Qorvo Beats On Q1 EPS, Expects Strong Free Cash Flow Outlook for FY23

Qorvo Inc QRVO reported a first-quarter FY23 revenue decline of 6.7% year-over-year to $1.035 billion, beating the consensus of $1.02 billion.

Adjusted EPS was $2.25, beating the consensus of $2.12.

Adjusted gross margin declined to 50% from 52.5% in 1Q22. Adjusted operating income decreased by 22.5% Y/Y to $284.4 million, and margin fell 558 bps to 27.5%.

Net cash provided by operating activities for the quarter totaled $273 million, and free cash flow was $229.5 million.

The company held cash and cash equivalents of $858.79 million as of July 2, 2022.

Grant Brown, the interim chief financial officer of Qorvo, commented, "Qorvo's September quarterly guidance reflects incremental weakness in the broader smartphone market and relative strength in other end markets, including defense and power."

"Looking forward, we will continue to drive productivity, and we are taking steps to improve our inventory position, including reducing factory utilization. We remain well-positioned for growth and expect to generate strong free cash flow in FY23."

2Q23 Outlook: Qorvo expects revenue of $1.12 billion to $1.15 billion vs. a consensus of $1.14 billion.

It sees a Non-GAAP gross margin between 49% and 50%, and Non-GAAP diluted earnings per share of $2.45 to $2.65 vs. a consensus of $2.64.

Price Action: QRVO shares are trading higher by 7.23% at $114.60 during the post-market session on Wednesday.