Skyworks Solutions, Inc. reports 4.5% Net Income decline in 2020 and 0.62% Revenue decline
11/02/2020 • About Skyworks Solutions, Inc. (
$SWKS) • By InTwits
Skyworks Solutions, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Skyworks Solutions, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.7%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: $78m in FY2020, $59m in FY2019, $34m in FY2018, $37m in FY2017, $48m in FY2016
- The company has highly profitable business model: ROIC is 21.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased slightly on 0.62%. Annual revenue decline showed slowdown in FY20Q4 - revenue jumped on 15.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.57 pp from 16.0% to 16.6% in FY2020.
Gross Margin increased slightly on 0.57 pp from 47.5% to 48.1% in FY2020. During the last 5 years Gross Margin bottomed in FY2019 at 47.5%. SG&A as a % of Revenue increased slightly on 1.0 pp from 5.9% to 6.9% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2018 at 5.4% and was growing since that time.
Net Income margin decreased slightly on 1.00 pp from 25.3% to 24.3% in FY2020.
Investments (CAPEX, working capital and M&A)
Skyworks Solutions, Inc.'s CAPEX/Revenue was 11.6% in FY2020. Skyworks Solutions, Inc.'s CAPEX/Revenue increased on 3.3 pp from 8.3% in FY2017 to 11.6% in FY2020. It's average CAPEX/Revenue for the last three years was 11.4%. CAPEX as a % of Revenue stuck to a growing trend at 1.5 pp per annum in FY2016-FY2020.
Return on investment
The company operates at high and attractive ROIC (21.2%) while ROE is a bit lower (19.7%). ROIC decreased slightly on 2.0 pp from 23.2% to 21.2% in FY2020. ROE decreased slightly on 1.1 pp from 20.8% to 19.7% in FY2020. ROIC declined at -3.5 pp per annum in FY2016-FY2020. ROE followed a declining trend at -2.6 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.1x Debt / EBITDA. Debt jumped while cash dropped on 33.4%.
Skyworks Solutions, Inc. has no short term refinancing risk: cash is higher than short term debt (2,009.6%).
Valuation and dividends
The company's trades at EV/EBITDA 18.5x and P/E 29.6x.
Management team
Skyworks Solutions, Inc.'s CEO Liam K Griffin has spent 4 years with the company. Kris Sennesael is a Skyworks Solutions, Inc.'s CFO. Kris Sennesael has spent 4 years at the company.
Financial and operational results
FY ended 10/02/2020
Skyworks Solutions, Inc. ($SWKS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 3,289 | 3,651 | 3,868 | 3,377 | 3,356 | -0.6% |
| Gross Profit | 1,665 | 1,842 | 1,951 | 1,604 | 1,613 | 0.6% |
| SG&A | 196 | 205 | 208 | 198 | 231 | 16.7% |
| EBITDA | 1,367 | 1,509 | 1,619 | 1,324 | 1,284 | -3.0% |
| EBIT | 1,119 | 1,254 | 1,319 | | | |
| Tax | 205 | 247 | 414 | | | |
| Net Income | 995 | 1,010 | 918 | 854 | 815 | -4.5% |
| Stock Based Compensation | 34 | 48 | 108 | | | |
Balance Sheet
|
|---|
| Cash | 1,084 | 1,617 | 733 | 851 | 567 | -33.4% |
| Accounts Receivable | 417 | 455 | 656 | | | |
| Inventory | 424 | 494 | 490 | | | |
| Accounts Payable | 110 | 258 | 230 | | | |
| Short Term Debt | 0 | 0 | 0 | 0 | 28 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 151 | |
Cash flow
|
|---|
| Capex | 189 | 303 | 422 | 398 | 389 | -2.3% |
| Dividends | 201 | 215 | 243 | | | |
| Acquisitions | 56 | 14 | 404 | | | |
Ratios
|
|---|
| Revenue growth | 0.9% | 11.0% | 5.9% | -12.7% | -0.6% | |
| EBITDA growth | 12.1% | 10.4% | 7.3% | -18.2% | -3.0% | |
|
|---|
| Gross Margin | 50.6% | 50.4% | 50.4% | 47.5% | 48.1% | 0.6% |
| EBITDA Margin | 41.5% | 41.3% | 41.8% | 39.2% | 38.3% | -0.9% |
| EBIT Margin | 34.0% | 34.3% | 34.1% | | |
| SG&A, % of revenue | 6.0% | 5.6% | 5.4% | 5.9% | 6.9% | 1.0% |
| SBC, % of revenue | 1.0% | 1.3% | 2.8% | | |
| Net Income Margin | 30.3% | 27.7% | 23.7% | 25.3% | 24.3% | -1.0% |
| CAPEX, % of revenue | 5.8% | 8.3% | 10.9% | 11.8% | 11.6% | -0.2% |
|
|---|
| ROIC | 33.7% | 33.1% | 32.3% | 23.2% | 21.2% | -2.0% |
| ROE | 29.7% | 26.6% | 22.5% | 20.8% | 19.7% | -1.1% |
| Net Debt/EBITDA | -0.8x | -1.1x | -0.5x | -0.6x | -0.3x | 0.3x |
People
|
|---|
| Insider ownership | 0.4% | 0.4% | 0.4% | | | |
| Employees | 7,300 | 8,400 | 9,400 | | | |
| Revenue/Employee, th. $ | 451 | 435 | 411 | | | |
Skyworks Solutions, Inc. ($SWKS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 896 | 766 | 737 | 957 | | -7.8% | -5.4% | -3.9% | 15.7% |
| EBITDA | 374 | 298 | 246 | 366 | | -9.6% | -9.8% | -2.8% | 12.0% |
| Net Income | 257 | 181 | 130 | 247 | | -9.8% | -15.4% | -9.9% | 17.0% |
Balance Sheet
|
|---|
| Cash | 928 | 912 | 791 | 567 | | -14.5% | 11.8% | 6.5% | -33.4% |
| Short Term Debt | 9 | 21 | 24 | 28 | | - | - | - | - |
| Long Term Debt | 151 | 152 | 156 | 151 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 49.6% | 49.0% | 45.3% | 48.0% | | -0.4% | 0.0% | 4.3% | -1.0% |
| EBITDA Margin | 41.8% | 38.8% | 33.4% | 38.3% | | -0.8% | -1.9% | 0.4% | -1.3% |
| Net Income Margin | 28.7% | 23.6% | 17.6% | 25.8% | | -0.6% | -2.8% | -1.2% | 0.3% |
Peers in Semiconductors
Below you can find Skyworks Solutions, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.4% | -3.0% | 2.8% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | - | 11.0% | 5.9% | -12.7% | -0.6% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.7% | 49.4% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 50.6% | 50.4% | 50.4% | 47.5% | 48.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 41.5% | 41.3% | 41.8% | 39.2% | 38.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 5.8% | 8.3% | 10.9% | 11.8% | 11.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.3% |
|---|
| Skyworks Solutions, Inc. ($SWKS) | 33.7% | 33.1% | 32.3% | 23.2% | 21.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.5x |
|---|
| Skyworks Solutions, Inc. ($SWKS) | -0.8x | -1.1x | -0.5x | -0.6x | -0.3x |
