Skyworks Solutions Reports 11.1% Revenue Decline and Leadership Transition

Skyworks Solutions, Inc. reported a decline in financial performance for the three months ended December 27, 2024, with net revenue of $1,068.5 million, down 11.1% from $1,201.5 million in the same period last year. The decrease was primarily attributed to reduced demand for mobile products. Gross profit also fell to $441.9 million, a decrease of 12.8% compared to $506.6 million in the prior year, resulting in a gross margin of 41.4%, down from 42.2%. Net income for the quarter was $162.0 million, down from $231.3 million, leading to earnings per share of $1.00 on a diluted basis, compared to $1.44 in the previous year.

Operating expenses increased to $260.8 million from $248.3 million, driven by higher research and development costs, which rose 15.2% to $176.4 million. Selling, general, and administrative expenses also increased by 4.8% to $82.6 million. The company reported a significant reduction in restructuring, impairment, and other charges, which fell to $1.6 million from $16.2 million in the prior year, reflecting the absence of prior impairment charges related to in-process research and development projects.

In terms of operational metrics, Skyworks' cash and cash equivalents increased to $1,602.5 million, up from $1,368.6 million at the end of the previous quarter. The company generated $377.2 million in cash from operations, although this was a decrease from $774.9 million in the same quarter last year. The company’s inventory decreased to $699.7 million from $784.8 million, indicating improved inventory management. The geographic breakdown of revenue showed a decline in the U.S. market, which accounted for $846.7 million, down from $969.2 million, while revenue from China and Taiwan also saw decreases.

Looking ahead, Skyworks anticipates continued challenges in the mobile product segment, with expectations of revenue impacts from a decrease in market share at a significant customer starting in the fourth quarter of fiscal 2025. The company remains focused on improving gross profit through increased unit volumes and the introduction of higher value-added products. Additionally, Skyworks is preparing for a leadership transition, with Philip Brace set to become the new President and CEO effective February 17, 2025, following the departure of Liam K. Griffin. The company expects to incur approximately $20 million in charges related to this transition.