UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~January~~October 2, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

Commission File Number 001-36801

Qorvo, Inc.

(Exact name of registrant as specified in its charter)


Delaware		46-5288992
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

7628 Thorndike Road
Greensboro,	North Carolina	27409-9421
(Address of principal executive office)		(Zip code)

(336) 664-1233

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

QRVO

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Table of Contents

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of ~~January 25,~~October 28, 2021, there were ~~113,262,707~~ 110,223,227shares of the registrant’s common stock outstanding.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

INDEX


			Page
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).
Condensed Consolidated Balance Sheets ~~as of~~ ~~January~~2 ~~, 202~~1 ~~and March 28, 2020~~			3
Condensed Consolidated Statements of Income ~~for the three and~~ ~~nine~~ ~~months ended~~ ~~January~~2 ~~, 202~~1 ~~and~~ ~~December~~ ~~28,~~ ~~2019~~			4
Condensed Consolidated Statements of Comprehensive Income ~~for the~~ ~~three and nine months ended January 2, 2021 and December 28, 2019~~			5
Condensed Consolidated Statements of Stockholders' Equity ~~for the~~ ~~three and nine months ended January 2, 2021 and December 28, 2019~~			6
Condensed Consolidated Statements of Cash Flows ~~for the~~ ~~nine~~ ~~months ended~~ ~~January 2, 2021 and December 28, 2019~~			8
Notes to Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			2118
Item 3. Quantitative and Qualitative Disclosures About Market Risk.			2927
Item 4. Controls and Procedures.			3027

PART II — OTHER INFORMATION			3128

Item 1A. Risk Factors.			3128
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			3229
Item 6. Exhibits.			3330

SIGNATURES			3431

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1.

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)


		January 2, 2021		March 28, 2020			October 2, 2021		April 3, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,234,415	$	714,939	Cash and cash equivalents	$	1,153,172	$	1,397,880

Accounts receivable, net of allowance of $560 and $55 as of January 2, 2021 and March 28, 2020, respectively		507,078		367,172
Accounts receivable, net of allowance of $464 and $331 as of October 2, 2021 and April 3, 2021, respectively						Accounts receivable, net of allowance of $464 and $331 as of October 2, 2021 and April 3, 2021, respectively	662,787		457,431
Inventories	Inventories	479,340		517,198		Inventories	597,563		507,787
Prepaid expenses	Prepaid expenses	42,793		37,872		Prepaid expenses	49,298		41,572
Other receivables	Other receivables	12,621		15,016		Other receivables	33,841		27,324
Other current assets	Other current assets	46,010		38,305		Other current assets	44,606		51,810

Total current assets	Total current assets	2,322,257		1,690,502		Total current assets	2,541,267		2,483,804
Property and equipment, net of accumulated depreciation of $1,519,829 and $1,415,397 as of January 2, 2021 and March 28, 2020, respectively		1,232,374		1,259,203
Property and equipment, net of accumulated depreciation of $1,655,084 and $1,561,613 as of October 2, 2021 and April 3, 2021, respectively						Property and equipment, net of accumulated depreciation of $1,655,084 and $1,561,613 as of October 2, 2021 and April 3, 2021, respectively	1,276,810		1,266,031
Goodwill	Goodwill	2,650,912		2,614,274		Goodwill	2,734,116		2,642,708
Intangible assets, net	Intangible assets, net	656,239		808,892		Intangible assets, net	615,486		611,155
Long-term investments	Long-term investments	31,271		22,515		Long-term investments	36,908		35,370
Other non-current assets	Other non-current assets	148,325		165,296		Other non-current assets	371,869		182,402
Total assets	Total assets	$	7,041,378	$	6,560,682	Total assets	$	7,576,456	$	7,221,470
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	301,576	$	246,954	Accounts payable	$	521,569	$	313,868
Accrued liabilities	Accrued liabilities	214,532		217,801		Accrued liabilities	284,689		255,060
Current portion of long-term debt	Current portion of long-term debt	5,091		6,893		Current portion of long-term debt	5,545		5,092
Other current liabilities	Other current liabilities	92,699		67,355		Other current liabilities	90,692		107,561
Total current liabilities	Total current liabilities	613,898		539,003		Total current liabilities	902,495		681,581
Long-term debt	Long-term debt	1,743,794		1,567,231		Long-term debt	1,740,552		1,742,550

Other long-term liabilities	Other long-term liabilities	179,985		161,783		Other long-term liabilities	205,655		167,914
Total liabilities	Total liabilities	2,537,677		2,268,017		Total liabilities	2,848,702		2,592,045
Commitments and contingent liabilities (Note 9)	Commitments and contingent liabilities (Note 9)					Commitments and contingent liabilities (Note 9)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	0		0		Preferred stock, $.0001 par value; 5,000 shares authorized; no shares issued and outstanding	—		—
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 113,299 and 114,625 shares issued and outstanding at January 2, 2021 and March 28, 2020, respectively		4,262,883		4,290,377
Accumulated other comprehensive income, net of tax		47,489		2,288
Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 110,461 and 112,557 shares issued and outstanding at October 2, 2021 and April 3, 2021, respectively						Common stock and additional paid-in capital, $.0001 par value; 405,000 shares authorized; 110,461 and 112,557 shares issued and outstanding at October 2, 2021 and April 3, 2021, respectively	4,158,170		4,244,740
Accumulated other comprehensive income						Accumulated other comprehensive income	23,431		29,649
Retained earnings	Retained earnings	193,329		0		Retained earnings	546,153		355,036
Total stockholders’ equity	Total stockholders’ equity	4,503,701		4,292,665		Total stockholders’ equity	4,727,754		4,629,425
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	7,041,378	$	6,560,682	Total liabilities and stockholders’ equity	$	7,576,456	$	7,221,470

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		January 2, 2021		December 28, 2019		January 2, 2021		December 28, 2019			October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Revenue	Revenue	$	1,094,834	$	869,073	$	2,942,577	$	2,451,369	Revenue	$	1,255,248	$	1,060,292	$	2,365,599	$	1,847,743
Cost of goods sold	Cost of goods sold	557,082		500,962		1,587,486		1,465,387		Cost of goods sold	633,695		568,742		1,197,863		1,030,404
Gross profit	Gross profit	537,752		368,111		1,355,091		985,982		Gross profit	621,553		491,550		1,167,736		817,339
Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	136,697		122,851		423,110		357,385		Research and development	158,377		156,342		310,456		286,413
Selling, general and administrative	Selling, general and administrative	93,139		81,205		289,115		258,458		Selling, general and administrative	93,489		109,372		183,788		195,976
Other operating expense	Other operating expense	8,713		10,986		29,307		49,077		Other operating expense	7,327		4,192		14,030		20,594
Total operating expenses	Total operating expenses	238,549		215,042		741,532		664,920		Total operating expenses	259,193		269,906		508,274		502,983
Operating income	Operating income	299,203		153,069		613,559		321,062		Operating income	362,360		221,644		659,462		314,356
Interest expense	Interest expense	(17,453)		(16,900)		(59,788)		(41,457)		Interest expense	(15,327)		(23,486)		(30,606)		(42,335)
Interest income		467		2,874		2,929		8,112
Other (expense) income, net		(58,701)		44,148		(36,106)		42,737
Other income, net										Other income, net	4,754		1,920		21,545		25,057

Income before income taxes	Income before income taxes	223,516		183,191		520,594		330,454		Income before income taxes	351,787		200,078		650,401		297,078

Income tax expense	Income tax expense	(22,481)		(21,835)		(85,720)		(46,519)		Income tax expense	(32,598)		(63,161)		(45,586)		(63,239)
Net income	Net income	$	201,035	$	161,356	$	434,874	$	283,935	Net income	$	319,189	$	136,917	$	604,815	$	233,839

Net income per share:	Net income per share:									Net income per share:
Basic	Basic	$	1.77	$	1.39	$	3.80	$	2.42	Basic	$	2.87	$	1.20	$	5.43	$	2.04
Diluted	Diluted	$	1.74	$	1.36	$	3.74	$	2.37	Diluted	$	2.84	$	1.18	$	5.35	$	2.01

Weighted average shares of common stock outstanding:	Weighted average shares of common stock outstanding:									Weighted average shares of common stock outstanding:
Basic	Basic	113,811		116,129		114,292		117,436		Basic	111,035		114,328		111,476		114,388
Diluted	Diluted	115,690		118,455		116,257		119,712		Diluted	112,411		116,177		113,088		116,395

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		January 2, 2021		December 28, 2019		January 2, 2021		December 28, 2019			October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Net income	Net income	$	201,035	$	161,356	$	434,874	$	283,935	Net income	$	319,189	$	136,917	$	604,815	$	233,839
Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:										Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	20,837		781		45,125		(674)		Foreign currency translation adjustment, including intra-entity foreign currency transactions that are of a long-term investment nature	(9,517)		18,201		(6,279)		24,288
Reclassification adjustments, net of tax:	Reclassification adjustments, net of tax:									Reclassification adjustments, net of tax:

Foreign currency loss realized upon liquidation of subsidiary		15		0		15		353
Amortization of pension actuarial loss	Amortization of pension actuarial loss	21		34		61		102		Amortization of pension actuarial loss	30		21		61		40
Other comprehensive income (loss)		20,873		815		45,201		(219)
Other comprehensive (loss) income										Other comprehensive (loss) income	(9,487)		18,222		(6,218)		24,328
Total comprehensive income	Total comprehensive income	$	221,908	$	162,171	$	480,075	$	283,716	Total comprehensive income	$	309,702	$	155,139	$	598,597	$	258,167

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


					Accumulated Other Comprehensive Income (Loss)				Retained Earnings (Accumulated Deficit)															Accumulated Other Comprehensive Income				Retained Earnings
		Common Stock										Common Stock
Three Months Ended	Three Months Ended	Shares	Amount								Total		Three Months Ended		Shares					Amount						Total
Balance, October 3, 2020		114,111	$	4,267,987			$	26,616					$	112,563				$	4,407,166
Balance, July 3, 2021																Balance, July 3, 2021	111,210				$	4,210,914				$	32,918			$	404,562			$	4,648,394
Net income																Net income	—				—					—				319,189				319,189
Other comprehensive loss																Other comprehensive loss	—				—			(9,487)				—				(9,487)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes																Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	459				(36,104)			—				—				(36,104)
Repurchase of common stock, including transaction costs																Repurchase of common stock, including transaction costs	(1,208)				(45,758)			—				(177,598)				(223,356)
Stock-based compensation																Stock-based compensation	—				29,118			—				—				29,118
Balance, October 2, 2021																Balance, October 2, 2021	110,461				$	4,158,170		$	23,431			$	546,153			$	4,727,754

Balance, June 27, 2020																Balance, June 27, 2020	114,354				$	4,293,621		$	8,394			$	49,230			$	4,351,245
Net income	Net income	0	0				0				201,035					201,035		Net income		—			—			—				136,917				136,917
Other comprehensive income	Other comprehensive income	0	0		20,873				0				20,873			Other comprehensive income	—				—			18,222				—				18,222
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	63	372		0				0				372			Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	594				(26,306)			—				—				(26,306)
Issuance of common stock in connection with employee stock purchase plan		188	15,608		0				0				15,608

Repurchase of common stock, including transaction costs	Repurchase of common stock, including transaction costs	(1,063)	(39,754)		0				(120,269)				(160,023)			Repurchase of common stock, including transaction costs	(837)				(31,425)			—				(73,584)				(105,009)
Stock-based compensation	Stock-based compensation	—	18,670		0				0				18,670			Stock-based compensation	—				32,097			—				—				32,097

Balance, January 2, 2021		113,299	$	4,262,883	$	47,489			$	193,329			$	4,503,701

Balance, September 28, 2019		116,294	$	4,471,656	$	(7,658)			$	(198,504)			$	4,265,494
Net income		0	0		0				161,356				161,356
Other comprehensive income		0	0		815				0				815
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes		490	10,150		0				0				10,150
Issuance of common stock in connection with employee stock purchase plan		213	13,710		0				0				13,710

Repurchase of common stock, including transaction costs		(1,259)	(125,012)		0				0				(125,012)
Stock-based compensation		—	12,864		0				0				12,864
Balance, December 28, 2019		115,738	$	4,383,368	$	(6,843)			$	(37,148)			$	4,339,377
Balance, October 3, 2020																Balance, October 3, 2020	114,111				$	4,267,987		$	26,616			$	112,563			$	4,407,166

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


					Accumulated Other Comprehensive Income (Loss)				Retained Earnings (Accumulated Deficit)															Accumulated Other Comprehensive Income			Retained Earnings
		Common Stock										Common Stock
Nine Months Ended		Shares	Amount								Total
Six Months Ended															Six Months Ended	Shares					Amount					Accumulated Other Comprehensive Income			Retained Earnings			Total
Balance, April 3, 2021															Balance, April 3, 2021	112,557					$	4,244,740					$	4,629,425
Net income															Net income	—					—						604,815
Other comprehensive loss															Other comprehensive loss	—					—						(6,218)			—			(6,218)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes															Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	642					(49,452)			—					—			(49,452)
Issuance of common stock in connection with employee stock purchase plan															Issuance of common stock in connection with employee stock purchase plan	165					17,794			—			—			17,794
Repurchase of common stock, including transaction costs															Repurchase of common stock, including transaction costs	(2,903)					(109,675)			—			(413,698)			(523,373)
Stock-based compensation															Stock-based compensation	—					54,763			—			—			54,763
Balance, October 2, 2021															Balance, October 2, 2021	110,461					$	4,158,170		$	23,431		$	546,153		$	4,727,754

Balance, March 28, 2020	Balance, March 28, 2020	114,625	$	4,290,377			$	2,288					$	0			$	4,292,665		Balance, March 28, 2020	114,625			$	4,290,377		$	2,288		$	—		$	4,292,665
Net income	Net income	0	0				0				434,874				434,874		Net income		—				—			—			233,839			233,839
Other comprehensive income	Other comprehensive income	0	0		45,201				0				45,201		Other comprehensive income	—					—			24,328			—			24,328
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	889	(31,999)		0				0				(31,999)		Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes	826					(32,371)			—			—			(32,371)
Issuance of common stock in connection with employee stock purchase plan	Issuance of common stock in connection with employee stock purchase plan	417	31,366		0				0				31,366		Issuance of common stock in connection with employee stock purchase plan	229					15,758			—			—			15,758
Cumulative-effect adoption of ASU 2016-13	Cumulative-effect adoption of ASU 2016-13	0	0		0				(38)				(38)		Cumulative-effect adoption of ASU 2016-13	—					—			—			(38)			(38)
Repurchase of common stock, including transaction costs	Repurchase of common stock, including transaction costs	(2,632)	(98,584)		0				(241,487)				(340,071)		Repurchase of common stock, including transaction costs	(1,569)					(58,830)			—			(121,218)			(180,048)
Stock-based compensation	Stock-based compensation	—	71,723		0				0				71,723		Stock-based compensation	—					53,053			—			—			53,053
Other	Other	0	0		0				(20)				(20)		Other	—					—			—			(20)			(20)
Balance, January 2, 2021		113,299	$	4,262,883	$	47,489			$	193,329			$	4,503,701

Balance, March 30, 2019		119,063	$	4,687,455	$	(6,624)			$	(321,152)			$	4,359,679
Net income		0	0		0				283,935				283,935
Other comprehensive loss		0	0		(219)				0				(219)
Exercise of stock options and vesting of restricted stock units, net of shares withheld for employee taxes		1,327	(5,459)		0				0				(5,459)
Issuance of common stock in connection with employee stock purchase plan		452	28,658		0				0				28,658
Cumulative-effect adoption of ASU 2016-02		0	0		0				69				69
Repurchase of common stock, including transaction costs		(5,104)	(390,117)		0				0				(390,117)
Stock-based compensation		—	62,831		0				0				62,831
Balance, December 28, 2019		115,738	$	4,383,368	$	(6,843)			$	(37,148)			$	4,339,377
Balance, October 3, 2020															Balance, October 3, 2020	114,111					$	4,267,987		$	26,616		$	112,563		$	4,407,166

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QORVO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Nine Months Ended					Six Months Ended
		January 2, 2021		December 28, 2019			October 2, 2021		October 3, 2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	434,874	$	283,935	Net income	$	604,815	$	233,839
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	152,337		172,314		Depreciation	105,205		100,799
Intangible assets amortization	Intangible assets amortization	217,781		177,930		Intangible assets amortization	74,022		144,470
Loss on debt extinguishment		61,991		0
Deferred income taxes	Deferred income taxes	26,311		(1,207)		Deferred income taxes	(2,230)		36,468

Gain on Cavendish investment		0		(43,008)

Stock-based compensation expense	Stock-based compensation expense	71,154		62,210		Stock-based compensation expense	53,929		51,907
Other, net	Other, net	(128)		18,111		Other, net	(6,867)		(7,496)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable, net	Accounts receivable, net	(140,054)		(25,166)		Accounts receivable, net	(203,321)		(118,008)
Inventories	Inventories	38,851		44,863		Inventories	(87,137)		41,844
Prepaid expenses and other assets	Prepaid expenses and other assets	(1,921)		2,942		Prepaid expenses and other assets	(157,063)		(2,366)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	35,597		41,723		Accounts payable and accrued liabilities	242,632		16,230
Income taxes payable and receivable	Income taxes payable and receivable	22,014		3,917		Income taxes payable and receivable	(16,455)		9,671
Other liabilities	Other liabilities	(19,883)		(7,313)		Other liabilities	(21,132)		(12,109)
Net cash provided by operating activities	Net cash provided by operating activities	898,924		731,251		Net cash provided by operating activities	586,398		495,249
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of property and equipment	Purchase of property and equipment	(109,505)		(129,004)		Purchase of property and equipment	(112,560)		(73,386)

Purchase of businesses, net of cash acquired	Purchase of businesses, net of cash acquired	(47,069)		(494,783)		Purchase of businesses, net of cash acquired	(166,818)		(47,520)
Proceeds from sales of available-for-sale debt securities		0		1,950
Other investing activities	Other investing activities	15,277		(1,263)		Other investing activities	11,781		9,581
Net cash used in investing activities	Net cash used in investing activities	(141,297)		(623,100)		Net cash used in investing activities	(267,597)		(111,325)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Payment of debt	Payment of debt	(1,086,744)		0		Payment of debt	(2,500)		(100,000)
Proceeds from borrowings and debt issuances	Proceeds from borrowings and debt issuances	1,206,750		659,000		Proceeds from borrowings and debt issuances	—		1,206,750

Repurchase of common stock, including transaction costs	Repurchase of common stock, including transaction costs	(340,071)		(390,117)		Repurchase of common stock, including transaction costs	(523,373)		(180,048)
Proceeds from the issuance of common stock	Proceeds from the issuance of common stock	28,659		37,530		Proceeds from the issuance of common stock	20,435		21,792
Tax withholding paid on behalf of employees for restricted stock units	Tax withholding paid on behalf of employees for restricted stock units	(37,069)		(21,013)		Tax withholding paid on behalf of employees for restricted stock units	(51,334)		(36,354)

Other financing activities	Other financing activities	(12,413)		(6,252)		Other financing activities	(5,990)		(11,705)

Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(240,888)		279,148		Net cash (used in) provided by financing activities	(562,762)		900,435

Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	2,569		(501)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,087)		936
Net increase in cash, cash equivalents and restricted cash		519,308		386,798
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(245,048)		1,285,295
Cash, cash equivalents and restricted cash at the beginning of the period	Cash, cash equivalents and restricted cash at the beginning of the period	715,612		711,382		Cash, cash equivalents and restricted cash at the beginning of the period	1,398,309		715,612
Cash, cash equivalents and restricted cash at the end of the period	Cash, cash equivalents and restricted cash at the end of the period	$	1,234,920	$	1,098,180	Cash, cash equivalents and restricted cash at the end of the period	$	1,153,261	$	2,000,907

Non-cash investing information:
Capital expenditure adjustments included in liabilities		$	45,592	$	26,152

Reconciliation of cash, cash equivalents and restricted cash:	Reconciliation of cash, cash equivalents and restricted cash:					Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	Cash and cash equivalents	$	1,234,415	$	1,097,724	Cash and cash equivalents	$	1,153,172	$	2,000,257
Restricted cash included in "Other current assets" and "Other non-current assets"	Restricted cash included in "Other current assets" and "Other non-current assets"	505		456		Restricted cash included in "Other current assets" and "Other non-current assets"	89		650
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	1,234,920	$	1,098,180	Total cash, cash equivalents and restricted cash	$	1,153,261	$	2,000,907

Supplemental disclosure of cash flow information:						Supplemental disclosure of cash flow information:
Capital expenditures included in liabilities						Capital expenditures included in liabilities	$	54,507	$	22,124

See accompanying Notes to Condensed Consolidated Financial Statements.

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QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(continued)~~

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements of Qorvo, Inc. and Subsidiaries (together, the “Company” or “Qorvo”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions, which could differ materially from actual results. In addition, certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial statements include all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the results of the interim periods presented. These Condensed Consolidated Financial Statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended ~~March 28, 2020.~~April 3, 2021.

The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain items in the fiscal ~~2020~~2021 financial statements have been reclassified to conform with the fiscal ~~2021~~2022 presentation.

The Company uses a 52- or 53-week fiscal year ending on the Saturday closest to March 31 of each year. ~~The~~Each fiscal year, the first ~~fiscal~~ quarter ~~of each year~~ ends on the Saturday closest to June 30, the second ~~fiscal~~ quarter ~~of each year~~ ends on the Saturday closest to September 30 and the third ~~fiscal~~ quarter ~~of each year~~ ends on the Saturday closest to December 31. Fiscal ~~2020 was~~2022 is a 52-week year, and fiscal 2021 iswas a 53-week ~~year with the additional week~~year. The second quarter of fiscal 2022 included in13 weeks, compared to 14 weeks for the second quarter of fiscal ~~quarter ended October 3, 2020.~~2021, and the first six months of fiscal 2022 included 26 weeks, compared to 27 weeks for the first six months of fiscal 2021.

2. RECENT ACCOUNTING PRONOUNCEMENTS

~~The Company assesses recently issued accounting standards by~~In December 2019, the Financial Accounting Standards Board ("FASB") to determine the expected impacts on the Company's financial statements. The summary below describes impacts from newly issued standards as well as material updates to our previous assessments, if any, from Qorvo’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020.

~~In June 2016, the FASB~~ issued Accounting Standards Update ~~("ASU") 2016-13,~~2019-12, "~~Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~Simplifying the Accounting for Income Taxes," which ~~requires a~~eliminates certain exceptions within Accounting Standards Codification Topic 740, "Income Taxes" and clarifies and simplifies other aspects of the current lifetime expected credit loss methodology to be used to measure impairments of accounts receivable and other financial assets. Using this methodology will result in earlier recognition of losses than under the previous incurred loss approach, which requires waiting to recognize a loss until it is probable of being incurred.accounting guidance. The Company adopted this standard ~~using the modified retrospective transition method,~~ in the first quarter of fiscal ~~2021, which resulted in a cumulative-effect adjustment to retained earnings of less than $0.1 million.~~

~~Under this new standard, the Company's trade receivables are now evaluated on a collective (pool) basis~~2022, and aggregated on the basis of similar risk characteristics. These aggregated risk pools will be reassessed at each measurement date. A combination of factors is considered in determining the appropriate estimate of expected credit losses which include broad-based economic indicators as well as customers' financial strength, credit standing, payment history and any historical defaults. The adoption of this standardit did not have a material impact on the Company's ~~condensed~~ consolidated financial statements.

3. INVENTORIES

The components of inventories, net of reserves, are as follows (in thousands):


		January 2, 2021		March 28, 2020			October 2, 2021		April 3, 2021
Raw materials	Raw materials	$	126,695	$	112,671	Raw materials	$	179,390	$	134,959
Work in process	Work in process	270,562		291,028		Work in process	319,525		283,067
Finished goods	Finished goods	82,083		113,499		Finished goods	98,648		89,761
Total inventories	Total inventories	$	479,340	$	517,198	Total inventories	$	597,563	$	507,787

4. BUSINESS ACQUISITIONS

NextInput, Inc.

On April 5, 2021, the Company acquired all the outstanding equity interests of NextInput, Inc. ("NextInput"), a leader in microelectromechanical system ("MEMS")-based sensing solutions, for a total cash purchase price of $173.4 million. The acquisition expands the Company's offerings of MEMS-based products for mobile applications and provides sensing solutions for a broad range of applications in other markets.

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QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

~~4. BUSINESS ACQUISITIONS~~

In the second quarter of fiscal 2021, the Company completed the acquisition of 7Hugs Labs S.A.S. ("7Hugs"). During fiscal 2020, the Company completed the acquisitions of Decawave Limited ("Decawave"), Custom MMIC Design Services, Inc. ("Custom MMIC"), Cavendish Kinetics Limited ("Cavendish") and Active-Semi International, Inc. ("Active-Semi"). The operating results of these companies have been included in the Company's consolidated financial statements as of the acquisition dates.

~~7Hugs Labs S.A.S.~~

On October 1, 2020, the Company acquired all of the outstanding equity interests of 7Hugs, a private developer of ultra-wide band ("UWB") software and solutions, for a total purchase price of $48.7 million, including cash acquired of $1.0 million. The acquisition expands the Company's product offerings and is expected to support the ongoing development and adoption of UWB products and solutions.

The purchase price was preliminarily allocated to 7Hugs' net tangible liabilities (approximately $5.4 million, which includes debt assumed), deferred tax liability (approximately $8.2 million) and an intangible asset (approximately $40.1 million, entirely related to developed technology) based on ~~their~~the estimated fair ~~values.~~values of the assets acquired and liabilities assumed as follows (in thousands):


Intangible assets	$	81,000
Goodwill	94,285
Net tangible assets (1)	8,216
Deferred tax liability, net	(10,132)
Total purchase price	$	173,369

(1) Includes cash acquired of $5.8 million.

The more significant intangible assets acquired included developed technology of $73.0 million and customer relationships of $7.5 million.

The fair value of the developed technology acquired was determined based on an income approach using the ~~"relief from royalty method,"~~"excess earnings method" which estimated the value of the intangible asset by discounting the ~~royalties avoided by acquiring~~future projected earnings of the ~~technology~~asset to present value as of the valuation date.The acquired developed technology asset is being amortized on a straight-line basis over ~~the~~its estimated useful life of 10seven years.

The ~~excess~~fair value of the ~~purchase price over~~customer relationships acquired was determined based on an income approach using the "with and without method" in which the value of the ~~net tangible liabilities, deferred tax liability and~~ intangible asset ~~resulted~~is determined by the difference in ~~goodwill~~discounted cash flows of ~~approximately $22.2 million.~~the profitability of the Company "with" the asset and the profitability of the Company "without" the asset. These customer relationships are being amortized on a straight-line basis over their estimated useful life of one year.

~~The purchase price allocation includes net adjustments of approximately $3.7 million recorded in the third quarter of fiscal 2021.~~ The Company will continue to evaluate certain assets, liabilities and tax estimates over the measurement period (up to one year from the acquisition date). The goodwill resulting from the acquisition of NextInput is attributed to synergies and other benefits that are expected to be generated from this transaction and is not deductible for income tax purposes.

The operating results of NextInput were not material and have been included in the Company's condensed consolidated financial statements as of the acquisition date. During the three and ~~nine~~ six months ~~ended January~~ended October 2, 2021, the Company recorded acquisition and integration related costs associated with the acquisition of ~~7Hugs of $0.7~~NextInput totaling $0.5 million and ~~$2.1~~$1.7 million ~~respectively,~~ in "Other operating expense" in the Condensed Consolidated Statements of Income.

~~Decawave Limited~~7Hugs Labs S.A.S.

On ~~February 21,~~October 1, 2020, the Company acquired all of the outstanding equity interests of ~~Decawave,~~7Hugs Labs S.A.S. ("7Hugs"), a ~~pioneer in UWB technology~~private developer of Ultra Wideband ("UWB") software and ~~provider of UWB~~ solutions, ~~for mobile, automotive and Internet of Things ("IoT") applications,~~ for a total cash purchase price of ~~$372.2~~$48.7 million. The acquisition ~~expands~~supports the ongoing development and adoption of the Company's ~~product~~UWB products and ~~technology offerings that enable real-time, highly accurate and reliable local area precision-location services.~~solutions.

During the ~~nine~~six months ended ~~January~~October 2, 2021, the Company recognized a decrease to goodwill of approximately ~~$3.1~~$0.1 million ~~as a result of~~ in connection with finalizing the purchase price ~~allocation adjustments.~~allocation. The ~~Company will continue to evaluate certain assets, liabilities, and tax estimates over the~~ measurement period ~~(up to~~ended one year from the acquisition ~~date).~~date.

~~Custom MMIC Design Services, Inc.~~

5. GOODWILL AND INTANGIBLE ASSETS

On February 6, 2020, the Company acquired all of the outstanding equity interests of Custom MMIC, a supplier of high-performance gallium arsenide ("GaAs") and gallium nitride ("GaN") monolithic microwave integrated circuits ("MMICs") for defense and commercial applications, for a total purchase price of $91.7 million. The acquisition expands the Company's millimeter wave ("mmWave") capabilities in defense and commercial markets. On the acquisition date, the purchase price was comprised of cash consideration of $86.0 million and contingent consideration of $5.7 million (based on estimated fair value). The contingent consideration will be payable to the sellerschanges in the ~~first quarter~~carrying amount of ~~fiscal 2022 if certain revenue targets~~goodwill for the six months ended October 2, 2021, are ~~attained over a one-year period from the acquisition date for a maximum amount payable~~as follows (in thousands):


	Mobile Products		Infrastructure and Defense Products		Total
Balance as of April 3, 2021 (1)	$	2,034,383	$	608,325	$	2,642,708
Goodwill resulting from NextInput acquisition (Note 4)	94,285		—		94,285
7Hugs measurement period adjustments	(97)		—		(97)
Effect of changes in foreign currency exchange rates	(2,780)		—		(2,780)
Balance as of October 2, 2021 (1)	$	2,125,791	$	608,325	$	2,734,116

(1) The Company’s goodwill balance is presented net of ~~$10.0~~accumulated impairment losses and write-offs of $621.6 million. The contingent consideration liability is included in "Accrued liabilities" and remeasured to fair value with changes recognized in "Other operating expense." The fair value of the contingent consideration liability as of January 2, 2021 was equal to the maximum amount payable of $10.0 million as a result of achieving revenue targets. See Note 6 for further information related to the fair value measurement.

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QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

During the nine months ended January 2, 2021, the Company recognized a decrease to goodwill of approximately $0.6 million as a result of purchase price allocation adjustments. The Company will continue to evaluate certain assets, liabilities, and tax estimates over the measurement period (up to one year from the acquisition date).

~~Cavendish Kinetics Limited~~

As of September 28, 2019, the Company had an investment in preferred shares in Cavendish, a private supplier of high-performance radio frequency ("RF") microelectromechanical system ("MEMS") technology for antenna tuning applications, with a carrying value of $59.4 million. The Company accounted for this investment as an equity investment without a readily determinable fair value using the measurement alternative in accordance with Accounting Standards Codification ("ASC") 321, ~~"Investments-Equity Securities."~~

On October 4, 2019, the Company acquired the remaining issued and outstanding capital of Cavendish for cash consideration of $198.4 million. The acquisition advances RF MEMS technology for applications across the Company's products and the technology will be transitioned into high-volume manufacturing for mobile devices and other markets.

The purchase of the remaining equity interest in Cavendish was considered to be an acquisition achieved in stages, whereby the previously held equity interest was remeasured at its acquisition-date fair value. The Company determined that the fair value of its previously held equity investment was $102.4 million based on the purchase consideration exchanged to acquire the remaining issued and outstanding capital of Cavendish. This resulted in recognition of a gain of $43.0 million in the third quarter of fiscal 2020, which is recorded in "Other (expense) income, net" in the Condensed Consolidated Statements of Income.

In fiscal 2021, the Company recognized an increase to goodwill of approximately $2.0 million and a decrease to intangible assets of approximately $2.0 million as a result of finalizing the purchase price allocation.

~~Active-Semi International, Inc.~~

On May 6, 2019, the Company acquired all of the outstanding equity interests of Active-Semi, a private fabless supplier of programmable analog power management solutions, for a total purchase price of $307.9 million. The acquisition expanded the Company's product offerings in power management markets.

~~In fiscal 2021, the Company recognized an increase to goodwill of approximately $0.1 million in connection with finalizing the purchase price allocation.~~

~~5. GOODWILL AND INTANGIBLE ASSETS~~

~~The changes in the carrying amount of goodwill for the nine months ended January 2, 2021 are as follows (in thousands):~~
Mobile Products Infrastructure and Defense Products Total
Balance as of March 28, 2020 (1)
$ 2,005,432 $ 608,842 $ 2,614,274
Goodwill resulting from 7Hugs acquisition (Note 4)
22,195 — 22,195
Measurement period adjustments from prior acquisitions (Note 4)
(1,075) (514) (1,589)
Foreign currency translation 16,032 0 16,032
Balance as of January 2, 2021 (1)
$ 2,042,584 $ 608,328 $ 2,650,912

~~(1) The Company’s goodwill balance is presented net of accumulated impairment losses and write-offs of $621.6 million.~~

~~Goodwill is allocated to the reporting units that are expected to benefit from the synergies of the business combinations generating the underlying goodwill.~~

~~Table of Contents~~

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets (in thousands):


		January 2, 2021				March 28, 2020
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			October 2, 2021				April 3, 2021
											Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Developed technology	Developed technology	$	1,272,572	$	716,397	$	1,325,472	$	652,400	Developed technology	$	913,798	$	361,564	$	1,295,113	$	750,044
Customer relationships	Customer relationships	458,150		399,505		463,772		346,799		Customer relationships	86,033		33,652		459,052		403,407
Technology licenses	Technology licenses	2,271		1,895		3,271		2,327		Technology licenses	2,648		2,057		2,368		2,076
Backlog	Backlog	1,600		1,467		1,600		267		Backlog	—		—		1,600		1,600
Trade names	Trade names	1,000		458		1,200		283		Trade names	1,573		1,010		1,090		636

In-process research and development	In-process research and development	9,600		N/A		9,600		N/A		In-process research and development	9,717		N/A		9,695		N/A
Foreign currency translation		35,497		4,729		6,064		11
Total		$	1,780,690	$	1,124,451	$	1,810,979	$	1,002,087
Total (1)										Total (1)	$	1,013,769	$	398,283	$	1,768,918	$	1,157,763

(1) Amounts include the impact of foreign currency translation.

At the beginning of each fiscal year, the Company removes the gross asset and accumulated amortization amounts of intangible assets that have reached the end of their useful lives and have been fully amortized. Useful lives are estimated based on the expected economic benefit to be derived from the intangible assets.

Total intangible assets amortization expense was ~~$73.3~~$36.6 million and ~~$217.8~~$74.0 million for the three and ~~nine~~six months ended ~~January~~October 2, 2021, respectively, and ~~$63.1~~$72.4 million and ~~$177.9~~$144.5 million for the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, respectively.

6. INVESTMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Equity Method Investments

The Company invests in limited partnerships ~~which are accounted~~and accounts for these investments using the equity method. The carrying amounts of these investments as of ~~January~~October 2, 2021, and ~~March 28, 2020~~April 3, 2021, were ~~$25.7~~$32.4 million and ~~$14.2~~$29.8 million, respectively, and are classified as “Long-term investments” in the Condensed Consolidated Balance Sheets. During the three and ~~nine~~six months ended ~~January~~October 2, 2021, the Company recorded ~~$1.8~~income of $1.5 million and ~~$17.4~~$16.0 million, respectively, based on its share of the limited partnerships' earnings. During the three and six months ended October 3, 2020, the Company recorded $0.1 million of expense and $15.6 million of income, respectively, based on its share of the limited partnerships' earnings. These amounts are included in “Other ~~(expense)~~ income, net” in the Condensed Consolidated Statements of Income. During the three and six months ended ~~January~~October 2, 2021, the Company received cash distributions of ~~$5.9~~$9.6 million ~~from one of these equity method investments. The distributions~~and $13.5 million, respectively, which were recognized as a reduction to the carrying value of the investment and included in the ~~majority of which represented a return of investment in~~ cash flows from investing ~~activities.~~

~~Equity Investments Without a Readily Determinable Fair Value~~

During the fourth quarter of fiscal 2020, the Company recorded an impairment of $18.3 million on an equity investment without a readily determinable fair value based on observable price changes present at the time. During the first quarter of fiscal 2021, the Company recorded an additional impairment of $2.8 million to fully impair this investment. This amount is recorded in “Other (expense) income, net”activities in the Condensed Consolidated Statement of ~~Income.~~

Cash Flows. There were 0 cash distributions received during the three and six months ended October 3, 2020.

1211

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QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Fair Value of Financial Instruments

The fair value of the financial assets and liabilities measured on a recurring basis was determined using the following levels of inputs ~~as of January 2, 2021 and March 28, 2020~~ (in thousands):

Total Quoted Prices In
Active Markets For
Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
January 2, 2021
Assets
Marketable equity securities $ 644 $ 644 $ 0 $ 0
Invested funds in deferred compensation plan (1)
31,015 31,015 0 0
Total assets measured at fair value $ 31,659 $ 31,659 $ 0 $ 0
Liabilities
Deferred compensation plan obligation (1)
$ 31,015 $ 31,015 $ 0 $ 0
Contingent earn-out liability (2)
10,000 0 0 10,000
Total liabilities measured at fair value $ 41,015 $ 31,015 $ 0 $ 10,000
March 28, 2020
Assets
Marketable equity securities $ 459 $ 459 $ 0 $ 0
Invested funds in deferred compensation plan (1)
19,398 19,398 0 0
Total assets measured at fair value $ 19,857 $ 19,857 $ 0 $ 0
Liabilities
Deferred compensation plan obligation (1)
$ 19,398 $ 19,398 $ 0 $ 0
Contingent earn-out liability (2)
5,700 0 0 5,700
Total liabilities measured at fair value $ 25,098 $ 19,398 $ 0 $ 5,700


		Total		Quoted Prices In Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
October 2, 2021
	Marketable equity securities	$	1,514	$	1,514	$	—	$	—
	Invested funds in deferred compensation plan (1)	37,114		37,114		—		—

April 3, 2021
	Marketable equity securities	$	3,802	$	3,802	$	—	$	—
	Invested funds in deferred compensation plan (1)	32,824		32,824		—		—
	Contingent earn-out liability (2)	(10,000)		—		—		(10,000)

(1) ~~The~~ Invested funds under the Company's non-qualified deferred compensation plan ~~provides eligible employees~~are held in a rabbi trust and ~~members~~consist of mutual funds. The fair value of the ~~Board~~mutual funds is calculated using the net asset value per share determined by quoted active market prices of ~~Directors with~~ the opportunity to defer a specified percentage of their cash compensation. The Company includes the assets deferred by the participants in the “Other current assets” and “Other non-current assets” line items of its Condensed Consolidated Balance Sheets and the Company's obligation to deliver the deferred compensation in the “Other current liabilities” and “Other long-term liabilities” line items of its Condensed Consolidated Balance Sheets.underlying investments.

(2) The Company recorded a contingent earn-out liability in conjunction with the acquisition of Custom MMIC acquisition. The fair value of this liability is estimated using an option pricing model and is remeasured to fair value each period with changes in fair value reported in “Other operating expense” in the Condensed Consolidated Statements of Income. As of January 2, 2021, the fair value of the contingent consideration liabilityDesign Services, Inc. which was equal to the maximum amount payable of $10.0 million. NaN payments have been made for the contingent liability as the earn-out assessment period is still ongoing. Any anticipated payments are expected to be settledpaid during the first quarter of fiscal 2022.

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~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

7. LONG-TERM DEBT

Long-term debt ~~as of January 2, 2021 and March 28, 2020~~ is as follows (in thousands):


		January 2, 2021		March 28, 2020			October 2, 2021		April 3, 2021
Term loan	Term loan	$	198,750	$	100,000	Term loan	$	195,000	$	197,500
7.00% senior notes due 2025		0		23,404
5.50% senior notes due 2026		0		900,000
4.375% senior notes due 2029	4.375% senior notes due 2029	850,000		550,000		4.375% senior notes due 2029	850,000		850,000
3.375% senior notes due 2031	3.375% senior notes due 2031	700,000		0		3.375% senior notes due 2031	700,000		700,000
Finance leases	Finance leases	1,648		2,252		Finance leases	2,493		1,617
Unamortized premium and issuance costs, net	Unamortized premium and issuance costs, net	(1,513)		(1,532)		Unamortized premium and issuance costs, net	(1,396)		(1,475)
Less current portion of long-term debt	Less current portion of long-term debt	(5,091)		(6,893)		Less current portion of long-term debt	(5,545)		(5,092)
Total long-term debt	Total long-term debt	$	1,743,794	$	1,567,231	Total long-term debt	$	1,740,552	$	1,742,550

Credit Agreement

On September 29, 2020, the Company and certain of its U.S. subsidiaries (the “Guarantors”) entered into a five-year unsecured senior credit facility pursuant to a credit agreement (the “2020 Credit Agreement”) with Bank of America, N.A., acting as administrative agent, ~~(the “Administrative Agent”)~~ and a syndicate of lenders. The 2020 Credit Agreement amended and restated the previous credit agreement dated as of December 5, 2017 (the “2017 Credit Agreement”). The 2020 Credit Agreement includes a senior term loan (the “2020 Term Loan”) of up to $200.0 million and a senior revolving line of credit (the “Revolving Facility”) of up to $300.0 ~~million (collectively~~million. During the ~~“Credit Facility”).~~three and six months ended October 2, 2021, there were no borrowings under the Revolving Facility.

On the closing date of the 2020 Credit Agreement, the Company repaid the remaining principal balance of $97.5 million on the term loan under the 2017 Credit Agreement ~~(the “2017 Term Loan”)~~ and concurrently drew $200.0 million under the 2020 Term Loan.

~~Principal paid on the 2020 Term Loan during the three months ended January 2, 2021 was $1.3 million. Interest paid on the 2017 Term Loan and 2020 Term Loan during~~ During the three and ~~nine~~ six months ended ~~January~~October 2, 2021, ~~was $0.7~~the Company made principal payments of $1.3 million and ~~$1.5~~$2.5 million, respectively.

~~Pursuant to~~ Interest paid during the ~~2020 Credit Agreement, the Company may request one or more additional tranches of term loans or increases to the Revolving Facility, up to an aggregate of $500.0~~three and six months ended October 2, 2021, was $0.6 million and ~~subject to securing additional funding commitments from the existing or new lenders. The Revolving Facility includes a $25.0~~$1.2 million, sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other general corporate purposes. Outstanding amounts are due in full on the maturity date of September 29, 2025, subject to scheduled amortization of the 2020 Term Loan principal prior to the maturity date as set forth in the 2020 Credit Agreement. During the nine months ended January 2, 2021, there were 0 borrowings under the Revolving Facility.

respectively.

At the Company’s option, loans under the 2020 Credit Agreement will bear interest at (i) the Applicable Rate (as defined in the 2020 Credit Agreement) plus the Eurodollar Rate (as defined in the 2020 Credit Agreement) or (ii) the Applicable Rate plus a rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate as set by the Administrative Agent, and (c) the Eurodollar Rate plus 1.0% (the “Base Rate”). All swing line loans will bear interest at a rate equal to the Applicable Rate plus the Base Rate. The Eurodollar Rate is the rate per annum equal to the reserve adjusted London Interbank Offered Rate (or a comparable or successor rate), for dollar deposits for interest periods of one, two, three or six months, as selected by the Company. The Applicable Rate for Eurodollar Rate loans ranges from 1.000% per annum to 1.250% per annum and is set at 1.125% per annum until the delivery of the Company’s first compliance certificate to the lenders following the fiscal quarter ended January 2, 2021. The Applicable Rate for Base Rate loans ranges from 0.000% per annum to 0.250% per annum, and is set at 0.125% per annum until the delivery of the Company’s first compliance certificate to the lenders following the fiscal quarter ended January 2, 2021. Undrawn amounts under the Credit Facility are subject to a commitment fee ranging from 0.150% to 0.200%. Interest for Eurodollar Rate loans is payable at the end of each applicable interest period or at three-month intervals if such interest period exceeds three months. Interest for Base Rate loans is payable quarterly in arrears.

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(Unaudited)

The 2020 Credit Agreement contains various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default. As of ~~January~~October 2, 2021, the Company was in compliance with these covenants.

Senior Notes due ~~2025~~

On November 19, 2015, the Company issued $550.0 million aggregate principal amount of its 7.00% senior notes due December 1, 2025 (the “2025 Notes”). The 2025 Notes were senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Guarantors.2029

In fiscal years 2018 and 2019, the Company retired $526.6 million of the 2025 Notes. On December 1, 2020, the Company redeemed the remaining $23.4 million principal amount of the 2025 Notes using cash on hand, at a redemption price equal to 103.50% of the principal amount, plus accrued and unpaid interest. In connection with the redemption, the Company recognized a loss on debt extinguishment of $1.0 million as "Other (expense) income, net" in the Condensed Consolidated Statements of Income. The loss on debt extinguishment consisted of a $0.8 million redemption premium and a $0.2 million write-off of the unamortized portion of the debt issuance costs.

Interest on the 2025 Notes was payable on June 1 and December 1 of each year. Interest paid on the 2025 Notes during the three and nine months ended January 2, 2021 was $0.8 million and $1.6 million, respectively. Interest paid on the 2025 Notes during the three and nine months ended December 28, 2019 was $0.8 million and $1.6 million, respectively.

~~Senior Notes due 2026~~

On July 16, 2018, the Company issued $500.0 million aggregate principal amount of its 5.50% senior notes due July 15, 2026 (the “Initial 2026 Notes”). On August 28, 2018 and March 5, 2019, the Company issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of such notes (together with the Initial 2026 Notes, the “2026 Notes”). The 2026 Notes were senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Guarantors.

On October 16, 2020, the Company redeemed all of the 2026 Notes at a redemption price equal to 106.363% of the $900.0 million principal amount, plus accrued and unpaid interest. The 2026 Notes were redeemed using proceeds from the issuance of the 2031 Notes (as defined below) combined with cash on hand plus borrowings under the 2020 Term Loan. In connection with the redemption, the Company recognized a loss on debt extinguishment of $61.0 million as "Other (expense) income, net" in the Condensed Consolidated Statements of Income. The loss on debt extinguishment consisted of a $57.3 million redemption premium and a $3.7 million net write-off of unamortized debt issuance costs and bond premium. The primary purpose of the redemption was to reduce future interest expense.

Interest on the 2026 Notes was payable on January 15 and July 15 of each year. NaN interest was paid on the 2026 Notes during the three months ended January 2, 2021 and December 28, 2019. Interest paid on the 2026 Notes during the nine months ended January 2, 2021 and December 28, 2019 was $24.8 million.

~~Senior Notes due 2029~~

On September 30, 2019, the Company issued $350.0 million aggregate principal amount of its 4.375% senior notes due 2029 (the “Initial 2029 Notes”). On December 20, 2019, and June 11, 2020, the Company issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of such ~~notes~~notes (together, the “Additional 2029 Notes” and together with the Initial 2029 Notes, the “2029 Notes”). The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

The Initial 2029 Notes were issued pursuant to an indenture, dated as of September 30, 2019, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee, and the Additional 2029 Notes were issued pursuant to supplemental indentures, dated as of December 20, 2019, and June 11, 2020 (such indenture and supplemental indentures, collectively, the “2019 Indenture”). The 2019 Indenture contains customary events of default, including payment default, failure to provide certain notices thereunder and certain provisions related to bankruptcy events and also contains customary negative covenants.

Interest is payable on the 2029 Notes on April 15 and October 15 of each year. ~~Interest~~The Company paid no interest on the 2029 Notes during the three months ended October 2, 2021, and paid interest of $18.6 million on the 2029 Notes during the six months ended October 2, 2021. The Company paid no interest on the 2029 Notes during the three ~~and nine~~ months ended ~~January 2, 2021 was $18.6~~October 3, 2020, and paid interest of $13.0 million ~~and $31.6 million, respectively.~~

on the 2029 Notes during the
six

~~Table of Contents~~months ended October 3, 2020.

~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Senior Notes due 2031

On September 29, 2020, the Company issued $700.0 million aggregate principal amount of its 3.375% senior notes due 2031 (the “2031 Notes”). ~~Interest is payable on the 2031 Notes on April 1 and October 1 of each year, commencing April 1, 2021.~~ The 2031 Notes will mature on April 1, 2031, unless earlier redeemed in accordance with their terms. The 2031 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

The 2031 Notes were issued pursuant to an indenture, dated as of September 29, 2020, by and among the Company, the Guarantors and MUFG Union Bank, N.A., as trustee (the “2020 Indenture”). The 2020 Indenture contains the same customary events of default ~~including payment default, failure to provide certain notices thereunder~~ and ~~certain provisions related to bankruptcy events and also contains customary~~ negative ~~covenants.~~covenants as the 2019 Indenture.

~~The~~Interest is payable on the 2031 Notes ~~have not been~~on April 1 and ~~will not be registered under~~October 1 of each year. During the ~~Securities Act~~three and six months ended October 2, 2021, the company paid interest of ~~1933, as amended (the “Securities Act”), or any state securities laws,~~$11.8 million on the 2031 Notes. The Company paid no interest on the 2031 Notes during the three and ~~may not be offered or sold in the United States absent an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.~~six months ended October 3, 2020.

Fair Value of Debt

The Company's debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair value of the 2029 Notes and the 2031 Notes as of ~~January~~October 2, 2021, was ~~$935.2~~$924.3 million and ~~$720.1~~$739.6 million, respectively (compared to ~~a carrying value~~the outstanding principal amount of $850.0 million and $700.0 million, respectively). The estimated fair value of the ~~2025 Notes, the 2026~~2029 Notes and the ~~2029~~2031 Notes as of ~~March 28, 2020~~April 3, 2021, was ~~$23.9 million, $962.8~~$905.3 million and ~~$489.5~~$689.5 million, respectively (compared to ~~a carrying value~~the outstanding principal amount of ~~$23.4 million, $900.0~~$850.0 million and ~~$550.0~~$700.0 million, respectively). The Company considers its debt to be Level 2 in the fair value hierarchy. Fair values are estimated based on quoted market prices for identical or similar instruments. The 2029 Notes and the 2031 Notes currently trade –over-the-counter, and the ~~2025 Notes and the 2026 Notes previously traded – over the counter and their~~ fair values were estimated based upon the value of ~~their~~the last trade at the end of the period.

The 2020 Term Loan carries a variable interest rate set at current market rates, and as such, the fair value of the 2020 Term Loan approximated ~~book~~carrying value as of ~~January~~October 2, 2021 and April 3, 2021.

Interest Expense

During the three and ~~nine~~six months ended ~~January~~October 2, 2021, the Company recognized total interest expense of ~~$18.3~~$16.2 million and ~~$62.9~~$32.5 million, respectively, primarily related to the ~~2026 Notes, the~~ 2029 Notes and the 2031 Notes, ~~which was~~ partially offset by interest capitalized to property and equipment of $0.9 million and ~~$3.1~~$1.9 million, respectively. During the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, the Company recognized total interest expense of ~~$18.3~~$24.6 million and ~~$45.8~~$44.6 million, respectively, primarily related to ~~the~~its 5.50%

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(Unaudited)

senior notes due July 15, 2026 ~~Notes~~(which were redeemed on October 16, 2020) and the 2029 Notes, ~~which was~~ partially offset by interest capitalized to property and equipment of ~~$1.4~~$1.1 million and ~~$4.4~~$2.3 million, respectively.

8. STOCK REPURCHASES

On ~~October 31, 2019,~~May 5, 2021, the Company announced that its Board of Directors authorized a new share repurchase program to repurchase up to ~~$1.0~~$2.0 billion of the Company's outstanding common stock, which included approximately ~~$117.0~~$236.9 million authorized under the prior program ~~which was~~ terminated concurrent with the new authorization. Under this current program, share repurchases are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchases depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require the Company to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

During the three and ~~nine~~six months ended ~~January~~October 2, 2021, the Company repurchased approximately ~~1.1~~1.2 million and ~~2.6~~2.9 million shares, respectively, of its common stock for approximately ~~$160.0~~$223.4 million and ~~$340.1~~$523.4 million, respectively ~~under the current share repurchase program.~~(including transaction costs). As of ~~January~~October 2, 2021, approximately ~~$425.8~~$1,490.6 million ~~remained~~remains available for repurchases under the current share repurchase program.

During the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, the Company repurchased approximately ~~1.3~~0.8 million and ~~5.1~~1.6 million shares, respectively, of its common stock for approximately ~~$125.0~~$105.0 million and ~~$390.1~~$180.0 million, respectively (including transaction costs) under the prior repurchase program.

9. COMMITMENTS AND CONTINGENT LIABILITIES

Purchase Obligations

As of October 2, 2021, the Company's purchase obligations totaled approximately $2.4 billion, of which approximately $600.0 million is expected to be paid during the last six months of fiscal 2022 and ~~current share repurchase programs.~~the remaining $1.8 billion is expected to be paid ratably over fiscal years 2023 through 2026. Noncancelable purchase obligations represent payments due related to the purchase of materials and manufacturing services, a majority of which are not recorded as liabilities in the Condensed Consolidated Balance Sheet because the Company has not received the related goods or services as of October 2, 2021.

In an effort to support growth amidst ongoing industry-wide supply constraints, the Company entered into a long-term capacity reservation agreement with a foundry supplier during the second quarter ended October 2, 2021. The Company agreed to pay certain fees and deposits which are recorded in "Prepaid expenses" and "Other non-current assets" in the Condensed Consolidated Balance Sheet as of October 2, 2021. Under the agreement the Company is required to purchase, and the foundry supplier is required to supply, a certain number of wafers (at predetermined sales prices) for calendar years 2022 through 2025. The Company currently estimates that it is obligated to purchase a total of approximately $1.8 billion of wafers (included in the total purchase obligations above) under the capacity reservation agreement.

Legal Matters

The Company is involved in various legal proceedings and claims that have arisen in the ordinary course of business that have not been fully adjudicated. The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company regularly evaluates developments in its legal matters that could affect the amount of the previously accrued liability and records adjustments as appropriate. Although it is not possible to predict with certainty the outcome of the unresolved legal matters, it is the opinion of management that these matters will not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position or results of operations. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal matters is not material.

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(Unaudited)

~~9. COMMITMENTS AND CONTINGENT LIABILITIES~~

~~Legal Matters~~

The Company accrues a liability for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

The Company is involved in various legal proceedings and claims that have arisen in the ordinary course of its business that have not been fully adjudicated. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, the Company cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, the Company believes there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, it is the opinion of management that these actions will not individually or in the aggregate have a material adverse effect on the Company’s consolidated financial position or results of operations.

10. REVENUE

The following table presents the Company's revenue disaggregated by geography, based on the location of the customers' headquarters (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		January 2, 2021		December 28, 2019		January 2, 2021		December 28, 2019			October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
China										China	$	418,263	$	391,011	$	954,200	$	778,233
United States	United States	$	587,737	$	423,573	$	1,295,398	$	1,143,995	United States	560,992		459,416		880,173		707,661
China		305,887		281,024		1,084,120		842,112
Other Asia	Other Asia	83,070		80,729		243,715		229,344		Other Asia	119,488		102,548		228,766		160,645
Taiwan	Taiwan	69,492		43,156		176,171		122,189		Taiwan	92,067		53,350		177,281		106,679
Europe	Europe	48,648		40,591		143,173		113,729		Europe	64,438		53,967		125,179		94,525

Total revenue	Total revenue	$	1,094,834	$	869,073	$	2,942,577	$	2,451,369	Total revenue	$	1,255,248	$	1,060,292	$	2,365,599	$	1,847,743

The Company also disaggregates revenue by operating segments (see Note ~~12)~~11).

11. ~~RESTRUCTURING~~

During fiscal 2019, the Company initiated restructuring actions to reduce operating expenses and improve its manufacturing cost structure, including the phased closure of a wafer fabrication facility in Florida and idling production at a wafer fabrication facility in Texas. As a result of these restructuring actions, the Company has recorded cumulative restructuring related charges totaling $93.1 million as of the end of the third quarter of fiscal 2021, including accelerated depreciation of $47.4 million (to reflect changes in estimated useful lives of certain property and equipment), impairment charges of $15.9 million (to adjust the carrying value of certain property and equipment to reflect its fair value), employee termination benefits of $13.8 million and other exit costs of $16.0 million. The Company expects to record additional expenses of approximately $0.1 million for employee termination benefits and other exit costs as a result of these actions.

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~~QORVO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~The following table summarizes the restructuring charges resulting from the 2019 restructuring event (in thousands):~~

Three Months Ended January 2, 2021 Three Months Ended December 28, 2019
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits (1)
$ 0 $ 141 $ 141 $ 0 $ 1,677 $ 1,677
Contract termination and other associated costs 0 154 154 3,437 809 4,246
Accelerated depreciation 0 0 0 4,324 0 4,324
Total $ 0 $ 295 $ 295 $ 7,761 $ 2,486 $ 10,247
Nine Months Ended January 2, 2021 Nine Months Ended December 28, 2019
Cost of Goods Sold Other Operating Expense Total Cost of Goods Sold Other Operating Expense Total
One-time employee termination benefits (1)
$ 0 $ 98 $ 98 $ 0 $ 6,291 $ 6,291
Contract termination and other associated costs 0 1,012 1,012 6,307 4,791 11,098
Accelerated depreciation 0 0 0 25,840 0 25,840
Total $ 0 $ 1,110 $ 1,110 $ 32,147 $ 11,082 $ 43,229

~~(1) Includes reversal due to true-up of previously accrued restructuring charges.~~

The Company has entered into other individually immaterial restructuring plans. The Company's restructuring charges related to these plans were $0.3 million and $1.0 million for the three and nine months ended January 2, 2021, respectively, and less than $0.1 million and $0.5 million for the three and nine months ended December 28, 2019, respectively.

~~The following table summarizes the activity related to the Company's restructuring liabilities for the nine months ended January 2, 2021 (in thousands):~~

One-Time Employee Termination Benefits Contract Termination and Other Associated Costs Total
Accrued restructuring balance as of March 28, 2020 $ 1,728 $ 270 $ 1,998
Costs incurred and charged to expense 873 1,220 2,093
Cash payments (2,061) (1,162) (3,223)
Non-cash activity 0 (139) (139)
Accrued restructuring balance as of January 2, 2021 $ 540 $ 189 $ 729

~~12.~~ OPERATING SEGMENT INFORMATION

The Company's operating and reportable segments ~~as of January 2, 2021~~ are Mobile Products ("MP") and Infrastructure and Defense Products ("IDP") based on the organizational structure and information reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), and these segments are managed separately based on the end markets and applications they support. The CODM allocates resources and assesses the performance of each operating segment primarily based on operating income.

MP is a global supplier of cellular, UWB, Wi-Fi and ~~Wi-Fi~~other solutions for a variety of ~~high-volume markets,~~applications, including smartphones, wearables, laptops, tablets and ~~IoT applications.~~Internet of Things ("IoT").

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

IDP is a global supplier of RF, system-on-a-chip and power management solutions for applications in wireless infrastructure, defense, Wi-Fi, smart home, automotive and IoT.

The "All other" category includes operating expenses such as stock-based compensation, amortization of intangible assets, acquisition and integration related costs, ~~restructuring related charges, start-up costs, accelerated depreciation and asset impairment,~~ (loss) gain on assets, start-up costs, restructuring related charges and other miscellaneous corporate overhead expenses that the Company does not allocate to its reportable segments because these expenses are not included in the segment operating performance measures evaluated by the Company’s CODM. The CODM does not evaluate operating segments using discrete asset information. The Company’s operating segments do not record intercompany revenue. The Company does not allocate gains and losses from equity investments, interest and other income, or taxes to operating segments. Except as discussed above regarding the "All other" category, the Company’s accounting policies for segment reporting are the same as for the Company as a whole.

~~The following tables present details of the Company’s operating and reportable segments and a reconciliation of the “All other” category (in thousands):~~

Three Months Ended Nine Months Ended
January 2,
2021 December 28,
2019 January 2,
2021 December 28,
2019
Revenue:
MP $ 826,021 $ 662,109 $ 2,048,719 $ 1,841,468
IDP 268,813 206,964 893,858 609,901
Total revenue $ 1,094,834 $ 869,073 $ 2,942,577 $ 2,451,369
Operating income (loss):
MP $ 342,118 $ 219,778 $ 714,959 $ 553,144
IDP 59,241 32,628 219,491 97,721
All other (102,156) (99,337) (320,891) (329,803)
Operating income 299,203 153,069 613,559 321,062
Interest expense (17,453) (16,900) (59,788) (41,457)
Interest income 467 2,874 2,929 8,112
Other (expense) income, net (58,701) 44,148 (36,106) 42,737
Income before income taxes $ 223,516 $ 183,191 $ 520,594 $ 330,454

Three Months Ended Nine Months Ended
January 2,
2021 December 28,
2019 January 2,
2021 December 28,
2019
Reconciliation of “All other” category:
Stock-based compensation expense $ (19,247) $ (16,381) $ (71,154) $ (62,210)
Amortization of intangible assets (73,112) (62,910) (217,203) (177,380)
Acquisition and integration related costs (5,261) (7,226) (25,183) (37,905)
Restructuring related charges (546) (5,956) (2,093) (17,850)
Accelerated depreciation and asset impairment 0 (4,324) 0 (26,897)
Other (including (loss) gain on assets, start-up costs and other miscellaneous corporate overhead) (3,990) (2,540) (5,258) (7,561)
Loss from operations for “All other” $ (102,156) $ (99,337) $ (320,891) $ (329,803)

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(Unaudited)

~~13. INCOME TAXES~~The following tables present details of the Company’s operating and reportable segments and a reconciliation of the “All other” category (in thousands):


	Three Months Ended				Six Months Ended
	October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Revenue:
MP	$	995,697	$	754,294	$	1,831,835	$	1,222,698
IDP	259,551		305,998		533,764		625,045
Total revenue	$	1,255,248	$	1,060,292	$	2,365,599	$	1,847,743
Operating income (loss):
MP	$	385,589	$	262,858	$	685,279	$	372,841
IDP	49,829		66,495		117,168		160,250
All other	(73,058)		(107,709)		(142,985)		(218,735)
Operating income	362,360		221,644		659,462		314,356
Interest expense	(15,327)		(23,486)		(30,606)		(42,335)
Other income, net	4,754		1,920		21,545		25,057
Income before income taxes	$	351,787	$	200,078	$	650,401	$	297,078


	Three Months Ended				Six Months Ended
	October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Reconciliation of “All other” category:
Stock-based compensation expense	$	(28,691)	$	(30,048)	$	(53,929)	$	(51,907)
Amortization of intangible assets	(36,577)		(72,147)		(73,800)		(144,091)
Acquisition and integration related costs	(6,040)		(7,259)		(10,033)		(19,922)
Other (including (loss) gain on assets, start-up costs, restructuring related charges and other miscellaneous corporate overhead)	(1,750)		1,745		(5,223)		(2,815)
Loss from operations for “All other”	$	(73,058)	$	(107,709)	$	(142,985)	$	(218,735)

The Company’s provision for income taxes for the three and nine months ended January 2, 2021 and December 28, 2019 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for those respective periods.

12. INCOME TAXES

The Company’s income tax expense was ~~$22.5~~$32.6 million and ~~$85.7~~$45.6 million for the three and ~~nine~~six months ended ~~January~~October 2, 2021, respectively, and ~~the Company’s income tax expense was $21.8 million and $46.5~~$63.2 million for the three and ~~nine~~six months ended ~~December 28, 2019, respectively.~~October 3, 2020. The Company’s effective tax rate was ~~10.1%~~9.3% and ~~16.5%~~7.0% for the three and ~~nine~~six months ended ~~January~~October 2, 2021, respectively, and ~~11.9%~~31.6% and ~~14.1%~~21.3% for the three and ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, respectively.

The Company's effective tax rate for the three and ~~nine~~six months ended ~~January~~October 2, 2021, differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, global intangible low tax income (“GILTI”), domestic tax credits generated and discrete tax items recorded during the period. A discrete benefit of ~~$3.8~~$10.3 million and ~~a discrete charge of $31.4~~$30.5 million was recorded during the three and ~~nine~~six months ended ~~January~~October 2, 2021, respectively. The discrete tax benefits for the three and six months ended October 2, 2021 primarily related to stock-based compensation deductions and net tax benefits associated with other non-recurring restructuring activities, including a discrete charge ~~primarily relates to~~associated with the intercompany restructuring of the ~~Cavendish~~NextInput intellectual ~~property, partially offset by~~property. The discrete tax benefit for the six months ended October 2, 2021 was also due in part to the recognition of previously unrecognized tax benefits ~~recognized for stock-based compensation deductions and a retroactive incentive allowing previously non-deductible payments~~due to ~~be amortized.~~the expiration of the statute of limitations.

The Company's effective tax rate for the three and ~~nine~~six months ended ~~December 28, 2019~~October 3, 2020, differed from the statutory rate primarily due to tax rate differences in foreign jurisdictions, GILTI, domestic tax credits generated ~~foreign permanent differences,~~and discrete tax items recorded during the period. A discrete ~~treatment~~charge of ~~post-combination compensation related expenses due to~~$45.2 million and $35.2 million was recorded during the ~~Active-Semi~~three and ~~Cavendish acquisitions,~~six months ended October 3, 2020, respectively. The discrete charges for the three and ~~a discrete expense~~six months ended October 3, 2020 primarily related to the ~~Company’s change~~

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QORVO, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

intercompany restructuring of the intellectual property from the acquisition of Cavendish Kinetics Limited in ~~its permanent reinvestment assertion~~fiscal 2020, partially offset by discrete tax benefits recognized for ~~certain unrepatriated foreign earnings~~stock-based compensation deductions. The discrete charge for the six months ended October 3, 2020 was further offset by a retroactive incentive allowing previously ~~subject~~non-deductible payments to ~~U.S. federal taxation.~~be amortized.

~~14.~~13. NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share data):


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		January 2, 2021		December 28, 2019		January 2, 2021		December 28, 2019			October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Numerator:	Numerator:									Numerator:
Numerator for basic and diluted net income per share — net income available to common stockholders		$	201,035	$	161,356	$	434,874	$	283,935
Numerator for basic and diluted net income per share										Numerator for basic and diluted net income per share	$	319,189	$	136,917	$	604,815	$	233,839
Denominator:	Denominator:									Denominator:
Denominator for basic net income per share — weighted average shares	Denominator for basic net income per share — weighted average shares	113,811		116,129		114,292		117,436		Denominator for basic net income per share — weighted average shares	111,035		114,328		111,476		114,388
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Stock-based awards	Stock-based awards	1,879		2,326		1,965		2,276		Stock-based awards	1,376		1,849		1,612		2,007
Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	115,690		118,455		116,257		119,712		Denominator for diluted net income per share — adjusted weighted average shares and assumed conversions	112,411		116,177		113,088		116,395
Basic net income per share	Basic net income per share	$	1.77	$	1.39	$	3.80	$	2.42	Basic net income per share	$	2.87	$	1.20	$	5.43	$	2.04
Diluted net income per share	Diluted net income per share	$	1.74	$	1.36	$	3.74	$	2.37	Diluted net income per share	$	2.84	$	1.18	$	5.35	$	2.01

An immaterial number of the Company's outstanding stock-based awards was excluded from the computation of diluted net income per share for the three and ~~nine~~six months ended ~~January~~October 2, 2021 and ~~December 28, 2019,~~October 3, 2020, because the effect of their inclusion would have been anti-dilutive.

14. SUBSEQUENT EVENT

United Silicon Carbide, Inc. Acquisition

On October 19, 2021, the Company acquired all the outstanding equity interests of United Silicon Carbide, Inc., a leading manufacturer of silicon carbide (SiC) power semiconductors, for cash consideration of approximately $227.1 million and contingent cash consideration of up to $31.3 million based on the achievement of certain revenue and gross margin targets subsequent to the close date and through December 31, 2022. The acquisition expands the Company's offerings with SiC power products that deliver leading performance for applications in electric vehicles, battery charging, IT infrastructure, renewables and circuit protection.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by use of terms such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue" and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management's current judgment and expectations, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results; our substantial dependence on developing new products and achieving design wins; our dependence on ~~a few~~several large customers for a substantial portion of our revenue; the COVID-19 pandemic materially and adversely affecting our financial condition and results of operations; a loss of revenue if ~~contracts with the United States government or~~ defense and aerospace ~~contractors~~contracts are canceled or delayed or if defense spending is reduced; the COVID-19 pandemic, which has and will likely continue to negatively impact the global economy and disrupt normal business activities, and which may have an adverse effect on our results of operations;delayed; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs due to timing of customer forecasts; our inability to effectively manage or maintain evolving relationships with platform providers; our ability to continue to innovate in a very competitive industry; underutilization of manufacturing facilities as a result of industry overcapacity; unfavorable changes in interest rates, pricing of certain precious metals, utility rates and foreign currency exchange rates; our acquisitions and other strategic investments failing to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; warranty claims, product recalls and product liability; changes in our effective tax rate; changes in the favorable tax status of certain of our subsidiaries; enactment of international or domestic tax legislation, or changes in regulatory guidance; risks associated with environmental, health and safety regulations, and climate change; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; our ability to implement innovative technologies; underutilization of manufacturing facilities as a result of industry overcapacity; we may not be able to borrow funds under our credit facility or secure future financing; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; volatility in the price of our common stock; damage to our reputation or brand; fluctuations in the amount and frequency of our stock repurchases; our recent and future acquisitions and other strategic investments could fail to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches and other similar disruptions compromising our information; theft, loss or misuse of personal data by or about our employees, customers or third parties; ~~warranty claims, product recalls~~provisions in our governing documents and ~~product liability;~~Delaware law may discourage takeovers and ~~risks associated with environmental, health and safety regulations and climate change. Many of the foregoing risks and uncertainties are, and will continue~~business combinations that our stockholders might consider to be ~~exacerbated by~~in their best interests; and volatility in the ~~COVID-19 pandemic and any worsening~~price of ~~the global business and economic environment as a result.~~our common stock. These and other risks and uncertainties, which are described in more detail in our most recent Annual Report on Form 10-K and in other reports and statements that we file with the SEC, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

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OVERVIEW

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the consolidated results of operations and financial condition of Qorvo. MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and accompanying Notes to Condensed Consolidated Financial Statements.

~~Qorvo®~~Qorvo is a leader in the development and commercialization of technologies and products for wireless and wired connectivity. We combine ~~a broad portfolio of innovative radio frequency ("RF") solutions,~~ highly differentiated ~~semiconductor~~ technologies, systems-level expertise and ~~global~~ manufacturing scale to ~~supply~~serve a diverse set of customers a broad ~~range~~portfolio of ~~products~~innovative solutions that enable a more connected world.

The COVID-19 pandemic and the resulting economic downturn are affecting business conditions in our industry. During the nine months ended January 2, 2021, we did not encounter material disruptions to our global supply chain or operations, and we believe that our cash on hand, cash flows from operations and availability under our revolving credit facility provide us with sufficient liquidity. The duration, severity, and future impact of the COVID-19 pandemic remains highly uncertain and may

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result in significant disruptions to our operations, including our supply chain, as well as negative impacts to our financial condition. We will continue to monitor the implications of the COVID-19 pandemic on our business, as well as our customers' and suppliers' businesses.

We design, develop, manufacture and market our products to U.S. and international original equipment manufacturers and original design manufacturers in two operating segments, which are also our reportable segments: Mobile Products ("MP") and Infrastructure and Defense Products ("IDP").

MP is a global supplier of cellular, ~~ultra-wide band~~Ultra Wideband ("UWB"), Wi-Fi and ~~Wi-Fi~~other solutions for a variety of ~~high-volume markets,~~applications, including smartphones, wearables, laptops, tablets and Internet of Things ("IoT") ~~applications.~~.

IDP is a global supplier of RF, system-on-a-chip and power management solutions for applications in wireless infrastructure, defense, Wi-Fi, smart home, automotive and IoT.

These business segments are based on the organizational structure and information reviewed by our Chief Executive Officer, who is our chief operating decision maker ("CODM"), and are managed separately based on the end markets and applications they support. The CODM allocates resources and evaluates the performance of each operating and reportable segment primarily based on operating income. See Note 1211 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this report for additional information regarding our reportable operating segments.

~~THIRD~~In the first half of fiscal 2022, the semiconductor industry continued to experience supply constraints. While we expect the industry to address these constraints over time, we have taken strategic actions to provide flexibility in our supply chain. During the second quarter ended October 2, 2021, we entered into a long-term capacity agreement with a foundry supplier to reserve manufacturing supply capacity. Under the agreement we are required to purchase, and the foundry supplier is required to supply, a certain number of wafers for calendar years 2022 through 2025. See Note 9 of the Notes to Condensed Consolidated Financial Statements and Part II, Item 1A., "Risk Factors" for additional information regarding this agreement.

The COVID-19 pandemic has been a contributing factor of the semiconductor industry supply constraints and is likely to continue to cause volatility and uncertainty in customer demand, worldwide economies and financial markets for some period of time. To date, any negative impact of COVID-19 on the overall demand for our products, cash flow from operations, need for capital expenditures, and our liquidity position has been limited, although we are addressing capacity constraints in our supply chain as described above.

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SECOND QUARTER FISCAL 2022 FINANCIAL HIGHLIGHTS

Fiscal 2022 is a 52-week year, and fiscal 2021 ~~FINANCIAL HIGHLIGHTS:~~was a 53-week year. The second quarter of fiscal 2022 included 13 weeks, compared to 14 weeks for the second quarter of fiscal 2021, and the first six months of fiscal 2022 included 26 weeks, compared to 27 weeks for the first six months of fiscal 2021.

•Revenue for the ~~third~~second quarter of fiscal ~~2021~~2022 increased ~~26.0%~~18.4% as compared to the ~~third~~second quarter of fiscal ~~2020,~~2021, driven primarily by higher demand for our 5G mobile solutions, ~~and Wi-Fi products,~~ partially offset by lower ~~shipments of~~demand for our ~~mobile products to Huawei Technologies Co., Ltd. and affiliates ("Huawei").~~base station products.

•Gross margin for the ~~third~~second quarter of fiscal 2022 was 49.5% as compared to 46.4% for the second quarter of fiscal 2021, ~~was 49.1% as compared to 42.4% for the third quarter of fiscal 2020,~~ primarily due to ~~the effects of increased revenue, including~~lower intangible amortization expense, lower unit costs on higher volume and productivity, and improved product mix, ~~and favorable fixed cost absorption resulting from improved factory utilization.~~partially offset by average selling price erosion.

•Operating income was ~~$299.2~~$362.4 million for the ~~third~~second quarter of fiscal ~~2021~~2022 as compared to ~~$153.1~~$221.6 million for the ~~third~~second quarter of fiscal ~~2020.~~2021. This increase was primarily due to higher revenue, ~~and~~favorable gross margin ~~partially offset by higher~~and lower operating expenses. Operating expenses ~~increased~~decreased primarily due to ~~higher personnel and commission expenses and increased product development spend as a result of recent acquisitions, partially offset by~~ lower ~~travel~~intangible amortization expense.

•Net income per diluted share was ~~$1.74~~$2.84 for the ~~third~~second quarter of fiscal ~~2021~~2022 as compared to ~~$1.36~~$1.18 for the ~~third~~second quarter of fiscal ~~2020.~~2021.

•Capital expenditures were ~~$36.1~~$47.3 million for the ~~third~~second quarter of fiscal ~~2021~~2022 as compared to ~~$40.7~~$43.6 million for the ~~third~~second quarter of fiscal ~~2020.~~2021.

•During the ~~third~~second quarter of fiscal ~~2021,~~2022, we repurchased approximately ~~1.1~~1.2 million shares of our common stock for approximately ~~$160.0~~$223.4 million.

•During the third quarter of fiscal 2021, we redeemed all of our 5.50% senior notes due July 15, 2026 (the "2026 Notes") at a redemption price equal to 106.363% of the $900.0 million outstanding principal amount, plus accrued and unpaid interest. In connection with the redemption, we recognized a loss on debt extinguishment of $61.0 million.

•During the third quarter of fiscal 2021, we redeemed the remaining 7.00% senior notes due December 1, 2025 (the "2025 Notes") at a redemption price equal to 103.50% of the $23.4 million outstanding principal amount, plus accrued and unpaid interest. In connection with the redemption, we recognized a loss on debt extinguishment of $1.0 million.

2220

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RESULTS OF OPERATIONS

Consolidated

The following table presents a summary of our results of operations ~~for the three and nine months ended January 2, 2021 and December 28, 2019~~ (in thousands, except percentages):


		Three Months Ended													Three Months Ended
		January 2, 2021		% of Revenue		December 28, 2019		% of Revenue		Increase (Decrease)		Percentage Change			October 2, 2021		% of Revenue		October 3, 2020		% of Revenue		Increase (Decrease)		Percentage Change
Revenue	Revenue	$	1,094,834	100.0	%	$	869,073	100.0	%	$	225,761	26.0	%	Revenue	$	1,255,248	100.0	%	$	1,060,292	100.0	%	$	194,956	18.4	%
Cost of goods sold	Cost of goods sold	557,082		50.9		500,962		57.6		56,120		11.2		Cost of goods sold	633,695		50.5		568,742		53.6		64,953		11.4
Gross profit	Gross profit	537,752		49.1		368,111		42.4		169,641		46.1		Gross profit	621,553		49.5		491,550		46.4		130,003		26.4
Research and development	Research and development	136,697		12.5		122,851		14.1		13,846		11.3		Research and development	158,377		12.6		156,342		14.8		2,035		1.3
Selling, general and administrative	Selling, general and administrative	93,139		8.5		81,205		9.4		11,934		14.7		Selling, general and administrative	93,489		7.4		109,372		10.3		(15,883)		(14.5)
Other operating expense	Other operating expense	8,713		0.8		10,986		1.3		(2,273)		(20.7)		Other operating expense	7,327		0.6		4,192		0.4		3,135		74.8
Operating income	Operating income	$	299,203	27.3	%	$	153,069	17.6	%	$	146,134	95.5	%	Operating income	$	362,360	28.9	%	$	221,644	20.9	%	$	140,716	63.5	%

		Nine Months Ended													Six Months Ended
		January 2, 2021		% of Revenue		December 28, 2019		% of Revenue		Increase (Decrease)		Percentage Change			October 2, 2021		% of Revenue		October 3, 2020		% of Revenue		Increase (Decrease)		Percentage Change
Revenue	Revenue	$	2,942,577	100.0	%	$	2,451,369	100.0	%	$	491,208	20.0	%	Revenue	$	2,365,599	100.0	%	$	1,847,743	100.0	%	$	517,856	28.0	%
Cost of goods sold	Cost of goods sold	1,587,486		53.9		1,465,387		59.8		122,099		8.3		Cost of goods sold	1,197,863		50.6		1,030,404		55.8		167,459		16.3
Gross profit	Gross profit	1,355,091		46.1		985,982		40.2		369,109		37.4		Gross profit	1,167,736		49.4		817,339		44.2		350,397		42.9
Research and development	Research and development	423,110		14.4		357,385		14.6		65,725		18.4		Research and development	310,456		13.1		286,413		15.5		24,043		8.4
Selling, general and administrative	Selling, general and administrative	289,115		9.8		258,458		10.5		30,657		11.9		Selling, general and administrative	183,788		7.8		195,976		10.6		(12,188)		(6.2)
Other operating expense	Other operating expense	29,307		1.0		49,077		2.0		(19,770)		(40.3)		Other operating expense	14,030		0.6		20,594		1.1		(6,564)		(31.9)
Operating income	Operating income	$	613,559	20.9	%	$	321,062	13.1	%	$	292,497	91.1	%	Operating income	$	659,462	27.9	%	$	314,356	17.0	%	$	345,106	109.8	%

Revenue increased for the three months ended ~~January~~October 2, 2021, as compared to the three months ended ~~December 28, 2019,~~October 3, 2020, primarily due to higher demand for our 5G mobile solutions, partially offset by lower demand for our base station products. The higher demand for our 5G mobile solutions was driven by the continued 5G smartphone ramp and associated content increases with our largest customers. The lower demand for our base station products was attributed to the slower China 5G massive Multiple-Input/Multiple-Output ("mMIMO") deployment and supply chain disruptions.

Revenue increased for the six months ended October 2, 2021, compared to the six months ended October 3, 2020, primarily bydue to higher demand for our 5G mobile solutions and Wi-Fi and broadband products, partially offset by lower ~~shipments of~~demand for our ~~mobile products to Huawei.~~

~~Revenue increased for the nine months ended January 2, 2021 as compared to the nine months ended December 28, 2019, driven primarily by~~base station products. The higher demand for our 5G mobile solutions was driven by the continued 5G smartphone ramp and associated content increases with our largest customers. The increased demand for our Wi-Fi and broadband products was in support of technology upgrades and other connectivity trends. The lower demand for our base station products was attributed to the slower China 5G mMIMO deployment and ~~Wi-Fi products, partially offset by lower shipments of our mobile products to Huawei.~~supply chain disruptions.

In May 2019, the Bureau of Industry and Security of the U.S. Department of Commerce ("Commerce") added Huawei Technologies Co., Ltd. and over 100 of its affiliates to the Entity List maintained by Commerce, which caused us to temporarily suspend the export, reexport, and transfer of products to Huawei. In August 2020, Commerce issued a final rule adding additional Huawei non-U.S. affiliates to the Entity List, confirming the expiration of a temporary general license applicable to Huawei, and amending the foreign-produced direct product rule in a manner that represents a significant expansion of its application to Huawei. While we were able to ship certain products to Huawei in fiscal 2020, trade restrictions and our ability to secure any required licenses will continue to impact sales to Huawei.

Gross margin increased for the three and ~~nine~~ six months ended ~~January~~October 2, 2021, as compared to the three and ~~nine~~six months ended October 3, 2020, primarily due to lower intangible amortization expense, lower unit costs on higher volume and productivity, and improved product mix, partially offset by average selling price erosion.

Operating expenses decreased for the three months ended October 2, 2021, compared to the three months ended October 3, 2020, primarily due to lower intangible amortization expense.

~~December 28, 2019,~~

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Operating expenses increased for the six months ended October 2, 2021, compared to the six months ended October 3, 2020, primarily due to additional headcount associated with the design and development of our UWB solutions and biotechnology testing solutions as well as the acquisition of NextInput, Inc. ("NextInput"). These increases were partially offset by lower intangible amortization expense and lower acquisition related legal expenses.

Operating Segments

Mobile Products


	Three Months Ended
(In thousands, except percentages)	October 2, 2021			October 3, 2020			Increase		Percentage Change
Revenue	$	995,697		$	754,294		$	241,403	32.0	%
Operating income	385,589			262,858			122,731		46.7
Operating income as a % of revenue	38.7		%	34.8		%

	Six Months Ended
(In thousands, except percentages)	October 2, 2021			October 3, 2020			Increase		Percentage Change
Revenue	$	1,831,835		$	1,222,698		$	609,137	49.8	%
Operating income	685,279			372,841			312,438		83.8
Operating income as a % of revenue	37.4		%	30.5		%

MP revenue increased for the three and six months ended October 2, 2021, compared to the three and six months ended October 3, 2020, primarily due to higher demand for our 5G mobile solutions driven by the continued 5G smartphone ramp and associated content increases with our largest customers.

MP operating income increased for the three and six months ended October 2, 2021, compared to the three and six months ended October 3, 2020, primarily due to the effects of increased revenue, including lower unit costs on higher volume and productivity, and improved product ~~mix~~mix. These increases were partially offset by average selling price erosion and higher operating expenses. Operating expenses increased primarily due to additional headcount associated with the design and development of our UWB solutions as well as the acquisition of NextInput.

Infrastructure and Defense Products


	Three Months Ended
(In thousands, except percentages)	October 2, 2021			October 3, 2020			Decrease		Percentage Change
Revenue	$	259,551		$	305,998		$	(46,447)	(15.2)	%
Operating income	49,829			66,495			(16,666)		(25.1)
Operating income as a % of revenue	19.2		%	21.7		%

	Six Months Ended
(In thousands, except percentages)	October 2, 2021			October 3, 2020			Decrease		Percentage Change
Revenue	$	533,764		$	625,045		$	(91,281)	(14.6)	%
Operating income	117,168			160,250			(43,082)		(26.9)
Operating income as a % of revenue	22.0		%	25.6		%

IDP revenue decreased for the three months ended October 2, 2021, compared to the three months ended October 3, 2020, primarily due to lower demand for our base station products, partially offset by increased demand for our power management products. The lower demand for our base station products was attributed to the slower China 5G mMIMO deployment and

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supply chain disruptions. The increased demand for our power management products was in support of the migration to battery-operated portable devices.

IDP revenue decreased for the six months ended October 2, 2021, compared to the six months ended October 3, 2020, primarily due to lower demand for our base station products, partially offset by increased demand for our Wi-Fi, broadband and power management products. The lower demand for our base station products was attributed to the slower China 5G mMIMO deployment and supply chain disruptions. The higher demand for our Wi-Fi, broadband and power management products was in support of technology upgrades, other connectivity trends and the migration to battery-operated portable devices.

IDP operating income decreased for the three months ended October 2, 2021, compared to the three months ended October 3, 2020, primarily due to decreased revenue, partially offset by lower operating expenses. Operating expenses decreased primarily due to lower product development spend.

IDP operating income decreased for the six months ended October 2, 2021, compared to the six months ended October 3, 2020, primarily due to decreased revenue and higher operating expenses, partially offset by favorable ~~fixed cost absorption resulting~~changes in gross margin. Operating expenses increased primarily due to additional headcount associated with our biotechnology testing solutions, partially offset by lower product development spend. Gross margin was favorable primarily due to lower unit costs.

See Note 11 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of reportable segment operating income to the consolidated operating income for the three and six months ended October 2, 2021 and October 3, 2020.

INTEREST, OTHER INCOME AND INCOME TAXES


	Three Months Ended				Six Months Ended
(In thousands)	October 2, 2021		October 3, 2020		October 2, 2021		October 3, 2020
Interest expense	$	(15,327)	$	(23,486)	$	(30,606)	$	(42,335)
Other income, net	4,754		1,920		21,545		25,057
Income tax expense	(32,598)		(63,161)		(45,586)		(63,239)

Interest expense

During the three and six months ended October 2, 2021, we recorded interest expense primarily related to our 4.375% senior notes due 2029 (the "2029 Notes") and our 3.375% senior notes due 2031 (the "2031 Notes"). During the three and six months ended October 3, 2020, we recorded interest expense primarily related to our 5.50% senior notes due July 15, 2026 (which were redeemed on October 16, 2020) and our 2029 Notes. See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information.

Other income, net

Other income is primarily related to our share of investments in limited partnerships' earnings and net gains from ~~improved factory utilization.~~our other investments. See Note 6 of the Notes to Condensed Consolidated Financial Statements for additional information.

Income tax expense

During the three and six months ended October 2, 2021, we recorded income tax expense of $32.6 million and $45.6 million, respectively, comprised primarily of tax expense related to domestic and international operations generating pre-tax book income, partially offset by tax benefits related to international operations generating pre-tax book losses, domestic tax credits and discrete tax items recorded during the period. The discrete tax benefits for the three and six months ended October 2, 2021 primarily related to stock-based compensation deductions and net tax benefits associated with other non-recurring restructuring activities, including a discrete charge associated with the intercompany restructuring of the NextInput intellectual property. The discrete tax benefit for the six months ended October 2, 2021 was also due in part to the recognition of previously unrecognized tax benefits due to the expiration of the statute of limitations.

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~~Operating Expenses~~

Research and development expense increased for the three and nine months ended January 2, 2021 as compared to the three and nine months ended December 28, 2019, primarily due to higher personnel costs and increased product development spend as a result of recent acquisitions.

Selling, general and administrative expense increased for the three and nine months ended January 2, 2021 as compared to the three and nine months ended December 28, 2019, primarily due to higher personnel and commission expenses and increased intangible amortization expense as a result of recent acquisitions. These increases were partially offset by lower travel expense.

Other operating expense decreased for the three months ended January 2, 2021 as compared to the three months ended December 28, 2019, primarily due to lower restructuring expenses and lower acquisition and integration-related expenses. Other operating expense decreased for the nine months ended January 2, 2021 as compared to the nine months ended December 28, 2019, primarily due to lower restructuring expenses, lower acquisition and integration-related expenses and realized gains on the sale of fixed assets.

~~Segment Product Revenue, Operating Income and Operating Income as a Percentage of Revenue~~

~~Mobile Products~~

Three Months Ended
(In thousands, except percentages) January 2,
2021 December 28,
2019 Increase Percentage
Change
Revenue $ 826,021 $ 662,109 $ 163,912 24.8 %
Operating income 342,118 219,778 122,340 55.7
Operating income as a % of revenue 41.4 % 33.2 %
Nine Months Ended
(In thousands, except percentages) January 2,
2021 December 28,
2019 Increase Percentage
Change
Revenue $ 2,048,719 $ 1,841,468 $ 207,251 11.3 %
Operating income 714,959 553,144 161,815 29.3
Operating income as a % of revenue 34.9 % 30.0 %

MP revenue increased for the three and nine months ended January 2, 2021 as compared to the three and nine months ended December 28, 2019, driven primarily by higher demand for our 5G mobile solutions an~~d Wi-Fi products,~~ ~~partially offset by lower shipments of our mobile products to Huawei.~~

MP operating income increased for the three and nine months ended January 2, 2021 as compared to the three and nine months ended December 28, 2019, primarily due to the effects of increased revenue, including product mix and favorable fixed cost absorption resulting from improved factory utilization, partially offset by higher operating expenses. Operating expenses increased primarily due to higher personnel and commission expenses and increased product development spend as a result of recent acquisitions, partially offset by lower travel expense.

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~~Infrastructure and Defense Products~~
Three Months Ended
(In thousands, except percentages) January 2,
2021 December 28,
2019 Increase Percentage
Change
Revenue $ 268,813 $ 206,964 $ 61,849 29.9 %
Operating income 59,241 32,628 26,613 81.6
Operating income as a % of revenue 22.0 % 15.8 %
Nine Months Ended
(In thousands, except percentages) January 2,
2021 December 28,
2019 Increase Percentage
Change
Revenue $ 893,858 $ 609,901 $ 283,957 46.6 %
Operating income 219,491 97,721 121,770 124.6
Operating income as a % of revenue 24.6 % 16.0 %

IDP revenue increased for the three months ended January 2, 2021 as compared to the three months ended December 28, 2019, primarily due to higher demand for our Wi-Fi products and defense and aerospace products.

IDP revenue increased for the nine months ended January 2, 2021 as compared to the nine months ended December 28, 2019, primarily due to higher demand for our 5G base station products, Wi-Fi products and defense and aerospace products.

IDP operating income increased for the three and nine months ended January 2, 2021 as compared to the three and nine months ended December 28, 2019, primarily due to increased revenue, higher factory utilization and lower inventory adjustments, partially offset by unfavorable changes in product mix and increased operating expenses. Operating expenses increased primarily due to higher personnel and commission expenses and increased product development spend as a result of recent acquisitions, partially offset by lower travel expense.

See Note 12 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of segment operating income to the consolidated operating income for the three and nine months ended January 2, 2021 and December 28, 2019.

~~INTEREST, OTHER (EXPENSE) INCOME AND INCOME TAXES~~

Three Months Ended Nine Months Ended
(In thousands) January 2, 2021 December 28, 2019 January 2, 2021 December 28, 2019
Interest expense $ (17,453) $ (16,900) $ (59,788) $ (41,457)
Interest income 467 2,874 2,929 8,112
Other (expense) income, net (58,701) 44,148 (36,106) 42,737
Income tax expense (22,481) (21,835) (85,720) (46,519)

~~Interest expense~~

During the three and ~~nine~~six months ended January 2, 2021, we recorded interest expense of $18.3 million and $62.9 million, respectively, which was partially offset by $0.9 million and $3.1 million, respectively, of capitalized interest. During the three and nine months ended December 28, 2019, we recorded interest expense of $18.3 million and $45.8 million, respectively, which was partially offset by $1.4 million and $4.4 million, respectively, of capitalized interest. See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information.

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~~Other (expense) income, net~~

In the third quarter of fiscal 2021, we recognized a loss on debt extinguishment of $62.0 million. See Note 7 of the Notes to Condensed Consolidated Financial Statements for information regarding our debt extinguishment activity. During the three and nine months ended January 2, 2021, we recorded $1.8 million and $17.4 million of income, respectively, based on our share of the earnings from our equity method investments.

~~In the third quarter of fiscal~~October 3, 2020, we recorded a gain of $43.0 million related to the remeasurement of our previously held equity interest in Cavendish Kinetics Limited ("Cavendish") in connection with our purchase of the remaining issued and outstanding capital of the entity. See Note 4 of the Notes to Condensed Consolidated Financial Statements for information regarding the Cavendish acquisition.

~~Income tax expense~~

Our provision for income taxes for the three and nine months ended January 2, 2021 and December 28, 2019 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or discrete items) for those respective periods.

~~During the three and nine months ended January 2, 2021,~~ we recorded income tax expense of ~~$22.5~~$63.2 million ~~and $85.7 million, respectively, which was~~ comprised primarily of tax expense related to international operations generating pre-tax book income and discrete ~~tax~~ items recorded during the period. The discrete tax expense items primarily ~~relate~~related to the intercompany restructuring of the ~~Cavendish~~ intellectual property from the acquisition of Cavendish Kinetics Limited in fiscal 2020, partially offset by discrete tax benefits recognized for stock-based compensation deductions and a retroactive incentive allowing previously non-deductible payments to be amortized.

During the three and nine months ended December 28, 2019, we recorded income tax expense of $21.8 million and $46.5 million, respectively, which was comprised primarily of tax expense related to international operations generating pre-tax book income and the reversal of the permanent reinvestment assertion with regards to unrepatriated foreign earnings, partially offset by a tax benefit related to domestic and international operations generating pre-tax book losses and domestic tax credits.

A valuation allowance remained against certain domestic and foreign net deferred tax assets as it is more likely than not that the related deferred tax assets will not be realized.

LIQUIDITY AND CAPITAL RESOURCES

Cash generated by operations is our primary source of liquidity. As of ~~January~~October 2, 2021, we had working capital of approximately ~~$1,708.4~~$1,638.8 million, including ~~$1,234.4~~$1,153.2 million in cash and cash equivalents, compared to working capital of approximately ~~$1,151.5~~$1,802.2 million, including ~~$714.9~~$1,397.9 million in cash and cash equivalents as of ~~March 28, 2020.~~April 3, 2021.

Our ~~$1,234.4~~$1,153.2 million of total cash and cash equivalents as of ~~January~~October 2, 2021, includes approximately ~~$1,003.5~~$860.9 million held by our foreign subsidiaries, of which ~~$896.2~~$730.1 million is held by Qorvo International Pte. Ltd. in Singapore. If the undistributed earnings of our foreign subsidiaries are needed in the U.S., we may be required to pay state income and/or foreign local withholding taxes to repatriate these earnings.

Stock Repurchases

During the ~~nine~~six months ended ~~January~~October 2, 2021, we repurchased approximately ~~2.6~~2.9 million shares of our common stock for approximately ~~$340.1~~$523.4 million, including transaction costs, under our prior and current share repurchase ~~program.~~programs. As of ~~January~~October 2, 2021, approximately ~~$425.8~~$1,490.6 million remained available for repurchases under the current program.

Cash Flows from Operating Activities

Operating activities for the ~~nine~~six months ended ~~January~~October 2, 2021 generated cash of ~~$898.9~~$586.4 million, compared to ~~$731.3~~$495.2 million for the ~~nine~~six months ended ~~December 28, 2019,~~October 3, 2020, primarily due to increased profitability, partially offset by changes in ~~working capital driven by~~ accounts ~~receivable.~~receivable, inventory and accounts payable, primarily as a result of demand and revenue growth. In addition, certain fees and deposits associated with a long-term capacity reservation agreement were recorded in accounts payable and offset in prepaid expenses and other non-current assets. See Note 9 of the Notes to Condensed Consolidated Financial Statements for additional information regarding this agreement.

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Cash Flows from Investing Activities

Net cash used in investing activities was ~~$141.3~~$267.6 million for the ~~nine~~six months ended ~~January~~October 2, 2021, compared to ~~$623.1~~$111.3 million for the ~~nine~~six months ended ~~December 28, 2019. During~~October 3, 2020. This increase in cash used in investing activities was primarily due to the nine months ended January 2, 2021, we acquired 7Hugs Labs S.A.S. for $47.7 million and during the nine months ended December 28, 2019, we acquired Active-Semi International, Inc. and Cavendish, which resulted in net cash outflowsacquisition of ~~$297.9 million and $196.8 million, respectively.~~NextInput. See Note 4 of the Notes to Condensed Consolidated Financial Statements for additional information regarding our business acquisitions.

Cash Flows from Financing Activities

Net cash used in financing activities was ~~$240.9~~$562.8 million for the ~~nine~~six months ended ~~January~~October 2, 2021, ~~compared~~primarily due to ~~net~~our stock repurchases. See Note 8 of the Notes to Condensed Consolidated Financial Statements for additional information regarding our stock repurchases. Net cash provided by financing activities ~~of $279.1~~was $900.4 million for the ~~nine~~six months ended ~~December 28, 2019. This decrease in cash flows was~~October 3, 2020, primarily due ~~primarily~~ to our debt ~~financing~~obligation activity. See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding our long-term debt.

COMMITMENTS AND CONTINGENCIES

Credit Agreement On September 29, 2020, we and certain of our U.S. subsidiaries (the “Guarantors”) entered into a five-year unsecured senior credit facility pursuant to a credit agreement (the “2020 Credit Agreement”) with Bank of America, N.A., acting as administrative agent, and a syndicate of lenders. The 2020 Credit Agreement amended and restated our previous credit agreement dated as of December 5, 2017 (the “2017 Credit Agreement”). The 2020 Credit Agreement includes a senior term loan (the “2020 Term Loan”) of up to $200.0 million and a senior revolving line of credit (the “Revolving Facility”) of up to $300.0 million (collectively the “Credit Facility”).

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On the closing date of the 2020 Credit Agreement, we repaid the remaining principal balance of $97.5 million on the previous term loan under the 2017 Credit Agreement and concurrently drew $200.0 million under the 2020 Term Loan.

Pursuant to the 2020 Credit Agreement, we may request one or more additional tranches of term loans or increases to the Revolving Facility, up to an aggregate of $500.0 million and subject to securing additional funding commitments from the existing or new lenders. The Revolving Facility includes a $25.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. The Credit Facility is available to finance working capital, capital expenditures and other general corporate purposes. Outstanding amounts are due in full on the maturity date of September 29, 2025, subject to scheduled amortization of the 2020 Term Loan principal prior to the maturity date as set forth in the 2020 Credit Agreement. During the ~~nine~~six months ended ~~January~~October 2, 2021, there were no borrowings under the Revolving Facility.

The 2020 Credit Agreement contains various conditions, covenants and representations with which we must be in compliance in order to borrow funds and to avoid an event of default. As of ~~January~~October 2, 2021, we were in compliance with these covenants.

~~2025 Notes~~On November 19, 2015, we issued $550.0 million aggregate principal amount of the 2025 Notes. Interest on the 2025 Notes was payable on June 1 and December 1 of each year at a rate of 7.00% per annum. The 2025 Notes were senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Guarantors.

In fiscal years 2018 and 2019, we retired $526.6 million of the 2025 Notes. On December 1, 2020, we redeemed the remaining $23.4 million principal amount of the 2025 Notes using cash on hand, at a redemption price equal to 103.50% of the principal amount, plus accrued and unpaid interest. In connection with the redemption, we recognized a loss on debt extinguishment of $1.0 million as “Other (expense) income, net” in the Condensed Consolidated Statements of Income. The loss on debt extinguishment consisted of a $0.8 million redemption premium and a $0.2 million write-off of the unamortized portion of the debt issuance costs.

~~2026 Notes~~ On July 16, 2018, we issued $500.0 million aggregate principal amount of the 2026 Notes. On August 28, 2018 and March 5, 2019, we issued an additional $130.0 million and $270.0 million, respectively, aggregate principal amount of the 2026 Notes. Interest on the 2026 Notes was payable on January 15 and July 15 of each year at a rate of 5.50% per annum. The 2026 Notes were senior unsecured obligations of the Company and guaranteed, jointly and severally, by the Guarantors.

On October 16, 2020, we redeemed all of the 2026 Notes at a redemption price equal to 106.363% of the $900.0 million principal amount, plus accrued and unpaid interest. The 2026 Notes were redeemed using proceeds from the issuance of the

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3.375% senior notes due 2031 (the "2031 Notes") combined with cash on hand plus borrowings under the 2020 Term Loan. In connection with the redemption, we recognized a loss on debt extinguishment of $61.0 million as “Other (expense) income, net” in the Condensed Consolidated Statements of Income. The loss on debt extinguishment consisted of a $57.3 million redemption premium and a $3.7 million net write-off of the unamortized portion of the debt issuance costs and the bond premium. The primary purpose of the redemption was to reduce future interest expense.

2029 Notes On September 30, 2019, we issued $350.0 million aggregate principal amount of our senior notes due 2029 (the "Initial 2029 Notes"). On December 20, 2019, and June 11, 2020, we issued an additional $200.0 million and $300.0 million, respectively, aggregate principal amount of such notes (together with the Initial 2029 Notes, the "2029 Notes"). Interest on the 2029 Notes is payable on April 15 and October 15 of each year at a rate of 4.375% per annum. The 2029 Notes will mature on October 15, 2029, unless earlier redeemed in accordance with their terms. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

2031 Notes On September 29, 2020, we issued $700.0 million aggregate principal amount of our 2031 Notes. Interest on the 2031 Notes is payable on April 1 and October 1 of each year ~~commencing April 1, 2021.~~at a rate of 3.375% per annum. The 2031 Notes will mature on April 1, 2031, unless earlier redeemed in accordance with their terms. The 2031 Notes are senior unsecured obligations of the Company and are guaranteed, jointly and severally, by the Guarantors.

For additional information regarding our long-term debt, see Note 7 of the Notes to Condensed Consolidated Financial Statements.

Capital Commitments ~~At January~~As of October 2, 2021, we had capital commitments of approximately ~~$116.0~~$131.7 million primarily for increasing manufacturing capacity, expanding capability to support new products, equipment and facility upgrades and cost savings initiatives.

Purchase Obligations During the second quarter ended October 2, 2021, we entered into a long-term capacity agreement with a foundry supplier to reserve manufacturing supply capacity. See Note 9 of the Notes to Condensed Consolidated Financial Statements and Part II, Item 1A., "Risk Factors" for additional information regarding our purchase obligations.

Future Sources of Funding Our future capital requirements may differ materially from those currently projected and will depend on many factors, including ~~the long-term impact of the COVID-19 pandemic on our business, financial conditions, results of operations, cash flow, as well as~~ market acceptance of and demand for our products, acquisition opportunities, technological advances and our relationships with suppliers and customers. Based on current and projected levels of cash flow from operations, coupled with our existing cash, cash equivalents and our Credit Facility, we believe that we have sufficient liquidity to meet both our short-term and long-term cash requirements. However, if there is a significant decrease in demand for our products, or in the event that growth is faster than we anticipate, operating cash flows may be insufficient to meet our needs. If our existing liquidity ~~combined with cash from operations are~~is not sufficient to meet our future requirements or if we perceive conditions to be favorable, we may seek additional debt or equity ~~financing. We cannot be sure that any additional debt or equity~~ financing ~~will not~~which could be dilutive to existing holders of our common ~~stock or~~stock. Furthermore, we cannot be certain that any additional debt or equity financing, if required, will be available on favorable terms, if at all.

Legal We are involved in various legal proceedings and claims that have arisen in the ordinary course of business that have not been fully adjudicated. ~~The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved~~We accrue a liability for legal ~~actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However,~~contingencies when we believe ~~there~~that it is ~~no more than~~both probable that a ~~remote chance~~liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate developments in our legal matters that ~~any~~could affect the amount of the previously accrued liability ~~arising from these matters would be material.~~and record adjustments as appropriate. Although it is not possible to predict with certainty the outcome of ~~these~~the unresolved legal ~~actions,~~matters, it is ~~our~~the opinion of management that these ~~actions~~matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position or results of operations. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal matters is not material.

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Taxes We are subject to income and other taxes in the United States and in numerous foreign jurisdictions. Our domestic and foreign tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions. Additionally, the amount of taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we operate. We are subject to audits by tax authorities. While we endeavor to comply with all applicable tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law than we do or that we will comply in all respects with applicable tax laws, which could result in additional taxes. There can be no assurance that the outcomes from tax audits will not have an adverse effect on our results of operations in the period during which the review is conducted.

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SUPPLEMENTAL PARENT AND GUARANTOR FINANCIAL INFORMATION

In accordance with the indentures governing the 2029 Notes and the 2031 Notes ~~(collectively,~~(together, the "Notes"), our obligations under the Notes are fully and unconditionally guaranteed on a joint and several unsecured basis by the Guarantors, which are listed on Exhibit 22 to this Quarterly Report on Form 10-Q. Each Guarantor is 100% owned, directly or indirectly, by Qorvo, Inc. ("Parent"). A Guarantor can be released in certain customary circumstances. Our other U.S. subsidiaries and our non-U.S. subsidiaries do not guarantee the Notes (such subsidiaries are referred to as the "Non-Guarantors").

The following presents summarized financial information for the Parent and the Guarantors on a combined basis as of and for the ~~period~~periods indicated, after eliminating (i) intercompany transactions and balances among the Parent and Guarantors, and (ii) equity earnings from, and investments in, any Non-Guarantor. The summarized financial information may not necessarily be indicative of the financial position and results of operations had the combined Parent and Guarantors operated independently from the Non-Guarantors.


Summarized Balance Sheets	Summarized Balance Sheets					Summarized Balance Sheets
(in thousands)	(in thousands)	January 2, 2021		March 28, 2020		(in thousands)	October 2, 2021		April 3, 2021
Due from Non-Guarantors	Due from Non-Guarantors	$	519,078	$	484,168	Due from Non-Guarantors	$	250,842	$	532,440
Other current assets	Other current assets	511,978		628,660		Other current assets	596,376		610,646
Total current assets	Total current assets	$	1,031,056	$	1,112,828	Total current assets	$	847,218	$	1,143,086

Non-current assets	Non-current assets	$	2,460,754	$	2,346,759	Non-current assets	$	2,594,143	$	2,450,960

Current liabilities	Current liabilities	$	222,684	$	253,324	Current liabilities	$	421,551	$	240,943

Payable to Non-Guarantors	Payable to Non-Guarantors	$	120,299	$	249,938	Payable to Non-Guarantors	$	535,124	$	395,323
Other long-term liabilities	Other long-term liabilities	1,861,146		1,651,818		Other long-term liabilities	1,884,107		1,855,343
Total long-term liabilities	Total long-term liabilities	$	1,981,445	$	1,901,756	Total long-term liabilities	$	2,419,231	$	2,250,666


Summarized Statement of Income	~~Nine~~Six Months Ended
(in thousands)	~~January~~October 2, 2021
Revenue	$	~~1,083,843~~558,845
Gross profit	$	~~434,489~~131,649
~~Income~~Net loss from continuing operations	$	~~46,581~~ (39,193)
Net ~~income~~loss	$	~~46,581~~ (39,193)

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes to our market risk exposures during the ~~third~~second quarter of fiscal ~~2021.~~2022. For a discussion of our exposure to market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in Qorvo's Annual Report on Form 10-K for the fiscal year ended ~~March 28, 2020.~~April 3, 2021.

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ITEM 4. CONTROLS AND PROCEDURES.

As of the end of the period covered by this report, the Company’s management, with the participation of the Company’s Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), evaluated the effectiveness of the Company’s disclosure controls and procedures in accordance with Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective, as of such date, to enable the Company to record, process, summarize and report in a timely manner the information that the Company is required to disclose in its Exchange Act reports, and to accumulate and communicate such information to management, including the Company’s CEO and the CFO, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~January~~October 2, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Due to the ongoing COVID-19 pandemic, a significant number of our employees are working from home. The design of our processes, systems, and controls allows for remote execution with accessibility to secure data.

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PART II — OTHER INFORMATION

ITEM 1A. RISK FACTORS.

Other than the risk factor set forth below, there have been no material changes to the risk factors included in Qorvo’s Annual Report on Form 10-K for the fiscal year ended March 28, 2020. In addition to the risk factor set forth below and the other information set forth in this report and in our other reports and statements that we file with the SEC, careful consideration should be given to the factors discussedidentified in Part I, Item 1A., ~~“Risk Factors”~~"Risk Factors" in Qorvo's Annual Report on Form 10-K for the fiscal year ended March 28, 2020, which could materially affect our business, financial condition or future results. The risks described in Qorvo's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.April 3, 2021.

~~Changes in government trade policies,~~We depend heavily on third parties.

We purchase numerous component parts, substrates and silicon-based products from external suppliers. We also utilize third-party suppliers for numerous services, including die processing, wafer bumping, test and tape and reel. The use of external suppliers involves a number of risks, including the ~~imposition~~possibility of ~~tariffs~~material disruptions in the supply of key components and ~~export restrictions, have limited~~the lack of control over delivery schedules, capacity constraints, manufacturing yields, product quality and ~~could continue~~cost increases. Furthermore, the COVID-19 pandemic has created heightened risk that external suppliers may be unable to meet their obligations to us. If we experience any significant difficulty in obtaining the materials or services used in the conduct of our business, these supply challenges may limit our ability to ~~sell~~fully satisfy customer demand.

The semiconductor industry has experienced supply constraints. In an effort to support our future expected supply needs in a constrained environment, we entered into a capacity reservation agreement with a foundry supplier during the second quarter ended October 2, 2021. Under the agreement we are required to purchase, and the supplier is required to supply, a certain number of wafers for calendar years 2022 through 2025. See Note 9 of the Notes to Condensed Consolidated Financial Statements for additional information. If our actual wafer requirements are less than the number of wafers required to meet the applicable wafer purchase requirements, we could have excess inventory or higher inventory unit costs, both of which may adversely impact our gross margin and our results of operations. Additionally, the agreement sets forth pricing for wafer purchases pursuant to the agreement through 2025. If market conditions change and wafer prices in the market decrease significantly below what is contemplated in the agreement, the agreement may put us at a competitive disadvantage relative to our competitors.

Even with long-term supply agreements, we are still subject to risks that a supplier will be unable to meet its supply commitments, achieve anticipated manufacturing yields, produce wafers on a timely basis, or provide additional wafer capacity beyond its current contractual commitments sufficient to meet our supply needs. If so, we may experience delays in product launches or supply shortages for certain products, ~~and other items to certain customers and suppliers,~~ which ~~may materially adversely affect~~could cause an unanticipated decline in our sales and damage our existing customer relationships and our ability to establish new customer relationships. In addition, if a supplier experiences financial difficulties or goes into bankruptcy, it could be difficult or impossible, or may require substantial time and expense, for us to recover any or all of our fees and deposits made as part of any long-term agreement.

Although our key suppliers commit to us to be compliant with applicable ISO 9001 and/or TS-16949 quality standards, we have experienced quality and reliability issues with suppliers in the past. Quality or reliability issues in our supply chain could negatively affect our products, our reputation and our results of operations.

The U.S. or foreign governments have taken and may continue to take administrative, legislative or regulatory action that could materially interfere with our ability to export, reexport, and transfer products and other items in certain countries, particularly in China. For example, between July 2018 and June 2019, the Office of the United States Trade Representative imposed 25% tariffs on specified product lists, including certain electronic components and equipment, totaling approximately $250 billion in Chinese imports. China imposed retaliatory tariffs in response to these tariffs and subsequent additional tariffs imposed by the U.S. government. While the imposition of these tariffs has not had a direct, material adverse impact on our business, the direct and indirect effects of tariffs and other restrictive trade policies are difficult to measure and are only one part of a larger U.S./China economic and trade policy disagreement. For example, imposition of tariffs on our customers’ products that are imported from China to the U.S. could harm sales of such products, which would harm our business. We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and China or other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.

Furthermore, we have experienced restrictions on our ability to export, reexport, and transfer our products and other items to certain foreign customers and suppliers where exports, reexports, or transfers of products require export licenses or are prohibited by government action. The U.S. government has in the past imposed export restrictions that effectively banned American companies from exporting, reexporting, and transferring products to ZTE Corporation, one of our customers. In May 2019, the Bureau of Industry and Security of the U.S. Department of Commerce (“Commerce”) added Huawei Technologies Co., Ltd. and over 100 of its affiliates to the “Entity List” maintained by Commerce, which caused us to temporarily suspend the export, reexport, and transfer of products to Huawei. In August 2020, Commerce issued a final rule adding additional Huawei non-U.S. affiliates to the Entity List, confirming the expiration of a temporary general license applicable to Huawei, and amending the foreign-produced direct product rule in a manner that represents a significant expansion of its application to Huawei. Huawei accounted for 10%, 15% and 8% of our total revenue during fiscal years 2020, 2019 and 2018, respectively. While we were able to ship certain products to Huawei in fiscal 2020, trade restrictions and our ability to secure any required licenses will continue to impact sales to Huawei.

As of the date of this report, we are unable to predict the scope and duration of the export restrictions imposed on Huawei and the corresponding future effects on our business. Even if such restrictions are lifted, any financial or other penalties or continuing export restrictions imposed on Huawei could have a continuing negative impact on our future revenue and results of operations. In addition, Huawei or other foreign customers or suppliers affected by future U.S. government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by adopting our foreign competitors’ solutions. Moreover, U.S. government actions targeting exports of certain technologies to China are becoming more pervasive. For example, in 2018, the U.S. adopted new laws designed to address concerns about the export of emerging and foundational technologies to China. In addition, in May 2019, an executive order invoked national emergency economic powers to implement a framework to regulate the acquisition or transfer of information communications technology in transactions that impose undue national security risks, and Commerce recently published an interim rule with regulations to implement provisions of the order. These actions could lead to additional restrictions on the export of products that include or enable certain technologies, including products we provide to China-based customers.

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The loss or temporary loss of Huawei or other foreign customers or suppliers or the imposition of restrictions on our ability to sell or transfer products to such customers or suppliers as a result of tariffs, export restrictions or other U.S. regulatory actions could materially adversely affect our sales, business and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Period
Total number of shares purchased (in thousands)
Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs (in thousands)
Approximate dollar value of shares that may yet be purchased under the plans or programs
October 4, 2020 to October 31, 2020 94 $ 134.53 94 $573.2 million
November 1, 2020 to November 28, 2020 512 $ 146.94 512 $498.0 million
November 29, 2020 to January 2, 2021 457 $ 157.87 457 $425.8 million
Total 1,063 $ 150.54 1,063 $425.8 million


Period	Total number of shares purchased (in thousands)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (in thousands)	Approximate dollar value of shares that may yet be purchased under the plans or programs
July 4, 2021 to July 31, 2021	80	$	191.34	80	$	1,698.7	million
August 1, 2021 to August 28, 2021	547	185.28		547	1,597.3		million
August 29, 2021 to October 2, 2021	581	183.50		581	1,490.6		million
Total	1,208	$	184.82	1,208	$	1,490.6	million

On ~~October 31, 2019,~~May 5, 2021, we announced that our Board of Directors authorized a new share repurchase program to repurchase up to ~~$1.0~~$2.0 billion of ~~the Company's~~our outstanding common stock, which included approximately ~~$117.0~~$236.9 million authorized under the prior program ~~which was~~ terminated concurrent with the new authorization. Under this current program, share repurchases are made in accordance with applicable securities laws on the open market or in privately negotiated transactions. The extent to which we repurchase our shares, the number of shares and the timing of any repurchases depends on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The program does not require us to repurchase a minimum number of shares, does not have a fixed term, and may be modified, suspended or terminated at any time without prior notice.

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ITEM 6. EXHIBITS.


~~10.1~~			~~2020 Declaration of Amendment to Qorvo, Inc. Nonqualified Deferred Compensation Plan, dated as of December 17, 2020~~

22			List of Subsidiary Guarantors

31.1			Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14 (a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14 (a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of Periodic Report by Robert A. Bruggeworth, as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of Periodic Report by Mark J. Murphy, as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			The following materials from our Quarterly Report on Form 10-Q for the quarter ended ~~January~~October 2, 2021, ~~formatted~~formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance ~~Sheets as of January 2, 2021 and March 28, 2020;~~Sheets; (ii) the Condensed Consolidated Statements of ~~Income for the three and nine months ended January 2, 2021 and December 28, 2019;~~Income; (iii) the Condensed Consolidated Statements of Comprehensive ~~Income for the three and nine months ended January 2, 2021 and December 28, 2019;~~Income; (iv) the Condensed Consolidated Statements of Stockholders' ~~Equity for the three and nine months ended January 2, 2021 and December 28, 2019;~~Equity; (v) the Condensed Consolidated Statements of Cash ~~Flows for the nine months ended January 2, 2021 and December 28, 2019;~~Flows; and (vi) the Notes to Condensed Consolidated Financial Statements

104			The cover page from our Quarterly Report on Form 10-Q for the quarter ended ~~January~~October 2, 2021, formatted in iXBRL

Our SEC file number for documents filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, is 001-36801.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Qorvo, Inc.

Date:	~~February~~November 4, 2021	/s/ Mark J. Murphy
		Mark J. Murphy
		Chief Financial Officer

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	Three Months Ended January 2, 2021						Three Months Ended December 28, 2019
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits (1)	$	0	$	141	$	141	$	0	$	1,677	$	1,677
Contract termination and other associated costs	0		154		154		3,437		809		4,246
Accelerated depreciation	0		0		0		4,324		0		4,324
Total	$	0	$	295	$	295	$	7,761	$	2,486	$	10,247

	Nine Months Ended January 2, 2021						Nine Months Ended December 28, 2019
	Cost of Goods Sold		Other Operating Expense		Total		Cost of Goods Sold		Other Operating Expense		Total
One-time employee termination benefits (1)	$	0	$	98	$	98	$	0	$	6,291	$	6,291
Contract termination and other associated costs	0		1,012		1,012		6,307		4,791		11,098
Accelerated depreciation	0		0		0		25,840		0		25,840
Total	$	0	$	1,110	$	1,110	$	32,147	$	11,082	$	43,229









	One-Time Employee Termination Benefits		Contract Termination and Other Associated Costs		Total
Accrued restructuring balance as of March 28, 2020	$	1,728	$	270	$	1,998
Costs incurred and charged to expense	873		1,220		2,093

Cash payments	(2,061)		(1,162)		(3,223)
Non-cash activity	0		(139)		(139)
Accrued restructuring balance as of January 2, 2021	$	540	$	189	$	729