Wireless chips maker Skyworks Solutions (NASDAQ: SWKS) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, but sales fell by 3.1% year on year to $934.8 million. Guidance for next quarter’s revenue was better than expected at $1.04 billion at the midpoint, 0.8% above analysts’ estimates. Its non-GAAP profit of $1.08 per share was 4.8% above analysts’ consensus estimates.
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Skyworks Solutions (SWKS) Q2 CY2026 Highlights:
- Revenue: $934.8 million vs analyst estimates of $926.1 million (3.1% year-on-year decline, 0.9% beat)
- Adjusted EPS: $1.08 vs analyst estimates of $1.03 (4.8% beat)
- Adjusted Operating Income: $182 million vs analyst estimates of $174.8 million (19.5% margin, 4.1% beat)
- Revenue Guidance for Q3 CY2026 is $1.04 billion at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q3 CY2026 is $1.27 at the midpoint, below analyst estimates of $1.30
- Operating Margin: 5.2%, down from 11.5% in the same quarter last year
- Free Cash Flow was -$16.7 million, down from $252.7 million in the same quarter last year
- Inventory Days Outstanding: 165, up from 144 in the previous quarter
- Market Capitalization: $9.54 billion
“We delivered a solid quarter with revenue and earnings above expectations, reflecting consistent execution across the portfolio,” said Phil Brace, chief executive officer and president of Skyworks.
Company Overview
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Skyworks Solutions’s demand was weak and its revenue declined by 3.3% per year. 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.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. Skyworks Solutions’s annualized revenue declines of 4.2% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk. 
This quarter, Skyworks Solutions’s revenue fell by 3.1% year on year to $934.8 million but beat Wall Street’s estimates by 0.9%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 5.9% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s 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, Skyworks Solutions’s DIO came in at 165, which is 32 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.
Key Takeaways from Skyworks Solutions’s Q2 Results
It was good to see Skyworks Solutions beat analysts’ EPS expectations this quarter. We were also glad its operating income outperformed Wall Street’s estimates. On the other hand, its inventory levels materially increased. Looking ahead, revenue guidance for next quarter was just in line and EPS guidance for next quarter was below. Overall, this print was mixed at a time when there is much skittishness surounding the sector. Investors were likely hoping for more, and shares traded down 8.2% to $59.46 immediately following the results.
So do we think Skyworks Solutions is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
