rfmd-20230701

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

Commission File Number 001-36801

Qorvo, Inc.

(Exact name of registrant as specified in its charter)


Delaware		46-5288992
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7628 Thorndike Road
Greensboro,	North Carolina	27409-9421
(Address of principal executive offices)		(Zip Code)

(336) 664-1233

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

QRVO

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of July 27, 2023, there were 97,910,445 shares of the registrant’s common stock outstanding.


			Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Operations			5
Condensed Consolidated Statements of Comprehensive (Loss) Income			6
Condensed Consolidated Statements of Stockholders' Equity			7
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			25
Item 4. Controls and Procedures.			25

PART II — OTHER INFORMATION			26

Item 1A. Risk Factors.			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			26
Item 5. Other Information.			27
Item 6. Exhibits.			28

SIGNATURES			29


	July 1, 2023		April 1, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	744,428	$	808,757
Accounts receivable, net of allowance of $415 and $369 as of July 1, 2023 and April 1, 2023, respectively	307,913		304,519
Inventories	917,390		796,596
Prepaid expenses	49,253		46,684
Other receivables	19,328		26,535
Other current assets	49,463		46,703
Total current assets	2,087,775		2,029,794
Property and equipment, net of accumulated depreciation of $1,933,949 and $1,900,317 as of July 1, 2023 and April 1, 2023, respectively	1,087,683		1,149,806
Goodwill	2,760,930		2,760,813
Intangible assets, net	507,174		537,703
Long-term investments	27,020		20,406
Other non-current assets	216,010		193,381
Total assets	$	6,686,592	$	6,691,903
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	294,171	$	210,701
Accrued liabilities	264,315		222,463
Other current liabilities	80,490		122,599
Total current liabilities	638,976		555,763
Long-term debt	2,048,255		2,048,073
Other long-term liabilities	187,138		185,273
Total liabilities	2,874,369		2,789,109
Commitments and contingent liabilities (Note 7)
Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—		—
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 98,048 and 98,649 shares issued and outstanding at July 1, 2023 and April 1, 2023, respectively	3,816,260		3,821,474
Accumulated other comprehensive loss	(4,037)		(3,175)
Retained earnings	—		84,495
Total stockholders’ equity	3,812,223		3,902,794
Total liabilities and stockholders’ equity	$	6,686,592	$	6,691,903


	Three Months Ended
	July 1, 2023		July 2, 2022
Revenue	$	651,164	$	1,035,358
Cost of goods sold	422,094		660,108
Gross profit	229,070		375,250

Operating expenses:
Research and development	163,090		168,568
Selling, general and administrative	105,423		101,815
Other operating expense	8,693		3,008
Total operating expenses	277,206		273,391
Operating (loss) income	(48,136)		101,859

Interest expense	(17,261)		(17,252)
Other income (expense), net	13,716		(5,062)
(Loss) income before income taxes	(51,681)		79,545

Income tax benefit (expense)	8,101		(10,661)
Net (loss) income	$	(43,580)	$	68,884

Net (loss) income per share:
Basic	$	(0.44)	$	0.65
Diluted	$	(0.44)	$	0.65

Weighted-average shares of common stock outstanding:
Basic	98,509		105,173
Diluted	98,509		106,080


	Common Stock and Additional Paid-In Capital			Accumulated Other Comprehensive (Loss) Income		Retained Earnings

Three Months Ended	Shares	Amount						Total
Balance, April 1, 2023	98,649	$	3,821,474	$	(3,175)	$	84,495	$	3,902,794
Net loss	—	—		—		(43,580)		(43,580)
Other comprehensive loss	—	—		(862)		—		(862)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	170	(4,422)		—		—		(4,422)
Issuance of common stock in connection with employee stock purchase plan	262	19,180		—		—		19,180
Repurchase of common stock, including transaction costs and excise tax	(1,033)	(59,697)		—		(40,915)		(100,612)
Stock-based compensation	—	39,725		—		—		39,725
Balance, July 1, 2023	98,048	$	3,816,260	$	(4,037)	$	—	$	3,812,223

Balance, April 2, 2022	106,303	$	4,035,849	$	5,232	$	512,137	$	4,553,218
Net income	—	—		—		68,884		68,884
Other comprehensive loss	—	—		(23,206)		—		(23,206)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	137	(4,188)		—		—		(4,188)
Issuance of common stock in connection with employee stock purchase plan	195	18,893		—		—		18,893
Repurchase of common stock, including transaction costs	(3,295)	(125,101)		—		(224,941)		(350,042)
Stock-based compensation	—	37,046		—		—		37,046
Balance, July 2, 2022	103,340	$	3,962,499	$	(17,974)	$	356,080	$	4,300,605


	July 1, 2023		April 1, 2023
Raw materials	$	286,421	$	264,367
Work in process	429,959		345,545
Finished goods	201,010		186,684
Total inventories	$	917,390	$	796,596


	HPA		CSG		ACG		Total
Balance as of April 1, 2023 (1)	$	501,602	$	525,351	$	1,733,860	$	2,760,813
Effect of changes in foreign currency exchange rates	—		117		—		117
Balance as of July 1, 2023 (1)	$	501,602	$	525,468	$	1,733,860	$	2,760,930


	July 1, 2023				April 1, 2023
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Developed technology	$	871,530	$	408,505	$	872,106	$	382,448
Customer relationships	87,040		54,230		104,616		67,485
Technology licenses	2,244		545		1,664		513
Trade names	910		850		910		789
In-process research and development	9,580		N/A		9,642		N/A
Total (1)	$	971,304	$	464,130	$	988,938	$	451,235


	Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
July 1, 2023
Marketable equity securities	$	1,009	$	1,009	$	—	$	—
Invested funds in deferred compensation plan (1)	43,428		43,428		—		—

April 1, 2023
Marketable equity securities	$	1,094	$	1,094	$	—	$	—
Invested funds in deferred compensation plan (1)	40,653		40,653		—		—
Contingent earn-out liability (2)	(31,250)		—		—		(31,250)


	July 1, 2023		April 1, 2023
1.750% senior notes due 2024	$	500,000	$	500,000
4.375% senior notes due 2029	850,000		850,000
3.375% senior notes due 2031	700,000		700,000
Finance leases and other	1,287		1,666
Unamortized premium, discount and issuance costs, net	(2,919)		(3,283)
Less current portion of long-term debt	(113)		(310)
Total long-term debt	$	2,048,255	$	2,048,073


	Three Months Ended July 1, 2023
	Cost of Goods Sold		Other Operating Expense		Total
Contract termination and other costs	$	16,796	$	1,429	$	18,225
Asset impairment costs	2,159		640		2,799
One-time employee termination benefits	—		1,712		1,712
Total	$	18,955	$	3,781	$	22,736


	Three Months Ended
	July 1, 2023		July 2, 2022
United States	$	315,283	$	396,031
China	150,806		283,476
Other Asia	91,334		192,328
Taiwan	65,856		91,172
Europe	27,885		72,351
Total revenue	$	651,164	$	1,035,358









	One-Time Employee Termination Benefits		Contract Termination and Other Costs		Total
Accrued restructuring balance as of April 1, 2023	$	—	$	5,248	$	5,248
Costs incurred and charged to expense	1,712		18,225		19,937
Cash payments	(1,260)		(3,085)		(4,345)
Accrued restructuring balance as of July 1, 2023	$	452	$	20,388	$	20,840


	Three Months Ended
	July 1, 2023		July 2, 2022
Reconciliation of "All other" category:
Stock-based compensation expense	$	(38,445)	$	(35,414)
Amortization of intangible assets	(30,872)		(33,652)
Restructuring related charges (1)	(22,736)		(550)
Acquisition and integration related costs	(1,195)		(6,308)
Charges associated with a long-term capacity reservation agreement	—		(110,000)
Other	(3,689)		3,418
Loss from operations for "All other"	$	(96,937)	$	(182,506)


	Three Months Ended
(In thousands, except percentages)	July 1, 2023			July 2, 2022			Decrease		Percentage Change
Revenue	$	139,692		$	210,951		$	(71,259)	(33.8)	%
Operating income	23,964			70,754			(46,790)		(66.1)
Operating income as a % of revenue	17.2		%	33.5		%


	Three Months Ended
	July 1, 2023		% of Revenue		July 2, 2022		% of Revenue		Increase (Decrease)		Percentage Change
Revenue	$	651,164	100.0	%	$	1,035,358	100.0	%	$	(384,194)	(37.1)	%
Cost of goods sold	422,094		64.8		660,108		63.8		(238,014)		(36.1)
Gross profit	229,070		35.2		375,250		36.2		(146,180)		(39.0)
Research and development	163,090		25.1		168,568		16.3		(5,478)		(3.2)
Selling, general and administrative	105,423		16.2		101,815		9.8		3,608		3.5
Other operating expense	8,693		1.3		3,008		0.3		5,685		189.0
Operating (loss) income	$	(48,136)	(7.4)	%	$	101,859	9.8	%	$	(149,995)	(147.3)	%


	Three Months Ended
(In thousands)	July 1, 2023		July 2, 2022
Interest expense	$	(17,261)	$	(17,252)
Other income (expense), net	13,716		(5,062)
Income tax benefit (expense)	8,101		(10,661)


Summarized Balance Sheets (in thousands)	July 1, 2023		April 1, 2023
ASSETS
Current assets (1)	$	986,646	$	972,989
Non-current assets	2,345,039		2,398,287

LIABILITIES
Current liabilities	$	216,074	$	296,049
Long-term liabilities (2)	2,740,775		2,689,824


Summarized Statement of Operations	Three Months Ended
(in thousands)	July 1, 2023
Revenue	$	252,078
Gross profit	39,401
Net loss	(62,963)


Period	Total number of shares purchased (in thousands)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (in thousands)	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
April 2, 2023 to April 29, 2023	149	$	94.61	149	$	1,690.9
April 30, 2023 to May 27, 2023	164	92.85		164	1,675.7
May 28, 2023 to July 1, 2023	720	98.16		720	1,605.0
Total	1,033	$	96.81	1,033


10.1			Second Amendment to Amended and Restated Credit Agreement, dated as of June 23, 2023, by and among Qorvo, Inc., as the Borrower, certain subsidiaries of the Borrower identified therein, as the Guarantors, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2023)

22			List of Subsidiary Guarantors

31.1			Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of Periodic Report by Grant A. Brown, as Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of Periodic Report by Grant A. Brown, as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			The following materials from our Quarterly Report on Form 10-Q for the quarter ended July 1, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive (Loss) Income; (iv) the Condensed Consolidated Statements of Stockholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements

104			The cover page from our Quarterly Report on Form 10-Q for the quarter ended July 1, 2023, formatted in iXBRL


		Qorvo, Inc.

Date:	August 3, 2023	/s/ Grant A. Brown
		Grant A. Brown
		Senior Vice President and Chief Financial Officer

SEC Form 10-Q filed by Qorvo Inc.