6 August 2021
Skyworks reports record fiscal Q3 revenue of $1.116bn, up 52% year-on-year
Despite being its slowest seasonal quarter of the year, Skyworks Solutions Inc of Woburn, MA, USA (which manufactures analog and mixed-signal semiconductors) has reported record revenue for fiscal third-quarter 2021 (ended 2 July) of $1116.4m, down 4.7% on last quarter’s record $1171.8m but up 52% on $736.8m a year ago and exceeding the midpoint of the $1075-1125m guidance, demonstrating “exceptional” performance across both Mobile and Broad Markets segments, says senior VP & chief financial officer Kris Sennesael.
Mobile revenue was up 52% year-on-year. “We capitalized on technology-rich content, powering an impactful set of 5G customers,” says Sennesael.
Broad Markets revenue was up 50% year-over-year, benefiting from strong demand for IoT solutions, including Wi-Fi 6 and 6E, and smart audio, as well as emerging use cases in industrial and automotive markets.
In Mobile, Skyworks expanded the reach of its Sky5 portfolio, powering upcoming smartphone launches at tier-1 manufacturers including Google, Oppo, Vivo and Xiaomi.
In Internet of Things (IoT), Skyworks secured wins across a diverse set of customers. Specifically, it delivered Wi-Fi front-end modules to Facebook for their new portal launch, captured design wins at Peloton supporting home fitness applications, partnered with Linksys to debut the market’s first Wi-Fi 6E mesh network system, and ramped additional Wi-Fi 6 and 6E platforms at Altice, Charter Communications and Aruba Networks. Skyworks also launched connected home and security solutions at Honeywell and shipped cognitive audio platforms to Samsung and Vizio for their home theater systems.
In wireless infrastructure, Skyworks continues to leverage its small-cell and advanced MIMO expertise in support of multiple tier-1 OEMs in Europe and Asia. Finally, in automotive, Skyworks strengthened its position across the global ecosystem, with its integrated solutions enabling advanced telematics systems for leading auto manufacturers.
On a non-GAAP basis, gross margin was 50.6%, down slightly from 50.8% last quarter but up on 50.1% a year ago.
Operating expenses have risen further, from $155m (13.2% of revenue) last quarter to $161m (14.5% of revenue), albeit still down on 18.9% of revenue a year ago, “demonstrating spending discipline while continuing our strategic investments to drive growth,” says Sennesael.
Net income has fallen from last quarter’s $395.2m ($2.37 per dilute share) to $358.6m ($2.15 per diluted share, although this is a record for fiscal Q3 and exceeded the $2.13 guidance). Also, this is up on $210.8m ($1.25 per diluted share) a year ago.
“Skyworks delivered record third quarter results, with strong year-over-year growth in both revenue and earnings per share,” says chairman, CEO & president Liam K. Griffin.
Operating cash flow was $272.9m. Capital expenditure (CapEx) was $115m. During the quarter, Skyworks paid $83m in dividends. Net cash was hence about $1.5bn, comprising $2.98bn in cash & investments and $1.49bn in debt.
“An expanding array of usage cases – from mobile to automotive, cloud computing and intelligent energy management – is accelerating the adoption of 5G across numerous end-markets. Our decades-long experience and deep customer relationships, combined with the strength and scale of our internal fabrication capabilities, position Skyworks to enable a broad set of applications and opportunities,” he adds.
“Looking ahead, we expect continued momentum as we execute on strong design wins with our Mobile and Broad Markets customers, levered by the performance gains of 5G,” says Griffin. “We are seeing a tipping point with 5G acting as the catalyst transforming entire industries, from telemedicine and autonomous driving to factory automation and intelligent energy management,” he adds. “By increasing efficiency, these 5G-enabled applications are also lowering carbon footprints and driving renewable energy. Skyworks is at the center of this unique technological shift and its reliance on wireless connectivity, with innovative solutions developed over 20 years and across multiple technology transitions. The combination of our innovative solutions, broad customer reach and unrivaled manufacturing scale drove another quarter of strong design-win execution.”
“The recent addition [on 26 July] of the Infrastructure & Automotive business of Silicon Labs immediately adds unique technologies as we expand our addressable markets and lead across a wide range of diversified and differentiated solutions,” says Griffin.
“Based on continued robust demand for connectivity solutions in Mobile and Broad Markets and the inclusion of a partial quarter of revenue from the recently completed acquisition of the Infrastructure & Automotive business from Silicon Labs, we expect further strong year-over-year growth in the September quarter,” says Sennesael.
For fiscal fourth-quarter 2021, Skyworks expects revenue of $1.27-1.33bn, up 36% or (excluding the two months of revenue from the I&A acquisition, which has a $100m per quarter run-rate) double-digit sequential growth in both Mobile and Broad Market segments.
Gross margin should be 51-51.5%, up 65 basis points sequentially and 85 basis points year-over-year (aided by the I&A business, which is running at about 60% gross margin). Operating expenses are expected to be $80-183m. diluted earnings per share of $2.53, up 37% year-on-year.
“Skyworks is clearly on track to deliver record financial results for fiscal 2021,” believes Griffin. “The addition of the I&A business further propels our expansion into strategic growth segments. And, with a widening array of usage cases, the proliferation of 5G is driving significant momentum,” he adds. “Our powerful cash generation capabilities, technology-centric operational scale, and global reach are fueling a robust design-win pipeline. And finally, the strength of our balance sheet allows us the flexibility to invest to win, while delivering consistent shareholder returns.”
“Given our conviction in Skyworks’ strategic outlook and predictable strong cash generation, we are announcing another substantial increase to our quarterly dividend,” says Sennesael. Skyworks’ board of directors has declared a cash dividend of $0.56 per share of common stock, representing a 12% increase from the prior quarterly dividend of $0.50 per share. The dividend is payable on 7 September to stockholders of record at the close of business on 17 August.