Skyworks Solutions (SWKS -0.16%), a prominent provider of analog and mixed-signal semiconductors widely used in wireless communications, reported results on August 5, 2025. It achieved a stronger than anticipated quarter, with GAAP revenue reaching $965 million, surpassing analyst expectations of $940.85 million. Non-GAAP earnings per share (EPS) also exceeded estimates at $1.33 versus $1.24. Both revenue and non-GAAP earnings grew compared to Q3 FY2024, with notable increases of 6.6% and 9.9%, respectively. The company raised its dividend, reflecting ongoing strength in free cash flow. Driven by progress in key markets, robust cash generation, and expanded product wins.
| Metric | Q3 FY25(June 27, 2025) | Q3 Estimate | Q3 FY24(June 28, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $1.33 | $1.24 | $1.21 | 9.9% |
| Revenue (GAAP) | $965 million | $940.85 million | $905.5 million | 6.6% |
| Operating Margin (Non-GAAP) | 23.3% | 24.2% | (0.9) pp | |
| Free Cash Flow (Non-GAAP) | $252.7 million | $249.1 million | 1.4% | |
| Gross Margin (Non-GAAP) | 47.1% | 46.0% | 1.1 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report.
About the Business and Strategic Focus Areas
Skyworks Solutions is recognized for designing and manufacturing high-performance analog and mixed-signal semiconductors, playing a pivotal role in wireless connectivity for smartphones, automotive systems, and industrial devices. The company’s products are critical for enabling technologies such as 5G mobile networks, edge Internet of Things (IoT) devices, and advanced automotive communications.
In recent years, Skyworks has emphasized four focus areas: maintaining technological leadership through R&D and innovation, managing customer concentration—particularly its deep integration with major manufacturers, extending diversification into vehicle, IoT, and industrial markets, and ensuring supply chain efficiency. These themes continue to shape its quarterly results and outlook, with ongoing efforts to develop new technologies and broaden its end-market exposure.
Quarter in Review: Financial and Business Highlights
Both top-line revenue and non-GAAP EPS came in well above estimates. Revenue (GAAP) increased 6.6% compared to Q3 FY2024, non-GAAP EPS rose by 9.9% compared to Q3 FY2024. Management attributed this performance to both core mobile demand and stronger contributions from the company’s Broad Markets division, which encompasses automotive, edge IoT, and data center applications.
The Broad Markets division remains smaller at about 15% of total revenue for Q2 FY2025. New design win activities in edge IoT and automotive—such as 5G telematics and in-car infotainment systems for global automakers like BYD, Ford, Geely, and Nissan—are evidence of growing demand in these segments.
Profitability metrics were mixed compared to Q3 FY2024. Gross margin (GAAP) improved by 1.4 percentage points year-over-year, supported by a favorable mix and cost management, but non-GAAP operating margin declined by 0.9 percentage points due to higher spending. Research and development expenses jumped 24% to nearly $200 million (GAAP) compared to Q3 FY2024.
Android device sales grew sequentially in the mobile business, boosted by new launches, including a flagship Samsung Galaxy smartphone. Additionally, non-mobile applications contributed to steady results despite ongoing industry normalization after a lengthy inventory correction. Segment details were not provided, but management confirmed the traditional split of about 85% of revenue from mobile and around 15% from Broad Markets for Q2 FY2025. There were no major shifts in order patterns with large customers, especially Apple, indicating seasonality as the primary driver of demand in Q2 FY2025 and Q3 FY2025 guidance.
Free cash flow (non-GAAP) reached $252.7 million. GAAP operating cash flow was $314.1 million, up 14.8% compared to Q3 FY2024. The company continued to buy back shares, which reduced the diluted share count by 7% compared to Q3 FY2024. At the end of Q3 FY2025, Skyworks had $1.34 billion in cash and marketable securities and maintained its debt level at about $995 million.
The company declared a 1% increase to its quarterly dividend, raising it to $0.71 per share. This marks a continuation of Skyworks’ shareholder return strategy, which also includes ongoing buybacks. Capital expenditures were $61.4 million, up from $24.4 million in Q3 FY2024. Restructuring and impairment charges totaled $1.5 million (GAAP), part of broader efforts to optimize manufacturing operations, including the consolidation of certain facilities.
Looking Ahead: Guidance and Watch Points
For Q4 FY2025, Skyworks issued non-GAAP guidance only, reflecting industry practice amid shifting regulatory and economic conditions. Management forecast revenue in the range of $1.00 billion to $1.03 billion, with non-GAAP EPS expected at $1.40 at the midpoint.
Investors should monitor several topics as the year progresses. Customer concentration remains a structural consideration, as a significant share of revenue still comes from major partners, notably Apple. The company’s cash balance declined as a result of buybacks and dividend payments, reducing its financial cushion in the event of a downturn. On the other hand, efforts to expand in automotive, enterprise networking, and new connectivity standards such as Wi-Fi 7 represent ongoing diversification and potential avenues for growth.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
