Mark Murphy
Chief Financial Officer at Qorvo
Thanks, Bob, and good afternoon, everyone. In the September quarter, Qorvo delivered the strongest quarterly revenue and earnings in the company's history. Qorvo's revenue for the fiscal year 2022 second quarter was $1.255 billion, $5 million above the midpoint of our guidance and $195 million or 18% higher than last year's September quarter. When comparing September quarter numbers, recall that our fiscal year 2021 was a 53-week fiscal year, and the September quarter last year was a 14-week quarter versus this fiscal year's more typical 13-week quarter. Mobile Products revenue of $996 million was up 32% year-over-year on the continued growth of higher content 5G smartphones. Infrastructure and Defense Products revenue of $260 million was slightly below expectations due to reduced supply from outsourced assembly and test operations in Malaysia and elsewhere. As expected, IDP was down year-over-year due primarily to last year's strong infrastructure build-out and the 14-week quarter.
We expect IDP to return to year-over-year growth in the December quarter and growth to accelerate in the March quarter. Non-GAAP gross margin in the September quarter was 52.4%, above the midpoint of our guidance despite supply chain disruptions that worsened through the quarter. Non-GAAP operating expenses in the second quarter were less than expected at $222 million or 17.7% of sales. The sequential and year-over-year increases in opex were driven by technology and product development expenses associated with key growth programs and recent acquisitions Non-GAAP operating income in the September quarter was $435 million and 34.7% of sales. This was the fourth consecutive quarter of operating margin over 33%. Non-GAAP net income in the second quarter was $385 million, and diluted earnings per share of $3.42 was $0.18 above the midpoint of our guidance.
Cash flow from operations in the second quarter was $245 million. Our working capital includes an increase in payables associated with a long-term silicon supply agreement. The largest of these pads is a deposit, which we expect to recoup by the end of the agreement in calendar 2025. This agreement is structured -- this agreement is a structured way to advance our differentiated technology position and simplify our long-term planning. Furthermore, it's only one of a number of examples whereby Qorvo is building longer-term and more collaborative partnerships to provide our customers supply assurance and meet their product and technology needs. Concurrently, our customer relationships are broadening and strengthening allowing us to invest with more certainty. As we have indicated previously, the challenges the industry is currently experiencing are driving more constructive and longer-term relationships that we see enhancing the overall durability and value of the business.
Capital expenditures in the September quarter were $47 million, lower than expected on spend timing and an earlier-than-expected reimbursement for a portion of our government-funded work on advanced packaging. Free cash flow was $198 million, and we repurchased $223 million of shares. Over the last two quarters, we've purchased $523 million of shares, which was 110% of our free cash flow. We continue to repurchase shares as our outlook is positive. Our free cash flow and ability to sustain investment in technology and growth is strong and our leverage remains low. On the balance sheet, cash and debt remained largely unchanged from the prior quarter at $1.2 billion and $1.7 billion, respectively. In the December quarter, our cash is projected to decline following payments associated with the previously mentioned agreement and with our acquisition of United Silicon Carbide. Now turning to our current quarter outlook. We expect revenue between $1.090 million and $1.120 million, non-GAAP gross margin between 52% and 52.5%, non-GAAP diluted earnings per share of $2.75 at the midpoint of our guidance.
Our December quarter revenue outlook reflects broadbased challenges in supply impacting mobile and IDP and near-term weakness in demand, principally in Asia. Starting with supply, we have several areas of constraint. Our external supply chain is still recovering from disruptions in September, including shutdowns in Southeast Asia. Beyond that, select materials, products and production capacity remain tight. These are industry-wide issues affecting all suppliers, and our customers are challenged in producing matched sets for products. For example, in smartphones even where channel inventory for certain parts is healthy, customers lack silicon chips to produce phones. This, in turn, creates tech changes in demand that add to constraints on our own production as we work to adjust mix. Mix changes are part of our business, but in a normal environment, Qorvo can move swiftly to respond and capture demand. These supply-driven gaps are making recent demand softness in select areas such as our Asia smartphone customers harder to quantify.
We see the industry working through this situation with some supply effects beginning to moderate this quarter and supply/demand alignment improving more broadly through the March quarter. Given these supply and demand effects, we now see 5G smartphone volumes coming in below $550 million in calendar 2021. Qorvo's December forecasted revenue of $1.105 billion at the midpoint is down 12% sequentially and up slightly year-over-year. We forecast mobile revenue in the current quarter to be approximately $830 million at the midpoint, down 17% sequentially and flat year-over-year. In the March quarter, we expect mobile to be up slightly sequentially as the typical seasonal decline is offset by improved supply and demand. In IDP, we project revenue to increase in the December quarter to $275 million and the segment to return to year-over-year growth. We expect IEP to be over $300 million in the March quarter.
Our December quarter gross margin guide of 52.25% at the midpoint is up versus the view we provided last quarter despite a more challenging supply-demand environment than expected. We see our technology and product mix and operating and capital efficiency yielding a gross margin above 52% for the fiscal year. We expect the March quarter to be around 52%. We project non-GAAP operating expenses to increase slightly in the December quarter to approximately $224 million reflecting higher investments in core technologies and expanding capabilities in new businesses, including the addition of the United Silicon Carbide team. We now project our current quarter and full year non-GAAP tax rate to be between 8.5% and 9%. Capital expenditures are projected to exceed $70 million in the December quarter as we work to intersect demand and support long-term supply agreements with multiple customers. Currently, we are supply constrained and project to remain so through our fiscal year end.
We continue to expand BAW and gaps capacity as well as biosensor production capacity to support our growth projections for fiscal 2023. In summary, we expect year-over-year revenue growth in the December quarter, though less than we had expected previously. The current supply challenges and near-term demand weaknesses -- weakness are acute but more temporary than durable. We expect supply effects to moderate starting this quarter and improved supply-demand alignment early next calendar year. For full fiscal year 2022, we expect revenue growth over 15%, gross margin over 52 -- excuse me, we expect revenue growth over 15% and gross margin over 52% and operating margin of approximately 33%. Looking beyond this fiscal year, we expect double-digit growth to continue as Qorvo's premium technology, product portfolio and operating capability support 5G, WiFi, IoT, defense, power and other growth markets. Overall, we are investing to grow mobile and IPE at or above market.
Looking at our business by end markets instead of operating segments helps highlight the strength of our portfolio and market position. On advanced cellular RF front ends for smartphones, Qorvo's technology and product breadth is world class. We expect this part of Qorvo's business near $3.3 billion this fiscal year to deliver high single-digit to low double-digit growth as increasing RF complexity and integration trends support years of content expansion. Next, looking at other connectivity beyond cellular solutions for smartphones, Qorvo enjoys exposure across multiple wireless protocols and serves industrial automation, connected home, automotive and other high-growth IoT markets. This fiscal year, connectivity solutions spread across our mobile and IDP segments combined to approximately $700 million and can grow in the strong double digits. Finally, defense, infrastructure and power solutions support multiple long-term secular growth drivers. These include the multiyear build-out of 5G infrastructure, increasing semiconductor spend in defense and worldwide demand for power semis driven by mega trends like electrification. We expect to sustain long-term double-digit growth in this business from a base of over $600 million this fiscal year.
Our December quarter is off what we expected previously but still guided up year-over-year as is our view of the March quarter. We expect the business to strengthen through the second half of our fiscal year and contribute to a record full year performance, including earnings growth over 20%. Longer term, the outlook is bright. Qorvo is exceptionally well-positioned to deliver earnings and free cash flow growth, serving the large and growing need for more efficient power and greater connectivity.
Now Todd, would please open the line for questions?