Core Viewpoint - Skyworks Solutions (SWKS) reported a decline in earnings and revenues for Q2 fiscal 2025, with non-GAAP earnings of $1.24 per share, beating estimates but down 20% year-over-year, and revenues of $953.3 million, down 8.9% year-over-year but slightly above consensus [1][2]. Financial Performance - Non-GAAP gross margin increased by 160 basis points year-over-year to 46.7% [3] - Research & development expenses rose by 480 basis points year-over-year to 19.6% of revenues [3] - Selling, general and administrative expenses increased by 190 basis points to 9.2% [3] - Non-GAAP operating margin contracted by 340 basis points year-over-year to 23.3% [3] Balance Sheet & Cash Flow - As of March 28, 2025, cash and cash equivalents were $1.53 billion, down from $1.75 billion as of December 27, 2024 [4] - Long-term debt was $995.1 million, slightly up from $994 million as of December 27, 2024 [4] - Cash generated by operating activities was $409.5 million, compared to $377.2 million in the prior quarter [4] - Free cash flow was $371 million, with a free cash flow margin of 38.9% [4] Dividend Information - Skyworks paid dividends totaling $110.6 million in the reported quarter [5] Q3 FY25 Guidance - For Q3 fiscal 2025, Skyworks expects revenues between $920 million and $960 million, with non-GAAP earnings projected at $1.24 per share at the midpoint [6] - The Zacks Consensus Estimate for Q3 revenues is $951.26 million, indicating a year-over-year decline of 9.06% [6] Market Performance - Following the results, SWKS shares fell by 2.06% in pre-market trading and have underperformed the Zacks Computer & Technology sector year-to-date, with a decline of 25% compared to the sector's decline of 8.7% [2]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Skyworks Solutions, Inc. due to a class action complaint alleging breaches of fiduciary duties by the board of directors during a specified class period [1] Group 1: Legal Investigation - A class action complaint was filed against Skyworks on March 3, 2025, with a class period from August 8, 2023, to February 5, 2025 [1] - The investigation focuses on whether the board of directors of Skyworks breached their fiduciary duties to the company [1] Group 2: Financial Performance - On February 5, 2025, Skyworks announced its financial results for Q1 of fiscal year 2025, providing lower-than-expected revenue guidance for Q2 [3] - The company attributed its disappointing results and guidance to an "intensified" competitive landscape [3] - Following the announcement, Skyworks' stock price plummeted from $87.08 per share to $65.60 per share, marking a decline of over 24% in one day [3] Group 3: Investor Communication - The law firm encourages long-term stockholders of Skyworks to reach out for more information regarding the claims or their rights [4]

Core Viewpoint - Skyworks Solutions reported quarterly earnings of $1.24 per share, exceeding the Zacks Consensus Estimate of $1.20 per share, but down from $1.55 per share a year ago, indicating a 20% year-over-year decline in earnings [1][2] Financial Performance - The company achieved revenues of $953.2 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.20%, but down from $1.05 billion in the same quarter last year, reflecting a decrease of approximately 9.5% [2] - Over the last four quarters, Skyworks has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - Skyworks shares have declined about 25.6% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates of $1.07 for the upcoming quarter and $4.76 for the current fiscal year, alongside expected revenues of $918.84 million and $3.81 billion respectively [7] - The estimate revisions trend for Skyworks is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Semiconductors - Radio Frequency industry, to which Skyworks belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable industry backdrop [8]

Financial Data and Key Metrics Changes - Skyworks reported revenue of $953 million, earnings per share of $1.24, and free cash flow of $371 million, exceeding the midpoint of guidance [8][16][18] - Gross profit was $445 million with a gross margin of 46.7%, driven by favorable mix and cost reduction initiatives [17][18] - Operating income was $222 million, translating into an operating margin of 23.3% [18] Business Line Data and Key Metrics Changes - Mobile revenue accounted for 62% of total revenue, down 17% sequentially due to seasonal patterns [16] - Revenue from the broad markets portfolio, including Edge IoT, Automotive, and Industrial, increased 2% sequentially and grew 3% year over year, marking five consecutive quarters of growth [16][18] Market Data and Key Metrics Changes - Demand signals are firming, with inventory normalization across distribution channels [10] - Wi-Fi 7 adoption is accelerating, driving greater RF content per system [10][11] - Automotive sector growth is driven by the shift to software-defined vehicles, increasing the need for robust wireless connectivity [10][11] Company Strategy and Development Direction - The company aims to reinforce its leadership in mobile, accelerate growth in diversified businesses, and optimize operational efficiency [22] - Focus on building upon core wireless capabilities and exploring adjacent markets for growth [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook, citing a strong balance sheet and consistent free cash flow as strategic assets [19][20] - The evolving tariff landscape is being monitored, with no major direct impact on the business currently anticipated [20][38] Other Important Information - The company returned a record $600 million to shareholders through dividends and share repurchases [8][19] - Changes in executive leadership were announced, with Mark Denninger succeeding Chris Sennesael as CFO [12][13] Q&A Session Summary Question: Initial thoughts on strategy and potential changes - Management highlighted the importance of core technology and the potential for growth in wireless connectivity [25][26] Question: Growth expectations in broad markets and inventory normalization - Management noted a normalization of inventory and positive booking trends, with growth expected in Edge IoT and automotive sectors [28][29][30] Question: Impact of tariffs on COGS and pricing - Management indicated that the current guidance reflects the tariff environment, with no major direct impact on the business [35][36][38] Question: Content expectations with largest customers - Management refrained from commenting on specific customers but noted tailwinds from increased RF content and complexity in workloads [44][46][78] Question: CapEx outlook and manufacturing capacity - Management stated that CapEx is focused on new technology development, with sufficient capacity to meet future demand [39][50] Question: Seasonal trends and inventory dynamics - Management clarified that they did not see pull-ins and expected typical order patterns for the upcoming quarters [94][95] Question: Organic vs. inorganic growth strategies - Management expressed confidence in pursuing both organic investments and potential M&A opportunities, while focusing on delivering shareholder value [88][90]

Financial Data and Key Metrics Changes - Skyworks reported revenue of $953 million, earnings per share of $1.24, and free cash flow of $371 million, exceeding the midpoint of guidance [6][15][18] - Gross profit was $445 million with a gross margin of 46.7%, driven by favorable mix and cost reduction initiatives [16][18] - Operating income was $222 million, translating into an operating margin of 23.3% [17] Business Line Data and Key Metrics Changes - Mobile revenue accounted for 62% of total revenue, down 17% sequentially due to seasonal patterns [15] - Revenue from the broad markets portfolio, including Edge IoT, Automotive, and Industrial, increased 2% sequentially and grew 3% year over year, marking five consecutive quarters of growth [15][16] - The Edge IoT segment is experiencing accelerated Wi-Fi 7 adoption, while automotive demand is driven by software-defined vehicles [9][10] Market Data and Key Metrics Changes - Demand signals are firming, with improving bookings and inventory normalization across distribution channels [8][20] - The automotive market is seeing good year-over-year growth, driven by the need for robust wireless connectivity in vehicles [10][32] - Wi-Fi 7 adoption is expected to provide a strong tailwind for growth, with only a small percentage of devices currently utilizing this technology [98] Company Strategy and Development Direction - The company aims to reinforce its leadership in mobile technology while accelerating growth in diversified businesses [22] - Focus areas include optimizing operational efficiency, investing in innovation, and exploring adjacencies to fuel growth [27][28] - The company is committed to disciplined capital allocation, returning value to shareholders through dividends and share repurchases [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook, citing a strong balance sheet and consistent free cash flow as strategic assets [19][20] - The evolving tariff landscape is being monitored, but the diversified global supply chain is expected to mitigate potential disruptions [20][39] - For Q3, the company anticipates revenue between $920 million and $960 million, with mobile business expected to decline slightly [20][21] Other Important Information - The company announced changes in the executive leadership team, with Mark Denninger succeeding Chris Cennesall as CFO [11][12] - The company returned a record $600 million to shareholders through share repurchases and dividends, the highest amount ever [6][19] Q&A Session Summary Question: Initial thoughts on strategy and potential changes - Management highlighted the importance of core technology and the potential for growth in wireless connectivity as more devices become connected [27][28] Question: Growth expectations in broad markets and inventory normalization - Management noted that inventory corrections are normalizing and that growth is expected in Edge IoT and automotive segments [30][32] Question: Impact of tariffs on COGS and pricing - Management indicated that the current guidance reflects the impact of tariffs, with no major direct impact on the business anticipated [39][40] Question: Content expectations with largest customers - Management refrained from commenting on specific customer plans but noted potential tailwinds from increased RF content and complexity in workloads [48][49] Question: Utilization rates and operational efficiency - Management stated that utilization rates vary by location but emphasized sufficient capacity to meet future revenue growth without significant additional capital expenditures [61][62] Question: Seasonal trends and inventory dynamics - Management acknowledged the complexity of the supply chain and indicated that current order patterns align with typical seasonal expectations [94][95] Question: Organic vs. inorganic growth strategies - Management expressed confidence in pursuing both organic investments and potential M&A opportunities, focusing on strategic priorities [88][90]

Financial Performance - Net revenue for the three months ended March 28, 2025, was $953.2 million, a decrease of 8.9% compared to $1,046.0 million for the same period in 2024[9]. - Gross profit for the six months ended March 28, 2025, was $833.5 million, down 10.0% from $926.8 million in the prior year[9]. - Operating income for the three months ended March 28, 2025, was $97.3 million, a decline of 48.6% compared to $189.2 million for the same period in 2024[9]. - Net income for the six months ended March 28, 2025, was $230.7 million, a decrease of 44.3% from $414.6 million in the prior year[12]. - Net income for the three months ended March 28, 2025, was $68.7 million, resulting in a basic earnings per share of $0.43[60]. - Net income for the six months ended March 28, 2025, was $231.3 million, compared to $183.3 million for the same period in 2024, representing a 26.2% increase[29]. Expenses - Research and development expenses increased to $186.5 million for the three months ended March 28, 2025, up 20.8% from $154.4 million in the same period last year[9]. - Total operating expenses increased to 30.9% of net revenue for the three months ended March 28, 2025, compared to 22.1% for the same period in 2024[66]. - Research and development expenses rose to 19.6% of net revenue for the three months ended March 28, 2025, compared to 14.8% for the same period in 2024[66]. - Selling, general, and administrative expenses rose by 14.6% to $88.0 million for the three months ended March 28, 2025, compared to $76.8 million in the prior year, representing 9.2% of net revenue[75]. - The provision for income taxes for the three months ended March 28, 2025, was $33.7 million, significantly higher than $9.6 million for the same period in 2024[9]. - The provision for income taxes increased by 251.0% to $33.7 million for the three months ended March 28, 2025, compared to $9.6 million in the same period last year[81]. Cash and Liquidity - Cash and cash equivalents at the end of the period were $1,387.8 million, an increase from $1,368.6 million at the beginning of the period[16]. - Liquidity, including cash, cash equivalents, and marketable securities, totaled $1,527.7 million as of March 28, 2025, a decrease of $46.4 million from September 27, 2024[89]. - Cash provided by operating activities decreased by $288.6 million to $786.6 million for the six months ended March 28, 2025, compared to $1,075.2 million in the prior year[85]. - The investment portfolio totals approximately $1,387.8 million, with cash and cash equivalents including money market funds, corporate bonds, and U.S. Treasury securities[95]. - The company anticipates that cash generated from operations and available credit will be sufficient to meet short-term and long-term liquidity requirements[91]. Stock Repurchase and Dividends - The company repurchased $500.0 million of common stock under its stock repurchase program during the six months ended March 28, 2025[16]. - The company repurchased common stock amounting to $504.3 million during the three months ended March 28, 2025[29]. - The company declared dividends totaling $112.5 million for the three months ended March 28, 2025, compared to $108.9 million for the same period in 2024, reflecting a 1.7% increase[29]. - A cash dividend of $0.70 per share was declared on May 7, 2025, payable on June 17, 2025, totaling $223.1 million for the fiscal year ended October 3, 2025[57][58]. - The total approximate dollar value of shares that may yet be purchased under the stock repurchase program is $1.5 billion as of March 28, 2025[113]. - The company has a new stock repurchase program approved on February 4, 2025, authorizing the repurchase of up to $2.0 billion of common stock, which will expire on February 3, 2027[113]. Assets and Liabilities - Total assets decreased to $7,885.7 million as of March 28, 2025, down from $8,283.3 million as of September 27, 2024[14]. - Long-term debt remained stable at $995.1 million as of March 28, 2025, compared to $994.3 million as of September 27, 2024[14]. - The carrying amount of total debt under Senior Notes was $995.1 million as of March 28, 2025, compared to $913.7 million as of September 27, 2024, indicating an increase of approximately 8.9%[35]. - Total inventory decreased to $678.3 million as of March 28, 2025, from $784.8 million as of September 27, 2024, representing a reduction of approximately 13.5%[37]. - Total property, plant, and equipment, net was $1,231.7 million as of March 28, 2025, down from $1,280.3 million as of September 27, 2024[38]. Market and Economic Conditions - Revenue from the United States for the six months ended March 28, 2025, was $1,571.0 million, down from $1,764.3 million in the same period of 2024, a decline of 10.9%[29]. - The company derives significant revenues from international customers, primarily in the Asia-Pacific region and Europe[106]. - Recent tariffs announced by the U.S. in April 2025 could negatively impact trade and operating costs[106]. - The company faces risks related to doing business in China, including evolving laws and potential tariffs[109]. - Geopolitical changes in China-Taiwan relations could disrupt operations and negatively affect the semiconductor industry[109]. Legal and Compliance Risks - The company faces potential litigation risks related to warranty claims and product defects, which could adversely affect its operating results and reputation[111]. - The company has been named in a putative class action lawsuit alleging violations of federal securities laws, which could result in significant defense costs and damages[111]. - The company may face challenges in fulfilling contractual obligations, which could lead to lawsuits from customers or third parties[111]. - Investigating product defects may divert resources from other product development efforts, potentially impacting future growth[111]. Accounting and Reporting - The company is currently evaluating the impact of recently issued accounting standards on its consolidated financial statements and related disclosures[25]. - The company has not recorded any liability for indemnities related to product sales and does not expect these obligations to materially impact its financial statements[51]. - The company is subject to a 1% excise tax on net share repurchases under the Inflation Reduction Act, impacting the amount available under the repurchase program[114].

Group 1 - The core point of the article is that Skyworks Solutions Inc. reported second-quarter revenue of $953 million, slightly exceeding analyst expectations of $950.3 million [1]

Revenue and Earnings - Revenue for Q2 Fiscal 2025 was $953 million, a decrease from $1,046 million in Q2 Fiscal 2024, representing a decline of approximately 8.9% year-over-year[3][20] - GAAP diluted earnings per share (EPS) for the quarter were $0.43, down from $1.14 in the same quarter last year, while non-GAAP diluted EPS was $1.24[3][20] - GAAP net income for Q2 2025 was $68.7 million, significantly lower than $183.3 million in Q2 2024, a decrease of 62.5%[21] - Non-GAAP net income for Q2 2025 was $196.8 million, down from $250.7 million in Q2 2024, a reduction of 21.5%[21] - Non-GAAP diluted earnings per share for Q2 2025 was $1.24, compared to $1.55 in Q2 2024, a decrease of 20.0%[21] - GAAP operating income for Q2 2025 was $97.3 million, down from $189.2 million in Q2 2024, a decline of 48.6%[21] - Non-GAAP operating income for Q2 2025 was $222.2 million, compared to $279.1 million in Q2 2024, a decrease of 20.3%[21] Cash Flow and Assets - Operating cash flow for the quarter was $410 million, resulting in an operating cash flow margin of 43%, and free cash flow was $371 million, with a free cash flow margin of 39%[5] - GAAP net cash provided by operating activities for Q2 2025 was $409.5 million, an increase from $300.2 million in Q2 2024, up by 36.4%[21] - Non-GAAP free cash flow for Q2 2025 was $371.0 million, compared to $272.6 million in Q2 2024, an increase of 36.1%[21] - Cash and cash equivalents at the end of the period were $1,387.8 million, a decrease from $1,602.5 million at the beginning of the period, reflecting a net decrease of $214.7 million[35] - Total assets decreased from $8,283.3 million on September 27, 2024, to $7,885.7 million on March 28, 2025, representing a decline of approximately 4.8%[33] Shareholder Returns - The company returned over $600 million to shareholders through share repurchases and dividends, marking the highest quarterly return ever[4] - The board declared a cash dividend of $0.70 per share, payable on June 17, 2025, to stockholders of record on May 27, 2025[10] - Dividends paid increased slightly to $110.6 million for the three months ended March 28, 2025, compared to $109.1 million for the same period last year[35] - The company repurchased $500.0 million in common stock during the six months ended March 28, 2025[35] Research and Development - Research and development expenses increased to $186.5 million from $154.4 million year-over-year, reflecting a focus on innovation and product development[20] Market Performance and Expectations - For Q3 Fiscal 2025, revenue is expected to be between $920 million and $960 million, with non-GAAP diluted EPS projected at $1.24 at the mid-point of the revenue range[8] - The mobile business is anticipated to decline low single digits sequentially, consistent with typical seasonal patterns, while Broad Markets are expected to show sequential growth[9] - The company secured 5G design wins across premium Android smartphones, including flagship models from Samsung Galaxy, Google Pixel, and Oppo[9] - Key design wins were achieved for in-vehicle infotainment systems with major automotive OEMs, enhancing market presence in the automotive sector[9] Profitability Metrics - GAAP gross profit for Q2 2025 was $391.6 million, down from $420.3 million in Q2 2024, representing a decrease of 6.5%[21] - Non-GAAP gross profit for Q2 2025 was $444.7 million, compared to $470.9 million in Q2 2024, a decline of 5.5%[21] - Share-based compensation increased to $62.7 million for the three months ended March 28, 2025, compared to $46.0 million for the same period last year, an increase of approximately 36.5%[35] - Capital expenditures for the three months ended March 28, 2025, were $38.5 million, up from $27.6 million in the same period last year, an increase of approximately 39.8%[35] Accounts Receivable and Liabilities - The company reported a decrease in accounts receivable from $508.8 million on September 27, 2024, to $371.9 million on March 28, 2025, a decline of about 26.9%[33] - Total liabilities remained relatively stable at $1,985.4 million as of March 28, 2025, compared to $1,946.6 million on September 27, 2024[33]

Core Viewpoint - Skyworks Solutions (SWKS) is expected to report a decline in earnings and revenues for the second quarter of fiscal 2025, with earnings projected at $1.20 per share, reflecting a 22.58% decrease year-over-year, and revenues anticipated between $935 million and $965 million, indicating a 9.06% decline from the previous year [1][2]. Group 1: Earnings and Revenue Expectations - The Zacks Consensus Estimate for earnings remains steady at $1.20 per share, with a projected revenue of $951.26 million for the second quarter of fiscal 2025 [1][2]. - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 1.46% [2]. Group 2: Factors Influencing Performance - The performance in Q2 is likely to benefit from a diversified portfolio and growth in edge IoT and automotive sectors, with 5G content in new smartphones contributing positively to revenues [3][5]. - There is expected to be strong demand for edge IoT technologies, including Wi-Fi 6e and Wi-Fi 7 systems, leading to a multiyear upgrade cycle due to faster data transfer speeds and lower latency [4]. Group 3: Market Trends and Challenges - The rising adoption of generative AI and 5G technologies is anticipated to drive demand for high-performance RF solutions, positioning Skyworks favorably in the market [5]. - Despite some inventory challenges, long-term growth opportunities are seen in the automotive sector, driven by the increasing complexity of radio solutions in software-defined vehicles and connected cars [6]. - However, mobile revenue is expected to decline by mid-to-high teens sequentially due to historical seasonality, and weakness in industrial and infrastructure sectors is likely to impact top-line growth [7]. Group 4: Earnings ESP and Stock Outlook - Currently, Skyworks has an Earnings ESP of -0.83% and a Zacks Rank of 4 (Sell), indicating lower odds of an earnings beat [8].

Core Viewpoint - A class action securities lawsuit has been filed against Skyworks Solutions, Inc. due to alleged securities fraud that affected investors between August 8, 2023, and February 5, 2025 [1][2]. Group 1: Lawsuit Details - The lawsuit aims to recover losses for investors who were misled by the company's statements regarding expected revenue for fiscal year 2025, including claims of confidence in expanding its mobile business and investing in new technologies [2]. - On February 5, 2025, Skyworks reported financial results for Q1 of fiscal year 2025, providing lower-than-expected revenue guidance for Q2, attributing this to an intensified competitive landscape [2]. - Following the announcement, Skyworks' stock price plummeted from $87.08 per share to $65.60 per share on February 6, 2025, marking a decline of over 24% in one day [2]. Group 2: Next Steps for Investors - Investors who suffered losses during the specified timeframe have until May 5, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require serving as lead plaintiff [3]. - Class members may be entitled to compensation without any out-of-pocket costs or fees [3]. Group 3: Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and has been recognized as one of the top securities litigation firms in the United States for seven consecutive years [4].