QUALCOMM INC/DE Q1 FY2025 earnings call

Key Points:

• Fiscal Q1 saw record revenues of $11.7 billion and non-GAAP EPS of $3.41. QCT had record chipset revenues, including strong handset, IoT, and automotive performance.
• Mobile roadmap is strong with Snapdragon in premium tier handsets. Automotive and IoT revenues grew significantly year-over-year.
• Committed to achieving $22 billion in non-handset revenues by 2029. Edge AI opportunity is growing, with models like DeepSeek-R1 running on Snapdragon devices.
• Product highlights include Samsung Galaxy S25 series powered by Snapdragon 8 Elite for Galaxy, over 80 PC designs on Snapdragon X series targeting 100+ by 2026, XR partnerships, industrial IoT expansion, automotive partnerships in software-defined vehicles, and QTL business with extended agreements and new licenses. The Arm vs. Qualcomm trial verdict vindicated Qualcomm's CPU innovations.

In fiscal Q1, Qualcomm delivered record revenues of $11.7 billion. The chipset business (QCT) achieved record revenues of $10.1 billion, accounting for 86.3% of total revenue. Handset revenues for QCT were a record $7.6 billion, with 13% year-over-year growth. IoT revenues were $1.5 billion, a 36% year-over-year increase, and automotive revenues were $961 million, a 61% year-over-year growth. The licensing business (QTL) had revenues of $1.5 billion, making up 12.8% of total revenue.

Fiscal Q2 Guidance:

• Non-GAAP revenues projected to be $10.2 billion to $11 billion and non-GAAP EPS $2.70 to $2.90.
• QTL estimated revenues $1.25 billion to $1.45 billion with EBT margins 69% to 73%.
• QCT expected revenues $8.9 billion to $9.5 billion with EBT margins 29% to 31%.
• QCT handset expected ~10% Y/Y growth (including Samsung Galaxy S25), IoT ~15% Y/Y growth, automotive ~50% Y/Y growth. Non-GAAP operating expenses estimated ~$2.25 billion.

Q: Joshua Buchalter asked about QTL guidance and unit shipments/royalty per unit tracking.

A: Akash Palkhiwala said the market is flat or low single-digit Y/Y, with baseline assumption in QTL forecast.

Q: Samik Chatterjee inquired about PC platform, Snapdragon X adoption by enterprise/consumer.

A: Cristiano Amon discussed design traction, 10% share in US retail above $800 laptops, and expansion to $600 price range.

Q: Samik Chatterjee asked about China market, subsidies impact on smartphone growth.

A: Akash Palkhiwala mentioned subsidy just began, historical subsidy improves market size, and premium tier growth in China.

Q: Stacy Rasgon asked about QTL guide flat Y/Y and Huawei negotiations.

A: Alex Rogers said Huawei discussions still in play, QTL guide doesn't include potential from Huawei renewal.

Q: Stacy Rasgon asked about pre-tariff pull forwards on personal electronics.

A: Cristiano Amon said strong Samsung share, end customer demand in China, and AI features driving demand.

Q: Chris Caso asked about June quarter seasonality, Samsung impact.

A: Akash Palkhiwala said seasonality driven by flagship launches, Samsung share included in guides.

Q: Ross Seymore asked about IoT segment cyclicality, gross margin.

A: Akash Palkhiwala said consumer IoT cyclical, industrial/edge networking strong, gross margin strong due to premium tier mix.

Q: Timothy Arcuri asked about modem situation, 20% share assumption.

A: Cristiano Amon said operating with assumptions, no change in 20% share model.

Q: Tal Liani asked about smartphone growth longevity, China demand.

A: Akash Palkhiwala said premium tier growth, content increase, and subsidy potential driving longevity.