A month has gone by since the last earnings report for Skyworks Solutions (SWKS Quick QuoteSWKS - Free Report) . Shares have added about 8.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Skyworks due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Skyworks Solutions, Inc. before we dive into how investors and analysts have reacted as of late.

SWKS Q3 Earnings Beat on Broad Markets, AI Data Center Growth

Skyworks Solutions reported third-quarter fiscal 2026 non-GAAP earnings of $1.08 per share, beating the Zacks Consensus Estimate by 4.85%. Earnings declined 18.8% year over year from $1.33.

Revenues of $934.8 million fell 3.1% year over year but topped the consensus mark by 1.38%. Results benefited from healthy mobile demand and continued Broad Markets growth, with automotive and data center delivering double-digit gains.

SWKS Broad Markets Maintains Growth Momentum

Broad Markets generated approximately $403 million in revenues, rising 8% year over year and accounting for 43% of total sales. Management highlighted that demand for several fast-growing products remained ahead of available supply during the quarter.

Wi-Fi, data center and automotive represented nearly two-thirds of the business and collectively grew 15% year over year. Artificial Intelligence (AI) data center was the fastest-growing operation, expanding at a rate above the 50% annual growth outlook provided in the prior quarter despite supply constraints.

Wi-Fi 7 adoption and early customer work on Wi-Fi 8 supported the connectivity pipeline. In automotive, connected-car and infotainment applications drove current growth, while management highlighted multiyear engagements with global automakers and suppliers. Demand for several faster-growing products exceeded available supply, partly offset by softness in consumer-oriented Internet of Things products.

Skyworks Mobile Mix Remains Concentrated

Mobile contributed 57% of total revenues. Performance was supported by healthy sell-through at the largest customer and successful new-product ramps at the company’s largest Android customer.

The largest customer generated approximately 57% of total revenues. Management maintained its expectation for roughly flat blended mobile content this year, with stronger unit demand helping offset previously disclosed content pressure.

Skyworks also reiterated that its major Android design win extends through 2030. The customer performed particularly well during the reported quarter, although management expects the normal seasonal pattern to moderate that contribution in the September quarter.

SWKS Expands Automotive & Data Center Pipeline

Skyworks added automotive engagements spanning telematics and in-vehicle infotainment with leading global original equipment manufacturers. The company expects connectivity and power products to broaden its presence across multiyear vehicle platforms.

In the data center, SWKS expanded its design-win pipeline with precision timing products for a hyperscaler switch platform and isolation solutions for 800-volt high-voltage direct-current power architectures. Rising data rates and rack density are supporting demand for advanced timing, connectivity and power-delivery solutions.

Skyworks Margins Contract on Input Cost Pressure

Non-GAAP gross profit was $420 million, resulting in a gross margin of 44.9%. The margin contracted 220 basis points from 47.1% in the year-ago quarter as higher input costs continued to weigh on profitability.

Operating expenses on a GAAP basis were $326.5 million, up 12.4% year over year. Research and development expenses increased 4.2% year over year, while selling, general and administrative expenses rose 10.5%.

Non-GAAP operating income totaled $181.6 million, down from $224.4 million a year earlier. The operating margin declined 390 basis points to 19.4%. Management is pursuing cost controls and selective price increases, primarily across its longer-life Broad Markets products, to offset cost inflation.

Skyworks Maintains Balance Sheet Strength

Skyworks ended the quarter with approximately $814 million in cash and investments and $497 million in debt after repaying $500 million of notes that matured during the period.

Operating cash flow totaled $70.4 million in the third quarter compared with $314.1 million a year earlier. The company reported negative free cash flow of $16.7 million against positive free cash flow of $252.7 million in the prior-year quarter.

The company paid $106.9 million in dividends during the quarter. However, Skyworks said it will not declare quarterly dividends going forward, redirecting capital toward share repurchases, debt reduction and strategic acquisitions.

The board replaced the prior repurchase authorization with a new $2 billion stock buyback program for the combined company, set to expire in January 2029.

Skyworks Guides for a Seasonal Mobile Ramp

For the fourth quarter of fiscal 2026, Skyworks expects revenues to be between $1.01 billion and $1.06 billion. At the midpoint of $1.035 billion, management projects non-GAAP earnings of $1.27 per share.

Mobile revenues are expected to grow sequentially in the high teens, driven by seasonal product launches at the largest customer. Broad Markets is projected to increase approximately 5% year over year and represent about 39% of sales. Gross margin is forecast between 44% and 45%, with operating expenses of $235 million to $245 million.

SWKS Advances Its Pending Qorvo Combination

Skyworks said regulatory reviews for the Qorvo transaction are progressing and expressed optimism that the combination could close within calendar 2026. The company expects to raise approximately $2 billion of acquisition-related debt financing, with fourth-quarter guidance including about $5 million of incremental net interest expense.

The board authorized a new $2 billion share-repurchase program for the combined company and decided not to declare quarterly dividends going forward. Capital will instead be directed toward share repurchases, debt reduction and opportunistic acquisitions following the transaction.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Skyworks has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Skyworks has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.