Qorvo reports 33 percent growth year-over-year
Decline forecasted next quarter as Asian customers delay flagship smartphone launches
Qorvo, a US provider of RF chips, has announced financial results for its fiscal year 2017 third quarter, ended December 31, 2016.
On a GAAP basis, Q3 2017 revenue increased 33.1 percent year-over-year and decreased 4.4 percent sequentially to $826.3 million. Gross margin was 37.6 percent, operating expenses were $249.2 million, operating income was $61.4 million, and net loss was $78.6 million, or a loss of $0.62 per share.
On a non-GAAP basis, gross margin was 44.3 percent, operating expenses were $157.1 million, operating income was $208.7 million, or 25.3 percent of sales, and net income was $177.3 million, or diluted EPS of $1.35. Gross margin decreased year-over-year due primarily to product mix shift to low band PAD products. On a sequential basis, gross margin increased due primarily to improvements in yields of low band PAD-related products.
Bob Bruggeworth, president and CAEO of Qorvo, said: "In the December quarter, Qorvo grew 33 percent year-over-year while exceeding our operating margin target for the quarter. We supported the launch of marquee smartphones and leading China-based OEMs and delivered record revenue in IDP.
"We did this while qualifying leading technologies for top customer programs, introducing over 100 new products, and achieving key milestones on operational initiatives. I'm extremely proud of what the team delivered to position Qorvo for anticipated double-digit revenue growth in fiscal year 2018.
"Of note, we achieved a significant performance milestone in BAW filter resonator performance, and we are competing today on the most complex BAW-based product opportunities. We now expect sales of BAW-based products will increase from less than a third of Mobile Products revenue in fiscal year 2018 to approaching 40 percent in fiscal year 2019.
"In the March quarter, we're forecasting a greater than historical sequential decline as two of our leading customers in China and a tier-one customer in Korea delay flagship smartphone launches. In fiscal year 2018, we expect double-digit revenue growth, driven by continued broad-based growth in IDP and increasing demand for our mobile products, including multiplexers, diversity receive modules, WiFi, RF Fusion, and RF Flex. We are also forecasting year-over-year content gains in marquee smartphones, driven by low-band PADs, envelope trackers and tuners."
Mobile Products (MP) revenue grew 34 percent year-over-year to $656.8 million, driven by sales of integrated solutions and highly differentiated discrete components to manufacturers of marquee smartphones and leading China-based smartphone OEMs
MP secured multiple design wins for complete system solutions combining low-, mid- and high-band RF Fusion® placements for smartphones and other connected mobile devices
Infrastructure and Defense Products (IDP) revenue grew 29 percent year-over-year to a record $168.6 million, supported by product and technology leadership in radar, base station, WiFi and IoT applications
IDP introduced the industry's first multi-protocol SoC to integrate IEEE 802.15.4, ZigBee 3.0, Thread and Bluetooth Low Energy communication protocols for sensors and actuators throughout the home
IDP enjoyed broad-based design win activity, highlighted by a complete RF solution win with content above $5 at a leading WiFi router OEM, multiple GaN wins for radar, electronic warfare and wireless infrastructure, and the adoption of BAW filters in automotive applications
IDP made substantial progress on efforts to consolidate GaN manufacturing, successfully transferring Greensboro GaN-based products to Richardson, Texas, and achieving customer qualification
Financial Outlook
Qorvo currently believes the demand environment in its end markets supports the following non-GAAP expectations for the March 2017 quarter: quarterly revenue in the range of $610 million to $650 million; ross margin of approximately 46 percent; tax rate of approximately 8 percent; and diluted EPS in the range of $0.70 to $0.90.
