash equivalents, and marketable securities totaled $1,754.8 million at December 27, 2024, an increase of $180.7 million from September 27, 2024. Operating activities provided $377.2 million in cash, although this was down $397.7 million from $774.9 million in the prior-year period, mainly due to working capital changes and lower net income. The company had no borrowings under its $750.0 million revolving credit facility.
What capital return actions did the company take or announce?
The company paid $112.5 million in dividends during the quarter and repurchased no shares during the quarter. On February 4, 2025, the Board approved a new $2.0 billion stock repurchase program running through February 3, 2027, which succeeds the prior program, and declared a $0.70 per share dividend payable March 17, 2025.
What leadership changes were announced, and what costs do they bring?
Philip Brace was appointed President and Chief Executive Officer and a director, effective February 17, 2025, succeeding Liam K. Griffin. The company expects to incur charges of approximately $20.0 million related to Mr. Griffin's change-in-control and severance agreement and the prorated vesting of approximately 5,934 shares under his fiscal 2025 restricted stock unit award.
06—Continue