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A month has gone by since the last earnings report for Skyworks Solutions (SWKS). Shares have added about 7.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Skyworks due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Skyworks Q4 Earnings Meet Estimates, Revenues Down Y/Y
Skyworks Solutions reported non-GAAP earnings of $1.55 per share in fourth-quarter fiscal 2024, beating the Zacks Consensus Estimate by 1.97% and declining 29.5% year over year.
Revenues of $1.02 billion dipped 15.9% on a year-over-year basis but surpassed the consensus mark by 0.31%.
Mobile revenues contributed nearly 65% to total revenues and increased 21% sequentially. This growth was attributed to the normalization of customer orders and inventory levels, as well as support for seasonal product ramps.
In the fourth quarter of fiscal 2024, Skyworks gained design wins in 5G for premium Android smartphones and increased its Wi-Fi 7 pipeline with major partners like Linksys, Charter, and NETGEAR.
The company expanded in automotive for 5G front-end modules, infotainment, and digital isolators, showing increased design win momentum.
Broad markets contributed nearly 35% to total revenues and up $1 million sequentially. It showed signs of stabilization with demand in edge IoT and automotive electrification, supported by increasing adoption of Wi-Fi 6E and Wi-Fi 7 systems.
SWKS Operating Details
Non-GAAP gross margin contracted 70 basis points (bps) on a year-over-year basis to 46.5%.
Research & development expenses, as a percentage of revenues, increased 390 bps year over year to 16%.
Selling, general and administrative expenses increased 120 bps to 7.2% in the reported quarter.
Non-GAAP operating margin contracted 600 bps on a year-over-year basis to 26.7% in the reported quarter.
SWKS Balance Sheet & Cash Flow
As of Sept. 27, 2024, cash & cash equivalents and marketable securities were $1.57 billion compared with $1.28 billion as of June 28, 2024.
Long-term debt was $994.3 million as of Sept. 27, 2024, compared with $994 million as of June 28, 2024.
Cash generated by operating activities was $476 million in the quarter under discussion compared with $273.5 million in the prior quarter.
Free cash flow was $393.2 million, with a 38.4% free cash flow margin.
Skyworks paid dividends worth $112 million in the reported quarter.