QI
QUALCOMM INC/DE (QCOM)·Q1 2025 Earnings Summary
Executive Summary
- Record quarter: revenue $11.7B and non-GAAP EPS $3.41, both above the high end of guidance; first-ever $10.1B QCT quarter with record handset ($7.6B) and automotive ($0.96B) revenues .
- Mix and content tailwinds: premium-tier Android demand, global Samsung Galaxy S25 design win on Snapdragon 8 Elite, and rising ASPs supported strength in QCT; IoT up 36% YoY and automotive up 61% YoY .
- Q2 FY25 guidance implies normal seasonality: non-GAAP revenue $10.2–$11.0B and EPS $2.70–$2.90; QCT $8.9–$9.5B, QTL $1.25–$1.45B, with QCT handset revenue guided +~10% YoY and QTL margins 69–73% .
- Licensing visibility stable, with two major Chinese OEM renewals near execution and potential Huawei renewal representing upside not in guidance; quarterly dividend maintained at $0.85 per share .
- Catalysts: on-device AI narrative (DeepSeek-R1 running on Snapdragon), expanding PC design traction (>80 designs; >10% share of >$800 Windows laptops in U.S. retail), continued automotive momentum (sixth consecutive record) .
What Went Well and What Went Wrong
What Went Well
- Record revenue and EPS, broad-based QCT outperformance across Android handsets, IoT, and automotive; QCT EBT margin 32%, above guidance on operating leverage .
- Strategic wins: Samsung Galaxy S25 globally on Snapdragon 8 Elite; rapid AI feature adoption and content uplift driving higher ASPs; Chinese OEM premium demand strength .
- PC traction accelerating: >80 designs in production or development; Snapdragon-native Windows 11 app ecosystem expanding; December >10% share of >$800 Windows laptops in U.S. retail .
What Went Wrong
- Q2 outlook sequentially lower (seasonality): non-GAAP EPS $2.70–$2.90 vs prior Q1 guide $2.85–$3.05; QTL revenues guided down sequentially, QTL margins 69–73% vs 73–77% prior .
- Ongoing Huawei uncertainty: QTL guide excludes Huawei renewal; licensing discussions still “in play,” representing upside but not embedded in Q2 or FY commentary .
- Handset seasonality and Apple shipments: QCT handset declines sequentially in Q2 primarily driven by seasonality and shipments to Apple; mix-driven margin support can wane if premium-tier volumes soften .
Financial Results
Segment breakdown:
KPIs:
Consensus vs actual (Q1 2025):
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- “In fiscal Q1, we delivered record revenues of $11.7 billion and non-GAAP earnings per share of $3.41… including record quarterly handset and automotive revenues.” — CEO Cristiano Amon .
- “As we enter the era of AI inference, we expect… inference will run increasingly on device… driving increased adoption… demand for Qualcomm platforms.” — CEO Cristiano Amon .
- “We delivered our sixth consecutive quarter of record QCT automotive revenues of $961 million, representing 61% year-over-year growth.” — CFO/COO Akash Palkhiwala .
- “For the second fiscal quarter, we are forecasting non-GAAP revenues of $10.2 billion to $11 billion and non-GAAP EPS of $2.70 to $2.90.” — CFO/COO Akash Palkhiwala .
Q&A Highlights
- QTL visibility and Huawei: Guidance excludes Huawei renewal; two large Chinese OEM renewals completed, execution pending Lunar New Year; unit growth baseline flat-to-low single digits YoY .
- PCs adoption curve: >80 designs; early consumer wave transitioning to commercial; expansion into $600 price tier; >10% U.S. retail share in >$800 Windows laptops in December .
- China subsidies and premium demand: Subsidies started in January, potential market-size upside not in Q2 guide; strong premium-tier demand and customer share gains in China drove Q1 upside .
- Seasonality and margins: June quarter (Q3) typically low point; QCT gross margin supported by premium-tier mix remains strong; ASP tailwind from added capabilities and wafer cost pass-through .
- Apple and modem outlook: Planning assumptions unchanged—20% share for 2026 launch; agreement ends after; 2025 share range 100%–20% .
Estimates Context
- S&P Global consensus estimates for Q1 FY25 revenue and EPS were unavailable due to data request limits; no consensus comparison can be provided at this time. The company reported actual revenue of $11.669B and non-GAAP EPS of $3.41, both above its own guidance high ends .
Key Takeaways for Investors
- Mix-led margin resilience: Premium-tier Android demand, Samsung global design win, and ASP uplift underpin QCT profitability; watch continued premium-tier momentum into H2 .
- AI-on-device inflection: Rapid deployment of models like DeepSeek-R1 on Snapdragon and expanding native app ecosystem strengthen Qualcomm’s differentiated edge AI position across handsets and PCs .
- PC vector accelerating: >80 designs and early share gains suggest Snapdragon X could be a multi-year growth engine; monitor commercial deployments and <$800 tier penetration .
- Automotive diversification durable: Sixth consecutive record quarter; continued content growth and Tier 1/automaker collaborations provide visibility; expect ADAS ramp over next couple of years .
- Licensing upside optionality: Near-term execution of two Chinese OEM renewals and potential Huawei settlement could lift QTL above baseline; none included in guidance—creates positive surprise risk .
- Near-term trading: Q2 guidance implies seasonal step-down in handset and QTL; any indications of stronger subsidy impact in China or additional Samsung strength could drive upside vs guide .
- Medium-term thesis: Edge AI proliferation across devices (handsets, PCs, auto, IoT) and content increases support sustained revenue/margin expansion; ARM dispute risk reduced after favorable verdict and license affirmation .
Additional Details and Non-GAAP Reconciliation Notes
- Q1 FY25 GAAP-to-Non-GAAP: Non-GAAP EPS excludes ~$0.54 per share of share-based compensation ($758M), ~$0.05 per share of other items (primarily acquisition-related charges), and includes minor QSI adjustments .
- Q1 FY25 financial statements: GAAP revenue $11.669B; cost of revenues $5.161B; operating income $3.555B; net income $3.180B; operating cash flow $4.587B .
Source Index
- Earnings press release and 8-K (Q1 FY25): .
- Earnings call transcript (Q1 FY25): .
- Prior quarters transcripts: Q4 FY24 ; Q3 FY24 .
- Dividend press release: .