Wireless chips maker Skyworks Solutions (NASDAQ: SWKS) reported calendar Q3 2026 (fiscal Q4 2026) results exceeding the market’s revenue expectations, but sales fell by 5% year on year to $1.05 billion. On the other hand, next quarter’s revenue guidance of $1.85 billion was less impressive, coming in 7% below analysts’ estimates. Its non-GAAP profit of $1.28 per share was in line with analysts’ consensus estimates.

Is now the time to buy SWKS? Find out in our full research report (it’s free for active Edge members).

StockStory’s take

Skyworks Solutions faced a turbulent third quarter, with the company’s revenue and non-GAAP profit landing in line with Wall Street expectations but falling year over year. Management attributed the decline to continued weakness in the Android smartphone market and persistent input cost pressures, despite healthy demand for its timing and power products and robust activity in automotive and data center segments. CEO Phil Brace acknowledged, “Input costs remain a headwind to margins, and we expect that to continue,” highlighting that while diversified markets showed growth, overall margins were squeezed.

Looking ahead, Skyworks Solutions’ guidance reflects cautious optimism tempered by ongoing supply constraints and integration challenges following the Qorvo merger. Management emphasized that synergies from the combined company are expected to be realized gradually, with most cost benefits weighted toward the latter part of the next year. CFO Philip Carter noted, “We expect the majority of the earnings benefit in the second half of [next year] as synergies are realized,” and warned that input cost inflation and the slow recovery in Android will persist as challenges in the near term.

Key insights from management’s remarks

Management cited supply constraints in growth markets, persistent cost inflation, and the impact of the Qorvo merger as key factors shaping recent performance and the outlook.

• Supply-constrained growth markets: Management reported that demand in data center, defense, and automotive remains strong, with growth held back by limited supply capacity rather than a lack of orders. CEO Phil Brace stated, “Right now, frankly, all of those businesses are supply constrained, and the demand far exceeds our ability to supply them.”
• Smartphone segment under pressure: The smartphone business, especially the Android portion, continued to decline due to ongoing market softness and the company’s strategic exit from lower-end Android products. This focus has led to a shift toward premium devices, which offer higher content per unit but cannot fully offset the broader market’s contraction.
• Margin headwinds from input costs: Input cost inflation continued to erode margins, with management emphasizing ongoing efforts to offset this through factory optimization, long-term supply agreements, and selective price increases. However, these measures only partially mitigated the pressure during the quarter.
• Integration and synergy realization: The Qorvo merger is expected to deliver $500 million or more in annual cost synergies, with operating expense reductions coming first, followed by cost of goods savings as factory consolidation progresses. Most of these benefits are expected to materialize in the second half of next year and beyond.
• Diversified Growth Markets momentum: The non-smartphone portion of the business—now labeled Diversified Growth Markets—delivered mid- to high-single-digit growth, led by physical AI, data center, and automotive. Management highlighted that “our wireless connectivity, power management, and power isolation technologies give us more content opportunity per device” as AI inference shifts to edge devices.

Drivers of future performance

Skyworks Solutions’ outlook for the coming quarters is shaped by merger integration, cost containment, and the evolving mix between smartphone and diversified segments.

• Synergy-driven margin expansion: Management expects operating margin improvement to be driven by cost synergies from the Qorvo integration, with operating expense reductions materializing earlier and cost of goods savings following as factory consolidation advances. CFO Philip Carter specified that “we expect operating expenses to decline sequentially…throughout [next year] as synergies are realized.”
• Premium smartphone focus: The company is shifting investment toward higher-end smartphones, where it can capture more value per device, especially as 5G Advanced and 6G technologies increase RF (radio frequency) content requirements. However, management cautioned that the smartphone market overall is expected to remain a low single-digit grower, with Android continuing to shrink as a portion of sales.
• Diversified Growth Markets expansion: The data center, defense, and automotive categories are expected to grow at a double-digit pace, but ongoing supply constraints and cost inflation introduce uncertainty. Management noted that “these businesses are supply constrained,” and that realization of their potential depends on securing additional supply and managing input costs effectively.

Catalysts in upcoming quarters

In the coming quarters, the StockStory team will closely monitor (1) the pace and effectiveness of cost synergy realization from the Qorvo merger, (2) the company’s ability to secure additional supply in high-growth segments such as data center and defense, and (3) stabilization or further declines in the Android smartphone market. We will also track any signs of operating margin improvement as factory integration progresses.

Skyworks Solutions currently trades at $70.57, down from $85.40 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

Now could be the perfect time to invest in these stocks

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.