Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Qualcomm Inc (QCOM, Financial) reported record revenues of $11.7 billion and non-GAAP earnings per share of $3.41, exceeding the high end of their guidance.
• The chipset business achieved record revenues of $10.1 billion, marking the first $10 billion quarter for QCT, with significant contributions from handset and automotive sectors.
• Automotive and IoT revenues grew impressively by 61% and 36% year over year, respectively, showcasing strong diversification efforts.
• The Snapdragon 8 Elite platform has seen strong demand, particularly with the Samsung Galaxy S25 series and Chinese OEMs, indicating robust market traction.
• Qualcomm Inc (QCOM) has expanded its design win momentum in PCs, with over 80 designs in production or development, targeting more than 100 designs by 2026.

Negative Points

• The QTL guidance for fiscal 2025 is flat compared to 2024, indicating potential challenges in maintaining growth in the licensing segment.
• The second fiscal quarter guidance shows a decline in revenues, primarily due to seasonality and shipments to Apple.
• The ongoing negotiations with Huawei remain unresolved, and the current guidance does not include potential revenue from a renewed agreement.
• There is a potential risk of increased costs due to TSMC's price hikes for 3- and 4-nanometer processes, which may impact future ASPs.
• The market for premium-tier smartphones is growing, but the overall smartphone market remains flat, posing challenges for sustained growth.

Q & A Highlights

Q: Could you clarify the QTL guidance for fiscal '25 and how it relates to unit shipments and royalty per unit? A: Akash Palkhiwala, CFO, explained that the market is expected to be flat or grow in low single digits year-over-year. The guidance does not account for potential upside from China subsidies or AI replacement rates.

Q: How do you see the adoption of the Snapdragon X platform for PCs evolving between enterprises and consumers in 2025 and 2026? A: Cristiano Amon, CEO, stated that Qualcomm is on a positive trajectory with over 80 design wins in development. The company targets more than 100 commercialized devices by 2026, with initial traction in consumer markets now expanding to commercial applications.

Q: What is the impact of the China smartphone market subsidies on Qualcomm's growth trajectory? A: Akash Palkhiwala noted that while the subsidies began in January and are not yet reflected in the guidance, historically, subsidies have expanded the market size. The first quarter saw strong performance due to increased premium tier demand and market share gains in China.

Q: Does the QTL guidance for the year include any potential settlement with Huawei? A: Alexander Rogers, President of QTL, confirmed that the guidance does not include any potential renewal with Huawei. The focus has been on extending agreements with other major OEMs.

Q: How does the share gain at Samsung affect Qualcomm's seasonality, particularly for the June quarter? A: Akash Palkhiwala explained that while Samsung's share gain is factored into the guidance, it does not fundamentally change the typical seasonality, with the first quarter being the high point and the third quarter the low point due to flagship launch timings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.