10-QPeriod: Q3 FY2022

QUALCOMM INC/DE Quarterly Report for Q3 Ended Jun 26, 2022

Filed July 27, 2022For Securities:QCOM

Summary

Qualcomm Inc./DE (QCOM) reported a strong third quarter for fiscal year 2022, with total revenues reaching $10.9 billion, a significant 36% increase year-over-year. This growth was primarily driven by a substantial 45% surge in QCT (Qualcomm CDMA Technologies) revenues, fueled by higher average selling prices and increased chipset shipments in handsets, alongside robust IoT revenue growth. Net income also saw a substantial increase of 84% to $3.7 billion, demonstrating effective cost management and the benefits of higher sales. A notable event in the quarter was the annulment of the European Commission's 2018 decision and associated fine by the General Court of the European Union, resulting in a significant $1.1 billion benefit to other income. This, combined with strong operational performance, paints a positive financial picture for the period. The company continues to invest heavily in R&D, particularly in 5G and application processor technologies, underscoring its commitment to future innovation. While the company anticipates some headwinds from a global slowdown in consumer demand for electronics, it expects QCT revenues to remain favorably impacted year-over-year in the fourth quarter. Qualcomm also notes a generally balanced supply and demand environment within the semiconductor industry. Investors should monitor the ongoing investments in new technologies, competition, and potential impacts from geopolitical tensions, particularly those involving China.

Financial Highlights

50 data points
Beta

Revenue

$10.94B

56.0% Gross Margin

Net Income

$3.73B

34.1% Net Margin

EPS (Diluted)

$3.29

Total Assets

$47.02B

Cash & Equivalents

$2.68B

Free Cash Flow

$2.90B

Financial Statements
Beta
Revenue$10.94B
Cost of Revenue$4.82B
Gross Profit$6.12B
R&D Expenses$2.05B
SG&A Expenses$655.00M
Operating Expenses$6.46B
Operating Income$4.47B
Interest Expense$70.00M
Net Income$3.73B
EPS (Basic)$3.32
EPS (Diluted)$3.29
Shares Outstanding (Basic)1.12B
Shares Outstanding (Diluted)1.13B

Key Highlights

  • 1Total revenues increased by 36% year-over-year to $10.9 billion in Q3 FY2022.
  • 2QCT segment revenues surged by 45% year-over-year, driven by strong performance in handsets and IoT.
  • 3Net income grew by 84% year-over-year to $3.7 billion.
  • 4A $1.1 billion benefit was recorded in 'Other income' due to the annulment of a European Commission fine.
  • 5R&D expenses increased by $188 million year-over-year, reflecting continued investment in 5G and processor technologies.
  • 6The company repurchased $2.6 billion of its common stock in the first nine months of FY2022 and declared a $0.75 per share dividend.
  • 7Long-term debt increased slightly with the issuance of $1.5 billion in fixed-rate notes.

Frequently Asked Questions

The primary driver of Qualcomm's revenue growth in Q3 FY2022 was the significant increase in its QCT (Qualcomm CDMA Technologies) segment, which saw a 45% year-over-year increase. This growth was attributed to higher average selling prices and increased chipset shipments in handsets, as well as strong performance in the Internet of Things (IoT) sector.

The annulment of the European Commission's 2018 decision and associated fine by the General Court of the European Union resulted in a $1.1 billion benefit being recorded in 'Other income' during the third quarter of fiscal year 2022. This significantly boosted the company's reported net income for the period.

Qualcomm expects QCT revenues to continue to be favorably impacted year-over-year in the fourth fiscal quarter, despite a reported decline in global demand for handsets and other consumer products due to the macroeconomic environment and supply chain complexities. Key factors influencing the outlook include ongoing commercial 5G network deployments and device launches, continued R&D investments, intense competition, and potential impacts from U.S./China trade relations.

Qualcomm is returning capital to shareholders through a combination of stock repurchases and dividends. In the first nine months of fiscal year 2022, the company repurchased $2.6 billion of its common stock under a $10 billion program and paid $2.4 billion in cash dividends. A quarterly dividend of $0.75 per share was also announced for the current quarter.