Qorvo, Inc. QRVO reported relatively healthy second-quarter fiscal 2025 results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. 

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The company reported a revenue contraction year over year due to a net sales drop in the High-Performance Analog (HPA) vertical. Despite major improvements in channel inventory, the persistence of low demand in some key end markets impacted the top-line growth.

Net Income

On a GAAP basis, the company reported a net loss of $17.4 million or a loss of 18 cents per share against a net income of $97.5 million or 99 cents per share in the prior-year quarter. The significant decline in year-over-year earnings is attributable to lower revenues and higher operating expenses.

Non-GAAP net income was $179.8 million or $1.88 per share, down from $235.5 million or $2.39 per share in the year-ago quarter owing to soft revenues. Nevertheless, the bottom line surpassed the Zacks Consensus Estimate by 3 cents.

Qorvo, Inc. Price, Consensus and EPS Surprise

Qorvo, Inc. price-consensus-eps-surprise-chart | Qorvo, Inc. Quote

Revenues

Net sales during the quarter declined to $1.05 billion from $1.10 billion in the prior-year quarter. The top line beat the Zacks Consensus Estimate of $1.03 billion. Despite significant improvement in inventory levels, demand in various end markets has yet to recover fully, which has impeded revenues.

Macroeconomic headwinds also impacted the top line. Nevertheless, the company secured major deal wins for its ultra-wideband portfolio in a flagship Android smartphone and a leading German automotive manufacturer.

Segment Results

HPA contributed $148.3 million in revenues, down from $149.8 million in the year-ago quarter. Inventory corrections in Cellular base station markets affected net sales in this segment. 

However, Qorvo secured new product orders for several large domestic and international ground-based radar systems. The transition from legacy mechanical systems to active electronics scanning systems is driving growth in the defense and aerospace business.

In power management, the company continues to boast a strong presence in the consumer electronic sector. Healthy traction in automotive also cushioned the top line. Growing demand for DOCSIS 4.0 hybrid power doublers is supporting growth in the infrastructure business.

Revenues from Connectivity and Sensors Group (CSG) were $146.8 million compared with $103.6 million in the year-earlier quarter. The improvement was driven by the growing adoption of Wi-Fi 7 across operator, retail, enterprise and mobile segments. Investment in diverse growth businesses, including an expanding portfolio of automotive solutions and SoCs for ultra-wideband, also supported this segment.

Net sales in Advance Cellular Group were $751.4 million, down 11.6% year over year from the prior-year quarter’s $850.1 million due to seasonal dynamics.