Qualcomm is an American company based in San Diego, California, founded in 1985 by Irwin Jacobs and six others. They focus on developing technology for wireless communication, including semiconductors, software, and services. Qualcomm is known for its role in creating 3G, 4G, and 5G technologies. Their products include Snapdragon processors, which are used in many smartphones, as well as other tech like Wi-Fi and Bluetooth.
The company has grown to be a major player in the telecommunications industry, with a strong presence globally. Qualcomm operates through various divisions, including Qualcomm CDMA Technologies and Qualcomm Technology Licensing. They invest heavily in research and development to stay at the forefront of technological advancements. Also, the company aim to meet the increasing demand for high-performance, low-power computing solutions.
Qualcomm Fiscal Q1 2025
Qualcomm (QCOM) announced results for its fiscal first quarter ended December 29, 2024. Both earnings and revenue beat estimates and exceeded the high end of their guidance.
The company reported record revenues of $11.7 billion, which marks a 17% increase compared to the same period last year. The GAAP earnings per share (EPS) for the quarter were $2.83, while the non-GAAP EPS reached a record high of $3.41.
Notably, Qualcomm’s QCT (Qualcomm CDMA Technologies) chipset business segment achieved record quarterly revenues exceeding $10 billion, with significant contributions from QCT Handsets and QCT Automotive, the latter of which recorded its sixth consecutive quarter of record revenues.
Highlights:
- Earnings Before Taxes (EBT) increased by 23% year-over-year, amounting to $3.6 billion on a GAAP basis and $4.4 billion on a non-GAAP basis.
- Net income also saw a substantial rise, reaching $3.2 billion GAAP and $3.8 billion non-GAAP, reflecting respective increases of 15% and 24%.
- Automotive and IoT revenues increased significantly, with 61% and 36% growth year over year, showing successful diversification efforts.
- The Snapdragon 8 Elite platform is in high demand, especially with the Samsung Galaxy S25 series and Chinese manufacturers, indicating strong market acceptance.
These results highlight Qualcomm’s strong performance and growth, positioning it favorably in the competitive technology and telecommunications landscape.
Outlook
The guidance for the QTL segment in fiscal 2025 remains the same as in 2024, suggesting that it might be difficult to achieve growth in the licensing area.
For the second fiscal quarter, the revenue is expected to decline, mainly because of seasonal factors and shipments to Apple.
Boards Statements
Cristiano Amon, CEO of Qualcomm Incorporated, expressed satisfaction with the company’s achievement of quarterly revenue records. He noted that these results reflect the strength of Qualcomm’s technology, product roadmap, and end-customer demand.
Amon also highlighted the company’s ongoing growth across its diversification initiatives and reaffirmed their commitment to reaching their fiscal 2029 targets, aiming to achieve $22 billion in non-handset revenues.
Impact on the Stock Market
Even though Qualcomm had strong Q1 earnings, the QCOM stock dropped 5% in pre-market trading. This happened because the QTL guidance for fiscal 2025 is the same as 2024, hinting at challenges in growing the licensing segment. Furthermore, for the second fiscal quarter, revenues are expected to drop, mainly due to seasonal factors and shipments to Apple.
Additionally, negotiations with Huawei are still unresolved, and the current guidance doesn’t include potential revenue from a new agreement. Moreover, there is a risk of increased costs because of TSMC’s price hikes for 3- and 4-nanometer processes, which might affect future average selling prices (ASPs).
Finally, while the market for high-end smartphones is growing, the overall smartphone market is flat, making sustained growth challenging.
