Qorvo Q1 Revenue Falls 7.7%

Qorvo (QRVO -2.57%), a leading supplier of radio frequency (RF), power, and connectivity solutions for smartphones, infrastructure, and connected devices, reported its Q1 FY2026 earnings on July 29, 2025. The most notable news: GAAP revenue and non-GAAP diluted earnings per share missed analyst estimates, coming in at $818.8 million and $0.92, below consensus forecasts of $868.8 million and $1.13, respectively. However, Non-GAAP gross margin advanced to 44.0% in Q1 FY2026, rising 3.1 percentage points from the prior-year quarter. While the company’s earnings lagged Wall Street expectations, its product mix changes and continued portfolio adjustments led to stronger profitability ratios, supporting management’s view that operational progress is underway, even as sales remain soft.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report.

About Qorvo and Its Business Focus

Qorvo’s core business is designing and manufacturing key components for wireless communications, including RF semiconductors, power amplifiers, and advanced connectivity chips. Its products are essential in smartphones, telecommunications networks, defense, automotive, and internet-of-things (IoT) devices. The company serves a small group of very large customers, including major smartphone manufacturers and defense contractors.

Recently, Qorvo has focused on three critical areas: strengthening its research and development (R&D) pipeline, deepening customer relationships, and scaling high-value operations. It is reducing exposure to lower-margin and high-competition portions of the Android smartphone market and prioritizing new design wins in areas like power management integrated circuits (ICs), automotive ultra-wideband chips, and defense-related electronics. Key to success are continued product innovation, operational efficiency, and customer concentration management.

Review of the Quarter: Financial and Strategic Developments

GAAP revenue for Q1 FY2026 came in below analyst forecasts, missing by $50.0 million, and Non-GAAP diluted EPS for Q1 FY2026 was $0.21 below consensus. This was driven mainly by end-market demand volatility and ongoing dependency on a few major smartphone customers—historically, Apple accounted for 47% and Samsung 10% of Qorvo’s sales in FY2025. This quarter, the company faced typical seasonality, as the June period aligns with Apple’s slowest segment. Lower demand and timing of new phone launches from large customers had a direct impact on sales, while the exit from “mass-tier” (lower-priced) Android programs further reduced revenue.

Non-GAAP gross margin climbed to 44.0% in Q1 FY2026, up 3.1 percentage points, thanks in part to product mix changes, restructuring, and the exit of less profitable businesses. Non-GAAP operating income rose 10.3% to $108.2 million in Q1 FY2026 compared to Q1 FY2025, and Free cash flow reached $145.4 million in Q1 FY2026. reflecting cost-cutting actions like workforce reductions and facility closures, including the sale of its China assembly and test operations and the closure of a site in Costa Rica.

Within its business segments, The High Performance Analog (HPA) unit reported GAAP revenue of $137.4 million in Q1 FY2026, up 6.1% year over year -- however, segment results remain highly seasonal and depend on government program funding. The Connectivity & Sensors Group (CSG), which produces chips for automotive, IoT, and smart home applications, posted revenue of $110.2 million in Q1 FY2026, down 4.1%. However, CSG narrowed its GAAP operating loss from $19.5 million in Q1 FY2025 to $7.5 million in Q1 FY2026, as it worked to scale new offerings. The Advanced Cellular Group (ACG), dominated by smartphone customers, recorded GAAP revenue of $571.2 million in Q1 FY2026, down 11.1% year over year, with ACG posted a 15.9% year over year decline in operating profit in Q1 FY2026. The drop was tied to weaker demand after the end of seasonal device ramps and a planned pullback from the low-tier Android market.

From a product standpoint, Qorvo continued to invest in developing new technologies that enable faster wireless data and improved battery efficiency. These efforts include GaAs (gallium arsenide) and GaN (gallium nitride) process technology, as well as BAW (bulk acoustic wave) and SAW (surface acoustic wave) filters, critical for advanced radio frequency signal control in 5G and Wi-Fi systems. The company’s power management ICs (used in smartphones and wearables) and ultra-wideband chips (for automotive and precision location applications) are top focus areas. The period also saw the company move toward advanced process nodes, leveraging artificial intelligence and machine learning to boost product performance and lower costs.

Looking Ahead

Management provided guidance for Q2 FY2026, projecting revenue of approximately $1.025 billion, plus or minus $50 million. It expects non-GAAP gross margin to increase to 48% to 50% and non-GAAP EPS to reach $2.00, plus or minus $0.25. Growth is forecast to be driven by shipment ramps tied to new customer device launches, particularly from its largest accounts.

Investors may want to monitor several key factors in upcoming quarters. These include Qorvo’s ability to diversify beyond its two largest smartphone customers, the delivery of promised profitability from the CSG segment, and whether R&D spending can drive new design wins in high-value markets like automotive, connectivity, and defense electronics. Persistent losses in the CSG group, heavy customer concentration, and volatility in end-market demand continue to pose risks.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.