• Qorvo® Announces Fiscal 2023 Second Quarter Financial Results

    Source: Nasdaq GlobeNewswire / 02 Nov 2022 15:00:00   America/Chicago

    GREENSBORO, N.C., Nov. 02, 2022 (GLOBE NEWSWIRE) -- Qorvo® (Nasdaq:QRVO), a leading global provider of connectivity and power solutions, today announced financial results for the Company’s fiscal 2023 second quarter ended October 1, 2022.

    On a GAAP basis, revenue for Qorvo’s fiscal 2023 second quarter was $1.158 billion, gross margin was 46.5%, operating income was $262 million and diluted earnings per share was $1.82. On a non-GAAP basis, gross margin was 49.2%, operating income was $338 million and diluted earnings per share was $2.66.

    Bob Bruggeworth, president and chief executive officer of Qorvo, said, “Qorvo delivered a solid September quarter, supported by a large customer launch and strength in defense and power. In the December quarter, Qorvo is continuing to adjust to weakening end-market demand while taking steps to significantly reduce inventory in the channel. Across our businesses, we remain encouraged by customer design win activity and content and integration trends. We are introducing new technologies and new products to drive growth and expand content in diverse markets, including defense, power, infrastructure, automotive, IoT connectivity and smartphones.”

    Strategic Highlights

    • Achieved fourth consecutive quarter of sequential growth in Silicon Carbide (SiC) business and signed agreement with SK Siltron for long-term supply of SiC wafers
    • Released portfolio of advanced fourth-generation SiC surface-mount FETs optimized for high-power applications such as DC-to-DC converters, fast DC chargers, and onboard chargers
    • Released 5-watt GaN power amplifier module for 4.5 - 4.6 GHz massive-MIMO cellular base stations and announced GaN power module for upcoming DOCSIS 4.0 broadband cable systems
    • Introduced highly compact PMIC designed to enable reconfigurability and reduce time to market in space-constrained applications including home automation and networking systems
    • Achieved Matter® 1.0 certification and commenced shipments of Matter development kits featuring ConcurrentConnect™ technology, simplifying design of IoT gateway and connected devices
    • Broadened smart home product portfolio leveraging UWB and Matter system solutions and expanded UWB design engagements serving enterprise applications, including indoor navigation
    • Expanded connectivity and sensing design wins supporting top-tier automakers for applications including infotainment, connectivity, secure car access and EV smart interiors
    • Secured broad range of Wi-Fi 6 and Wi-Fi 6E design wins in support of 2023 platforms and launched 5 GHz and 6 GHz filters for European band Wi-Fi 6E and Wi-Fi 7 applications
    • Launched commercial trials of Qorvo Omnia™ COVID-19 diagnostic test platform with multiple retail healthcare outlets and began production of flu A/B cartridges for clinical trials in support of National Institutes of Health (NIH) initiatives
    • Increased shipments of Phase 7 LE solutions and secured additional design wins, including LB, MHB and UHB integrated placements across multiple smartphone OEMs
    • Commenced first production shipments of high-performance MEMS-based antenna solutions and expanded customer engagements to include top-tier smartphone OEMs
    • Expanded content at Korea-based OEM with first LB PAD win in their flagship smartphone, complementing wins in MHB main and secondary transmit, tuning and Wi-Fi applications, in support of upcoming 2023 flagship launch
    • Introduced highly integrated MHB PAD combining main path and diversity receive content, in support of future cellular architectures

    Financial Commentary and Outlook

    Grant Brown, chief financial officer of Qorvo, said, “Qorvo delivered September quarterly revenue and EPS above the high end of our guidance while also reducing inventories. Looking forward, we anticipate ongoing weakness across end markets, primarily consumer, and a more acute inventory correction at our Android-based smartphone customers. Despite the challenging environment, we expect to deliver strong free cash flow in fiscal 2023 while investing to drive diversified long-term growth. On this outlook and projected free cash flow, the board of directors has approved a $2 billion share repurchase authorization.”

    Qorvo's current outlook for the December 2022 quarter is:

    • Quarterly revenue of $700 million to $750 million
    • Non-GAAP gross margin between 43% and 44%
    • Non-GAAP diluted earnings per share in the range of $0.50 to $0.75

    Qorvo’s actual quarterly results may differ from these expectations and projections, and such differences may be material.

    Selected Financial Information

    The following tables set forth selected GAAP and non-GAAP financial information for Qorvo for the periods indicated. See the more detailed financial information for Qorvo, including reconciliations of GAAP and non-GAAP financial information, attached.

      SELECTED GAAP RESULTS 
      (Unaudited) 
      (In millions, except for percentages and EPS) 
      For the quarter ended
    October 1, 2022    		 For the quarter ended
    July 2, 2022    		 Change vs. Q1
    FY 2023    		 
    Revenue$1,158.1 $1,035.4 $122.7  
    Gross profit$538.9 $375.3 $163.6  
    Gross margin 46.5% 36.2% 10.3 ppt
    Operating expenses$277.4 $273.4 $4.0  
    Operating income$261.6 $101.9 $159.7  
    Net income$188.6 $68.9 $119.7  
    Weighted average diluted shares 103.7  106.1  (2.4) 
    Diluted EPS$1.82 $0.65 $1.17  


      SELECTED NON-GAAP RESULTS1 
      (Unaudited) 
      (In millions, except for percentages and EPS) 
      For the quarter ended
    October 1, 2022    		 For the quarter ended
    July 2, 2022    		 Change vs. Q1
    FY 2023    		 
    Revenue$1,158.1 $1,035.4 $122.7  
    Gross profit$570.2 $518.2 $52.0  
    Gross margin 49.2% 50.0% (0.8)ppt
    Operating expenses$232.5 $233.8 $(1.3) 
    Operating income$337.7 $284.4 $53.3  
    Net income$276.2 $238.4 $37.8  
    Weighted average diluted shares 103.7  106.1  (2.4) 
    Diluted EPS$2.66 $2.25 $0.41  


      SELECTED GAAP RESULTS 
      (Unaudited) 
      (In millions, except for percentages and EPS) 
      For the quarter ended
    October 1, 2022    		 For the quarter ended
    October 2, 2021    		 Change vs. Q2
    FY 2022    		 
    Revenue$1,158.1 $1,255.2 $(97.1) 
    Gross profit$538.9 $621.6 $(82.7) 
    Gross margin 46.5% 49.5% (3.0)ppt
    Operating expenses$277.4 $259.2 $18.2  
    Operating income$261.6 $362.4 $(100.8) 
    Net income$188.6 $319.2 $(130.6) 
    Weighted average diluted shares 103.7  112.4  (8.7) 
    Diluted EPS$1.82 $2.84 $(1.02) 


      SELECTED NON-GAAP RESULTS1 
      (Unaudited) 
      (In millions, except for percentages and EPS) 
      For the quarter ended
    October 1, 2022    		 For the quarter ended
    October 2, 2021    		 Change vs. Q2
    FY 2022    		 
    Revenue$1,158.1 $1,255.2 $(97.1) 
    Gross profit$570.2 $657.5 $(87.3) 
    Gross margin 49.2% 52.4% (3.2)ppt
    Operating expenses$232.5 $222.1 $10.4  
    Operating income$337.7 $435.4 $(97.7) 
    Net income$276.2 $384.5 $(108.3) 
    Weighted average diluted shares 103.7  112.4  (8.7) 
    Diluted EPS$2.66 $3.42 $(0.76) 

    1 Excludes stock-based compensation expense, amortization of intangible assets, acquisition and integration related costs, charges associated with a long-term capacity reservation agreement, loss (gain) on assets, start-up costs, restructuring related charges, (gain) loss on investments, other expense and an adjustment of income taxes.

    Non-GAAP Financial Measures

    In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains some or all of the following non-GAAP financial measures: (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating income and operating margin, (iii) non-GAAP net income, (iv) non-GAAP net income per diluted share, (v) non-GAAP operating expenses (research and development; selling, general and administrative), (vi) free cash flow, (vii) EBITDA, (viii) non-GAAP return on invested capital (ROIC), and (ix) net debt or positive net cash. Each of these non-GAAP financial measures is either adjusted from GAAP results to exclude certain expenses or derived from multiple GAAP measures, which are outlined in the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables, attached, and the “Additional Selected Non-GAAP Financial Measures and Reconciliations” tables, attached.

    In managing Qorvo's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures. In developing and monitoring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing gross margin and operating margin. In addition, management relies upon these non-GAAP financial measures to assess whether research and development efforts are at an appropriate level, and when making decisions about product spending, administrative budgets, and other operating expenses. Also, we believe that non-GAAP financial measures provide useful supplemental information to investors and enable investors to analyze the results of operations in the same way as management. We have chosen to provide this supplemental information to enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses and stock-based compensation expense, which may obscure trends in Qorvo's underlying performance.

    We believe that these non-GAAP financial measures offer an additional view of Qorvo's operations that, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of Qorvo's results of operations and the factors and trends affecting Qorvo's business. However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

    Our rationale for using these non-GAAP financial measures, as well as their impact on the presentation of Qorvo's operations, are outlined below:

    Non-GAAP gross profit and gross margin. Non-GAAP gross profit and gross margin exclude amortization of intangible assets, stock-based compensation expense and certain non-cash expenses. We believe that exclusion of these costs in presenting non-GAAP gross profit and gross margin facilitates a useful evaluation of our historical performance and projected costs and the potential for realizing cost efficiencies.

    We view amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, and customer relationships, as items arising from pre-acquisition activities, determined at the time of an acquisition, rather than ongoing costs of operating Qorvo’s business. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangible assets is a static expense, which is not typically affected by operations during any particular period. Although we exclude the amortization of purchased intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting and contribute to revenue generation.

    We believe that presentation of non-GAAP gross profit and gross margin and other non-GAAP financial measures that exclude the impact of stock-based compensation expense assists management and investors in evaluating the period-over-period performance of Qorvo's ongoing operations because (i) the expenses are non-cash in nature, and (ii) although the size of the grants is within our control, the amount of expense varies depending on factors such as short-term fluctuations in stock price volatility and prevailing interest rates, which can be unrelated to the operational performance of Qorvo during the period in which the expense is incurred and generally are outside the control of management. Moreover, we believe that the exclusion of stock-based compensation expense in presenting non-GAAP gross profit and gross margin and other non-GAAP financial measures is useful to investors to understand the impact of the expensing of stock-based compensation to Qorvo's gross profit and gross margins and other financial measures in comparison to prior periods. We also believe that the adjustments to profit and margin related to certain non-cash expenses do not constitute part of Qorvo's ongoing operations and therefore the exclusion of these items provides management and investors with better visibility into the actual revenue and actual costs required to generate revenues over time and facilitates a useful evaluation of our historical and projected performance. We believe disclosure of non-GAAP gross profit and gross margin has economic substance because the excluded expenses do not represent continuing cash expenditures and, as described above, we have little control over the timing and amount of the expenses in question.

    For the three months ended July 2, 2022, non-GAAP gross profit and gross margin also exclude charges associated with a long-term capacity reservation agreement. Unprecedented disruption resulting from measures taken in China to control the COVID-19 pandemic and the conflict in Ukraine have negatively impacted demand for 5G handsets in China and EMEA within a short period of time. As a result of these extraordinary circumstances, we did not meet the minimum purchase commitments under a long-term capacity reservation agreement with a foundry supplier. This resulted in shortfall charges that have been recorded in our cost of goods sold. We believe these charges are not reflective of the performance of our ongoing business as they were the result of unprecedented disruption resulting from the COVID-19 pandemic and the conflict in Ukraine.

    Non-GAAP operating income and operating margin. Non-GAAP operating income and operating margin exclude stock-based compensation expense, amortization of intangible assets, acquisition and integration related costs, gain or loss on assets, asset impairments, start-up costs, restructuring related charges, charges associated with a long-term capacity reservation agreement and certain non-cash expenses. We believe that presentation of a measure of operating income and operating margin that excludes amortization of intangible assets and stock-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin. We believe that acquisition and integration related costs, gain or loss on assets, asset impairments, start-up costs, restructuring related charges, charges associated with a long-term capacity reservation agreement and certain non-cash expenses do not constitute part of Qorvo's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and facilitates a useful evaluation of our historical and projected performance. We believe disclosure of non-GAAP operating income and operating margin has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

    Non-GAAP net income and non-GAAP net income per diluted share. Non-GAAP net income and non-GAAP net income per diluted share exclude the effects of stock-based compensation expense, amortization of intangible assets, acquisition and integration related costs, gain or loss on assets, asset impairments, start-up costs, restructuring related charges, charges associated with a long-term capacity reservation agreement, certain non-cash expenses, gain or loss on investments, other expense (income) and also reflect an adjustment of income taxes. The income tax adjustment primarily represents the use of research and development tax credit carryforwards, deferred tax expense (benefit) items not affecting taxes payable, adjustments related to the deemed and actual repatriation of historical foreign earnings, non-cash expense (benefit) related to uncertain tax positions and other items unrelated to the current fiscal year or that are not indicative of our ongoing business operations. We believe that presentation of measures of net income and net income per diluted share that exclude these items is useful to both management and investors for the reasons described above with respect to non-GAAP gross profit and gross margin and non-GAAP operating income and operating margin. We believe disclosure of non-GAAP net income and non-GAAP net income per diluted share has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

    Non-GAAP operating expenses (research and development and selling, general and administrative). Non-GAAP research and development and selling, general and administrative expenses exclude stock-based compensation expense, amortization of intangible assets and certain non-cash expenses (primarily acquisition and integration related costs). We believe that presentation of measures of these operating expenses that exclude amortization of intangible assets and stock-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin. We believe that acquisition and integration related costs and certain non-cash expenses do not constitute part of Qorvo's ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and facilitates a useful evaluation of our historical and projected performance. We believe disclosure of these non-GAAP operating expenses has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

    Free cash flow. Qorvo defines free cash flow as net cash provided by operating activities during the period minus property and equipment expenditures made during the period, and free cash flow margin is calculated as free cash flow as a percentage of revenue. We use free cash flow as a supplemental financial measure in our evaluation of liquidity and financial strength. Management believes that this measure is useful as an indicator of our ability to service our debt, meet other payment obligations and make strategic investments. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.

    EBITDA. Qorvo adjusts GAAP net income for interest expense, interest income, income tax expense (benefit), depreciation and intangible amortization expense, stock-based compensation and other charges that are not representative of Qorvo's ongoing operations (including asset impairments, investment activity, acquisition-related costs, certain charges associated with a long-term capacity reservation agreement and restructuring-related costs) when presenting EBITDA. Management believes that this measure is useful to evaluate our ongoing operations and as a general indicator of our operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges).

    Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP financial measure that management believes provides useful supplemental information for management and the investor by measuring the effectiveness of our operations' use of invested capital to generate profits. We use ROIC to track how much value we are creating for our shareholders. Non-GAAP ROIC is calculated by dividing annualized non-GAAP operating income, net of an adjustment for income taxes (as described above), by average invested capital. Average invested capital is calculated by subtracting the average of the beginning balance and the ending balance of equity plus net debt, less certain goodwill.

    Net debt or positive net cash. Net debt or positive net cash is defined as unrestricted cash, cash equivalents and short-term investments minus any borrowings under our credit facility and the principal balance of our senior unsecured notes. Management believes that net debt or positive net cash provides useful information regarding the level of Qorvo's indebtedness by reflecting cash and investments that could be used to repay debt.

    Inventory days on hand. Inventory days on hand is defined as (a) average net inventory for the period, divided by (b) the result of non-GAAP cost of goods sold for the period divided by the number of days in the period.

    Forward-looking non-GAAP financial measures. Our earnings release contains forward-looking free cash flow, gross margin, income tax rate and diluted earnings per share. We provide these non-GAAP measures to investors on a prospective basis for the same reasons (set forth above) that we provide them to investors on a historical basis. We are unable to provide a reconciliation of the forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures without unreasonable effort due to variability and difficulty in making accurate projections for items that would be required to be included in the GAAP measures, such as stock-based compensation, acquisition and integration related costs, restructuring related charges, gain or loss on assets, asset impairments, gain or loss on investments and the provision for income taxes. We believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

    Limitations of non-GAAP financial measures. The primary material limitations associated with the use of non-GAAP financial measures as an analytical tool compared to the most directly comparable GAAP financial measures are these non-GAAP financial measures (i) may not be comparable to similarly titled measures used by other companies in our industry, and (ii) exclude financial information that some may consider important in evaluating our performance, thus limiting their usefulness as a comparative tool. We compensate for these limitations by providing full disclosure of the differences between these non-GAAP financial measures and the corresponding GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, to enable investors to perform their own analysis of our gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities. We further compensate for the limitations of our use of non-GAAP financial measures by presenting the corresponding GAAP measures more prominently.

    Qorvo will conduct a conference call at 5:00 p.m. ET today to discuss today’s press release. The conference call will be broadcast live over the Internet and can be accessed by any interested party at https://www.qorvo.com (under “Investors”). A telephone playback of the conference call will be available approximately two hours after the call’s completion and can be accessed by dialing 412-317-6671 and using the passcode 13733149. The playback will be available through the close of business November 9, 2022.

    About Qorvo

    Qorvo (Nasdaq:QRVO) supplies innovative semiconductor solutions that make a better world possible. We combine product and technology leadership, systems-level expertise and global manufacturing scale to quickly solve our customers’ most complex technical challenges. Qorvo serves diverse high-growth segments of large global markets, including consumer electronics, smart home/IoT, automotive, EVs, battery-powered appliances, network infrastructure, healthcare and aerospace/defense. Visit www.qorvo.com to learn how our diverse and innovative team is helping connect, protect and power our planet.

    Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and in other countries. All other trademarks are the property of their respective owners.

    This press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results; our substantial dependence on developing new products and achieving design wins; our dependence on several large customers for a substantial portion of our revenue; continued volatility and uncertainty in customer demand, worldwide economies and financial markets resulting from the impact of the COVID-19 pandemic, conflict in Ukraine or other macroeconomic factors; a loss of revenue if defense and aerospace contracts are canceled or delayed; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs, including under long-term supply agreements, due to timing of customers’ forecasts; our inability to effectively manage or maintain evolving relationships with chipset suppliers; our ability to continue to innovate in a very competitive industry; underutilization of manufacturing facilities; unfavorable changes in interest rates, pricing of certain precious metals, utility rates and foreign currency exchange rates; our acquisitions and other strategic investments failing to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; warranty claims, product recalls and product liability; changes in our effective tax rate; changes in the favorable tax status of certain of our subsidiaries; enactment of international or domestic tax legislation, or changes in regulatory guidance; risks associated with environmental, health and safety regulations, and climate change; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches and other similar disruptions compromising our information; theft, loss or misuse of personal data by or about our employees, customers or third parties; provisions in our governing documents and Delaware law may discourage takeovers and business combinations that our stockholders might consider to be in their best interests; and volatility in the price of our common stock. These and other risks and uncertainties, which are described in more detail under "Risk Factors" in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended April 2, 2022 and Qorvo's subsequent reports and statements filed with the Securities and Exchange Commission, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

    Financial Tables to Follow

    QORVO, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share data)
    (Unaudited)

     Three Months Ended Six Months Ended
     October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
    Revenue$1,158,057  $1,255,248  $2,193,415  $2,365,599 
            
    Costs and expenses:       
    Cost of goods sold 619,130   633,695   1,279,238   1,197,863 
    Research and development 168,164   158,377   336,732   310,456 
    Selling, general and administrative 97,752   93,489   199,567   183,788 
    Other operating expense 11,449   7,327   14,457   14,030 
    Total costs and expenses 896,495   892,888   1,829,994   1,706,137 
            
    Operating income 261,562   362,360   363,421   659,462 
    Interest expense (16,904)  (15,327)  (34,156)  (30,606)
    Other income (expense), net 2,214   4,754   (2,848)  21,545 
            
    Income before income taxes 246,872   351,787   326,417   650,401 
    Income tax expense (58,257)  (32,598)  (68,918)  (45,586)
    Net income$188,615  $319,189  $257,499  $604,815 
            
    Net income per share, diluted$1.82  $2.84  $2.46  $5.35 
            
    Weighted average outstanding diluted shares 103,674   112,411   104,817   113,088 

    QORVO, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    (In thousands, except per share data)
    (Unaudited)

     Three Months Ended
     October 1, 2022 July 2, 2022 October 2, 2021
          
    GAAP operating income$261,562  $101,859  $362,360 
    Stock-based compensation expense 31,789   35,414   28,691 
    Amortization of intangible assets 32,787   33,652   36,577 
    Acquisition and integration related costs 8,642   6,308   6,040 
    Charges associated with a long-term capacity reservation agreement —   110,000   — 
    (Gain) loss on assets, start-up costs, restructuring and other non-cash expenses 2,917   (2,868)  1,750 
    Non-GAAP operating income$337,697  $284,365  $435,418 
          
    GAAP net income$188,615  $68,884  $319,189 
    Stock-based compensation expense 31,789   35,414   28,691 
    Amortization of intangible assets 32,787   33,652   36,577 
    Acquisition and integration related costs 8,642   6,308   6,040 
    Charges associated with a long-term capacity reservation agreement —   110,000   — 
    (Gain) loss on assets, start-up costs, restructuring and other non-cash expenses 2,917   (2,868)  1,750 
    (Gain) loss on investments (967)  1,375   (3,673)
    Other expense 1,629   5,198   103 
    Adjustment of income taxes 10,814   (19,559)  (4,133)
    Non-GAAP net income$276,226  $238,404  $384,544 
          
    GAAP weighted average outstanding diluted shares 103,674   106,080   112,411 
    Dilutive stock-based awards —   —   — 
    Non-GAAP weighted average outstanding diluted shares 103,674   106,080   112,411 
          
    Non-GAAP net income per share, diluted$2.66  $2.25  $3.42 
          

    QORVO, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    (Unaudited)

     Three Months Ended
    (in thousands, except percentages)October 1, 2022 July 2, 2022 October 2, 2021
    GAAP gross profit/margin$538,92746.5% $375,25036.2% $621,55349.5%
    Amortization of intangible assets 27,5742.4   28,0832.7   30,8762.5 
    Stock-based compensation expense 3,7040.3   4,5020.5   4,9490.4 
    Charges associated with a long-term capacity reservation agreement ——   110,00010.6   —— 
    Other non-cash expenses 35—   354—   152— 
    Non-GAAP gross profit/margin$570,24049.2% $518,18950.0% $657,53052.4%


     Three Months Ended
    Non-GAAP Operating IncomeOctober 1, 2022
    (as a percentage of sales) 
      
    GAAP operating income22.6%
    Stock-based compensation expense2.7 
    Amortization of intangible assets2.8 
    Acquisition and integration related costs0.8 
    Gain on assets, start-up costs, restructuring and other non-cash expenses0.3 
    Non-GAAP operating income29.2%


     Three Months Ended
    Free Cash Flow(1)October 1, 2022
    (in millions) 
      
    Net cash provided by operating activities$267.4 
    Purchases of property and equipment (47.0)
    Free cash flow$220.4 

    (1) Free Cash Flow is calculated as net cash provided by operating activities minus property and equipment expenditures.

    QORVO, INC. AND SUBSIDIARIES
    ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
    (In thousands)
    (Unaudited)

     Three Months Ended
     October 1, 2022 July 2, 2022 October 2, 2021
    GAAP research and development expense$168,164 $168,568 $158,377
    Less:     
    Stock-based compensation expense 10,445  8,966  8,614
    Other non-cash expenses 58  61  235
    Non-GAAP research and development expense$157,661 $159,541 $149,528
          
          
          
     Three Months Ended
     October 1, 2022 July 2, 2022 October 2, 2021
    GAAP selling, general and administrative expense$97,752 $101,815 $93,489
    Less:     
    Stock-based compensation expense 17,640  21,946  15,128
    Amortization of intangible assets 5,213  5,569  5,701
    Other non-cash expenses 17  17  76
    Non-GAAP selling, general and administrative expense$74,882 $74,283 $72,584

    QORVO, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)

     October 1, 2022 April 2, 2022
    ASSETS   
    Current assets:   
    Cash and cash equivalents$911,570 $972,592
    Accounts receivable, net 645,125  568,850
    Inventories 840,850  755,748
    Other current assets 123,739  152,675
    Total current assets 2,521,284  2,449,865
        
    Property and equipment, net 1,222,924  1,253,591
    Goodwill 2,757,124  2,775,634
    Intangible assets, net 585,860  674,786
    Long-term investments 29,452  31,086
    Other non-current assets 258,088  324,110
    Total assets$7,374,732 $7,509,072
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable and accrued liabilities$621,129 $568,101
    Other current liabilities 142,998  107,026
    Total current liabilities 764,127  675,127
        
    Long-term debt 2,047,398  2,047,098
    Other long-term liabilities 241,067  233,629
    Total liabilities 3,052,592  2,955,854
        
    Stockholders’ equity 4,322,140  4,553,218
    Total liabilities and stockholders’ equity$7,374,732 $7,509,072

    At Qorvo®
    Doug DeLieto
    VP, Investor Relations
    1.336.678.7968


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