01—Abstract
Summary
Summary of the 10-K filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.
QUALCOMM's fiscal 2024 (ended September 29, 2024, a 53-week year) was a strong year on the top and bottom lines.
Revenue rose 9% to $39.0 billiona and net income jumped 40% to $10.1 billion, with diluted EPS of $8.97 versus $6.42 a year earlier. Growth came mainly from QCT (semiconductors), where revenue rose 9% to $33.2 billion on higher handset chipset shipments as OEM inventories normalized, plus automotive growth of 56%. IoT revenue fell 9%, reflecting unfavorable product mix.
QTL (licensing) revenue rose 5% to $5.6 billionb, and segment EBT margin improved to 72%. Gross margin was flat at 56%, and R&D fell as a share of revenue to 23%. Operating income rose 29% to $10.1 billion, and investment income increased sharply on higher interest rates and gains on strategic investments.
02—Key points
Key Highlights
- Revenue of $39.0 billion (+9% YoY) and net income of $10.1 billion (+40% YoY); diluted EPS of $8.97 vs. $6.42 in fiscal 2023
- QCT revenue up 9% to $33.2 billion, driven by $2.8 billion in higher chipset shipments as customer inventories normalized; automotive revenue rose 56% to $2.9 billion while IoT fell 9% to $5.4 billion
- QTL licensing revenue up 5% to $5.6 billion with a 72% segment EBT margin, supported by 3G/4G/5G multimode product sales growth
- Customer concentration remains high: Apple, Samsung and Xiaomi each exceeded 10% of revenue; China accounts for 46% of revenue by customer headquarters location
- Revoked U.S. export license for Huawei (May 2024) eliminates future Huawei product revenue; fiscal 2024 Huawei revenue was about $560 million before the revocation
- Capital returns of $7.8 billion in fiscal 2024 (about $4.1 billion in buybacks and $3.7 billion in dividends); a new $15.0 billion repurchase authorization was announced November 6, 2024, and the quarterly dividend was raised to $0.85 per share
- Ongoing legal risk includes the Arm v. Qualcomm dispute over Nuvia-derived CPU designs (trial scheduled for December 2024), the U.S. consumer class action appeal, and the ParkerVision reversal; no loss accrual has been recorded
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Qualcomm Inc kept $0.26.
- Revenue$38.96B100.0%
- Cost of revenue−$17.06B43.8%
- Gross profit$21.90B56.2%
- Operating costs−$11.83B30.4%
- Operating income$10.07B25.8%
- Interest, other & tax$71.0M0.2%
- Net income$10.14B26.0%
Where FY2024 revenue went
$38.96B- Cost of revenue: $17.06B, 44% of revenue
- Operating income: $10.07B, 26% of revenue
- R&D: $8.89B, 23% of revenue
- SG&A: $2.76B, 7.1% of revenue
Kept 26% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 6, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $38.96B$35.82B | +8.8% |
| Cost of Revenue | $17.06B$15.87B | +7.5% |
| Gross Profit | $21.90B$19.95B | +9.8% |
| R&D Expenses | $8.89B$8.82B | +0.9% |
| SG&A Expenses | $2.76B$2.48B | +11.1% |
| Operating Expenses | $28.89B$28.03B | +3.1% |
| Operating Income | $10.07B$7.79B | +29.3% |
| Interest Expense | $697.00M$694.00M | +0.4% |
| Net Income | $10.14B$7.23B | +40.2% |
| EPS (Basic) | $9.09$6.47 | +40.5% |
| EPS (Diluted) | $8.97$6.42 | +39.7% |
| Shares Outstanding (Basic) | 1.12B1.12B | −0.1% |
| Shares Outstanding (Diluted) | 1.13B1.13B | +0.4% |
05—Questions
Frequently Asked Questions
Why did net income grow 40% when revenue grew only 9%?
Operating income rose about 29% to $10.1 billion on revenue growth and a $683 million decline in other expenses (restructuring and a securities settlement in fiscal 2024 versus larger restructuring and an impairment in fiscal 2023). Investment and other income also rose $613 million to $962 million, mainly from higher interest income and gains on strategic investments. The effective tax rate stayed very low at 2%, due largely to FDII deductions and a $317 million intellectual property transfer benefit.
How exposed is Qualcomm to Apple, Samsung and China?
Concentration is significant. Apple, Samsung and Xiaomi each represented 10% or more of fiscal 2024 revenue, and China (including Hong Kong) represented 46% of revenue by customer headquarters. Apple has moved to its own modem products, Samsung develops its own chips, and Chinese OEMs face U.S.-China trade and national security restrictions. These factors are the main threats to the chipset business.
What is the outlook for the automotive and IoT businesses?
Automotive is the clearest growth engine, with revenue up 56% to $2.9 billion on Snapdragon digital cockpit and connectivity wins. IoT declined 9% to $5.4 billion because of unfavorable mix and customers drawing down elevated inventory. Management expects demand to remain strong in these markets, but both segments still represent a small share of total revenue relative to handsets, and automotive faces long design-in cycles.
What are the main balance sheet and cash flow considerations?
Cash, cash equivalents and marketable securities rose to $13.3 billion, and debt declined to $14.6 billion. Operating cash flow was $12.2 billion, but cash taxes exceeded the provision because of the requirement to capitalize R&D expenditures for tax purposes, which is expected to ease over time. Purchase obligations were $12.8 billion, and capital expenditures are expected to rise from $1.0 billion. Shareholder returns of $7.8 billion exceeded free cash flow of about $11.2 billion minus payments, so the capital return program is large relative to near-term cash generation.
What licensing risks could affect future royalty revenue?
Several license agreements expire in fiscal 2025, including with Huawei, and renewals may be less favorable or require arbitration. Qualcomm is litigating against Transsion, a China-based OEM, over unlicensed products. Regulators and courts in multiple jurisdictions are challenging its patent licensing practices, and adverse outcomes could reduce royalty rates or the royalty base. Because licensing carries high margins, any decline would have a disproportionate effect on cash available for R&D.
06—Continue