Skyworks Solutions, Inc. CAPEX surged on 39.2% and Revenue increased on 5.9%
11/08/2018 • About Skyworks Solutions, Inc. (
$SWKS) • By InTwits
Skyworks Solutions, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Skyworks Solutions, Inc. is a growth stock: FY2018 revenue growth was 5.9%, 5 year revenue CAGR was 16.6% at FY2018 ROIC 32.3%
- Skyworks Solutions, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.5%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $422m in FY2018, $303m in FY2017, $189m in FY2016, $430m in FY2015, $209m in FY2014
- The company has highly profitable business model: ROIC is 32.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Skyworks Solutions, Inc.'s Revenue increased on 5.9%. Revenue growth showed slowdown in FY18Q4 - it was 2.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from 23.1% to 30.6% in 2018.
Gross Margin showed almost no change in FY2018. Gross Margin followed a growing trend at 1.4 pp per annum in FY2014-FY2018. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 1.5 pp from 1.3% to 2.8% in FY2018. During the last 5 years SBC as a % of Revenue bottomed in FY2016 at 1.0% and was growing since that time.
Net Income margin decreased on 3.9 pp from 27.7% to 23.7% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2016 at 30.3% and was declining since that time. The efficient tax rate was 31.1% in FY2018 while the average for the last five years was 22.3%.
Investments (CAPEX, working capital and M&A)
Skyworks Solutions, Inc.'s CAPEX/Revenue was 10.9% in FY2018. CAPEX/Revenue decreased on 2.3 pp from 13.2% in FY2015 to 10.9% in FY2018. It's average level of CAPEX/Revenue for the last three years was 8.3%.
Accounts receivable as a % of Revenue increased on 4.5 pp from 12.5% to 17.0% in FY2018. Inventories as a % of Revenue decreased slightly on 0.84 pp from 13.5% to 12.7% in FY2018. Accounts payable as a % of Revenue decreased on 2.3 pp from 14.3% to 12.0% in FY2018.
Skyworks Solutions, Inc. has spent
$404m on M&A in FY2018 which accounts for 10.4% of revenue.
Return on investment
The company operates at high and attractive ROIC (32.3%) and ROE (22.5%). ROIC decreased slightly on 0.77 pp from 33.1% to 32.3% in FY2018. ROE decreased on 4.1 pp from 26.6% to 22.5% in FY2018. During FY2014-FY2018 ROIC topped in FY2015 at 36.4% and was declining since that time. During FY2014-FY2018 ROE topped in FY2016 at 29.7% and was declining since that time.
Leverage (Debt)
The company has no debt. Cash dropped on 54.6%.
Valuation and dividends
The company's trades at EV/EBITDA 7.6x and P/E 14.2x.
The company paid 26.5% of Net Income as dividends in FY2018. Dividends grew on average at 42.7% per annum in the last 5 years).
Management team
The company's CEO is Liam K Griffin. Liam K Griffin is a founder and has 3 years tenure with the company. CEO total compensation was
$9,342,113 in FY2018 which included
$894,808 salary. Skyworks Solutions, Inc.'s CFO is Kris Sennesael. Kris Sennesael has 2 years tenure at the company.
Insider ownership is 0.40%. Insider ownership didn't change in 2018.
The company has 9,400 employees. The number of employees jumped on 11.9%. Average revenue per employee in FY2018 was
$411,489 and it decreased on 5.3%.
Financial and operational results
FY ended 09/28/2018
Skyworks Solutions, Inc. ($SWKS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 2,292 | 3,258 | 3,289 | 3,651 | 3,868 | 5.9% |
| Gross Profit | 1,023 | 1,555 | 1,665 | 1,842 | 1,951 | 5.9% |
| SG&A | 179 | 191 | 196 | 205 | 208 | 1.6% |
| EBITDA | 688 | 1,219 | 1,367 | 1,509 | 1,619 | 7.3% |
| EBIT | 565 | 1,023 | 1,119 | 1,254 | 1,319 | 5.2% |
| Tax | 108 | 225 | 205 | 247 | 414 | 67.6% |
| Net Income | 458 | 798 | 995 | 1,010 | 918 | -9.1% |
| Stock Based Compensation | 45 | 43 | 34 | 48 | 108 | 126.0% |
Balance Sheet
|
|---|
| Cash | 806 | 1,044 | 1,084 | 1,617 | 733 | -54.6% |
| Accounts Receivable | 318 | 538 | 417 | 455 | 656 | 44.2% |
| Inventory | 271 | 268 | 424 | 494 | 490 | -0.7% |
| Accounts Payable | 201 | 291 | 110 | 258 | 230 | -11.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 209 | 430 | 189 | 303 | 422 | 39.2% |
| Dividends | 41 | 123 | 201 | 215 | 243 | 13.0% |
| Acquisitions | 149 | 25 | 56 | 14 | 404 | 2,848.9% |
Ratios
|
|---|
| Revenue growth | 27.9% | 42.2% | 0.9% | 11.0% | 5.9% | |
| EBITDA growth | 53.4% | 77.2% | 12.1% | 10.4% | 7.3% | |
|
|---|
| Gross Margin | 44.6% | 47.7% | 50.6% | 50.4% | 50.4% | -0.0% |
| EBITDA Margin | 30.0% | 37.4% | 41.5% | 41.3% | 41.8% | 0.5% |
| EBIT Margin | 24.7% | 31.4% | 34.0% | 34.3% | 34.1% | -0.2% |
| SG&A, % of revenue | 7.8% | 5.9% | 6.0% | 5.6% | 5.4% | -0.2% |
| SBC, % of revenue | 2.0% | 1.3% | 1.0% | 1.3% | 2.8% | 1.5% |
| Net Income Margin | 20.0% | 24.5% | 30.3% | 27.7% | 23.7% | -3.9% |
| CAPEX, % of revenue | 9.1% | 13.2% | 5.8% | 8.3% | 10.9% | 2.6% |
|
|---|
| ROIC | 24.8% | 36.4% | 33.7% | 33.1% | 32.3% | -0.8% |
| ROE | 19.8% | 28.1% | 29.7% | 26.6% | 22.5% | -4.1% |
| Net Debt/EBITDA | -1.2x | -0.9x | -0.8x | -1.1x | -0.5x | 0.6x |
People
|
|---|
| Insider ownership | 0.4% | 0.4% | 0.4% | 0.4% | 0.4% | 0.0% |
| Employees | 5,550 | 6,700 | 7,300 | 8,400 | 9,400 | 11.9% |
| Revenue/Employee, th. $ | 413 | 486 | 451 | 435 | 411 | -5.3% |
Skyworks Solutions, Inc. ($SWKS) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1,052 | 913 | 894 | 1,008 | | 15.0% | 7.2% | -0.7% | 2.4% |
| EBITDA | 453 | 361 | 381 | 424 | | 17.3% | 4.9% | 3.7% | 3.1% |
| Net Income | 70 | 276 | 287 | 286 | | -72.7% | 22.7% | 16.4% | 1.5% |
Balance Sheet
|
|---|
| Cash | 1,682 | 1,881 | 1,158 | 733 | | 24.5% | 33.7% | -19.8% | -54.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 51.0% | 50.2% | 50.5% | 49.9% | | 0.3% | 0.3% | 0.1% | -0.7% |
| EBITDA Margin | 43.0% | 39.5% | 42.6% | 42.0% | | 0.8% | -0.9% | 1.8% | 0.3% |
| Net Income Margin | 6.7% | 30.2% | 32.0% | 28.3% | | -21.5% | 3.8% | 4.7% | -0.3% |
Peers in Semiconductors
Below we provide Skyworks Solutions, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 5.2% | 10.9% | 4.7% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | | 42.2% | 0.9% | 11.0% | 5.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 46.4% | 47.0% | 47.2% | 48.6% | 51.0% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 44.6% | 47.7% | 50.6% | 50.4% | 50.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.6% | 11.3% | 9.2% | 10.7% | 9.8% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 30.0% | 37.4% | 41.5% | 41.3% | 41.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 9.1% | 13.2% | 5.8% | 8.3% | 10.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.0% | 3.8% | 1.4% | 3.2% | 3.0% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 24.8% | 36.4% | 33.7% | 33.1% | 32.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| Skyworks Solutions, Inc. ($SWKS) | -1.2x | -0.9x | -0.8x | -1.1x | -0.5x |
