QCOM earnings call transcript, November 4, 2026

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm fourth quarter fiscal 2026 earnings conference call. At this time, all participants are in listen-only mode.

Later, we'll conduct a question and answer session. If you'd like to ask a question during this time, press star, then a number one on your telephone. To withdraw your question, press star, then a number two. If you're using a speakerphone, please pick up your handset before pressing the numbers. Please limit your questions to one question and one follow-up. As a reminder, this conference is being recorded November 4th, 2026. The playback number for today's call is 877-777-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-877-8

Simpson. Please go ahead.

Thank you, and good afternoon, everyone. Today's call will include prepared remarks by Cristiano Amon and Akash Pakwala.

In addition, Alex Rogers will join the question and answer session. You can access our earnings release and a slide presentation that will accompany this call on our investor-related... In addition, this call is being webcast on qualcomm.com and a replay will be available on our website later today. During the call today, we will use non-GAAP financial measures as defined in Regulation G and you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements. including projections and estimates of future events, business or industry trends, or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. Please refer to our SEC filings, including our most recent 10K, which contain important... ...factors that could cause actual results to differ materially from the forward-looking statements. And now to comments from Qualcomm's President and Chief Executive Officer, Cristiano Amon.

Thank you, Brett, and good afternoon, everyone. In fiscal Q4, we deliver non-GAAP revenues of $10.4 billion in non-GAAP... ...earnings per share of $2.17. QCT revenues of $9 billion, up 6% sequentially, were at the high end of our guidance. Licensing business revenues were $1.3 billion. For fiscal 26, we reported non-GAAP revenues of $43.8 billion... ...in QCT revenues of $37.2 billion, highlighted by year-over-year revenue growth of 24% across combined automotive and IoT. We close fiscal 26 with many of the uncertainties that have been weighing on our business now behind us. Specifically, QTL license renewals, the loss of Apple as a customer, and the negative impact of memory pricing on the size of the mobile industry. Regarding the latter, the June quarter marked the low point for our China Android business, and we have seen sequential growth this quarter. ...going forward. Our plan assumes global handset units will remain flat to down in calendar 27. The timing and shape of the Apple modem transition is fully incorporated in how we're planning the business, and it's well understood at this point. We also renew important QTL licensing agreements... including Apple and Huawei. Now, we enter fiscal 27 as a broader, more diversified Qualcomm with strong momentum and significant opportunities ahead. First, non-handset revenues in QCT will grow by more than 60% year-over-year. Second, our data center business begins its ramp with revenues expected to exceed $650 million in the December quarter.

Third, automotive revenues reach an $8 billion annualized run rate exiting fiscal 26, $1 billion ahead. of expectations. Fourth, we establish a solid foundation in how agentic AI transforms the edge and leads to new product categories for Qualcomm. And finally, we reach a landmark agreement with SpaceX to power their nationwide terrestrial 5G network in the U.S. Our technology investments are aligned with the direction the industry is moving. We've made key acquisitions to build on our hardware and software capabilities as we evolve into a full-stack semiconductor company. We announced strategic agreements with industry leaders, including Meta, Amazon, BMW. and Stellantis with more to come, and our design wind pipeline across the company grew 70% year over year. This is the backdrop that positions Qualcomm to deliver on our fiscal 29 targets of $40 billion in non-Handset revenues with over $15 billion. coming from data center. Now I will focus on the areas that are top of mind for investors. Let me start with licensing, where we reached a milestone this quarter. We're extremely pleased with our renewals with Apple, Huawei, and Transient. These agreements provide stability for QT. as we move to the 6G era. They also demonstrate the enduring value of our IP and patent portfolio. And just as in every prior generation, we expect our inventions to be foundational to 6G. Importantly, our QT.L. revenue run rate remains.

Unchanged. The next renewal cycle begins in fiscal 2030 and runs through fiscal 2033. Licensing gives QCOM a durable, highly profitable foundation as we scale our next set of growth opportunities. Data center is another area where we made considerable progress this quarter. It's one of our top strategic priorities and a major focus of my own time as we build this business around long-term customer relationships, a broad product portfolio, and an open software ecosystem. AWS is a good example. Our agreement... ...spans multiple product generations across custom silicon for AI inference and optical connectivity. Custom accelerators began shipping in October in our connectivity solutions with AWS ramped later this month. We also secure a second optical connectivity customer. With Qualcomm... ...AI bandwidth compute, our AI 250 silicon is exceeding our expectations for power efficiency and bandwidth, and early yields are on track. These results are generating significant entrance from AI customers and memory partners, and we added two major prospects in the quarter. Our Dragonfly C1000 CPU remains on track to ship to META as scheduled, and we engage with a large new potential customer. We're optimistic about the opportunities we have today with our high-speed connectivity solutions such as optical DSPs, and we are investing... ...in bringing optics directly alongside our XPUs and custom silicon, as we demonstrated with Lumenton and Corning at ECOG 2026. In software, our full-stack integration with Modular is progressing well. Modular is delivering impressive performance as an open...

...multivendor stack running on NVIDIA and AMD GPUs, Amazon Tranium, and Google TPU. Optimization for Qualcomm accelerators is also underway. Last month, Modular made the full MAC source code available, and this builds on open sourcing the Mojo language in August. We're also excited that Modular Cloud went live during the September quarter and is already processing tens of trillions of tokens per month. We'll share more details soon about how our ecosystem partners are using Modular Cloud. Our data center business is off to a strong start. We are reiterating our $5 billion revenue on YouTube. target for fiscal 27 with healthy order covers supporting continued revenue growth in fiscal 28. In automotive, we exit fiscal 26 at an annualized revenue run rate of approximately $8 billion, well above the $7 billion expectations we provided last quarter. Additionally, fiscal... Fourth quarter automotive revenue grew nearly 90% year-over-year. Commercial shipments of our fifth-generation Snapdragon digital chassis began in the September quarter and will continue to ramp in fiscal 2027. As a reminder, this platform is our most advanced to date, delivering a significant... ...increase in performance and represents our largest generation-to-generation content increase in Qualcomm's history. Our products also evolved from SoCs to integrated compute modules. Customer demand remains strong across our portfolio and Qualcomm is positioned to become one of the largest automotives...

...semiconductor suppliers by revenue in fiscal 2027. In robotics, our premium-tier Dragon Wing IQ10 processor is set to begin its commercial ramp and continues to generate strong customer momentum. During the quarter, ecosystem partners demonstrated AI models of up to 80 billion parameters... ...running directly on IQ10. In fiscal 2027, we will continue to expand the technologies and capabilities across our robotics platforms. As we anticipated, the proliferation and capability of AI agents is increasing rapidly, and we're seeing growing consumer adoption as a result. A prime example is Meta Muse, which reached over 10 million downloads in just 40 days. We're also seeing more companies designing experiences and devices around agents. This includes agentic smartphones, smart glasses, and other new personal AI form factors. Meta's audio AI... ...glasses, Muse Charm, Gemini Eyewear, and Alibaba's SQUIN AI glasses are recent examples of intelligent wearables with more to come over the next year. The smartphone is an essential device for agentic experiences as it's the device that knows people best. It's always with them. and has their contacts, preferences, and permissions. The device is also evolving to simultaneously support what the user is doing and what agents are doing on the user's behalf. Delivering these experiences will require greater computing performance, power efficiency, and connectivity which play directly to Qualcomm's strengths.

More of our customers are already building agentic features into their flagship devices, and we're pleased to share that the world's first agentic smartphones were launched on Snapdragon. Heading into fiscal 2027, we're pleased with our premium tier Android share position, and we expect it to strengthen. As the transition to agentic smartphones drive an increase in computing content per device. For perspective, leading AI companies are targeting smartphones by 2028 capable of running 100 billion power meter models locally with an all-day battery life. Reaching this goal will require a... step function change in on-device compute performance. Finally, I'm very proud to share that SpaceX selected Qualcomm to power Starlink's mobile's nationwide terrestrial 5G network in the U.S. Starlink is building one of the most ambitious new cellular networks in the country. and our Dragon Wing infrastructure platforms will bring together advanced massive MIMO, purpose-built RAM processing, and commercial-grade Layer 1 software. Under a multi-year agreement, deployment begins in 2027, and it is expected to be one of the largest 5G deployments in the United States. Together, we have an opportunity to advance United States wireless leadership, starting with 5G, and the convergence of satellite and terrestrial connectivity. This new architecture establishes a foundation for next-generation connectivity and network intelligence. This is a significant win for our...

...infrastructure business in the beginning of a strategic relationship with tremendous potential. Before I close, I would like to briefly address our litigation with ARM. We're gratified that the jury found ARM breached its long-standing architecture license agreement, ALA, with Qualcomm, failed to honor its commitments. Intentionally acted to disrupt Qualcomm's business and engage in unfair competition, both as a supplier and a competitor. Together with Qualcomm's prior court victory, this outcome further exposes ARM's intentions to harm Qualcomm and its ecosystem. This outcome is a victory for innovation and competition. We remain focused on developing and delivering industry-leading semiconductor products, including our Orion CPUs, to customers and consumers worldwide, from mobile to data center. In summary, we enter fiscal 2027, having made important progress against the ambitious growth plan. We outline at Investor Day. Since then, we've signed major strategic agreements and positioned our data center business to ramp at scale. We remain focused on execution as we build the next chapter for Qualcomm, and we're confident in delivering on our fiscal 2029 targets. With that, I'll turn it over.

Thank you, Christiano, and good afternoon, everyone. Let me begin with our results for the fourth fiscal quarter. We delivered non-GAAP revenues of $10.4 billion and EPS of $2.17 with revenues at the high end of our guidance. QTL revenues of $1.3 billion and EBT margin. of 70% were in line with our expectations. QCT revenues of $9 billion were at the high end of our guidance and EBT margin of 24% was in line with expectations. QCT handset revenues of $5.1 billion reflected the impact of industry-wide memory dynamics on the global smartphone market. At QCT Automotive, we delivered our first $2 billion revenue quarter with 89% year-over-year growth, driven by the growing adoption of integrated module products for our fifth-generation compute platforms. QCT IoT revenues of $1.9 billion were up 4% year-over-year, led by our industrial networking. QCT and robotics category of products, which grew 20% versus the year-ago period, offset by the impact of memory constraints on consumer products. Total non-Handset revenues in QCT, including automotive and IoT, grew 36% year-over-year, underscoring the continued execution of our growth initiatives. Lastly, we return to QCT. $2 billion to stockholders, including $1 billion each, in share repurchases and dividends. Before turning to guidance, I'd like to provide an update on a couple factors reflected in our financial performance. First, in QTL, we have now completed long-term license agreements with Apple, Huawei, and Transient, and do not have any upcoming license renewals.

with major handset OEMs for the next several years. Following these agreements, QTL revenue run rate and long-term revenue forecast remains unchanged. Second, as we outlined last quarter, we're implementing price increases across our products to reflect the higher semiconductor input costs. We expect the full benefit of these actions to be reflected in UCT gross margins in the second half of fiscal 27. Finally, we're excited that fiscal 27 marks an important milestone for our data center business as we transition from customer engagements to revenue generation. Our first fiscal quarter guidance reflects the commencement of shipments to two hyperscaler customers for custom silicon engagement. As we've discussed previously, we expect these custom silicon engagements to be accretive to QCT operating margins but dilutive to gross margins. These factors are reflected in our fourth quarter performance and first quarter outlook. I'll now provide our guidance for the first fiscal quarter. We are forecasting revenues of $10.4 to $11.2 billion. And non-GAAP EPS of $2.15 to $2.35. In QTL, we estimate revenues of $1.3 to $1.5 billion and EBT margins of 72% to 76%, reflecting normal seasonal trends. In QCT, we expect revenues of $9 to $9.6 billion. And EBT margins of 20% to 22%. Please note that QCT EBT margin guidance includes an impact of three percentage points due to the addition of data center in the QCT segment starting in fiscal 27 and reflects investments for AI accelerator and CPU platform ahead of revenue ramp.

Importantly, this segmentation change has no impact on total company guidance or on our long-term QCT EBT margin target of 30%. We forecast QCT handset revenues to decline by a mid-single-digit percentage sequentially as growth in Android revenues is offset by the continued ramp-down in app. In QCT data center, we expect revenues of greater than $650 million driven by commencements of shipments to custom silicon customers. We expect combined QCT automotive and IoT revenues to be approximately flat sequentially. Lastly, we anticipate non-cap operating expenses to be approximately 2%. $2.8 billion in the quarter. Before I conclude my prepared remarks, I'd like to outline the progress in the execution of our growth strategy. In fiscal 27, we expect to achieve two key milestones for revenue diversification. First, non-Hansat revenues in QCT across automotive IoT and data center will grow by greater than 60%. On a year-over-year basis, starting in the first fiscal quarter. Second, non-Hansat revenues will represent more than 50% of QCT revenues in the fiscal year. In data center, we're executing to the revenue targets we outlined at investor day, including $5 billion in fiscal 27 and $15 billion in fiscal 29. We expect data center revenues to scale throughout fiscal 27, exiting the year at a $7 billion run rate. We're also expanding our customer engagement pipeline across additional global hyperscalers, including the long-term strategic agreement with Amazon Web Services, with a potential revenue opportunity of up to $60 billion.

over the next 10 years. During the quarter, we also successfully validated our high-bandwidth compute technology in lab trials, marking a key milestone in delivering an innovative AI inference accelerator solution designed to address the memory bandwidth challenge in data centers. We are also well-positioned to lead other key industry trends. Including the transition to agentic AI in consumer devices and the adoption of physical AI across automotive, industrial, and robotics. Finally, we would like to thank our employees for their exceptional execution and innovation throughout fiscal 26. Their commitment enables us to deliver industry-leading products to customers around the world.

This concludes our preparation.

Back to you, Brett.

Thank you, Akash.

Operator, we are now ready for questions. Thank you. To queue a question, press star, then a number one. To withdraw your question, press star two. If you're using a speakerphone, please pick up your handset before pressing the numbers. One moment, please, for the first question.

The first question comes from the line of Joshua Buckhalter with TD Cowan.

The next question is from the line of Joseph Cardoso with JPMorgan. Please receive your questions.

The next question is in the line of Joe Moore with Morgan Stanley.

Pleased to see you with your questions. Great. Thank you. In terms of the royalty rate, you sort of said that the revenue run rate of QPL is unchanged. Is that, you know, the rate per device kind of similar as you look at these new contracts that you signed? Is there any change there? I assume that's right, but I just want to make sure. Yeah, Joe, you should, you should, we obviously don't specifically talk about the details of the contract, the confidential, but I do. We are indicating that the revenue run rate remains the same, which you should take it as we were able to hold the rates and the royalties as we, as we renewed the contracts. Great. That's helpful. And then separately, on the Amazon deal, the warrant structure that you have there, do you view that as kind of the model? For approaching other customers, do you expect to have those types of warrant arrangements or is that unique to that specific relationship? Well, if you look at our general set of engagements across data centers, the engagements are very traditional, normal kind of customer engagements in the semiconductor industry. The Amazon warrant structure. is the exception. And as you know, the warrants that we issued were at the money warrants. So that's the only exception that we have at this point. And I think as we consider data center engagements going forward, we'll look at other structures on a deal-by-deal basis, but you should think of our framework.

As being aligned with the traditional semiconductor model.

The next question is from the line of Timothy Akuri with UBS. Please receive your questions.

Our next question is from the line of Stacey Raskin with Bernstein Research. Please receive your question.

Our next question is from the line of Ben Riches with Mellius Research. Pleased to see if you have questions.

The next question is from the line of Vivek Arya with Bank of America. Please proceed with your questions.

The next questions are from the line of Jim Schneider with Goldman Sachs. Please proceed with your questions.

Good afternoon.

Thanks for taking my question.

I was wondering if you could maybe just kind of clarify. Relative to the three distinct hyperscale customers that you're ramping through fiscal 27, will all three of those be at some kind of revenue materiality exiting the year, or will it just be maybe two of them and one will kind of fall outside the year? Thank you. Yeah, you should think of... Two of those customers at a very significant scale making up that $5 billion, and they will extend into fiscal 28 and then 29 as well. So think of it as a long-term, multi-generation, multi-product relationship, and both the relationships are at scale.

Thank you. And then, you know, as we model fiscal 27, you provide some helpful overall EBIT margin commentary in terms of the profile of the year. But is there any way to think about OPEX? And specifically, is there any kind of material OPEX step up that we should be thinking about during the course of fiscal 27? Thanks. Yeah, I think you should just think of our OPEX approach as consistent over the last year. We're guiding $2.8 billion for the September quarter. And the focus on OPEX is really kind of bringing in new skills that don't exist in the company as we diversify, especially within data center. And that will continue to be the focus area for us going forward. Just maybe one timing thing is just we typically have calendar year employee-related expenses reset when we get to January. So that will happen. But that's kind of consistent with previous years that you've seen.

Thank you.

Our final questions from the line of Chris Queso with Wolf Research. Please receive your questions. Yes.

Good evening.

I guess first question is with regard to the Starlink announcement you made this morning. Could you give some more color on that in terms of timing, magnitude? And what Qualcomm is providing into that venture? Yes.

Thanks for the question, Chris.

So timing, I think we're talking about 27. You should think about from a financial standpoint, it will start to appear as we exit fiscal 27. It's more of a fiscal 28. Revenue standpoint. Magnitude, I think that what we can say at this point, and I think it's probably how we both articulated into the announcement is a nationwide network in the United States and probably one of the largest build out of a network. It's terrestrial network. We provide silicon content for radio, including massive MIMO, as well as the accelerator for the digital unit, and we provide software on the layer one. It's a great partnership with SpaceX for next generation, I think. Infrastructure, the industry has been running on dedicated equipment. I think, you know, we have seen a lot of trends of technology ranging from open RAN to AI native. It's an opportunity to innovate in this space, and as we talk about it, it's a multi-year. agreement, and including how we're going to be thinking about the next generation of wireless as well. We're very proud of this announcement. I think it's great. Also, from the United States technology leadership standpoint, and we're going to be executing on it.

Great. As a follow-up question, I wanted you to give some color. And, you know, I know you talked a bit about this in the analyst day, but in terms of what product categories are in the data center revenue in the $5 billion in fiscal 27 and when other products layer in. And, you know, obviously for near term for this year, is it all connectivity revenue? Is there assuming that there's no accelerator revenue in the numbers for the $5 billion that comes in 27? Chris, so for the $5 billion, most of that revenue is actually custom silicon engagement for the main AI accelerator at our two hyperscaler customers. The next category that's material in the $5 billion in fiscal 27 is the connectivity revenue. So you should think of... those as driving the FY27 revenue ramp. When you think about the $15 billion revenue in 29, that will be inclusive of the custom silicon engagement, expansion in connectivity, but then we'll also have... CPU and AI accelerator both coming in, and that's why we feel confident about achieving the $15 billion and really going beyond that as we execute on the product roadmap, given how good our technology is looking and the interest that we're seeing from various hyperscalers.

Thank you. That concludes today's question and answer session. Mr. Ramon, do you have anything further to add before adjourning the call? No, I just wanted to thank our employees and our partners. As I said in my prepared remarks, this is an important, I think, close of a fiscal year for QCOM, and it really positioned us to start fiscal 27 with all of the things that are within our control and focus on growing in a much more diversified company. We're very excited about that. We have a lot of things we're doing in parallel, but I guess we develop that capability as we diversify the company, and we're excited about our future. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.