rfmd-20211002
10/2/2021Qorvo, Inc.000160477810-QOctober 2, 2021false2022Q24/2October 2, 20214643311,655,0841,561,6130.00010.00015,0005,0000.00010.0001405,000405,000110,461112,557110,461112,557P7YP1YOctober 2, 202111.8063.200016047782021-04-042021-10-02xbrli:shares00016047782021-10-28iso4217:USD00016047782021-10-0200016047782021-04-03iso4217:USDxbrli:shares00016047782021-07-042021-10-0200016047782020-06-282020-10-0300016047782020-03-292020-10-030001604778us-gaap:CommonStockMember2021-07-0300016047782021-07-030001604778us-gaap:CommonStockMember2021-07-042021-10-020001604778us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-042021-10-020001604778us-gaap:RetainedEarningsMember2021-07-042021-10-020001604778us-gaap:CommonStockMember2020-06-2700016047782020-06-270001604778us-gaap:CommonStockMember2020-06-282020-10-030001604778us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-282020-10-030001604778us-gaap:RetainedEarningsMember2020-06-282020-10-030001604778us-gaap:CommonStockMember2020-10-0300016047782020-10-030001604778us-gaap:CommonStockMember2021-04-042021-10-020001604778us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-042021-10-020001604778us-gaap:RetainedEarningsMember2021-04-042021-10-020001604778us-gaap:CommonStockMember2020-03-2800016047782020-03-280001604778us-gaap:CommonStockMember2020-03-292020-10-030001604778us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-292020-10-030001604778us-gaap:RetainedEarningsMember2020-03-292020-10-030001604778rfmd:NextInputMember2021-04-052021-04-050001604778rfmd:NextInputMember2021-04-050001604778us-gaap:DevelopedTechnologyRightsMemberrfmd:NextInputMember2021-04-050001604778rfmd:NextInputMemberus-gaap:CustomerRelationshipsMember2021-04-050001604778us-gaap:DevelopedTechnologyRightsMemberrfmd:NextInputMember2021-04-052021-04-050001604778rfmd:NextInputMemberus-gaap:CustomerRelationshipsMember2021-04-052021-04-050001604778us-gaap:OtherOperatingIncomeExpenseMemberrfmd:NextInputMember2021-07-042021-10-020001604778us-gaap:OtherOperatingIncomeExpenseMemberrfmd:NextInputMember2021-04-042021-10-020001604778rfmd:A7HugsMember2020-10-012020-10-010001604778rfmd:A7HugsMember2021-04-042021-10-020001604778rfmd:MobileProductsMember2021-04-030001604778rfmd:InfrastructureandDefenseProductsMember2021-04-030001604778rfmd:NextInputMemberrfmd:MobileProductsMember2021-04-042021-10-020001604778rfmd:NextInputMemberrfmd:InfrastructureandDefenseProductsMember2021-04-042021-10-020001604778rfmd:NextInputMember2021-04-042021-10-020001604778rfmd:A7HugsMemberrfmd:MobileProductsMember2021-04-042021-10-020001604778rfmd:A7HugsMemberrfmd:InfrastructureandDefenseProductsMember2021-04-042021-10-020001604778rfmd:MobileProductsMember2021-04-042021-10-020001604778rfmd:InfrastructureandDefenseProductsMember2021-04-042021-10-020001604778rfmd:MobileProductsMember2021-10-020001604778rfmd:InfrastructureandDefenseProductsMember2021-10-020001604778us-gaap:DevelopedTechnologyRightsMember2021-10-020001604778us-gaap:DevelopedTechnologyRightsMember2021-04-030001604778us-gaap:CustomerRelationshipsMember2021-10-020001604778us-gaap:CustomerRelationshipsMember2021-04-030001604778us-gaap:LicensingAgreementsMember2021-10-020001604778us-gaap:LicensingAgreementsMember2021-04-030001604778us-gaap:OrderOrProductionBacklogMember2021-10-020001604778us-gaap:OrderOrProductionBacklogMember2021-04-030001604778us-gaap:TradeNamesMember2021-10-020001604778us-gaap:TradeNamesMember2021-04-030001604778us-gaap:InProcessResearchAndDevelopmentMember2021-10-020001604778us-gaap:InProcessResearchAndDevelopmentMember2021-04-030001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-10-020001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-10-020001604778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-10-020001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-04-030001604778us-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778us-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-04-030001604778us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-04-030001604778rfmd:TermLoanMember2021-10-020001604778rfmd:TermLoanMember2021-04-030001604778rfmd:SeniorNotesDue20294.375Member2021-10-020001604778rfmd:SeniorNotesDue20294.375Member2021-04-030001604778rfmd:A3.375SeniorNotesdue2031Member2021-10-020001604778rfmd:A3.375SeniorNotesdue2031Member2021-04-030001604778rfmd:FinanceleasesMember2021-10-020001604778rfmd:FinanceleasesMember2021-04-030001604778rfmd:TermLoanMember2020-09-290001604778us-gaap:RevolvingCreditFacilityMember2020-09-290001604778us-gaap:RevolvingCreditFacilityMember2021-04-042021-10-020001604778rfmd:TermLoanMember2020-09-292020-09-290001604778rfmd:TermLoanMember2020-09-292020-09-290001604778rfmd:TermLoanMember2021-07-042021-10-020001604778rfmd:TermLoanMember2021-04-042021-10-020001604778rfmd:SeniorNotesDue20294.375Member2019-09-30xbrli:pure0001604778rfmd:SeniorNotesDue20294.375Member2019-12-200001604778rfmd:SeniorNotesDue20294.375Member2020-06-110001604778rfmd:SeniorNotesDue20294.375Member2021-07-042021-10-020001604778rfmd:SeniorNotesDue20294.375Member2021-04-042021-10-020001604778rfmd:SeniorNotesDue20294.375Member2020-06-282020-10-030001604778rfmd:A3.375SeniorNotesdue2031Member2020-09-290001604778rfmd:A3.375SeniorNotesdue2031Member2021-07-042021-10-020001604778rfmd:A3.375SeniorNotesdue2031Member2020-06-282020-10-030001604778us-gaap:SeniorNotesMember2021-07-042021-10-020001604778us-gaap:SeniorNotesMember2021-04-042021-10-020001604778us-gaap:SeniorNotesMember2020-06-282020-10-030001604778us-gaap:SeniorNotesMember2020-03-292020-10-030001604778rfmd:A3.375SeniorNotesdue2031Member2021-04-042021-10-020001604778rfmd:A3.375SeniorNotesdue2031Member2020-03-292020-10-030001604778rfmd:May2021ProgramMember2021-05-050001604778rfmd:CapacityReservationAgreementWithFoundrySupplierMember2021-10-020001604778country:CN2021-07-042021-10-020001604778country:CN2020-06-282020-10-030001604778country:CN2021-04-042021-10-020001604778country:CN2020-03-292020-10-030001604778country:US2021-07-042021-10-020001604778country:US2020-06-282020-10-030001604778country:US2021-04-042021-10-020001604778country:US2020-03-292020-10-030001604778rfmd:OtherAsiaMember2021-07-042021-10-020001604778rfmd:OtherAsiaMember2020-06-282020-10-030001604778rfmd:OtherAsiaMember2021-04-042021-10-020001604778rfmd:OtherAsiaMember2020-03-292020-10-030001604778country:TW2021-07-042021-10-020001604778country:TW2020-06-282020-10-030001604778country:TW2021-04-042021-10-020001604778country:TW2020-03-292020-10-030001604778srt:EuropeMember2021-07-042021-10-020001604778srt:EuropeMember2020-06-282020-10-030001604778srt:EuropeMember2021-04-042021-10-020001604778srt:EuropeMember2020-03-292020-10-030001604778us-gaap:OperatingSegmentsMemberrfmd:MobileProductsMember2021-07-042021-10-020001604778us-gaap:OperatingSegmentsMemberrfmd:MobileProductsMember2020-06-282020-10-030001604778us-gaap:OperatingSegmentsMemberrfmd:MobileProductsMember2021-04-042021-10-020001604778us-gaap:OperatingSegmentsMemberrfmd:MobileProductsMember2020-03-292020-10-030001604778rfmd:InfrastructureandDefenseProductsMemberus-gaap:OperatingSegmentsMember2021-07-042021-10-020001604778rfmd:InfrastructureandDefenseProductsMemberus-gaap:OperatingSegmentsMember2020-06-282020-10-030001604778rfmd:InfrastructureandDefenseProductsMemberus-gaap:OperatingSegmentsMember2021-04-042021-10-020001604778rfmd:InfrastructureandDefenseProductsMemberus-gaap:OperatingSegmentsMember2020-03-292020-10-030001604778us-gaap:CorporateNonSegmentMember2021-07-042021-10-020001604778us-gaap:CorporateNonSegmentMember2020-06-282020-10-030001604778us-gaap:CorporateNonSegmentMember2021-04-042021-10-020001604778us-gaap:CorporateNonSegmentMember2020-03-292020-10-030001604778rfmd:UnitedSiliconCarbideMemberus-gaap:SubsequentEventMember2021-10-192021-10-190001604778rfmd:UnitedSiliconCarbideMemberus-gaap:SubsequentEventMember2021-10-19
Table of Contents
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 October 2, 2021
or
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
https://cdn.kscope.io/624f740953c7c0f3ff1254c8e03484f7-rfmd-20211002_g1.jpg
Qorvo, Inc.
(Exact name of registrant as specified in its charter) 
Delaware46-5288992
(State or other jurisdiction of incorporation or organization)(I.R.S. employer identification no.)
7628 Thorndike Road
Greensboro,North Carolina27409-9421
      (Address of principal executive office)(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueQRVOThe 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 filerþAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company


Table of Contents
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 October 28, 2021, there were 110,223,227 shares of the registrant’s common stock outstanding.


Table of Contents
QORVO, INC. AND SUBSIDIARIES
INDEX
 
 Page    

2

Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1.
QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
 
October 2, 2021April 3, 2021
ASSETS
Current assets:
Cash and cash equivalents $1,153,172 $1,397,880 
Accounts receivable, net of allowance of $464 and $331 as of October 2, 2021 and April 3, 2021, respectively662,787 457,431 
Inventories
597,563 507,787 
Prepaid expenses49,298 41,572 
Other receivables33,841 27,324 
Other current assets
44,606 51,810 
Total current assets2,541,267 2,483,804 
Property and equipment, net of accumulated depreciation of $1,655,084 and $1,561,613 as of October 2, 2021 and April 3, 2021, respectively1,276,810 1,266,031 
Goodwill2,734,116 2,642,708 
Intangible assets, net
615,486 611,155 
Long-term investments36,908 35,370 
Other non-current assets371,869 182,402 
Total assets$7,576,456 $7,221,470 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$521,569 $313,868 
Accrued liabilities284,689 255,060 
Current portion of long-term debt5,545 5,092 
Other current liabilities90,692 107,561 
Total current liabilities902,495 681,581 
Long-term debt1,740,552 1,742,550 
Other long-term liabilities205,655 167,914 
Total liabilities2,848,702 2,592,045 
Commitments and contingent liabilities (Note 9)
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; 110,461 and 112,557 shares issued and outstanding at October 2, 2021 and April 3, 2021, respectively4,158,170 4,244,740 
Accumulated other comprehensive income23,431 29,649 
Retained earnings546,153 355,036 
Total stockholders’ equity4,727,754 4,629,425 
Total liabilities and stockholders’ equity$7,576,456 $7,221,470 
See accompanying Notes to Condensed Consolidated Financial Statements.
3

Table of Contents
 QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
 Three Months EndedSix Months Ended
 October 2, 2021October 3, 2020October 2, 2021October 3, 2020
Revenue$1,255,248 $1,060,292 $2,365,599 $1,847,743 
Cost of goods sold633,695 568,742 1,197,863 1,030,404 
Gross profit621,553 491,550 1,167,736 817,339 
Operating expenses:
Research and development158,377 156,342 310,456 286,413 
Selling, general and administrative93,489 109,372 183,788 195,976 
Other operating expense7,327 4,192 14,030 20,594 
Total operating expenses259,193 269,906 508,274 502,983 
Operating income362,360 221,644 659,462 314,356 
Interest expense(15,327)(23,486)(30,606)(42,335)
Other income, net4,754 1,920 21,545 25,057 
Income before income taxes351,787 200,078 650,401 297,078 
Income tax expense(32,598)(63,161)(45,586)(63,239)
Net income$319,189 $136,917 $604,815 $233,839 
Net income per share:
Basic $2.87 $1.20 $5.43 $2.04 
Diluted $2.84 $1.18 $5.35 $2.01 
Weighted average shares of common stock outstanding:
Basic 111,035 114,328 111,476 114,388 
Diluted 112,411 116,177 113,088 116,395 

See accompanying Notes to Condensed Consolidated Financial Statements.

4

Table of Contents
QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
 Three Months EndedSix Months Ended
 October 2, 2021October 3, 2020October 2, 2021October 3, 2020
Net income$319,189 $136,917 $604,815 $233,839 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature(9,517)18,201 (6,279)24,288 
Reclassification adjustments, net of tax:
Amortization of pension actuarial loss 30 21 61 40 
Other comprehensive (loss) income(9,487)18,222 (6,218)24,328 
Total comprehensive income$309,702 $155,139 $598,597 $258,167 
See accompanying Notes to Condensed Consolidated Financial Statements.


5

Table of Contents

QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)


Accumulated Other Comprehensive IncomeRetained Earnings
Common Stock
Three Months EndedSharesAmountTotal
Balance, July 3, 2021111,210 $4,210,914 $32,918 $404,562 $4,648,394 
Net income
—   319,189 319,189 
Other comprehensive loss—  (9,487) (9,487)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes
459 (36,104)  (36,104)
Repurchase of common stock, including transaction costs
(1,208)(45,758) (177,598)(223,356)
Stock-based compensation
— 29,118   29,118 
Balance, October 2, 2021110,461 $4,158,170 $23,431 $546,153 $4,727,754 
Balance, June 27, 2020114,354 $4,293,621 $8,394 $49,230 $4,351,245 
Net income
—   136,917 136,917 
Other comprehensive income—  18,222  18,222 
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes
594 (26,306)  (26,306)
Repurchase of common stock, including transaction costs
(837)(31,425) (73,584)(105,009)
Stock-based compensation
— 32,097   32,097 
Balance, October 3, 2020114,111 $4,267,987 $26,616 $112,563 $4,407,166 

See accompanying Notes to Condensed Consolidated Financial Statements.













6

Table of Contents

QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)


Accumulated Other Comprehensive IncomeRetained Earnings
Common Stock
Six Months EndedSharesAmountTotal
Balance, April 3, 2021112,557 $4,244,740 $29,649 $355,036 $4,629,425 
Net income
—   604,815 604,815 
Other comprehensive loss—  (6,218) (6,218)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes
642 (49,452)  (49,452)
Issuance of common stock in connection with employee stock purchase plan
165 17,794   17,794 
Repurchase of common stock, including transaction costs
(2,903)(109,675) (413,698)(523,373)
Stock-based compensation
— 54,763   54,763 
Balance, October 2, 2021110,461 $4,158,170 $23,431 $546,153 $4,727,754 
Balance, March 28, 2020114,625 $4,290,377 $2,288 $ $4,292,665 
Net income
—   233,839 233,839 
Other comprehensive income—  24,328  24,328 
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes
826 (32,371)  (32,371)
Issuance of common stock in connection with employee stock purchase plan
229 15,758   15,758 
Cumulative-effect adoption of ASU 2016-13—   (38)(38)
Repurchase of common stock, including transaction costs
(1,569)(58,830) (121,218)(180,048)
Stock-based compensation
— 53,053   53,053 
Other—   (20)(20)
Balance, October 3, 2020114,111 $4,267,987 $26,616 $112,563 $4,407,166 

See accompanying Notes to Condensed Consolidated Financial Statements.
7

Table of Contents

QORVO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
October 2, 2021October 3, 2020
Cash flows from operating activities:
Net income$604,815 $233,839 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation105,205 100,799 
Intangible assets amortization74,022 144,470 
Deferred income taxes(2,230)36,468 
Stock-based compensation expense53,929 51,907 
Other, net(6,867)(7,496)
Changes in operating assets and liabilities:
Accounts receivable, net(203,321)(118,008)
Inventories(87,137)41,844 
Prepaid expenses and other assets(157,063)(2,366)
Accounts payable and accrued liabilities242,632 16,230 
Income taxes payable and receivable(16,455)9,671 
Other liabilities(21,132)(12,109)
Net cash provided by operating activities586,398 495,249 
Cash flows from investing activities:
Purchase of property and equipment(112,560)(73,386)
Purchase of businesses, net of cash acquired(166,818)(47,520)
Other investing activities11,781 9,581 
Net cash used in investing activities(267,597)(111,325)
Cash flows from financing activities:
Payment of debt(2,500)(100,000)
Proceeds from borrowings and debt issuances 1,206,750 
Repurchase of common stock, including transaction costs(523,373)(180,048)
Proceeds from the issuance of common stock20,435 21,792 
Tax withholding paid on behalf of employees for restricted stock units(51,334)(36,354)
Other financing activities(5,990)(11,705)
Net cash (used in) provided by financing activities(562,762)900,435 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,087)936 
Net (decrease) increase in cash, cash equivalents and restricted cash(245,048)1,285,295 
Cash, cash equivalents and restricted cash at the beginning of the period1,398,309 715,612 
Cash, cash equivalents and restricted cash at the end of the period$1,153,261 $2,000,907 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$1,153,172 $2,000,257 
Restricted cash included in "Other current assets" and "Other non-current assets"89 650 
Total cash, cash equivalents and restricted cash$1,153,261 $2,000,907 
Supplemental disclosure of cash flow information:
Capital expenditures included in liabilities$54,507 $22,124 

See accompanying Notes to Condensed Consolidated Financial Statements.
8

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements of Qorvo, Inc. and Subsidiaries (together, the “Company” or “Qorvo”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions, which could differ materially from actual results. In addition, certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial statements include all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of the interim periods presented. These Condensed Consolidated Financial Statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended April 3, 2021.

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain items in the fiscal 2021 financial statements have been reclassified to conform with the fiscal 2022 presentation.

The Company uses a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year. Each fiscal year, the first quarter ends on the Saturday closest to June 30, the second quarter ends on the Saturday closest to September 30 and the third quarter ends on the Saturday closest to December 31. Fiscal 2022 is a 52-week year, and fiscal 2021 was a 53-week year. The second quarter of fiscal 2022 included 13 weeks, compared to 14 weeks for the second quarter of fiscal 2021, and the first six months of fiscal 2022 included 26 weeks, compared to 27 weeks for the first six months of fiscal 2021.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update 2019-12, "Simplifying the Accounting for Income Taxes," which eliminates certain exceptions within Accounting Standards Codification Topic 740, "Income Taxes" and clarifies and simplifies other aspects of the current accounting guidance. The Company adopted this standard in the first quarter of fiscal 2022, and it did not have a material impact on the Company's consolidated financial statements.

3. INVENTORIES
The components of inventories, net of reserves, are as follows (in thousands):
October 2, 2021April 3, 2021
Raw materials$179,390 $134,959 
Work in process319,525 283,067 
Finished goods98,648 89,761 
Total inventories$597,563 $507,787 

4. BUSINESS ACQUISITIONS

NextInput, Inc.

On April 5, 2021, the Company acquired all the outstanding equity interests of NextInput, Inc. ("NextInput"), a leader in microelectromechanical system ("MEMS")-based sensing solutions, for a total cash purchase price of $173.4 million. The acquisition expands the Company's offerings of MEMS-based products for mobile applications and provides sensing solutions for a broad range of applications in other markets.

9

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


The purchase price was preliminarily allocated based on the estimated fair values of the assets acquired and liabilities assumed as follows (in thousands):
Intangible assets$81,000 
Goodwill94,285 
Net tangible assets (1)
8,216 
Deferred tax liability, net(10,132)
Total purchase price$173,369 
(1) Includes cash acquired of $5.8 million.

The more significant intangible assets acquired included developed technology of $73.0 million and customer relationships of $7.5 million.

The fair value of the developed technology acquired was determined based on an income approach using the "excess earnings method" which estimated the value of the intangible asset by discounting the future projected earnings of the asset to present value as of the valuation date. The acquired developed technology asset is being amortized on a straight-line basis over its estimated useful life of seven years.

The fair value of the customer relationships acquired was determined based on an income approach using the "with and without method" in which the value of the intangible asset is determined by the difference in discounted cash flows of the profitability of the Company "with" the asset and the profitability of the Company "without" the asset. These customer relationships are being amortized on a straight-line basis over their estimated useful life of one year.

The Company will continue to evaluate certain assets, liabilities and tax estimates over the measurement period (up to one year from the acquisition date). The goodwill resulting from the acquisition of NextInput is attributed to synergies and other benefits that are expected to be generated from this transaction and is not deductible for income tax purposes.

The operating results of NextInput were not material and have been included in the Company's condensed consolidated financial statements as of the acquisition date. During the three and six months ended October 2, 2021, the Company recorded acquisition and integration related costs associated with the acquisition of NextInput totaling $0.5 million and $1.7 million in "Other operating expense" in the Condensed Consolidated Statements of Income.

7Hugs Labs S.A.S.

On October 1, 2020, the Company acquired all the outstanding equity interests of 7Hugs Labs S.A.S. ("7Hugs"), a private developer of Ultra Wideband ("UWB") software and solutions, for a total cash purchase price of $48.7 million. The acquisition supports the ongoing development and adoption of the Company's UWB products and solutions.

During the six months ended October 2, 2021, the Company recognized a decrease to goodwill of approximately $0.1 million in connection with finalizing the purchase price allocation. The measurement period ended one year from the acquisition date.

5. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended October 2, 2021, are as follows (in thousands):
Mobile ProductsInfrastructure and Defense ProductsTotal
Balance as of April 3, 2021 (1)
$2,034,383 $608,325 $2,642,708 
Goodwill resulting from NextInput acquisition (Note 4)
94,285  94,285 
7Hugs measurement period adjustments(97) (97)
Effect of changes in foreign currency exchange rates(2,780) (2,780)
Balance as of October 2, 2021 (1)
$2,125,791 $608,325 $2,734,116 
(1) The Company’s goodwill balance is presented net of accumulated impairment losses and write-offs of $621.6 million.

10

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets (in thousands):
 October 2, 2021April 3, 2021
 Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Developed technology $913,798 $361,564 $1,295,113 $750,044 
Customer relationships 86,033 33,652 459,052 403,407 
Technology licenses 2,648 2,057 2,368 2,076 
Backlog  1,600 1,600 
Trade names 1,573 1,010 1,090 636 
In-process research and development9,717 N/A9,695 N/A
Total (1)
$1,013,769 $398,283 $1,768,918 $1,157,763 
(1) Amounts include the impact of foreign currency translation.

At the beginning of each fiscal year, the Company removes the gross asset and accumulated amortization amounts of intangible assets that have reached the end of their useful lives and have been fully amortized. Useful lives are estimated based on the expected economic benefit to be derived from the intangible assets.

Total intangible assets amortization expense was $36.6 million and $74.0 million for the three and six months ended October 2, 2021, respectively, and $72.4 million and $144.5 million for the three and six months ended October 3, 2020, respectively.

6. INVESTMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Equity Method Investments
The Company invests in limited partnerships and accounts for these investments using the equity method. The carrying amounts of these investments as of October 2, 2021, and April 3, 2021, were $32.4 million and $29.8 million, respectively, and are classified as “Long-term investments” in the Condensed Consolidated Balance Sheets. During the three and six months ended October 2, 2021, the Company recorded income of $1.5 million and $16.0 million, respectively, based on its share of the limited partnerships' earnings. During the three and six months ended October 3, 2020, the Company recorded $0.1 million of expense and $15.6 million of income, respectively, based on its share of the limited partnerships' earnings. These amounts are included in “Other income, net” in the Condensed Consolidated Statements of Income. During the three and six months ended October 2, 2021, the Company received cash distributions of $9.6 million and $13.5 million, respectively, which were recognized as a reduction to the carrying value of the investment and included in the cash flows from investing activities in the Condensed Consolidated Statement of Cash Flows. There were no cash distributions received during the three and six months ended October 3, 2020.
11

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


Fair Value of Financial Instruments
The fair value of the financial assets and liabilities measured on a recurring basis was determined using the following levels of inputs (in thousands):
TotalQuoted Prices In
Active Markets For
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
October 2, 2021
Marketable equity securities$1,514 $1,514 $ $ 
Invested funds in deferred compensation plan (1)
37,114 37,114   
April 3, 2021
Marketable equity securities$3,802 $3,802 $ $ 
Invested funds in deferred compensation plan (1)
32,824 32,824   
Contingent earn-out liability (2)
(10,000)  (10,000)
(1) Invested funds under the Company's non-qualified deferred compensation plan are held in a rabbi trust and consist of mutual funds. The fair value of the mutual funds is calculated using the net asset value per share determined by quoted active market prices of the underlying investments.
(2) The Company recorded a contingent earn-out liability in conjunction with the acquisition of Custom MMIC Design Services, Inc. which was paid during the first quarter of fiscal 2022.

7. LONG-TERM DEBT

Long-term debt is as follows (in thousands):
October 2, 2021April 3, 2021
Term loan$195,000 $197,500 
4.375% senior notes due 2029850,000 850,000 
3.375% senior notes due 2031700,000 700,000 
Finance leases2,493 1,617 
Unamortized premium and issuance costs, net(1,396)(1,475)
Less current portion of long-term debt(5,545)(5,092)
Total long-term debt$1,740,552 $1,742,550 

Credit Agreement
On September 29, 2020, the Company and certain of its U.S. subsidiaries (the “Guarantors”) entered into a five-year unsecured senior credit facility pursuant to a credit agreement (the “2020 Credit Agreement”) with Bank of America, N.A., acting as administrative agent, and a syndicate of lenders. The 2020 Credit Agreement amended and restated the previous credit agreement dated as of December 5, 2017 (the “2017 Credit Agreement”). The 2020 Credit Agreement includes a senior term loan (the “2020 Term Loan”) of up to $200.0 million and a senior revolving line of credit (the “Revolving Facility”) of up to $300.0 million. During the three and six months ended October 2, 2021, there were no borrowings under the Revolving Facility.

On the closing date of the 2020 Credit Agreement, the Company repaid the remaining principal balance of $97.5 million on the term loan under the 2017 Credit Agreement and concurrently drew $200.0 million under the 2020 Term Loan. During the three and six months ended October 2, 2021, the Company made principal payments of $1.3 million and $2.5 million, respectively. Interest paid during the three and six months ended October 2, 2021, was $0.6 million and $1.2 million, respectively.

12

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


The 2020 Credit Agreement contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default. As of October 2, 2021, the Company was in compliance with these covenants.

Senior Notes due 2029
On September 30, 2019, the Company issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “Initial 2029 Notes”). On December 20, 2019, and June 11, 2020, the Company issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of such notes (together, the “Additional 2029 Notes” and together with the Initial 2029 Notes, the “2029 Notes”). The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

The Initial 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2029 Notes were issued pursuant to supplemental indentures, dated as of December 20, 2019, and June 11, 2020 (such indenture and supplemental indentures, collectively, the “2019 Indenture”). The 2019 Indenture contains customary events of default, including payment default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events and also contains customary negative covenants.

Interest is payable on the 2029 Notes on April 15 and October 15 of each year. The Company paid no interest on the 2029 Notes during the three months ended October 2, 2021, and paid interest of $18.6 million on the 2029 Notes during the six months ended October 2, 2021. The Company paid no interest on the 2029 Notes during the three months ended October 3, 2020, and paid interest of $13.0 million on the 2029 Notes during the six months ended October 3, 2020.

Senior Notes due 2031
On September 29, 2020, the Company issued $700.0 million aggregate principal amount of its 3.375% senior notes due 2031 (the “2031 Notes”). The 2031 Notes will mature on April 1, 2031, unless earlier redeemed in accordance with their terms. The 2031 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

The 2031 Notes were issued pursuant to an indenture, dated as of September 29, 2020, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee (the “2020 Indenture”). The 2020 Indenture contains the same customary events of default and negative covenants as the 2019 Indenture.

Interest is payable on the 2031 Notes on April 1 and October 1 of each year. During the three and six months ended October 2, 2021, the company paid interest of $11.8 million on the 2031 Notes. The Company paid no interest on the 2031 Notes during the three and six months ended October 3, 2020.

Fair Value of Debt
The Company's debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair value of the 2029 Notes and the 2031 Notes as of October 2, 2021, was $924.3 million and $739.6 million, respectively (compared to the outstanding principal amount of $850.0 million and $700.0 million, respectively). The estimated fair value of the 2029 Notes and the 2031 Notes as of April 3, 2021, was $905.3 million and $689.5 million, respectively (compared to the outstanding principal amount of $850.0 million and $700.0 million, respectively). The Company considers its debt to be Level 2 in the fair value hierarchy. Fair values are estimated based on quoted market prices for identical or similar instruments. The 2029 Notes and the 2031 Notes currently trade over-the-counter, and the fair values were estimated based upon the value of the last trade at the end of the period.

The 2020 Term Loan carries a variable interest rate set at current market rates, and as such, the fair value of the 2020 Term Loan approximated carrying value as of October 2, 2021 and April 3, 2021.

Interest Expense
During the three and six months ended October 2, 2021, the Company recognized total interest expense of $16.2 million and $32.5 million, respectively, primarily related to the 2029 Notes and the 2031 Notes, partially offset by interest capitalized to property and equipment of $0.9 million and $1.9 million, respectively. During the three and six months ended October 3, 2020, the Company recognized total interest expense of $24.6 million and $44.6 million, respectively, primarily related to its 5.50%
13

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


senior notes due July 15, 2026 (which were redeemed on October 16, 2020) and the 2029 Notes, partially offset by interest capitalized to property and equipment of $1.1 million and $2.3 million, respectively.

8. STOCK REPURCHASES

On May 5, 2021, the Company announced that its Board of Directors authorized a new share repurchase program to repurchase up to $2.0 billion of the Company's outstanding common stock, which included approximately $236.9 million authorized under the prior program terminated concurrent with the new authorization. Under this current program, share repurchases are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchases depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require the Company to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

During the three and six months ended October 2, 2021, the Company repurchased approximately 1.2 million and 2.9 million shares, respectively, of its common stock for approximately $223.4 million and $523.4 million, respectively (including transaction costs). As of October 2, 2021, approximately $1,490.6 million remains available for repurchases under the current share repurchase program.

During the three and six months ended October 3, 2020, the Company repurchased approximately 0.8 million and 1.6 million shares, respectively, of its common stock for approximately $105.0 million and $180.0 million, respectively (including transaction costs) under the prior repurchase program.

9. COMMITMENTS AND CONTINGENT LIABILITIES

Purchase Obligations
As of October 2, 2021, the Company's purchase obligations totaled approximately $2.4 billion, of which approximately $600.0 million is expected to be paid during the last six months of fiscal 2022 and the remaining $1.8 billion is expected to be paid ratably over fiscal years 2023 through 2026. Noncancelable purchase obligations represent payments due related to the purchase of materials and manufacturing services, a majority of which are not recorded as liabilities in the Condensed Consolidated Balance Sheet because the Company has not received the related goods or services as of October 2, 2021.

In an effort to support growth amidst ongoing industry-wide supply constraints, the Company entered into a long-term capacity reservation agreement with a foundry supplier during the second quarter ended October 2, 2021. The Company agreed to pay certain fees and deposits which are recorded in "Prepaid expenses" and "Other non-current assets" in the Condensed Consolidated Balance Sheet as of October 2, 2021. Under the agreement the Company is required to purchase, and the foundry supplier is required to supply, a certain number of wafers (at predetermined sales prices) for calendar years 2022 through 2025. The Company currently estimates that it is obligated to purchase a total of approximately $1.8 billion of wafers (included in the total purchase obligations above) under the capacity reservation agreement.

Legal Matters
The Company is involved in various legal proceedings and claims that have arisen in the ordinary course of business that have not been fully adjudicated. The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates developments in its legal matters that could affect the amount of the previously accrued liability and records adjustments as appropriate. Although it is not possible to predict with certainty the outcome of the unresolved legal matters, it is the opinion of management that these matters will not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position or results of operations. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal matters is not material.

14

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


10. REVENUE

The following table presents the Company's revenue disaggregated by geography, based on the location of the customers' headquarters (in thousands):
Three Months EndedSix Months Ended
October 2, 2021October 3, 2020October 2, 2021October 3, 2020
China$418,263 $391,011 $954,200 $778,233 
United States560,992 459,416 880,173 707,661 
Other Asia119,488 102,548 228,766 160,645 
Taiwan92,067 53,350 177,281 106,679 
Europe64,438 53,967 125,179 94,525 
Total revenue
$1,255,248 $1,060,292 $2,365,599 $1,847,743 

The Company also disaggregates revenue by operating segments (see Note 11).

11. OPERATING SEGMENT INFORMATION

The Company's operating and reportable segments are Mobile Products ("MP") and Infrastructure and Defense Products ("IDP") based on the organizational structure and information reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), and these segments are managed separately based on the end markets and applications they support. The CODM allocates resources and assesses the performance of each operating segment primarily based on operating income.

MP is a global supplier of cellular, UWB, Wi-Fi and other solutions for a variety of applications, including smartphones, wearables, laptops, tablets and Internet of Things ("IoT").

IDP is a global supplier of RF, system-on-a-chip and power management solutions for applications in wireless infrastructure, defense, Wi-Fi, smart home, automotive and IoT.

The "All other" category includes operating expenses such as stock-based compensation, amortization of intangible assets, acquisition and integration related costs, (loss) gain on assets, start-up costs, restructuring related charges and other miscellaneous corporate overhead expenses that the Company does not allocate to its reportable segments because these expenses are not included in the segment operating performance measures evaluated by the Company’s CODM. The CODM does not evaluate operating segments using discrete asset information. The Company’s operating segments do not record intercompany revenue. The Company does not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Except as discussed above regarding the "All other" category, the Company’s accounting policies for segment reporting are the same as for the Company as a whole.

15

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


The following tables present details of the Company’s operating and reportable segments and a reconciliation of the “All other” category (in thousands):
 Three Months EndedSix Months Ended
October 2, 2021October 3, 2020October 2, 2021October 3, 2020
Revenue:
MP$995,697 $754,294 $1,831,835 $1,222,698 
IDP259,551 305,998 533,764 625,045 
Total revenue$1,255,248 $1,060,292 $2,365,599 $1,847,743 
Operating income (loss):
MP$385,589 $262,858 $685,279 $372,841 
IDP49,829 66,495 117,168 160,250 
All other(73,058)(107,709)(142,985)(218,735)
Operating income362,360 221,644 659,462 314,356 
Interest expense(15,327)(23,486)(30,606)(42,335)
Other income, net4,754 1,920 21,545 25,057 
Income before income taxes$351,787 $200,078 $650,401 $297,078 
 
 Three Months EndedSix Months Ended
October 2, 2021October 3, 2020October 2, 2021October 3, 2020
Reconciliation of “All other” category:
Stock-based compensation expense$(28,691)$(30,048)$(53,929)$(51,907)
Amortization of intangible assets(36,577)(72,147)(73,800)(144,091)
Acquisition and integration related costs
(6,040)(7,259)(10,033)(19,922)
Other (including (loss) gain on assets, start-up costs, restructuring related charges and other miscellaneous corporate overhead)(1,750)1,745 (5,223)(2,815)
Loss from operations for “All other”$(73,058)$(107,709)$(142,985)$(218,735)

12. INCOME TAXES

The Company’s income tax expense was $32.6 million and $45.6 million for the three and six months ended October 2, 2021, respectively, and $63.2 million for the three and six months ended October 3, 2020. The Company’s effective tax rate was 9.3% and 7.0% for the three and six months ended October 2, 2021, respectively, and 31.6% and 21.3% for the three and six months ended October 3, 2020, respectively.

The Company's effective tax rate for the three and six months ended October 2, 2021, differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, global intangible low tax income (“GILTI”), domestic tax credits generated and discrete tax items recorded during the period. A discrete benefit of $10.3 million and $30.5 million was recorded during the three and six months ended October 2, 2021, respectively. The discrete tax benefits for the three and six months ended October 2, 2021 primarily related to stock-based compensation deductions and net tax benefits associated with other non-recurring restructuring activities, including a discrete charge associated with the intercompany restructuring of the NextInput intellectual property. The discrete tax benefit for the six months ended October 2, 2021 was also due in part to the recognition of previously unrecognized tax benefits due to the expiration of the statute of limitations.

The Company's effective tax rate for the three and six months ended October 3, 2020, differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, GILTI, domestic tax credits generated and discrete tax items recorded during the period. A discrete charge of $45.2 million and $35.2 million was recorded during the three and six months ended October 3, 2020, respectively. The discrete charges for the three and six months ended October 3, 2020 primarily related to the
16

Table of Contents

QORVO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


intercompany restructuring of the intellectual property from the acquisition of Cavendish Kinetics Limited in fiscal 2020, partially offset by discrete tax benefits recognized for stock-based compensation deductions. The discrete charge for the six months ended October 3, 2020 was further offset by a retroactive incentive allowing previously non-deductible payments to be amortized.

13. NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data):
 Three Months EndedSix Months Ended
 October 2, 2021October 3, 2020October 2, 2021October 3, 2020
Numerator:
Numerator for basic and diluted net income per share$319,189 $136,917 $604,815 $233,839 
Denominator:
Denominator for basic net income per share — weighted average shares
111,035 114,328 111,476 114,388 
Effect of dilutive securities:
Stock-based awards
1,376 1,849 1,612 2,007 
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions
112,411 116,177 113,088 116,395 
Basic net income per share$2.87 $1.20 $5.43 $2.04 
Diluted net income per share$2.84 $1.18 $5.35 $2.01 

An immaterial number of the Company's outstanding stock-based awards was excluded from the computation of diluted net income per share for the three and six months ended October 2, 2021 and October 3, 2020, because the effect of their inclusion would have been anti-dilutive.

14. SUBSEQUENT EVENT

United Silicon Carbide, Inc. Acquisition
On October 19, 2021, the Company acquired all the outstanding equity interests of United Silicon Carbide, Inc., a leading manufacturer of silicon carbide (SiC) power semiconductors, for cash consideration of approximately $227.1 million and contingent cash consideration of up to $31.3 million based on the achievement of certain revenue and gross margin targets subsequent to the close date and through December 31, 2022. The acquisition expands the Company's offerings with SiC power products that deliver leading performance for applications in electric vehicles, battery charging, IT infrastructure, renewables and circuit protection.


17

Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results; our substantial dependence on developing new products and achieving design wins; our dependence on several large customers for a substantial portion of our revenue; the COVID-19 pandemic materially and adversely affecting our financial condition and results of operations; a loss of revenue if defense and aerospace contracts are canceled or delayed; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs due to timing of customer forecasts; our inability to effectively manage or maintain evolving relationships with platform providers; our ability to continue to innovate in a very competitive industry; underutilization of manufacturing facilities as a result of industry overcapacity; unfavorable changes in interest rates, pricing of certain precious metals, utility rates and foreign currency exchange rates; our acquisitions and other strategic investments failing to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; warranty claims, product recalls and product liability; changes in our effective tax rate; changes in the favorable tax status of certain of our subsidiaries; enactment of international or domestic tax legislation, or changes in regulatory guidance; risks associated with environmental, health and safety regulations, and climate change; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches and other similar disruptions compromising our information; theft, loss or misuse of personal data by or about our employees, customers or third parties; provisions in our governing documents and Delaware law may discourage takeovers and business combinations that our stockholders might consider to be in their best interests; and volatility in the price of our common stock. These and other risks and uncertainties, which are described in more detail in our most recent Annual Report on Form 10-K and in other reports and statements that we file with the SEC, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

18

Table of Contents
OVERVIEW

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the consolidated results of operations and financial condition of Qorvo. MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and accompanying Notes to Condensed Consolidated Financial Statements.

Qorvo is a leader in the development and commercialization of technologies and products for wireless and wired connectivity. We combine highly differentiated technologies, systems-level expertise and manufacturing scale to serve a diverse set of customers a broad portfolio of innovative solutions that enable a more connected world.

We design, develop, manufacture and market our products to U.S. and international original equipment manufacturers and original design manufacturers in two operating segments, which are also our reportable segments: Mobile Products ("MP") and Infrastructure and Defense Products ("IDP").

MP is a global supplier of cellular, Ultra Wideband ("UWB"), Wi-Fi and other solutions for a variety of applications, including smartphones, wearables, laptops, tablets and Internet of Things ("IoT").

IDP is a global supplier of RF, system-on-a-chip and power management solutions for applications in wireless infrastructure, defense, Wi-Fi, smart home, automotive and IoT.

These business segments are based on the organizational structure and information reviewed by our Chief Executive Officer, who is our chief operating decision maker ("CODM") and are managed separately based on the end markets and applications they support. The CODM allocates resources and evaluates the performance of each operating and reportable segment primarily based on operating income. See Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for additional information regarding our reportable operating segments.

In the first half of fiscal 2022, the semiconductor industry continued to experience supply constraints. While we expect the industry to address these constraints over time, we have taken strategic actions to provide flexibility in our supply chain. During the second quarter ended October 2, 2021, we entered into a long-term capacity agreement with a foundry supplier to reserve manufacturing supply capacity. Under the agreement we are required to purchase, and the foundry supplier is required to supply, a certain number of wafers for calendar years 2022 through 2025. See Note 9 of the Notes to Condensed Consolidated Financial Statements and Part II, Item 1A., "Risk Factors" for additional information regarding this agreement.

The COVID-19 pandemic has been a contributing factor of the semiconductor industry supply constraints and is likely to continue to cause volatility and uncertainty in customer demand, worldwide economies and financial markets for some period of time. To date, any negative impact of COVID-19 on the overall demand for our products, cash flow from operations, need for capital expenditures, and our liquidity position has been limited, although we are addressing capacity constraints in our supply chain as described above.
19

Table of Contents

SECOND QUARTER FISCAL 2022 FINANCIAL HIGHLIGHTS

Fiscal 2022 is a 52-week year, and fiscal 2021 was a 53-week year. The second quarter of fiscal 2022 included 13 weeks, compared to 14 weeks for the second quarter of fiscal 2021, and the first six months of fiscal 2022 included 26 weeks, compared to 27 weeks for the first six months of fiscal 2021.

Revenue for the second quarter of fiscal 2022 increased 18.4% as compared to the second quarter of fiscal 2021, driven primarily by higher demand for our 5G mobile solutions, partially offset by lower demand for our base station products.

Gross margin for the second quarter of fiscal 2022 was 49.5% as compared to 46.4% for the second quarter of fiscal 2021, primarily due to lower intangible amortization expense, lower unit costs on higher volume and productivity, and improved product mix, partially offset by average selling price erosion.

Operating income was $362.4 million for the second quarter of fiscal 2022 as compared to $221.6 million for the second quarter of fiscal 2021. This increase was primarily due to higher revenue, favorable gross margin and lower operating expenses. Operating expenses decreased primarily due to lower intangible amortization expense.

Net income per diluted share was $2.84 for the second quarter of fiscal 2022 as compared to $1.18 for the second quarter of fiscal 2021.

Capital expenditures were $47.3 million for the second quarter of fiscal 2022 as compared to $43.6 million for the second quarter of fiscal 2021.

During the second quarter of fiscal 2022, we repurchased approximately 1.2 million shares of our common stock for approximately $223.4 million.

20

Table of Contents
RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations (in thousands, except percentages): 
 Three Months Ended
                      October 2, 2021% of
Revenue
October 3, 2020% of
Revenue
Increase (Decrease)Percentage
Change
Revenue$1,255,248 100.0 %$1,060,292 100.0 %$194,956 18.4 %
Cost of goods sold633,695 50.5 568,742 53.6 64,953 11.4 
Gross profit621,553 49.5 491,550 46.4 130,003 26.4 
Research and development158,377 12.6 156,342 14.8 2,035 1.3 
Selling, general and administrative93,489 7.4 109,372 10.3 (15,883)(14.5)
Other operating expense7,327 0.6 4,192 0.4 3,135 74.8 
Operating income$362,360 28.9 %$221,644 20.9 %$140,716 63.5 %
Six Months Ended
October 2, 2021% of RevenueOctober 3, 2020% of RevenueIncrease (Decrease)Percentage Change
Revenue$2,365,599 100.0 %$1,847,743 100.0 %$517,856 28.0 %
Cost of goods sold