Communications chips maker Qorvo (NASDAQ: QRVO) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 1.1% year on year to $1.06 billion. On top of that, next quarter’s revenue guidance ($985 billion at the midpoint) was surprisingly good and 99,309% above what analysts were expecting. Its non-GAAP profit of $2.22 per share was 5.1% above analysts’ consensus estimates.
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Qorvo (QRVO) Q3 CY2025 Highlights:
- Revenue: $1.06 billion vs analyst estimates of $1.04 billion (1.1% year-on-year growth, 1.9% beat)
- Adjusted EPS: $2.22 vs analyst estimates of $2.11 (5.1% beat)
- Adjusted Operating Income: $252.6 million vs analyst estimates of $239.7 million (23.9% margin, 5.4% beat)
- Revenue Guidance for Q4 CY2025 is $985 billion at the midpoint, above analyst estimates of $990.9 million
- Adjusted EPS guidance for Q4 CY2025 is $1.85 at the midpoint, below analyst estimates of $1.88
- Operating Margin: 14.9%, up from 0.9% in the same quarter last year
- Free Cash Flow Margin: 4%, down from 9.1% in the same quarter last year
- Inventory Days Outstanding: 98, down from 120 in the previous quarter
- Market Capitalization: $8.79 billion
Bob Bruggeworth, president and chief executive officer of Qorvo, said, “In the September quarter, ACG supported our largest customer’s smartphone ramp while continuing to serve Android’s premium and flagship tiers. In HPA, we grew our D&A and infrastructure businesses while supporting a recently launched smartwatch with our power management ICs. In CSG, we consolidated our organizational structure to improve profitability and prioritize opportunities in automotive, industrial, enterprise, and other markets. In the December quarter, we expect year-over-year revenue growth and margin expansion, supported by strategic customers in mobile and D&A markets."
Company Overview
Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Qorvo struggled to consistently increase demand as its $3.66 billion of sales for the trailing 12 months was close to its revenue five years ago. This was below our standards and suggests it’s a low quality business. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Qorvo’s annualized revenue growth of 8.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Qorvo reported modest year-on-year revenue growth of 1.1% but beat Wall Street’s estimates by 1.9%. Adding to the positive news, Qorvo’s growth inflected positively this quarter, news that will likely give some shareholders hope. Company management is currently guiding for a 107,396% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 4.3% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Qorvo’s DIO came in at 98, which is 20 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Qorvo’s Q3 Results
We were impressed by Qorvo’s strong improvement in inventory levels. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. On the other hand, next quarter's EPS guidance missed. Zooming out, we think this was a mixed print. The stock remained flat at $94 immediately following the results.
Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
