- Revenue and Earnings: Qualcomm reported $10.4 billion in revenue with non-GAAP EPS of $2.77, driven by strong chipset sales.
- Chipset Growth: Chipset business earned $9 billion, with automotive and IoT growing 21% and 24% year-over-year.
- Automotive and IoT Target: The company is on track to meet its $22 billion combined automotive and IoT revenue target for fiscal '29.
- Windows Laptop Market Share: Snapdragon-based PCs captured 9% of Windows laptops sold above $600 in the second calendar quarter of 2025.
- Stockholder Returns: Qualcomm returned $3.8 billion to stockholders, including $2.8 billion in buybacks and $967 million in dividends.
Segment Performance
The chipset business, QCT, saw significant growth in automotive and IoT, which now account for a larger portion of revenues. Management highlighted that the company is on track to meet its fiscal '29 target for combined automotive and IoT revenues of $22 billion. In handsets, Qualcomm extended its Xiaomi collaboration with a multiyear agreement, a positive for future revenue growth. The Snapdragon Summit event, scheduled for September 23-25, is expected to provide updates on new chip launches and flagship devices.
Guidance and Outlook
For the fourth quarter, Qualcomm forecasts revenues of $10.3 billion to $11.1 billion and non-GAAP EPS of $2.75 to $2.95. Guidance implies high single-digit growth, robust considering the loss of Apple revenues. Normal seasonal trends are expected in the December quarter, adjusted for lower Apple volume. The Chinese OEMs' launch timing and extra week in the quarter last year will have an impact. Analysts estimate next year's revenue growth at 2.1%.
Valuation and Financials
At current prices, Qualcomm trades at a P/E Ratio of 13.98, a P/B Ratio of 5.95, and a P/S Ratio of 3.7. The EV/EBITDA multiple stands at 12.69, while the Dividend Yield is 2.32%. The Free Cash Flow Yield is 7.27%, with a ROIC of 25.24% and ROE of 42.85%. Net Debt / EBITDA is 0.7. These metrics suggest that the stock may offer a relatively attractive valuation, considering its growth prospects.
Strategic Developments
Qualcomm acquired Alphawave IP Group plc, a global leader in high-speed wire connectivity and compute technologies for data centers, for $2.4 billion. The company is in advanced discussions with a leading hyperscaler, with potential revenues starting in the fiscal '28 time frame. A Memorandum of Understanding (MOU) was signed with HUMAIN to develop AI data centers in Saudi Arabia. These strategic moves position Qualcomm for growth in emerging areas.