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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

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions, Non-GAAP)$9.4 $10.2 $11.7
Diluted EPS ($, Non-GAAP)$2.33 $2.69 $3.41
Diluted EPS ($, GAAP)N/AN/A$2.83
Company EBT Margin % (Non-GAAP)N/AN/A38%

Segment breakdown:

Segment MetricQ3 2024Q4 2024Q1 2025
QCT Handsets Revenue ($USD Billions)$5.9 $6.1 $7.574
QCT IoT Revenue ($USD Billions)$1.4 $1.7 $1.549
QCT Automotive Revenue ($USD Billions)$0.811 $0.899 $0.961
QTL Revenue ($USD Billions)$1.3 $1.5 $1.535

KPIs:

KPI (Q1 2025)Value
Return of Capital ($USD Billions)$2.7 (repurchases $1.8, dividends $0.942)
Share Repurchases (Shares)11 million
Dividend per Share ($)$0.85 (payable Mar 27, 2025)
Cash from Operations ($USD Billions)$4.587

Consensus vs actual (Q1 2025):

MetricActualConsensus (S&P Global)Surprise
Revenue ($USD Billions)$11.7 UnavailableN/A
Non-GAAP Diluted EPS ($)$3.41 UnavailableN/A
Note: Wall Street consensus data from S&P Global was unavailable due to request limits.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Revenue ($B)Q2 FY25N/A$10.2–$11.0 New
GAAP Revenue ($B)Q2 FY25N/A$10.3–$11.2 New
Non-GAAP Diluted EPS ($)Q2 FY25$2.85–$3.05 (Q1 guide) $2.70–$2.90 Lower sequentially (seasonality)
QCT Revenues ($B)Q2 FY25$9.0–$9.6 (Q1 guide) $8.9–$9.5 Slightly lower sequentially
QTL Revenues ($B)Q2 FY25$1.45–$1.65 (Q1 guide) $1.25–$1.45 Lower sequentially
QCT EBT Margin %Q2 FY2529–31 (Q1 guide) 29–31 Maintained
QTL EBT Margin %Q2 FY2573–77 (Q1 guide) 69–73 Lower sequentially
Non-GAAP OpEx ($B)Q2 FY25~2.2 (Q1 guide) ~2.25 Raised modestly
Dividend per Share ($)Q1–Q2 FY25$0.85 $0.85 Maintained
FY25 QTL Revenue ScaleFY25 vs FY24Consistent with FY24 (prior commentary) Consistent with FY24 (renewals in place; Huawei excluded) Maintained; upside possible on Huawei

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
On-device AI/Edge AIVision for GenAI across devices; Snapdragon X PC launch; expanding AI use cases Broad recognition of on-device AI; partnerships (Meta Llama, Amazon AI Hub) AI inference shifting to device; DeepSeek-R1 running on Snapdragon; expanding AI apps suite Strengthening
PC: Snapdragon X Series20 Copilot+ PCs launched; road map targets lower price tiers 58 platforms launched/in dev; X Plus extends to ~$700 tier >80 designs; targeting 100+ by 2026; >10% share of >$800 Windows laptops in U.S. retail (Dec) Accelerating
Premium Android handsetsGalaxy Z Fold/Flip on 8 Gen 3; Chinese OEM revenues +>50% YoY Snapdragon 8 Elite announced; customers launching Samsung S25 global on 8 Elite; premium-tier demand/ASP uplift; Chinese premium demand strong Strengthening
China market & subsidiesLicensing renewals (Honor); handset tiers shifting to >$400 Huawei export license revoked; guidance offsets via other demand Subsidies began Jan; potential upside not in Q2 guide; premium-tier strength; customers gaining share Emerging tailwind
Licensing (QTL)Executed renewals; Apple extended to ’27; multiple Chinese OEMs Maintaining revenue/margin scale; renewals progressing Two major Chinese OEM agreements post-Lunar New Year; Huawei renewal upside excluded Stable with potential upside
Automotive10+ new design wins; record revenue trajectory Cockpit/Ride Elite; 12x AI uplift; record revenue; +68% YoY 6th consecutive record; $961M revenue; collaborations (Hyundai Mobis, Tier 1s) Accelerating
Gross margins/mixNot detailedQCT EBITDA margin ~28%; mix support Strong premium mix keeps QCT gross margin firm; mix drives margins Strong
Regulatory/legalN/AARM trial scheduled; confidence in license rights Jury verdict vindicated Qualcomm; ARM withdrew breach notice; no plan to terminate license Risk reduced

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: .