Operating Cash Flow in Q2 2024 was primarily driven by a **substantial increase in net income from continuing operations** as well as **favorable changes in operating assets and liabilities**. In addition to this robust operational performance, factors such as **increased accrued customer incentives, reduced inventory levels due to sales of excess inventory, and higher accounts payable resulting from timing and volume of inventory purchases** contributed to the surge. Although **income taxes and severance payments** had some offsetting impact, their effect was outweighed by the strong positive changes in operating activities.  **[0000804328-24-000039_qcom-20240324.htm:5]** **[0000804328-24-000039_qcom-20240324.htm:25]** **[0000804328-24-000038_qcom032424erex991.htm:5]** 

Why was Operating Cash Flow so high in Q2 2024?

The documents indicate that even though there were operational improvements—such as higher net income and increased accruals in customer incentives and accounts payable—the decline in operating cash flow in Q4 2024 was primarily attributed to **income taxes paid in excess of the provision** (which were driven by factors such as the capitalization and amortization of research and development expenditures and one‐time tax-related adjustments) and **adverse changes in operating assets and liabilities** (for example, an increase in accounts receivable due to higher revenues) that offset those positive factors.  **[0000804328-24-000075_qcom-20240929.htm:90]** **[0000804328-24-000075_qcom-20240929.htm:119]** 

What factors contributed to the decline in Operating Cash Flow in Q4 2024?

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The dip in Q2 2023 was driven primarily by substantial financing outflows. Specifically, Qualcomm used **$3,558 million** in financing activities—including **$2,173 million** for stock repurchases, **$1,676 million** for dividend payments, and **$1,446 million** for long-term debt repayment—which, even when offset by proceeds from new long-term debt issuance (**$1,880 million**), led to a significant reduction in cash relative to Q1 2023.  **[0000804328-23-000022_qcom032623erex991.htm:7]** **[0000804328-23-000023_qcom-20230326.htm:3]** **[0000804328-23-000023_qcom-20230326.htm:29]** **[0000804328-23-000023_qcom-20230326.htm:5]** 

What caused the significant dip in cash in Q2 2023?

Qualcomm's cash surge in Q4 2023 was driven primarily by a **strong increase in net cash provided by operating activities** (generating **$11,299 million**, reflecting lower accounts receivable and decreased other assets) and **improvements in investing activities** (including **$1.5 billion** from the sale of the Active Safety business and **$434 million** from the issuance of common stock, which partially offset capital expenditures). Additionally, moderated cash outflows in financing activities contributed to the overall increase, boosting cash and cash equivalents from **$2,773 million** at the end of fiscal 2022 to **$8,450 million** in Q4 2023.  **[0000804328-23-000055_qcom-20230924.htm:89]** 

Why did cash surge in Q4 2023?

The significant drop in **short-term debt** in Q2 2023 was primarily driven by Qualcomm's active management of its debt obligations. The company notably reduced its short-term debt from **$1,945 million** in September 2022 to **$499 million** in March 2023 by repaying **$4,668 million** in short-term debt during the period, even as it borrowed an equal amount. Additionally, the issuance of **$1.9 billion in long-term debt** appears to have played a role in refinancing or replacing some of the short-term obligations.  **[0000804328-23-000022_qcom032623erex991.htm:7]** **[0000804328-23-000023_qcom-20230326.htm:3]** **[0000804328-23-000022_qcom032623erex991.htm:8]** **[0000804328-23-000023_qcom-20230326.htm:5]** **[0000804328-23-000023_qcom-20230326.htm:29]** 

What led to the drop in short-term debt in Q2 2023?

The asset growth in Q1 2024 was primarily driven by several factors. **Marketable securities** increased by **$1,047 million**, boosting the overall asset base. Additionally, **accounts receivable** grew by **$330 million** and **deferred tax assets** increased by **$269 million**. These inflows were partially offset by a **$175 million** decline in **inventories**, but the net effect was a significant rise in total assets.  **[0000804328-24-000015_qcom122423erex991.htm:4]** 

What factors contributed to the asset growth in Q1 2024?

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The jump in Q1 2025 total revenues was driven primarily by **higher equipment and services revenues** in the QCT segment, which saw a **$1.6 billion** increase due to strong performance in handsets, automotive, and IoT products. Additionally, the QTL segment experienced a **$75 million** increase in licensing revenues. The QCT segment's record revenues, with strong growth in handsets (a **13%** increase) and automotive (a **61%** increase), also played a significant role in boosting overall revenues.  **[0000804328-25-000011_qcom-20241229.htm:15]** **[0000804328-25-000010_qcom122924erex991.htm:0]** 

Why did Total Revenues jump in Q1 2025?

The higher **Cost of Revenues in Q1 2025** was primarily driven by **increased equipment and services revenues**, particularly in the **QCT segment**, which saw an additional **$1.6 billion** in revenues compared to Q1 2024. This significant rise in revenue led to higher associated costs. Additionally, a change in the **product mix**—specifically, a lower proportion of high-margin QTL licensing revenues—resulted in a slight decrease in the gross margin percentage, further contributing to the increased costs.  **[0000804328-25-000011_qcom-20241229.htm:15]** 

What drove the higher Cost of Revenues in Q1 2025?

Based on the detailed explanation, Qualcomm’s Q4 2024 income tax numbers actually reflected a substantial net tax benefit—not a positive tax expense. In this quarter, after accounting for factors such as a **$317 million tax benefit from intellectual property transfers**, a **$93 million benefit from the FDII deduction**, a **$73 million foreign currency gain**, and additional adjustments (including repatriation and acquisition-related tax effects), the income tax expense turned into a net benefit of **$(318) million**.  **[0000804328-24-000074_qcom092924erex991.htm:9]** **[0000804328-24-000075_qcom-20240929.htm:146]**  This means that although one report lists a figure of **319.00** (which might reflect a different accounting presentation), the underlying drivers indicate that the tax expense was effectively negative due to these tax benefits.  **[0000804328-24-000075_qcom-20240929.htm:117]** 

Why was Income Tax Expense positive in Q4 2024?

The boost in **Operating Income** for Q1 2025 was primarily driven by **higher revenues** and effective **cost management**. Specifically, revenues increased by **$1,734 million** year-over-year, with the **QCT segment** contributing a significant increase of **$1,661 million** from higher chipset shipments and premium-tier Snapdragon platforms, alongside notable contributions from **IoT** and **automotive** sectors. Additionally, although costs increased, they did so at a pace that allowed the robust revenue growth to outpace them, further supporting the improved operating income performance.  **[0000804328-25-000011_qcom-20241229.htm:15]** **[0000804328-25-000011_qcom-20241229.htm:17]** 

What led to the boost in Operating Income in Q1 2025?

35af68b845e82ea2e7cb5df4cf86043d5cb13c3f84862d03236abec6a3e72527

Total Revenues (USD, millions)

Equipment and Services Revenues (USD, millions)

Licensing Revenues (USD, millions)

Cost of Revenues (USD, millions)

Research and Development Expenses (USD, millions)

Selling, General and Administrative Expenses (USD, millions)

Other Expenses (USD, millions)

Total Costs and Expenses (USD, millions)

Operating Income (USD, millions)

Interest Expense (USD, millions)

Investment and Other Income, Net (USD, millions)

Income from Continuing Operations Before Income Taxes (USD, millions)

Income Tax Expense (USD, millions)

Income from Continuing Operations (USD, millions)

Discontinued Operations, Net of Income Taxes (USD, millions)

Net Income (USD, millions)

33ddcc07e892930e7f6b8372754e9479ccaf21a718822c239b289b931d384c9e

Net income from continuing operations (USD, millions)

Depreciation and amortization expense (USD, millions)

Income tax provision less than income tax payments (USD, millions)

Share-based compensation expense (USD, millions)

Net gains (losses) on marketable securities and other investments (USD, millions)

Impairment losses on other investments (USD, millions)

Net cash used by operating activities from discontinued operations (USD, millions)

Net cash provided by operating activities (USD, millions)

Capital expenditures (USD, millions)

Purchases of debt and equity marketable securities (USD, millions)

Proceeds from sales and maturities of debt and equity marketable securities (USD, millions)

Acquisitions and other investments, net of cash acquired (USD, millions)

Proceeds from other investments (USD, millions)

Other items, net - Investing Activities (USD, millions)

Net cash used by investing activities (USD, millions)

Proceeds from short-term debt (USD, millions)

Repayment of short-term debt (USD, millions)

Proceeds from issuance of common stock (USD, millions)

Repurchases and retirements of common stock (USD, millions)

Dividends paid (USD, millions)

Payments of tax withholdings related to vesting of share-based awards (USD, millions)

Other items, net - Financing Activities (USD, millions)

Net cash used by financing activities (USD, millions)

Effect of exchange rate changes on cash and cash equivalents (USD, millions)

Net increase (decrease) in total cash and cash equivalents (USD, millions)

Total cash and cash equivalents at beginning of period (USD, millions)

Total cash and cash equivalents at end of period (USD, millions)

a5e35555d5c2a3bbb699e35fd60bc2073de68635d9fc62a7b1d24e098b085ffe

Cash and cash equivalents (USD, millions)

Marketable securities (USD, millions)

Accounts receivable, net (USD, millions)

Inventories (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Deferred tax assets (USD, millions)

Property, plant and equipment, net (USD, millions)

Goodwill (USD, millions)

Other intangible assets, net (USD, millions)

Other assets (USD, millions)

Total assets (USD, millions)

Trade accounts payable (USD, millions)

Payroll and other benefits related liabilities (USD, millions)

Unearned revenues - current (USD, millions)

Short-term debt (USD, millions)

Other current liabilities (USD, millions)

Total current liabilities (USD, millions)

Unearned revenues - non-current (USD, millions)

Long-term debt (USD, millions)

Other liabilities (USD, millions)

Total liabilities (USD, millions)

Common stock and paid-in capital (USD, millions)

Retained earnings (USD, millions)

Accumulated other comprehensive income (USD, millions)

Total stockholders’ equity (USD, millions)

Total liabilities and stockholders’ equity (USD, millions)

3629513e3d9766212ade2ede381c12bf2579deb9b1298c5509dc2aa233d81beb

c20171cdbe7e32932379c917b5861feb45325da2f9f50042abb69431e255330e

d719abf31d1df8e02577eb5b1036aafdc875195dfd758ed56c37700e2f75b7c6

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Proceeds from Debt (USD, millions)

Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

4dcbbabbcad5cd0ad8c57461007f9cb843ae484e5456cff6873ec210b2271e1f

9423f3631e7ff90d15542e79fec324c2c7c6ec7d9473981075ea0b59fc51e0ed

China

United States

China (including Hong Kong)

Vietnam

South Korea

Other Foreign

Ireland

Other foreign

Total Revenue

e924923ec3adf7f25e82424561e47c25a41dfd835baf13c2bb0290f73bf8bddb

QUALCOMM INC/DE (QCOM)

Financials