10-QPeriod: Q1 FY2024

QUALCOMM INC/DE Quarterly Report for Q1 Ended Dec 24, 2023

Filed January 31, 2024For Securities:QCOM

Summary

Qualcomm Inc. reported strong results for the first quarter of fiscal year 2024, with total revenues of $9.9 billion, up 5% year-over-year, and net income of $2.8 billion, a substantial 24% increase. This growth was primarily driven by a 7% rise in QCT (Qualcomm CDMA Technologies) revenues, fueled by higher handset and automotive sales, despite a slight decrease in IoT revenue. The QCT segment saw improved handset performance due to normalization of customer inventory levels and accelerated device launches. Additionally, Automotive revenues experienced a notable increase. The QTL (Qualcomm Technology Licensing) segment experienced a 4% decrease in revenue, largely attributed to the conclusion of upfront license fee recognition from a prior agreement with Nokia. However, the segment's Earnings Before Taxes (EBT) margin remained strong at 74%. The company continues to manage its expenses effectively, with a notable decrease in R&D spending due to restructuring actions, contributing to the overall increase in profitability. Qualcomm also highlighted its ongoing commitment to returning capital to shareholders through dividends and share repurchases, with $4.4 billion remaining authorization under its current repurchase program.

Financial Highlights

47 data points
Beta

Revenue

$9.94B

56.6% Gross Margin

Net Income

$2.77B

27.9% Net Margin

EPS (Diluted)

$2.46

Total Assets

$52.13B

Cash & Equivalents

$8.19B

Free Cash Flow

$2.95B

Financial Statements
Beta
Revenue$9.94B
Cost of Revenue$4.31B
Gross Profit$5.62B
R&D Expenses$2.10B
SG&A Expenses$627.00M
Operating Expenses$7.01B
Operating Income$2.93B
Interest Expense$178.00M
Net Income$2.77B
EPS (Basic)$2.48
EPS (Diluted)$2.46
Shares Outstanding (Basic)1.12B
Shares Outstanding (Diluted)1.13B

Key Highlights

  • 1Total revenues increased by 5% year-over-year to $9.9 billion.
  • 2Net income grew by a significant 24% year-over-year to $2.8 billion.
  • 3QCT segment revenues rose 7%, driven by strong performance in Handsets and Automotive, offsetting a decline in IoT.
  • 4Automotive revenue showed robust growth, indicating success in diversifying beyond mobile handsets.
  • 5QTL segment revenue decreased slightly by 4%, but maintained a high EBT margin of 74%.
  • 6Research and Development expenses decreased due to restructuring, contributing to improved operating leverage.
  • 7The company continued its capital return program, paying dividends and repurchasing shares.

Frequently Asked Questions

Revenue growth was primarily driven by a 7% increase in QCT revenues, fueled by higher handset and automotive sales. The handset segment benefited from the normalization of customer inventory levels and accelerated device launches. Automotive revenues also saw a significant increase, reflecting the company's diversification efforts.

QTL revenues decreased by 4% primarily due to the ending of the recognition of certain upfront license fee consideration from a long-term license agreement with Nokia in the prior year's quarter. Despite the revenue decrease, the QTL segment maintained a strong EBT margin of 74%, indicating its continued profitability and importance to Qualcomm's business.

Qualcomm effectively managed its expenses, notably reducing R&D expenses by $155 million year-over-year. This reduction was primarily due to cost-saving measures from restructuring actions initiated in fiscal 2023. These expense controls, combined with revenue growth, led to a significant 24% increase in net income, demonstrating improved operating leverage.

Qualcomm continues to return capital to shareholders through a combination of cash dividends and stock repurchases. In the first quarter of fiscal 2024, the company paid $895 million in dividends and $784 million to repurchase shares. As of December 24, 2023, $4.4 billion remained authorized for repurchase under its existing program, which has no expiration date.