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QUALCOMM INC/DE (QCOM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY25 delivered $10.37B revenue and $2.77 non-GAAP EPS, near the high end of guidance; growth driven by QCT diversification with Automotive up 21% YoY to a record $984M and IoT up 24% YoY to $1.68B .
  • Results modestly beat Wall Street consensus: revenue $10.35B* vs actual $10.37B and non-GAAP EPS $2.71* vs actual $2.77; management guided Q4 FY25 revenue to $10.3B–$11.1B and non-GAAP EPS to $2.75–$2.95 .
  • Strong capital return: $3.8B returned ($2.8B buybacks of 19M shares; $0.89 dividend declared for September 25, 2025) and reaffirmed commitment to return 100% of FY25 free cash flow .
  • Strategic catalysts: multi‑year Xiaomi flagship agreement, Samsung baseline share at ~75%, and expansion into data center with Alphawave Semi acquisition and advanced hyperscaler discussions .
    Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Diversification momentum: “Another quarter of strong growth in QCT Automotive and IoT revenues” with combined Auto+IoT up 23% YoY; Auto hit a record quarter .
  • Handset strength at premium: QCT handsets up 7% YoY to $6.33B, supported by Snapdragon 8 Elite traction and Xiaomi multi‑year flagship deal; Samsung baseline share ~75% with upside potential .
  • Strategic expansion: progressing into data center—Orion CPU and NPU accelerators, Alphawave Semi acquisition to accelerate roadmap; “advanced discussions with a leading hyperscaler” .

What Went Wrong

  • Handset mix: management noted “slightly weaker mix” in the seasonally soft quarter vs prior expectations of ~10% YoY handset growth set last quarter .
  • Apple headwind: Q4 and December seasonality to reflect lower Apple revenues, though broader Android/Auto/IoT trends remain strong .
  • Macro/trade uncertainty: tariffs remain a monitored risk; Q2 commentary emphasized dynamic trade environment with minor direct impacts incorporated in guidance .

Financial Results

Headline Results vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Billions)$9.39 $10.98 $10.37
GAAP EPS ($)$1.88 $2.52 $2.43
Non-GAAP EPS ($)$2.33 $2.85 $2.77
QCT Revenue ($B)$8.07 $9.47 $8.99
QTL Revenue ($B)$1.27 $1.32 $1.32

Segment Margins

MetricQ3 2024Q2 2025Q3 2025
QCT EBT Margin (%)27% 30% 30%
QTL EBT Margin (%)70% 70% 71%

QCT Revenue Streams

QCT Revenue Streams ($USD Billions)Q3 2024Q3 2025
Handsets$5.90 $6.33
Automotive$0.81 $0.98
IoT$1.36 $1.68
Total QCT$8.07 $8.99

Actual vs Street Consensus (Q3 FY25)

MetricStreet ConsensusActual
Revenue ($USD Billions)$10.35*$10.37
Non-GAAP EPS ($)$2.71*$2.77
Values retrieved from S&P Global.*

Capital Return and Share Count

KPIQ3 2025
Return to Shareholders$3.8B (Dividends $0.967B; Buybacks $2.8B; 19M shares repurchased)
Diluted Shares (mm)1,099

Liquidity Snapshot

Metric ($USD Billions)Q2 2025Q3 2025
Cash and Cash Equivalents$7.20 $5.45
Marketable Securities$6.64 $4.56

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3 FY25$9.9B–$10.7B Actual $10.37B Met near high end
Non-GAAP EPSQ3 FY25$2.60–$2.80 Actual $2.77 Near high end
RevenueQ4 FY25N/A$10.3B–$11.1B Initial issuance
QCT RevenueQ4 FY25N/A$9.0B–$9.6B Initial issuance
QTL RevenueQ4 FY25N/A$1.25B–$1.45B Initial issuance
Non-GAAP EPSQ4 FY25N/A$2.75–$2.95 Initial issuance
QCT EBT MarginQ4 FY25N/A27%–29% Initial issuance
QTL EBT MarginQ4 FY25N/A69%–73% Initial issuance
Non-GAAP OpExQ4 FY25N/A~$2.35B Initial issuance
Dividend per ShareQ3 FY25$0.85 (prior quarters) $0.89 declared for Sep 25, 2025 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY25)Previous Mentions (Q2 FY25)Current Period (Q3 FY25)Trend
AI smartphones & premium AndroidRecord handsets; Samsung S25 global; premium mix rising 90+ flagship designs; continued ASP/content gains 7% YoY handset growth; Xiaomi multi‑year deal; Galaxy AI usage rising Improving
PCs (Snapdragon X)>80 designs; >10% share >$800 US retail ~9% share >$600 tier in US/EU; 85+ designs Steady progress; >100 designs by 2026 Steady
IoT (Industrial/Networking)IoT up 36% YoY; AI on‑prem suite; partners Honeywell/IBM Industrial IoT strength; Edge Impulse & Focus AI acquisitions IoT +24% YoY; Dragon Wing traction; Wi‑Fi 7/FWA demand Improving
Automotive (Digital Chassis/ADAS)Record Auto $961M; design traction Auto $959M (+59% YoY); pipeline expanding Record Auto $984M; BMW global ADAS launch; 50 vehicle launches FY25 Improving
Data center expansion—Alphawave Semi acquisition announced Orion CPU/NPU accelerators; advanced hyperscaler talks Emerging growth
China, trade, tariffsPremium tier growth; QTL renewals; Huawei not in guidance Minor direct tariff impact; monitoring Strong China positioning; Xiaomi agreement; no pull‑ins observed Stable/positive
Samsung shareGlobal S25 launch ~70% share modeled for fall launches Baseline ~75% contracted share; upside possible Positive baseline
R&D/OpEx disciplineNon-GAAP tax/R&D treatment updates OpEx discipline and reallocation to diversification Non-GAAP OpEx ~$2.35B for Q4; prudent hiring Steady discipline
Licensing (QTL) & HuaweiStrong execution; renewals; Huawei not included QTL flat YoY; Huawei still in discussions QTL $1.32B; 71% margin Stable

Management Commentary

  • “Another quarter of strong growth in QCT Automotive and IoT revenues further validates our diversification strategy… leadership in AI processing… positions us to become the industry platform of choice as AI gains scale at the edge.” — Cristiano Amon, CEO .
  • “QTL revenues of $1.3B… QCT delivered revenues of $9B and EBT of $2.7B… record quarter in QCT Automotive… returned $3.8B to stockholders.” — Akash Palkhiwala, CFO/COO .
  • “We’re currently building NPU-based AI inference accelerator cards as well as custom SoCs… advanced discussions with a leading hyperscaler.” — Cristiano Amon .

Q&A Highlights

  • Handsets and seasonality: Q4 handsets guided ~+5% sequentially; no evidence of pull‑ins; September strength tied to new flagship launches and product mix .
  • Samsung and share: Multi‑year agreement; baseline ~75% contracted share for Galaxy S generation; anything above is upside .
  • Data center strategy: Alphawave IP complements Orion/NPU; advanced negotiations with a significant hyperscaler; revenue potential starting FY28 if wins convert .
  • China exposure: Strong positioning via Xiaomi and other OEMs across phones, auto, wearables and industrial; learned to “move at China’s speed” over decades .
  • OpEx discipline: Continued reallocation to diversification areas; careful hiring for new skills; maintain margin targets near 30% QCT .

Estimates Context

  • Q3 FY25 beats vs consensus: revenue $10.35B* vs actual $10.37B; non-GAAP EPS $2.71* vs actual $2.77 — a modest EPS beat and slight revenue beat.
  • Q4 FY25 setup: guidance $10.3B–$11.1B revenue and $2.75–$2.95 non‑GAAP EPS ; Street consensus at the time was EPS $2.87* and revenue $10.76B* — roughly mid‑range of guidance.
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Diversification is working: Auto and IoT collectively drove double‑digit growth and record auto revenue; expect continued momentum with BMW ADAS launches and broader OEM programs .
  • Android premium leadership persists: Snapdragon 8 Elite traction, Xiaomi multi‑year flagship deal, and Samsung baseline share support handset resilience despite Apple headwinds .
  • Data center optionality: Alphawave Semi acquisition and hyperscaler discussions create a new long‑term growth vector; near‑term P&L impact limited, but validates strategy .
  • Capital return remains aggressive: $3.8B in Q3; dividend raised to $0.89; commitment to 100% FY25 FCF return is a support for the stock .
  • Q4 guide aligns with consensus mid‑range; watch September flagship ramps, QCT margins, and IoT/Auto revenue execution into year‑end .
  • Risks to monitor: trade/tariffs dynamics, Apple share normalization, and execution milestones in data center; management is proactively managing OpEx .
  • Near‑term trading: modest beat and constructive Q4 setup with Auto/IoT visibility; catalysts include September product launches, Snapdragon Summit (Sept 23–25), and updates on data center engagements .
Note: All financial and segment figures and management quotes are sourced from Q3 FY25 8-K/press release and earnings call. Consensus figures marked with * are values retrieved from S&P Global.

Document Citations

  • Q3 FY25 8-K 2.02 press release: revenue/EPS, segment results, guidance, capital returns, balance sheet/cash flow .
  • Q3 FY25 earnings call transcript: prepared remarks and Q&A on segments, guidance, Samsung share, data center, OpEx .
  • Q2 FY25 8-K and call: prior guidance for Q3, tariff commentary, prior segment trends .
  • Q1 FY25 8-K and call: earlier trajectory, premium Android, PC momentum, QTL renewals/Huawei context .
  • Dividend press release: $0.89 quarterly dividend (payable Sep 25, 2025) .
  • Alphawave Semi acquisition press release: data center strategy context .
  • Earnings release schedule/availability press release: timing context .