Qualcomm Inc Earnings - Q4 2025 Analysis & Highlights
Qualcomm's Q1 2026 earnings call highlighted record revenues and non-GAAP EPS, driven by strong performance in QCT and Automotive. The company discussed the impact of memory shortages on the handset industry, strategic growth in AI-native smartphones, PCs, automotive digital chassis, industrial IoT, and robotics, and provided financial guidance for Q2 fiscal year 2026.
Key Financial Results
Total revenues were $12.3 billion, a record.
Non-GAAP earnings per share (EPS) was $3.50, also a record and at the high end of guidance.
Business Segment Results
QTL (Qualcomm Technology Licensing)
QTL revenues were $1.6 billion.
EBT margin for QTL was 77%, at the high end of guidance.
QCT (Qualcomm CDMA Technologies)
QCT revenues reached a record $10.6 billion.
QCT handset revenues were a record $7.8 billion.
QCT IoT revenues were $1.7 billion, growing 9% year-over-year.
QCT Automotive revenues grew to $1.1 billion, up 15% versus the year-ago period, marking another record quarter.
QCT EBT margin was 31%, exceeding the long-term target of 30%.
Capital Allocation
$3.6 billion was returned to stockholders.
Stock repurchases amounted to $2.6 billion.
Dividends paid were $949 million.
Industry Trends and Dynamics
The handset industry will be constrained by the availability and pricing of memory, particularly DRAM.
Memory suppliers are redirecting manufacturing capacity to HBM to meet AI data center demand, leading to an industry-wide memory shortage and price increases.
The overall scale of the handset industry through the fiscal year is likely to be defined by this memory shortage.
Handset OEMs, especially in China, are taking a cautious approach and reducing their chipset inventory.
Global consumer demand for handsets, especially premium and high tier, exceeded expectations in Q1 fiscal year 2026.
The premium and high tier smartphone segments continue to expand.
The physical AI and robotics space is experiencing rapid growth, driven by advances in edge AI and sensor fusion.
The availability of memory will determine the overall size of the handset market.
Competitive Landscape
Qualcomm expects approximately 75% share for Samsung's upcoming family of premium tier devices, consistent with prior expectations.
Qualcomm's Hexagon NPU provides up to 5.7 times and 3.4 times faster inferencing versus competitors' NPU and GPU, respectively.
The Snapdragon X2 Plus, powered by the third-generation Qualcomm Oryon CPU, delivers up to 35% faster single-core performance and up to 3.5 times faster multi-core performance compared to the competition.
Qualcomm is positioned to enable the next frontier of AI by leveraging its strengths in high-performance, power-efficient computing, connectivity, and edge intelligence.
Macroeconomic Environment
The macroeconomic indicators for handset demand have been strong.
The fundamentals of the Handset business remain favorable with a stable global economic environment.
Growth Opportunities and Strategies
ByteDance launched the first agentic AI smartphone powered by the Snapdragon 8 Elite, marking a significant milestone toward AI-native smartphones.
Intelligent wearables are emerging as the next mobile computing category, evolving into personal AI companions.
Qualcomm is working with seven of the nine largest cloud companies globally, and more than 40 personal AI devices are in production or development.
In PCs, Qualcomm introduced the Snapdragon X2 Plus for the enterprise and commercial segment.
18 Snapdragon-powered PCs debuted at CES from ASUS, HP, Lenovo, and Microsoft.
Qualcomm remains on track to commercialize 150 Snapdragon X-powered PCs this year.
Demand for Snapdragon Digital Chassis solutions remains strong, with collaborations announced with Volkswagen Group (including Audi and Porsche), Hyundai Mobis, Leapmotor, Li Auto, Zeekr, Great Wall Motors, NIO, and Chery.
The newly launched Toyota RAV4 is powered by the Snapdragon Cockpit Platform.
In industrial IoT, Qualcomm expanded its portfolio with the acquisition of Augentix and introduced two new Dragonwing processors and the Dragonwing IQ-X Series for industrial PC space.
Qualcomm announced its expansion into advanced robotics and introduced a full suite of robotics technologies and solutions, including the Dragonwing IQ10 Series.
Qualcomm is developing data center solutions and engaging with hyperscalers, cloud service providers, and sovereign AI projects.
The company completed the Alphawave Semi acquisition, adding high-speed wire connectivity technologies.
Qualcomm also acquired Ventana Micro Systems, reinforcing its leadership in RISC-V standard and ecosystem for high-performance RISC-V CPU for data center workloads.
Financial Guidance and Outlook
For the second fiscal quarter, Qualcomm is forecasting revenues of $10.2 billion to $11 billion.
Non-GAAP EPS is projected to be $2.45 to $2.65.
QTL revenues are estimated at $1.2 million to $1.4 billion, with EBT margins of 68% to 72%.
QCT revenues are expected to be $8.8 billion to $9.4 billion, with EBT margins of 26% to 28%.
QCT handset revenues are forecasted to be approximately $6 billion due to memory constraints.
QCT IoT revenues are anticipated to grow by a low teens percentage year-over-year.
QCT Automotive revenue growth is expected to accelerate to greater than 35% in the second fiscal quarter.
Non-GAAP operating expenses are expected to be approximately $2.6 billion in the quarter.
Qualcomm expects to return to its prior run rate and growth trajectory for QCT handset revenues when memory conditions normalize.
The fiscal year mobile handset size will be determined by memory availability.
