Kris Sennesael
Senior Vice President and Chief Financial Officer at Skyworks Solutions
Thanks, Liam. Skyworks revenue for the first fiscal quarter of 2025 was $1.68 million, slightly above the midpoint of our outlook. Mobile revenue was 67% of total revenue and increased 6% sequentially as we successfully supported multiple product launches. Broad markets was up slightly sequentially and returned to year-over-year growth at 2%. Q1 fiscal '25 marked the fourth consecutive quarter of modest sequential growth since the Q1 fiscal '24 bottom, despite a muted demand environment and ongoing inventory digestion across selective end-markets.
Gross profit was $497 million with gross margin at 46.5%, in-line with expectations. Also, during Q1, we further decreased our internal inventory slightly below $700 million, resulting in eight consecutive quarters of reductions. Operating expenses were $212 million, reflecting our strategic investments in our technology and product roadmaps. We delivered $285 million of operating income, translating into an operating margin of 27%. We generated $9 million of other income and our effective tax-rate was 12.2%, driving net income of $258 million and diluted earnings per share of $1.60, $0.03 above our guidance.
For the first-quarter of fiscal 2025, we demonstrated robust cash generation with operating cash-flow of $377 million, capital expenditures of $39 million and a free-cash flow of $338 million, representing a 32% free-cash flow margin. During fiscal Q1, we distributed $112 million in dividends. Our cash and investment balance increased to approximately $1.75 billion, while we maintain a debt level of $1 billion, providing us with ample financial flexibility.
Now let's move on to our outlook for Q2 of fiscal 2025. We anticipate revenue of $935 million to $965 million. We expect our mobile business to decline mid to-high teens sequentially, in-line with historical seasonality. In broad markets, we anticipate additional sequential growth and a further improvement in year-over-year growth. We are seeing positive momentum in booking trends, backlog and sell-through patterns across broad markets. However, inventory headwinds remain acute in industrial and infrastructure.
Gross margin is projected between 45.5% and 46%, which is seasonally-adjusted for lower sales volume. We anticipate operating expenses in the range of $220 million to $228 million, utilizing our robust cash-flow generation to invest in technology and product roadmaps. The sequential increase is mostly driven by a reset of the social charges at the beginning of the calendar year as well as an increase in R&D project expenses. Below-the-line, we anticipate $6 million in other income, an effective tax-rate of 12% to 12.5% and a diluted share count of approximately 158.5 million shares. Accordingly, at the midpoint of the revenue range of $950 million, we intend to deliver diluted earnings per share of $1.20. Finally, our Board of Directors has approved a new EUR2 billion stock repurchase program as part of our disciplined capital allocation strategy.
Before moving into Q&A, I want to briefly reflect on our business and address our strategic partnership with our largest customer. Over the past 25 years, we have built a strong technology company, a leader in RF connectivity for mobile solutions and expanded those RF capabilities with analog and mixed-signal expertise in our growing broad markets business. And over the last 18 years, we have benefited from a truly collaborative partnership with our largest customer, who has constantly pushed us to develop innovative high-performance and highly integrated RF solutions. We have partnered with that customer since the launch of their first phone, which has resulted in significant content and revenue growth over the years. However, the last couple of years have been challenging as the competitive landscape has intensified.
As it relates to the upcoming phone cycle, expected to be launched in the fall of 2025. The SkyWorks team developed a suite of high-performance RF solutions. Despite our rich product offering, we did not get the result that we targeted. Although we were able to secure multiple sockets, including several highly integrated RF modules, our content position is expected to be down 20% to 25%. This decline will start impacting our revenue in the 4th-quarter of fiscal '25 and throughout fiscal '26. While we are disappointed with this outcome, we remain steadfast in our commitment to invest and innovate around our technology roadmaps.
We have already started the development of a new suite of solutions for the next-generation form with an expanding set of products and addressing more opportunities than ever before. In addition, we will continue to pursue growth opportunities with our other mobile customers, although on a selective basis, focusing on those segments of the market that demand high-performance RF. And we will continue to drive our diversification strategy, strategy supported by multiple secular growth trends in broad markets. We expect those opportunities to partially offset the revenue decline at a large customer in fiscal '26 and position us for growth in fiscal '27.
Now let me hand it back to Liam for some final remarks. To wrap it up, I would like to thank all of our Skyworks employees and stakeholders for their support during the last 25 years. It has truly been a privilege and the highlight of my career to lead this company. I strongly believe the Skyworks team with support of our Board of Directors and under new leadership will execute on the strategic path of profitable growth.
I will turn it over to Chris now, who will be taking Q&A this quarter. Operator, let's open the line for questions.
