Skyworks posts $935m Q3 revenue as Qorvo deal nears close
Skyworks Solutions posted third-quarter fiscal 2026 revenue of $935 million, marginally ahead of its own guidance, as the Nasdaq-listed analogue and mixed-signal semiconductor group reported continued growth in its automotive and data centre segments. Non-GAAP diluted earnings per share came in at $1.08, against a GAAP figure of $0.22, with the wide gap between the two measures reflecting $25.7 million in acquisition-related expenses tied to the pending Qorvo transaction.
Chief executive Phil Brace said the quarter demonstrated "consistent execution across the portfolio," with the Mobile segment performing well on healthy handset demand and the Broad Markets division posting another year-on-year increase, driven by double-digit gains in automotive and data centre. Non-GAAP operating margin was 19.4%, down from 23.3% in the year-ago quarter, a compression that reflects rising research and development costs and acquisition overhead.
The Qorvo deal
The headline news from the earnings release was not the quarterly numbers but the acceleration of Skyworks' proposed combination with fellow radio-frequency chipmaker Qorvo. Brace said the company is now "optimistic" about closing within the 2026 calendar year, and potentially within its own fiscal year, which ends in early October. The company has outlined approximately $2 billion of acquisition debt financing and announced an expected leadership structure for the combined entity, though it has not yet disclosed individual leadership appointments by name.
To fund the transaction and reshape its capital return programme, the board has replaced an expiring $2 billion buyback with a fresh $2 billion repurchase authorisation and simultaneously suspended the quarterly dividend. The company framed this as redirecting capital toward higher-return uses, citing the combined group's anticipated free cash flow and adjusted EBITDA generation. Investors should note that free cash flow turned negative in the quarter on a non-GAAP basis, at minus $16.7 million, owing to a sharp rise in capital expenditure to $87.1 million and a build in inventory to just over $1 billion.
For the fourth fiscal quarter, CFO Philip Carter guided revenue of $1.01 billion to $1.06 billion, with non-GAAP diluted EPS of $1.27 at the midpoint. Mobile is expected to grow sequentially in the high-teens range, supported by what the company described as a seasonal ramp at its largest customer, widely understood to be Apple. Broad Markets is expected to grow approximately 5% year-on-year and represent around 39% of total sales.
Market context
The Skyworks-Qorvo combination, if completed, would create a formidable RF semiconductor group with a broad catalogue spanning filters, power amplifiers, antenna-tuning components and timing solutions. The two companies have long competed for design wins in smartphone platforms and are both pivoting toward faster-growing segments including automotive connectivity, defence electronics and AI data centre infrastructure.
The competitive landscape for RF semiconductors is concentrated. Murata Manufacturing, Qorvo and Skyworks have historically shared the premium filter market, while Qualcomm competes on integrated front-end modules. A merged Skyworks-Qorvo entity would hold a significantly larger share of the addressable market for smartphone RF content, a fact that has drawn regulatory scrutiny in multiple jurisdictions. Skyworks confirmed that approvals are progressing but did not disclose which regulatory bodies remain outstanding.
Export controls also warrant attention. The company's safe-harbour disclosures reference US Department of Commerce licensing requirements for sales to certain foreign entities, a recurring pressure point for suppliers to Chinese smartphone OEMs given the evolving Entity List landscape. Any tightening of BIS export controls on advanced RF components ahead of the merger closing could affect revenue assumptions for the combined group.
The data centre and automotive design wins cited in the release, including precision timing for a hyperscaler switch platform and isolation components for 800-volt HVDC power architectures for electric vehicles, point to the diversification strategy both companies have been pursuing. Those segments carry higher average selling prices and longer product lifecycles than consumer mobile, making them attractive from a margin-stability perspective once the deal closes.