Qorvo, Inc. (QRVO)
Qorvo, Inc. (Nasdaq: QRVO) is a global leader in RF, analog mixed-signal, connectivity and power management semiconductors, organized into three segments: HPA (defense, infrastructure, power), CSG (Wi-Fi, UWB, IoT, sensors) and ACG (smartphone RF solutions). Key market drivers include 5G, Wi-Fi 7...
Qorvo, Inc. 2025 10-K Review: Connecting the Future with RF, Connectivity & Power
Qorvo, Inc. (Nasdaq: QRVO) is a leading provider of semiconductor solutions that power mobile, infrastructure, defense and IoT applications. In its fiscal 2025 10-K (year ended March 29, 2025), the company highlights its three reportable segments—High Performance Analog (HPA), Connectivity & Sensors Group (CSG) and Advanced Cellular Group (ACG)—and reports key trends, financial results, risks and corporate actions.
Warren.AI 💰 6.2 / 10
1. Business Overview
1.1 Segments
High Performance Analog (HPA): Supplies RF, analog mixed-signal & power management solutions for defense & aerospace, infrastructure (5G, Wi-Fi), industrial and consumer.
Connectivity & Sensors Group (CSG): Delivers Wi-Fi, Matter™/Thread™, Bluetooth® LE, Zigbee®, UWB, cellular IoT and MEMS sensors for automotive, enterprise, consumer and industrial markets.
Advanced Cellular Group (ACG): Offers discrete and highly integrated RF modules, front-end solutions, antenna tuners and PMICs for smartphones, wearables and client computing.
1.2 Industry & Market Trends
- 5G to Wi-Fi 7 & Beyond: Migration to 5G NR and emerging Wi-Fi 7 (802.11be) drives demand for filters, LNAs, PAs and highly integrated front-end modules.
- Defense & Aerospace: Upgrading radar, electronic warfare, satellite communications (LEO constellations) boosts demand for GaN, GaAs RF amplifiers, LNAs and switches.
- Automotive Connectivity & Sensing: V2X, digital key and Child Presence Detection leverage UWB and RF front-end solutions under AEC-Q100 standards.
- Power Efficiency: IoT, automotive and data-center SSDs require advanced power management, motor control and battery management ICs.
1.3 R&D & Manufacturing
- R&D Investments: Focus on materials (GaAs, GaN, BAW, SOI, SiGe, MEMS), process technologies, IC design and advanced packaging.
- Fab Footprint: In-house GaAs, GaN, BAW, SAW fabs in North Carolina, Oregon and Texas; outsourcing of bulk CMOS, SOI, CMOS PMIC, MEMS.
- Supply Chain: Diversified procurement, key foundry partnerships, sale of China assembly & test to Luxshare, winding down Costa Rica site.
1.4 Customers & Competition
- Customer Concentration: Apple (47% of FY 2025 revenue) and Samsung (10%) rely on Qorvo RF solutions in handsets.
- Competition: Analog Devices, Broadcom, Skyworks, Murata, Qualcomm, Texas Instruments and in-house chipset makers.
2. Key Financial Results (FY 2025 vs. FY 2024)
| Metric | FY 2025 | FY 2024 | Change | % |
|---|---|---|---|---|
| Revenue | $3.719B | $3.770B | -$50.5M | -1.3% |
| Gross Margin | 41.3% | 39.5% | +1.8% pts | |
| Operating Income | $95.5M | $91.7M | +$3.8M | +4.2% |
| Net Income (Loss) | $55.6M | $(70.3)M | +$126.0M | |
| EPS (Dil.) | $0.58 | $(0.72) | ||
| Op Cash Flow | $622M | $833M | -$211M | |
| CapEx | $138M | $127M | +$11M | |
| FCF | $484M | $706M | -$222M | |
| Debt—Net of Cash | $528M | $959M | -$431M |
Net Profit in FY 2025: Qorvo returned to profitability with $55.6 million net income, or $0.58 EPS, compared to a net loss of $70.3 million in FY 2024. The improvement stems from margin expansion, higher D&A and CSG sales, and cost control, despite ACG revenue headwinds.
2.1 Segment Performance
- HPA: Revenue up 11% to $637M; operating income rose 32% to $109M. Defense and infrastructure drove demand.
- CSG: Revenue up 9% to $473M; loss narrowed to $56M. Wi-Fi components, UWB and automotive connectivity gained traction.
- ACG: Revenue down 5.5% to $2.609B; operating income down 17% to $602M. Lower RF content in 5G handsets and strategic shift to premium smartphones.
2.2 Cost & Margin Drivers
- Better factory utilization and product mix improved gross margin to 41.3%.
- Gross margin was drag‐impacted by ASP erosion in ACG and divestiture costs in FY 2024.
- R&D and SG&A climbed on strategic investments in D&A, Wi-Fi and automotive programs.
3. Cash, Liquidity & Capital Management
- $1.021B of cash & equivalents ($848M offshore). 40% of FY 2025 revenue comes from international markets.
- Generated $622M of operating cash flow; invested $138M in CapEx and returned $359M to shareholders via buybacks (4M shares).
- Net debt (debt less cash) decreased to $528M from $959M.
- Installed a new $325M unsecured revolving credit facility maturing April 2029.
- Retained $948M of repurchase authorization under a $2B program.
4. Portfolio Actions & Restructuring
4.1 Divestitures
- SiC Power Device Business: Impairment of $126.8M; sold for $117.5M in Jan 2025 (gain of $26.9M).
- China Assembly & Test: $35.3M impairment; sold to Luxshare in May 2024 for $234M, with a supply agreement for assembly & test.
- Costa Rica: Winding down internal assembly & test; evaluating further strategic outsourcing.
4.2 Restructuring
Total restructuring charges of $280.8M in FY 2025, including $192.6M goodwill & intangibles impairments and $88.2M in severance, contract terminations & FS system write-offs.
5. Risks & Outlook
Qorvo highlights key risk factors including:
- Customer Concentration: 47% of revenue from Apple; any share loss or delays in new iPhone launches will dent results.
- Mobile Cyclicality: 5G handset demand in China and EMEA remains uneven; strategic pivot to premium segment.
- Supply Chain: Critical wafers, substrates and external foundry capacity remain at risk from shortages & tariffs.
- Geopolitics & Trade: U.S./China export controls, tariffs and national security measures could limit China sales.
- Competition & Technology Migration: Rapid innovation, chipset in-house integration and AI in RF design intensify the competitive landscape.
Looking Ahead — Qorvoplans to:
1.Continue R&D & M&A to expand its RF GaN/GaAs/BAW portfolio in defense, Wi-Fi 7 and UWB. 2.Focus ACG on flagship 5G devices, shifting away from low-margin mass market smartphones. 3.Leverage strong balance sheet, robust cash flow and global fabs to sustain investment cycle. 4.Balance share repurchases with capex for new fabs and technology upgrades.
Investment Score: 6.2/10
Qorvo is a leading-edge innovator in RF, connectivity and power management, with strong positions in defense and emerging IoT markets. However, its ACG segment faces mobile market cyclicality and customer concentration risks. The diversified portfolio, margin recovery and robust cash generation underpin a moderate investment recommendation. Future upside hinges on defense spending, Wi-Fi 7 adoption, UWB growth and successful ACG repositioning in premium handsets.
Disclaimer: The investment score is for illustrative purposes only, not an actual recommendation. Please do your own due diligence.