Qualcomm surpassed expectations in its latest earnings report, achieving record revenue and earnings amid continued diversification in key segments.
Wireless technologies specialist Qualcomm (QCOM 1.63%) reported fiscal 2025 first-quarter earnings on Wednesday, Feb. 5, that topped analyst consensus top- and bottom-line estimates. Adjusted EPS soared to $3.41, exceeding the analyst estimate of $2.96. Revenue reached $11.67 billion, topping the predicted $10.91 billion. The quarter highlighted significant growth across key segments, particularly in Qualcomm CDMA Technologies (QCT), reflecting strong operational execution and market demand.
Altogether, the quarter was marked by significant achievements though potential macroeconomic challenges loom.
| Metric | Q1 Fiscal 2025 | Analysts’ Estimate | Q1 Fiscal 2024 | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $3.41 | $2.96 | $2.75 | 24% |
| Revenue | $11.67 billion | $10.91 billion | $9.92 billion | 18% |
| Adj. net income | $3.83 billion | – | $3.1 billion | 24% |
| QCT revenue | $10.08 billion | – | $8.42 billion | 20% |
Source: Qualcomm. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year.
About Qualcomm
Qualcomm is an industry leader in mobile innovation, known for its pioneering role in developing wireless technologies such as the Snapdragon chipset platform and 5G technology. It operates primarily through two segments: Qualcomm CDMA Technologies (QCT), which develops integrated circuit (IC) products, including mobile semiconductors, and Qualcomm Technology Licensing (QTL), which licenses intellectual property essential to wireless communications.
Recently, Qualcomm has been honing its focus on expanding beyond mobile devices to build strengths in the automotive and IoT sectors. These initiatives are critical success factors, allowing the company to diversify its revenue streams and reduce dependency on smartphone-related revenue. Such strategic diversification aligns with its mission to maintain connectivity leadership while tapping into burgeoning markets for smart vehicles and connected devices.
First Quarter Highlights
In its most recent fiscal quarter, Qualcomm posted standout growth across several metrics.
The Qualcomm CDMA Technologies (QCT) segment, which represents a significant portion of Qualcomm’s revenue, saw revenue soar to $10.08 billion, driven by robust performances in handsets, automotive, and IoT sub-segments. In the handsets category alone, revenues rose 13% year over year to $7.57 billion, highlighting the continued success of its Snapdragon platform. Meanwhile, QCT’s automotive revenue saw a remarkable 61% increase, reaching $961 million as a result of the growing adoption of its Snapdragon Digital Chassis.
Qualcomm’s Technology Licensing (QTL) segment generated $1.54 billion, an increase of 5% compared to the previous year. Despite the modest growth, the licensing segment remains a key contributor to Qualcomm’s revenue, underpinned by its solid 5G patent portfolio.
One-time events were largely absent from this quarter’s results, providing a clear picture of the company’s organic growth. Management didn’t declare any significant dividend changes, although the solid financial performance might sustain future shareholder returns. Qualcomm returned $2.7 billion to stockholders, including $942 million in cash dividends paid and $1.8 billion through repurchases of 11 million shares.
Looking Ahead
For the upcoming second quarter, Qualcomm established a revenue guidance in the range of $10.3 billion to $11.2 billion, with an adjusted EPS expectation of $2.70 to $2.90. The adjusted guidance reflects ongoing anticipation of solid demand in its diversified markets, albeit with acknowledged risks from shifting economic landscapes and market transitions.
Investors should watch Qualcomm’s continued push into automotive and IoT markets, as these areas are expected to play pivotal roles in future growth. Management has set a target of achieving $22 billion in non-handset revenue by fiscal 2029. As the company reduces its reliance on handheld devices, monitoring its strategic efforts to capture emerging markets will be crucial for its sustained momentum.
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