Skyworks' Q4 2025 Earnings Call: Contradictions Emerge on Content, Android Growth, and Broad Markets Projections

Date of Call: November 04, 2025

Financials Results

• Revenue: $1.1 billion, exceeded the high end of guidance
• EPS: $1.76 diluted EPS, exceeded expectations
• Gross Margin: 46.5% (Q4 FY25)
• Operating Margin: 24% (operating income $264M); operating expenses $247M (slightly above high end of guidance)

Guidance:

• Revenue for Q1 FY26 expected to be $975M to $1,025M (midpoint $1.0B).
• Mobile expected to decline low- to mid-teens sequentially.
• Broad Markets expected to be up slightly sequentially, ~39% of sales and up mid- to high-single digits year-over-year.
• Gross margin projected to be approximately 46%–47%.
• Operating expenses expected $230M–$240M; other income ~ $4M; effective tax rate ~10%; diluted share count ~150.5M; midpoint EPS ~$1.40.
• Free cash flow expected to remain solid in FY26 but below FY25 due to lower revenue base and normalized working capital.

Business Commentary:

• Strong Financial Performance:
• Skyworks Solutions reported revenue of $1.1 billion for the fiscal fourth quarter, with earnings per share of $1.76.

• Revenue was up 21% sequentially and 7% year-over-year in mobile, driven by healthy sell-through and a richer product mix at its top customer, as well as continued growth in Android.

• Broad Markets Growth:

• Revenue from Broad Markets grew 3% sequentially and 7% year-over-year, driven by growth across edge IoT, automotive, and data center.

• WiFi 7 adoption accelerated, and the automotive business had a record run rate, with a pipeline for design wins across various global OEMs.

• Android Segment Progress:

• The Android segment saw revenue below $100 million, primarily driven by the Google product ramp.

• The business is expected to increase again in the December quarter, reflecting strong unit volumes.

• Qorvo Merger Agreement:

• Skyworks announced an agreement to combine with Qorvo, which will add scale, diversification, and complementing technology and product portfolios.
• The merger is expected to reduce customer concentration and enhance financial and strategic positioning for Skyworks.

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "Skyworks delivered strong results... revenue of $1.1 billion, delivered earnings per share of $1.76." CEO: "three straight quarters of solid execution" and Broad Markets described as "an approximately $1.5 billion business with positive momentum over the past 7 quarters." CFO: Free cash flow $1.1B (27% FCF margin) and a strong balance sheet ($1.4B cash, $1.0B debt).

Q&A:

• Question from Harsh Kumar (Piper Sandler & Co., Research Division): It was not that long ago that your company was telegraphing a loss of content at your largest customers, but your revenues are holding extremely well — what changed or went right, was it units, share, or traction in other areas causing you to outperform?
  Response: Management: Outperformance driven by both better-than-expected unit demand and a favorable mix (richer product mix at top customer), and execution; guidance reflects prior content comments.

• Question from Harsh Kumar (Piper Sandler & Co., Research Division): You mentioned streamlining sales — at a high level what did you do and how is it benefiting the business?
  Response: Management: Recruited new sales executive, moved product marketing into business units to align engineering and product road maps, and refocused sales on revenue generation, improving customer alignment.

• Question from Christopher Rolland (Susquehanna Financial Group, LLLP, Research Division): On mergers/divestitures and diversification — with the pending Qorvo deal are there still opportunities to M&A or divest, and is there a theme (analog/IoT) you would pursue?
  Response: Management: The Qorvo combination provides scale and diversification and should reduce customer concentration; both companies will operate independently during the process and no major transformational actions are expected now.

• Question from Christopher Rolland (Susquehanna Financial Group, LLLP, Research Division): Are you more optimistic on Android going forward or do you still worry about commoditization in that space?
  Response: Management: Strength is focused on premium Android customers that value integration/performance; company is deliberately defocusing low-end commodity segments.

• Question from Hadi Orabi (TD Cowen, Research Division) on behalf of Krish Sankar: Excluding the biggest customer, revenues were up ~50% YoY — how much of that is units vs content and how should we think about that segment going forward?
  Response: Management: Growth outside the largest customer is broad-based across automotive, edge IoT and data center (Broad Markets) rather than a single unit/content driver.

• Question from Hadi Orabi (TD Cowen, Research Division) on behalf of Krish Sankar: Your exposure to China is below 10% and peers are exiting — are you comfortable with current exposure or do you plan to reduce it?
  Response: Management: No change in focus — they target premium customers in China (including non-handset businesses like automotive) and avoid low-SP handset segments that are not attractive.

• Question from James Schneider (Goldman Sachs Group, Inc., Research Division): Given recovery in broad markets, how should we think about long-term structural growth rate there — could it be mid-teens?
  Response: Management: Broad Markets is modeled as a long-term double-digit grower driven by WiFi (7/8), automotive connectivity, and infrastructure/cloud opportunities.

• Question from James Schneider (Goldman Sachs Group, Inc., Research Division): How should we think about OpEx run rate from here — can you hold the December OpEx run rate into next year or expect step-ups?
  Response: Management (CFO): Q4 included an extra week (~$7M); going forward they expect targeted investments but no spending above normal inflation and will maintain discipline.

• Question from Samuel Feldman (BNP Paribas, Research Division) on behalf of Karl Ackerman: Android was just under $100M last quarter driven by Google and was up sequentially — what is the magnitude/direction of the Android business this quarter and the path to a $400M run rate?
  Response: Management (Investor Relations): Android was slightly under $100M, up sequentially and primarily driven by Google; they expect it to increase again in the December quarter driven by Google.

• Question from Edward Snyder (Charter Equity Research): How much of the strength at your largest customer is mix versus units, and should the content strength provide a base for increases next year?
  Response: Management: It's difficult to predict precisely; current strength reflects both mix and units and guidance incorporates their best view quarter-to-quarter.

• Question from Edward Snyder (Charter Equity Research): Your accounts receivable jumped materially — is there anything unusual beyond the September quarter launch timing?
  Response: Management (CFO): Nothing unusual — AR movement reflects revenue linearity and timing of collections, no extraordinary item.

• Question from Peter Peng (JPMorgan Chase & Co, Research Division): At your largest customer, is the better-than-expected content driven by mix within the current generation or a better mix of prior generation models?
  Response: Management: It is a combination of better units and better mix across generations; details not provided beyond that.

• Question from Peter Peng (JPMorgan Chase & Co, Research Division): Within Broad Markets (auto, infrastructure, consumer IoT), which buckets are back to normal growth and which remain trend-line?
  Response: Management (IR): Broad Markets growth is led by WiFi 7 adoption, record automotive run-rate (~$65M/quarter exiting FY25) and rebuilding in data center/infrastructure; expect seasonality but overall momentum is positive.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): With recent executive changes, do you have the right leadership across functions or should we expect more changes?
  Response: Management: CEO is comfortable with the current leadership team and is not anticipating additional changes.

• Question from Craig Ellis (B. Riley Securities, Inc., Research Division): Can you remind us of fiscal Q2 seasonality and how you plan to manage inventory going into a seasonally softer period?
  Response: Management (CFO): They don't guide beyond one quarter but expect normal seasonality; FY25 benefited from inventory reduction (boosting FCF) that will not repeat and some inventory build is expected as working capital normalizes.

Contradiction Point 1

Content and Unit Sales Expectations

It involves expectations for content and unit sales in the handset business, which impact revenue projections and investor expectations.

What changes in content loss at your largest customers, or was outperformance driven by traction in other areas? - Harsh Kumar (Piper Sandler & Co.)

2025Q4: The strong mobile results were due to better-than-expected units and a richer product mix at the top customer, along with continued growth in Android. - [Philip Brace](CEO)

Has anything changed in the past 90 days regarding content or unit sales in the handset business? - Christopher Caso (Wolfe Research, LLC)

2025Q3: We've seen strong demand for our products, driven by solid unit demand and healthy shipments. - [Philip Gordon Brace](CEO)

Contradiction Point 2

Android Business Growth

It involves expectations for the growth of the Android business, which is a significant part of Skyworks' revenue.

What was the direction of the Android business this quarter? - Samuel Feldman (BNP Paribas, Research Division)

2025Q4: Android was roughly $100 million, driven primarily by Google, expected to increase again in the December quarter, with continued growth anticipated. - [Rajvindra Gill](Vice President of Investor Relations)

How should we view your Android business compared to last quarter, and can it grow from these levels? - Samuel Jacob Feldman (BNP Paribas Exane)

2025Q3: Android revenue was up significantly in the June quarter, primarily related to our ramp with Google. We anticipate continued growth into the September quarter. - [Rajvindra S. Gill](Vice President, Investor Relations and Corporate Development)

Contradiction Point 3

Relationship with the Largest Customer

It involves the company's relationship with its largest customer, which is crucial for its revenue prospects.

Is the better-than-expected performance due to the current generation mix or the prior generation mix? - Peter Peng (JPMorgan Chase & Co)

2025Q4: Our relationship with the largest customer remains intact. We continue to collaborate and will focus on growth in broad markets and Android, with strategic diversification. - [Philip Brace](CEO)

What is the long-term impact on your largest customer relationship and diversification strategy? - Peter Peng (JPMorgan)

2025Q1: Our relationship with the largest customer remains intact. We continue to collaborate and will focus on growth in broad markets and Android, with strategic diversification. - [Kris Sennesael](CFO)

Contradiction Point 4

Content Loss and Sockets

It involves the reason for content loss in the company's largest customer, which directly impacts revenue projections.

What caused the content loss at your largest customers, or was it due to traction in other areas driving outperformance? - Harsh Kumar (Piper Sandler & Co.)

2025Q4: The strong mobile results were due to better-than-expected units and a richer product mix at the top customer, along with continued growth in Android. - [Philip Brace](CEO)

Can you explain the cause of the content loss and provide details about the Qualcomm sockets? - Christopher Rolland (Susquehanna)

2025Q1: Content loss is due to share loss, not due to losing sockets. We gained content in other areas. The dual-source situation is because the customer decided not to single-source our parts for a specific socket. Regarding Qualcomm sockets, it will be challenging to win them back. - [Kris Sennesael](CFO)

Contradiction Point 5

Growth in Broad Markets

It involves the growth expectations and drivers for the company's Broad Markets segment, which is a key area for diversification.

What is the long-term structural growth rate of the Broad Markets business? - James Schneider (Goldman Sachs Group, Inc.)

2025Q4: Broad Markets expected to grow double-digit long-term, driven by WiFi 7 adoption, automotive connectivity, and infrastructure opportunities. Investments align with higher growth segments. - [Philip Brace](CEO)

Can you clarify whether R&D RF designs can be repurposed for new 5G Android/Samsung content and discuss dollar content opportunities in consumer electronics? - Karl Ackerman (BNP Paribas)

2025Q1: Growth in Broad Markets is in excess of 50% year-over-year, driven by strength in automotive and industrial IoT, along with data center and infrastructure. - [Kris Sennesael](CFO)