Communications chips maker Qorvo (NASDAQ: QRVO) reported Q2 CY2026 results beating Wall Street’s revenue expectations, but sales fell by 4.2% year on year to $784.8 million. Its non-GAAP profit of $1.64 per share was 54.1% above analysts’ consensus estimates.

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Bob Bruggeworth, president and chief executive officer of Qorvo, said, "The Qorvo team delivered strong June quarterly financial results, supported by double-digit year-over-year revenue growth in D&A, infrastructure, and power, coupled with our successful pivot in ACG to higher value placements. For full-year fiscal 2027, we continue to expect non-GAAP gross margin above 50% and now expect non-GAAP diluted earnings per share above $7.00."

Company Overview

Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Qorvo’s demand was weak and its revenue declined by 3.4% 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. Qorvo’s recent performance shows its demand remained suppressed as its revenue has declined by 4.6% annually over the last two years.

This quarter, Qorvo’s revenue fell by 4.2% year on year to $784.8 million but beat Wall Street’s estimates by 6.2%. Despite the beat, the drop in sales could mean that the current downcycle is deepening.

Looking ahead, sell-side analysts expect revenue to decline by 2.4% over the next 12 months. While this projection is better than its two-year trend, it’s tough to feel optimistic about a company facing demand difficulties.

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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, Qorvo’s DIO came in at 140, which is 18 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 Qorvo’s Q2 Results

"Given Qorvo's pending transaction with Skyworks, Qorvo has discontinued conducting conference calls and providing forward-looking guidance." Holding aside the pending deal, it was good to see Qorvo beat analysts’ EPS expectations this quarter. We were also excited its operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its inventory levels materially increased. Zooming out, we think this quarter featured some important positives. Investors were likely hoping for more, and shares traded down 5.4% to $86.75 immediately following the results.

Should you buy the stock or not? 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).