Q4 2024 Summary
Published Jan 31, 2025, 4:49 PM UTC- Qualcomm's handset revenue is showing strong growth, with greater than 40% sequential growth from Chinese OEMs forecasted for Q1 fiscal '25 guidance . In fiscal '24, Android revenues grew 20% year-over-year, even including the loss of Huawei revenues . Compared to its closest competitor, Qualcomm has over 5x the premium-tier revenue in Android devices, indicating strength in the premium segment .
- Automotive sector is a significant growth driver for Qualcomm, with diverse design wins globally across OEMs, not reliant on any specific geography . The new Snapdragon Ride Elite and Cockpit Elite platforms offer 12x increase in AI capabilities, receiving high design traction from OEMs . Expected ramp-up in ADAS deployments over the next couple of years is anticipated to be an inflection point in revenue growth .
- IoT business is growing, driven by new product launches in XR and NPC . On the industrial side, the market is turning, and Qualcomm sees early stages of demand for solutions that have processing, connectivity, and AI readiness .
- Potential loss of a major customer after 2026, as Qualcomm's planning assumes their share will ramp down to 20% for the 2026 launch, with the agreement ending thereafter, potentially impacting QCT margins.
- Concerns about overreliance on growth in China, while other companies report weakness and migration to lower-tier devices in the region. Qualcomm's handset revenue with Chinese OEMs is expected to be up over 40% quarter-over-quarter, which may not be sustainable.
- Dependence on future product adoption in automotive and industrial IoT, with significant growth projections relying on products that will ramp over the next few years, introducing risks if adoption does not meet expectations.
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q4 2024 | $9.5B to $10.3B | $10,245 million | Met |
QCT | Q4 2024 | $8.1B to $8.7B | $8,678 million | Met |
QTL | Q4 2024 | $1.35B to $1.55B | $1,521 million | Met |
Non-GAAP EPS | Q4 2024 | $2.45 to $2.65 | GAAP EPS (diluted): 2.58 | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Automotive | Previously achieved record revenues each quarter (e.g., $811M in Q3, 35% YoY growth in Q2). Emphasized design wins, strong global traction, and targets of $4B by 2026 and $9B by decade-end. | Revenues reached $899 million with 68% YoY, 11% sequential growth driven by ADAS and cockpit platforms. Expects 50% YoY growth next quarter but flat sequentially. | Consistent robust growth across quarters, remains a key long-term driver. |
IoT (incl. PCs, XR) | Gradual recovery and sequential gains each quarter, with new product launches in IoT, PCs, and XR (e.g., AI PCs, Ray-Ban Meta glasses, industrial IoT solutions). | Expanded portfolio with PC launches (Snapdragon X Plus 8-core), XR collaborations (e.g., Meta Quest 3S, AR1 smart glasses). Introduced industrial-grade solutions (Qualcomm IQ Series). | Steady expansion and product diversification across consumer, PC, XR, and industrial segments. |
Handset Business | Reports each quarter emphasized premium smartphones (Snapdragon 8 series), growing revenue from Chinese OEMs (e.g., +50% YoY in Q3, +40% YoY in Q2). Higher-tier devices and on-device AI features drive demand. | Focused on premium-tier with Snapdragon 8 Elite (30% faster CPU, 57% less power). Noted >40% revenue growth from Chinese OEMs. Market mix continues shifting to higher-priced devices. | Continued strength in premium Android; positive momentum with Chinese OEMs persists. |
Huawei Licensing & Export | Q3 noted license revocation on May 7, 2024, affecting revenues. Q2 shipments focused on low-end 4G chips; expected no future 5G revenue. Q1 continued shipments under 4G license. | No mention in Q4 2024. | No new commentary in Q4; previously a key factor in Q3. |
Dependency on Major Customer | No mention in Q3, Q2, or Q1. | 3-year agreement covering 2024–2026 launches. Planning assumption: share ramps down to 20% by 2026 launch. | Newly discussed in Q4, indicating potential future revenue shift. |
Legal Dispute with ARM | No mention in Q3, Q2, or Q1. | Trial expected December 2024; Qualcomm remains confident in its license rights. | Newly mentioned in Q4; potential legal outcome could impact CPU design strategy. |
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Handset Revenue Growth in China
Q: How is Qualcomm's handset revenue performing in China?
A: Qualcomm projects handset revenue from Chinese OEMs to grow by over 40% quarter-over-quarter in Q1 fiscal '25, driven by accelerated launches of new premium-tier devices using Qualcomm's latest chipsets. This growth reflects increased content per device and an improved mix across tiers, with devices priced over $400 rising from 21% to 30% of the market over the past 3-4 years ,. -
IoT Business Growth
Q: What is driving the growth in Qualcomm's IoT business?
A: Qualcomm's IoT revenues are benefiting across consumer, industrial, and networking segments due to new product launches in PC, XR, and industrial applications. The company introduced AI-ready solutions addressing both chipsets and software in industrial IoT, anticipating significant demand. Early stages of demand are already contributing to performance, with more details to be shared at the upcoming Investor Day ,. -
Automotive Segment Performance
Q: How is Qualcomm's automotive segment performing and what is the outlook?
A: Qualcomm's auto revenues are growing as new models launch with their technology, reflecting a shift in market share. The company holds design wins with virtually every OEM globally and is seeing significant traction with its Snapdragon Ride Elite and Cockpit Elite platforms, offering a 12x increase in AI performance. This growth is tied to technology adoption in new vehicle models rather than market fluctuations ,. -
Potential Impact of Customer Internalization
Q: How could a large customer going internal affect Qualcomm's QCT margins?
A: Qualcomm acknowledges the risk of a large customer potentially moving to internal solutions but notes no change from previous statements. They have a 3-year agreement covering '24, '25, and '26 phone launches, with the planning assumption that share will ramp down to 20% for the '26 launch. The agreement ends after that, and any better outcome would be considered upside. -
Chipset Gross Margins Outlook
Q: What are the expectations for Qualcomm's chipset gross margins?
A: Qualcomm expects chipset gross margins to remain largely in line with Q4, around 48%, due to a favorable product mix. The company believes this is a reasonable way to model the business going forward and feels positive about their product mix across businesses and within handsets. -
ARM Licensing Dispute Status
Q: What's the status of the ARM licensing dispute?
A: Qualcomm is confident in their broad, well-established license rights to custom design CPUs and expects these rights to be affirmed. The trial with ARM is scheduled for December, and the company looks forward to addressing ARM's claims at that time. -
Sustainability of Revenue Growth
Q: How sustainable is Qualcomm's current revenue growth into future quarters?
A: While pleased with the trajectory of their business, including a guided 10% revenue growth in Q1, Qualcomm is not providing guidance beyond that. They plan to discuss their diversification strategy and growth plans, including a financial framework, at the upcoming Investor Day. -
Expansion in PC Market
Q: How is Qualcomm expanding in the PC market?
A: Qualcomm has established itself as a performance leader in Windows devices and recently launched the Snapdragon X Plus 8-core chip, accessing the $700 price tier in the PC market. The number of platforms designed in has increased from 20 to 58, nearly a 3x increase, indicating strong traction with OEMs. Initial reactions have been positive, with more details to be shared at the Investor Day.