01—Abstract
Summary
Summary of the 10-Q filed February 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Qualcomm Inc./DE (QCOM) reported total revenues of $12.25 billiona for the first quarter of fiscal 2026, a 5% increase year-over-year, driven by growth in both its Equipment and Services (QCT) and Licensing (QTL) segments.
QCT revenues rose 5% to $10.61 billionb, primarily due to higher shipments in handsets, automotive, and IoT. QTL revenues grew 4% to $1.59 billion, supported by increased cellular product sales. Despite the revenue growth, net income saw a 6% decrease to $3.0 billion, or $2.78 per diluted share, compared to $3.18 billion in the prior year.
This decrease was influenced by higher operating expenses, including increased R&D and SG&A costs, and a slight decrease in the QCT gross margin percentage. The company completed the significant acquisition of Alphawave IP Group plc for $2.3 billionc to bolster its expansion into data centers. Qualcomm also continues to return capital to shareholders, repurchasing $2.65 billion of its common stock and paying $949 million in dividends during the quarter.
The outlook remains cautious due to expected memory supply constraints impacting handset demand and continued intense competition, including vertical integration by key customers. Management anticipates these factors will negatively affect financial results in the coming quarters.
02—Key points
Key Highlights
- Total revenues increased 5% year-over-year to $12.25 billion, driven by strong performance in QCT and QTL segments.
- QCT segment revenue grew 5% to $10.61 billion, supported by increased shipments in handsets, automotive, and IoT.
- QTL segment revenue increased 4% to $1.59 billion, primarily due to higher estimated sales of cellular products.
- Net income decreased 6% to $3.00 billion, translating to $2.78 in diluted EPS, compared to $3.18 billion and $2.83 in the prior year, respectively.
- The company completed the acquisition of Alphawave IP Group plc for $2.3 billion to expand its presence in the data center market.
- Qualcomm returned significant capital to shareholders through $2.65 billion in stock repurchases and $949 million in dividend payments.
- Management forecasts challenges from memory supply constraints affecting handset demand and ongoing competitive pressures, including customer vertical integration.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Qualcomm Inc kept $0.25.
- Revenue$12.25B100.0%
- Cost of revenue−$5.57B45.4%
- Gross profit$6.68B54.6%
- Operating costs−$3.32B27.1%
- Operating income$3.37B27.5%
- Interest, other & tax−$362.0M3.0%
- Net income$3.00B24.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 4, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $12.25B$11.67B | +5.0% |
| Cost of Revenue | $5.57B$5.16B | +7.9% |
| Gross Profit | $6.68B$6.51B | +2.7% |
| R&D Expenses | $2.45B$2.23B | +10.0% |
| SG&A Expenses | $865.00M$723.00M | +19.6% |
| Operating Expenses | $8.89B$8.11B | +9.5% |
| Operating Income | $3.37B$3.56B | −5.3% |
| Interest Expense | $169.00M$163.00M | +3.7% |
| Net Income | $3.00B$3.18B | −5.5% |
| EPS (Basic) | $2.81$2.86 | −1.7% |
| EPS (Diluted) | $2.78$2.83 | −1.8% |
| Shares Outstanding (Basic) | 1.07B1.11B | −3.6% |
| Shares Outstanding (Diluted) | 1.08B1.12B | −3.8% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Qualcomm's revenue growth in this quarter?
Qualcomm's revenue growth of 5% to $12.25 billion was primarily driven by its QCT (Qualcomm CDMA Technologies) segment, which saw a 5% increase to $10.61 billion due to higher shipments in handsets, automotive, and IoT. The QTL (Qualcomm Technology Licensing) segment also contributed with a 4% revenue increase to $1.59 billion, largely due to an increase in estimated sales of cellular products.
Why did net income decrease despite revenue growth?
Net income decreased by 6% to $3.00 billion, or $2.78 per diluted share, compared to $3.18 billion in the prior year. This decline was influenced by an increase in operating expenses, specifically higher research and development (R&D) and selling, general and administrative (SG&A) costs. Additionally, the QCT segment experienced a slight decrease in its gross margin percentage, primarily due to unfavorable product costs.
What is the significance of the Alphawave acquisition?
Qualcomm completed the acquisition of Alphawave IP Group plc for $2.3 billion. This strategic move is intended to accelerate and provide key assets for Qualcomm's expansion into the data center market. Alphawave develops high-speed wired connectivity technologies, IP, custom silicon, and connectivity products.
What are Qualcomm's key concerns for the upcoming quarters?
Qualcomm anticipates challenges from ongoing memory supply constraints, which are expected to negatively impact demand from several handset customers. Additionally, the company expects continued intense competition, including vertical integration by some of its key customers (such as Apple developing its own modem products). These factors are anticipated to adversely affect financial results in the near term.
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