Core Insights - Skyworks Solutions, Inc. (NASDAQ: SWKS) has reported its fiscal Q4 and full-year results, prompting an analysis of the numbers and future outlook for the next year [1]. Financial Performance - The company has released its fiscal Q4 results, which are critical for assessing its performance and future potential [1]. Investment Perspective - The analysis suggests a long-term investment horizon, typically between 5 to 10 years, focusing on a balanced portfolio that includes growth, value, and dividend-paying stocks, with a tendency to prioritize value investments [1].

Core Insights - Skyworks Solutions (SWKS) reported non-GAAP earnings of $1.55 per share for Q4 fiscal 2024, exceeding the Zacks Consensus Estimate by 1.97% but down 29.5% year-over-year [1] - Revenues for the quarter were $1.02 billion, a decline of 15.9% year-over-year, yet slightly above the consensus estimate by 0.31% [1] Revenue Breakdown - Mobile revenues accounted for nearly 65% of total revenues, increasing 21% sequentially due to normalization of customer orders and inventory levels, along with support for seasonal product ramps [2] - The company achieved design wins in 5G for premium Android smartphones and expanded its Wi-Fi 7 pipeline with major partners [2] - Broad markets contributed approximately 35% to total revenues, showing signs of stabilization with demand in edge IoT and automotive electrification [3] Operational Performance - Non-GAAP gross margin decreased by 70 basis points year-over-year to 46.5% [5] - Research & development expenses rose by 390 basis points year-over-year to 16% of revenues [5] - Non-GAAP operating margin contracted by 600 basis points year-over-year to 26.7% [5] Financial Position - As of September 27, 2024, cash and cash equivalents along with marketable securities totaled $1.57 billion, up from $1.28 billion as of June 28, 2024 [6] - Long-term debt remained stable at $994.3 million [6] - Cash generated from operating activities was $476 million for the quarter, compared to $273.5 million in the previous quarter [6] - Free cash flow was reported at $393.2 million, reflecting a 38.4% free cash flow margin [6] Dividend and Guidance - The company paid dividends amounting to $112 million in the reported quarter [7] - For Q1 fiscal 2025, Skyworks expects revenues between $1.05 billion and $1.08 billion, indicating a 4% sequential increase at the mid-point, with non-GAAP diluted earnings projected at $1.57 per share [8] Market Performance - Skyworks shares have declined by 22.6% year-to-date, contrasting with a 39.7% increase in the Zacks Computer and Technology sector [3]

Financial Data and Key Metrics Changes - Skyworks reported revenue of $1.025 billion for Q4 2024, with earnings per share of $1.55 and free cash flow of $393 million [7][19] - Gross profit was $476 million, resulting in a gross margin of 46.5%, which grew by 50 basis points sequentially [18] - The company generated over $1.6 billion in free cash flow for fiscal 2024, marking the second consecutive year of strong cash generation [20] Business Line Data and Key Metrics Changes - Mobile revenue accounted for approximately 65% of total revenue, increasing by 21% sequentially, while broad markets contributed about 35% of total revenue, showing a slight increase of $1 million sequentially [17] - In mobile, customer orders and channel inventory have normalized, supporting seasonal product ramps [9] - Broad markets have shown signs of stabilization, with modest growth since the bottom in December 2023, driven by trends in edge IoT and automotive electrification [11][12] Market Data and Key Metrics Changes - Demand in edge IoT is improving as customers adopt Wi-Fi 6E and 7 systems, indicating a multi-year upgrade cycle [12] - The automotive and industrial markets are experiencing muted global demand as Tier 1s and OEMs work down excess inventory [14] - The company is undershipping natural demand in traditional data centers and wireless infrastructure due to elevated inventory levels [13] Company Strategy and Development Direction - Skyworks aims to leverage robust cash generation to invest in technology and product roadmaps for long-term growth while diversifying its business [16] - The company is well-positioned to capitalize on the transformative smartphone upgrade cycle driven by AI advancements [10] - Strategic investments are being made in connectivity, power isolation, and digital broadcast solutions for connected cars and EV markets [15] Management's Comments on Operating Environment and Future Outlook - Management expects revenue for Q1 2025 to be between $1.05 billion and $1.08 billion, reflecting a 4% sequential increase at the midpoint [22] - The recovery pace is more measured than anticipated due to excess inventory in select segments [23] - Gross margin is projected to be between 46% and 47%, with operating expenses expected to increase sequentially [24] Other Important Information - The company paid $112 million in dividends during the quarter and ended with approximately $1.6 billion in cash and investments [21] - An impairment charge was taken in Q4 related to a process R&D from an acquisition, but the business remains well-positioned for growth [70][71] Q&A Session Summary Question: Trends in the Android portion of the mobile business - Management highlighted a robust pipeline with Android players like Google and Samsung, indicating strong design wins and performance [26][28] Question: Sustainability of recovery in broad markets - Management confirmed that broad markets have shown three consecutive quarters of modest sequential growth, with expectations for further growth despite excess inventory [31][32] Question: Impact of AI on Edge IoT business - Management noted that AI advancements are expected to drive growth in both smartphone and Edge IoT markets, with significant design wins in the automotive sector [66][67] Question: Inventory management and gross margin outlook - Management stated that inventory levels have been reduced for seven consecutive quarters, and while gross margins are expected to be flattish in fiscal 2025, improvements are anticipated towards the end of the year [61][56] Question: M&A environment and buyback strategy - Management expressed confidence in the company's strong cash flow and balance sheet, indicating flexibility for M&A and share buybacks while remaining disciplined [42][64]

Core Viewpoint - Skyworks Solutions reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.52 per share, but down from $2.20 per share a year ago, indicating a decline in profitability [1][2] Financial Performance - The company achieved revenues of $1.02 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.31%, but down from $1.22 billion year-over-year [2] - Over the last four quarters, Skyworks has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Skyworks shares have declined approximately 21.7% since the beginning of the year, contrasting with the S&P 500's gain of 25.8% [3] - The current Zacks Rank for Skyworks is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.68 on revenues of $1.08 billion, and for the current fiscal year, it is $6.38 on revenues of $4.23 billion [7] - The trend of estimate revisions for Skyworks is mixed, which could change following the recent earnings report [6] Industry Context - The Semiconductors - Radio Frequency industry, to which Skyworks belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, suggesting a challenging environment [8]

Financial Performance - Skyworks reported Q4 revenue of $1.025 billion, representing a 13% sequential growth[2] - GAAP diluted EPS for Q4 was $0.37, while non-GAAP diluted EPS was $1.55[2] - Total operating income for Q4 was $59 million, down from $254 million in the same quarter last year[2] - GAAP operating income for the three months ended September 27, 2024, was $59.5 million, a decrease from $254.0 million for the same period in 2023[17] - Non-GAAP operating income for the three months ended September 27, 2024, was $273.5 million, down from $397.9 million year-over-year[17] - GAAP net income for the three months ended September 27, 2024, was $60.5 million, compared to $244.8 million in the same quarter of 2023[18] - Non-GAAP net income for the twelve months ended September 27, 2024, was $1,012.7 million, a decline from $1,366.7 million in the previous year[18] - Net income for the three months ended September 27, 2024, was $60.5 million, down 75.3% from $244.8 million in the same period last year[30] Cash Flow and Margins - Annual operating cash flow reached $1.825 billion, with a 44% operating cash flow margin, and free cash flow was $1.668 billion, reflecting a 40% free cash flow margin[1] - Non-GAAP free cash flow for the three months ended September 27, 2024, was $393.2 million, up from $295.6 million year-over-year[18] - GAAP net cash provided by operating activities for the three months ended September 27, 2024, was $476.0 million, compared to $365.7 million in the same period of 2023[18] - Net cash provided by operating activities increased to $476.0 million from $365.7 million year-over-year, a growth of 30.3%[30] Assets and Liabilities - Total assets decreased to $8,283.3 million from $8,426.7 million year-over-year, a decline of 1.7%[29] - Debt reduced to $994.3 million from $1,292.2 million, a decrease of 23.1%[29] - Stockholders' equity increased to $6,336.7 million from $6,082.7 million, a growth of 4.2%[29] Inventory and Capital Expenditures - Inventory decreased to $784.8 million from $1,119.7 million, a reduction of 29.9%[29] - Capital expenditures for the three months were $82.8 million, compared to $70.1 million in the prior year, an increase of 18.5%[30] Dividends and Shareholder Returns - The company declared a cash dividend of $0.70 per share, payable on December 24, 2024[7] - Dividends paid increased to $112.0 million from $108.4 million, a rise of 3.3%[30] Future Outlook - Skyworks expects Q1 2025 revenue to be between $1.05 billion and $1.08 billion, with non-GAAP diluted EPS projected at $1.57 at the midpoint[6] - The mobile business is anticipated to grow mid-single digits sequentially, driven by seasonal product ramps[6] - The company expects non-GAAP diluted earnings per share for Q1 2025 to be impacted by estimated share-based compensation expense of $0.20 to $0.40 per diluted share[27] Product Development and Market Position - Skyworks secured 5G content for premium Android smartphones, including Google Pixel 9 and Samsung Galaxy[4] - Skyworks expanded its Wi-Fi 7 design wins with major companies like Linksys and NETGEAR[4] - Skyworks is well-positioned to capitalize on the transformative smartphone upgrade cycle driven by AI[3] Operating Margins - GAAP operating margin for the three months ended September 27, 2024, was 5.8%, significantly lower than 20.8% in the same quarter of 2023[17] - Non-GAAP operating margin for the three months ended September 27, 2024, was 26.7%, down from 32.6% year-over-year[17] Share-Based Compensation - Share-based compensation expense for the three months ended September 27, 2024, was $38.2 million, compared to $49.9 million in the same period of 2023[18]

Core Viewpoint - Skyworks Solutions (SWKS) is expected to report a decline in earnings and revenues for the fourth quarter of fiscal 2024, with earnings projected at $1.52 per share, reflecting a 30.91% year-over-year decrease, and revenues estimated between $1 billion and $1.04 billion, indicating a 16.17% decline from the previous year [1][2]. Financial Performance Expectations - Earnings per share for Q4 fiscal 2024 are anticipated to be $1.52, consistent with the Zacks Consensus Estimate over the past month [1] - Revenue guidance for the quarter is set between $1 billion and $1.04 billion, with the Zacks Consensus Estimate at $1.02 billion [2] Influencing Factors - The performance in Q4 is likely to benefit from a diversified portfolio, strong mobile demand, and growth in edge IoT and automotive sectors [3] - A 20% sequential increase in mobile business revenues is expected due to normalizing demand and supply conditions in the smartphone market [3] - The proliferation of 5G content in new smartphones is anticipated to positively impact revenues [4] - Strong demand for edge IoT, particularly Wi-Fi 7 systems, is contributing to a multiyear upgrade cycle, which is expected to enhance performance [5] - The rising adoption of generative AI and 5G technologies is driving demand for high-performance RF solutions, benefiting the company [6] - Long-term growth opportunities in the automotive sector are noted, driven by the increasing complexity of radio solutions in software-defined vehicles and connected cars [7] Challenges - Despite positive factors, challenges such as excess inventory, supply chain issues, and economic uncertainty are expected to negatively impact top-line growth [8] Earnings Model Insights - According to the Zacks model, Skyworks currently has an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating that the odds of an earnings beat are not favorable [9]

Core Viewpoint - Skyworks (SWKS) has underperformed compared to its peers and the broader technology sector, facing challenges in inventory levels and competition, despite having a strong design win pipeline and diversified portfolio [1][2][4]. Group 1: Performance Comparison - Skyworks shares have dropped 14% year-to-date, while Broadcom's shares surged 54% and Qorvo's shares declined 9.7%. The broader sector appreciated 22.5% during the same period [1]. - The company is experiencing sluggishness in wireless infrastructure and traditional data center markets, which is contributing to its underperformance [1]. Group 2: Design Wins and Market Position - Skyworks has a robust design win pipeline, particularly in automotive and industrial sectors, with improving demand in edge IoT markets [2]. - The company showcased its Si82Fx gate driver solutions at PCIM Europe, enhancing efficiency in AI data servers and electric vehicle charging applications [2]. - In the mobile segment, which contributed approximately 61% to total revenues in Q3 2024, Skyworks is seeing signs of inventory normalization and improved order patterns [2]. Group 3: AI and Smartphone Market - New AI features in smartphones are expected to drive a multiyear upgrade cycle, increasing Radio Frequency complexity and positioning Skyworks as a market leader [3]. - Skyworks secured 5G content for premium Android smartphones, including models like Google Pixel 8a and Samsung Galaxy M, strengthening its market presence [3]. - Collaboration with Semtech has boosted low-power wide-area network solutions for industrial and smart city applications [3]. Group 4: Financial Outlook - For Q4 fiscal 2024, Skyworks expects revenues between $1 billion and $1.04 billion, with earnings projected at $1.52 per share at the mid-point of this guidance [4]. - The Zacks Consensus Estimate for Q4 fiscal 2024 revenue is $1.02 billion, indicating a 16.17% year-over-year decline, while earnings are expected to decline by 30.91% year-over-year [4]. Group 5: Valuation and Investment Considerations - Skyworks shares are considered cheap with a Value Score of B, having a forward 12-month Price/Sales ratio of 3.68, lower than the sector's 6.12 [6]. - However, the sluggish prospects lead to a Growth Score of D, indicating potential risks for growth-oriented investors [6]. - Skyworks currently holds a Zacks Rank 3 (Hold), suggesting a cautious approach for potential investors [6].

Group 1 - The article does not provide any specific information or data regarding companies or industries [1]

Core Insights - Skyworks Solutions (SWKS) reported third-quarter fiscal 2024 non-GAAP earnings of $1.21 per share, matching the Zacks Consensus Estimate but declining 30.1% year over year [1] - Revenues for the quarter were $905.5 million, a decrease of 15.5% year over year, and below the consensus estimate of $913 million [1] - Mobile revenues accounted for nearly 61% of total revenues, experiencing a sequential decline of 21% [1] - Broad markets contributed approximately 39% to total revenues, with a sequential increase of 1% [1] Operating Details - Non-GAAP gross margin decreased by 160 basis points year over year to 46%, but improved by 100 basis points sequentially due to cost-reduction efforts and a favorable mix shift [2] - Research & development expenses rose by 390 basis points year over year to 17.7% of revenues [2] - Selling, general and administrative expenses increased by 70 basis points to 7.9% in the reported quarter [2] - Non-GAAP operating margin contracted by 630 basis points year over year to 24.2% [2] Balance Sheet & Cash Flow - As of June 28, 2024, cash and cash equivalents along with marketable securities totaled $1.28 billion, up from $1.2 billion as of March 29, 2024 [3] - Long-term debt remained stable at $994 million as of June 28, 2024 [3] - Cash generated by operating activities was $273.5 million, down from $300 million in the previous quarter [3] - Free cash flow was reported at $249.1 million, with a free cash flow margin of 27.5% [3] - The company paid dividends totaling $109 million and repurchased 764,000 shares for $77 million during the quarter [3] Guidance - For the fourth quarter of fiscal 2024, Skyworks expects revenues between $1 billion and $1.04 billion, with earnings projected at $1.52 per share at the midpoint of this guidance [4] - Gross margin is anticipated to be between 46% and 47%, while operating expenses are expected to range from $197 million to $203 million [4] Market Position - Skyworks currently holds a Zacks Rank 3 (Hold) [5] - Year-to-date, SWKS shares have returned 4.6%, compared to the Zacks Computer and Technology sector's growth of 18.2% [5] - Other stocks in the sector with better rankings include Shopify (Rank 1), Apple (Rank 2), and Digital Ocean (Rank 1) [5]

Core Insights - Skyworks Solutions Inc reported mixed third-quarter financial results, with earnings per share of $1.21, missing the analyst consensus estimate of $1.23, and reflecting a 30.06% decrease year-over-year [1] - Quarterly sales reached $905.5 million, surpassing the analyst consensus estimate of $900.4 million, but showing a 15.47% decline compared to the same period last year [1] - The CEO highlighted strong profitability and a ramp-up in the mobile business, with expectations for generative AI applications to drive future growth in RF complexity [1] Financial Performance - Earnings per share: $1.21, below the expected $1.23, down 30.06% from last year [1] - Quarterly sales: $905.5 million, exceeding the $900.4 million estimate, down 15.47% year-over-year [1] Future Outlook - Skyworks anticipates fourth-quarter revenue between $1 billion to $1.04 billion, with non-GAAP diluted earnings per share projected at $1.52 at the midpoint, slightly above the estimate of $1.51 [1] - The company expects a sequential increase of approximately 20% in its mobile business as demand and supply patterns normalize [1] Market Reaction - Following the earnings announcement, Skyworks shares fell by 5.7%, trading at $110.95 [2]