Qorvo (QRVO, Financial) is seeing a rise in its stock price following impressive Q3 earnings and guidance for Q4. The company reported a significant EPS beat, the largest in the past year, despite a 14.7% year-over-year revenue decline to $916.3 million, which was better than analyst expectations.

• Qorvo's stock showed volatility after the earnings release, initially jumping, then dropping, and finally recovering. The fluctuation is attributed to major changes in its Android segment, which required investor digestion, particularly Qorvo's first quantified comments on the Android impact.
• Qorvo supplies mobile components, with Apple (AAPL, Financial) as its largest customer, accounting for 46% of FY24 sales. However, the Android market is shifting, with a faster-than-expected decline in mass tier Android 5G opportunities. Qorvo has adjusted its Android build plans to meet higher demand for entry tier 5G devices.
• In December, Qorvo restructured its support for Android 5G, including workforce reductions and a focus shift to premium and flagship tiers to enhance profitability. Its 5G development spending is now concentrated on these high-end segments.
• Qorvo will continue serving existing mass tier Android programs, which are expected to phase out by FY26 and FY27. For FY25, Android 5G revenue in ACG is projected at $875 million, with an anticipated annual decline of $150-200 million in FY26 and FY27, primarily in China and mid-tier Samsung. From FY27, Qorvo aims for mid-single digit growth in ACG revenue.
• In other markets, Qorvo reports stabilization in its infrastructure segment and significant year-over-year revenue growth in broadband and cellular base stations. However, automotive revenue declined sequentially due to market softness, though interest in Qorvo's ultra-wideband products remains strong. Consumer market revenues also faced sequential declines due to headwinds.

Last quarter's revelation about Android changes was surprising, but this call provided detailed financial implications of phasing out lower tier Android business. Despite initial investor hesitation, the stock's slight upward trend is encouraging. While future guidance risks exist during Qorvo's transition, investors can now better assess the Android impact and focus on the company's new direction.