Why does non-GAAP EPS ($2.77) differ so much from GAAP EPS ($2.43)?

Non-GAAP results exclude share-based compensation ($0.48 per diluted share in the quarter), the QSI strategic investments segment ($0.11), and other items ($0.03), including acquisition-related charges, deferred compensation revaluation, and a tax benefit. Share-based compensation is the largest adjustment, so investors should assess how much of their view depends on treating it as a non-cash cost.

How strong is the shift away from handsets?

Handsets still represent the largest share of QCT revenue at $6.33 billion, or about 70% of QCT. However, Automotive and IoT together reached $2.67 billion, roughly 30% of QCT, and grew at about 23% compared with about 7% for handsets. The trend supports the diversification thesis, but handsets remain the dominant driver of total revenue.

Is Qualcomm's shareholder return sustainable given the rising debt?

The company returned $3.8 billion this quarter, and nine-month operating cash flow of $10.0 billion covered nine-month capital expenditures of $785 million, dividends of $2.85 billion, and buybacks of $6.35 billion. The gap was filled by net financing, including new long-term debt of $1.49 billion and cash reduction. Long-term debt increased by about $1.5 billion year to date, so the sustainability of returns depends on continued cash generation and the company's debt management.

What do the QTL licensing results indicate about the business?

QTL revenue grew 4% to $1.32 billion and its EBT margin was 71%, which highlights the high profitability of the patent licensing model. Growth was modest relative to the company's product businesses. Investors should monitor licensing renewals and OEM royalty disputes, which are listed as risk factors in the filing.

What should investors watch in the next filings?

Investors should review the full Business Outlook for fourth-quarter revenue and EPS guidance, which is not included in this excerpt, and track whether the accelerated buyback is completed in fiscal 2025. They should also watch the QCT Automotive and IoT growth rates, China exposure, and the accounting effects of the R&D capitalization requirement on tax expense.

QCOM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 30, 2025. Cited figures are marked; the original filing is the authoritative source.

Qualcomm reported fiscal third-quarter 2025 results (quarter ended June 29, 2025) with revenue of $10.37 billion^a, up 10% year over year.

GAAP diluted EPS was $2.43^b, up 29%, and non-GAAP diluted EPS was $2.77, up 19%. The growth was led by QCT, where revenue rose 11% to $8.99 billion. Within QCT, Automotive revenue grew 21% to a record $984 million and IoT grew 24% to $1.68 billion.

Combined, these diversification businesses grew about 23%, which supports management's thesis that the company is reducing its reliance on handsets. Handset revenue grew 7%, and QTL licensing revenue grew 4% to $1.32 billion^c. Capital returns were substantial.

Qualcomm returned $3.8 billion^d to stockholders in the quarter, including $967 million in dividends ($0.89 per share) and $2.8 billion in repurchases of 19 million shares. Nine-month repurchases totaled $6.3 billion, and management says it remains on track to meet its accelerated buyback commitment in fiscal 2025. Shares outstanding fell to 1,084 million from 1,113 million at the end of fiscal 2024.

Balance sheet changes merit attention: long-term debt rose to $14.8 billion from $13.3 billion, short-term debt was fully repaid, and $2.3 billion of cash is now classified as restricted. Nine-month operating cash flow was $10.0 billion. The excerpt does not include the full Business Outlook section, so the fourth-quarter guidance figures are not available here.

The filing does note that fourth-quarter GAAP EPS will be affected by the requirement to capitalize R&D expenditures for U.S. tax purposes, partly offset by acquisition-related items. Investors should review the complete press release and the earnings call for guidance details. Non-GAAP results exclude the QSI strategic investments segment, share-based compensation, and certain acquisition-related and other items, so GAAP and non-GAAP figures differ materially.

02—Key points

Key Highlights

Revenue rose 10% year over year to $10.37 billion. GAAP diluted EPS was $2.43 (up 29%), and non-GAAP diluted EPS was $2.77 (up 19%).
Diversification is advancing: QCT Automotive revenue grew 21% to a record $984 million, IoT grew 24% to $1.68 billion, and the two combined grew about 23%.
QCT revenue grew 11% to $8.99 billion, with QCT EBT margin expanding to 30% from 27%. Handset revenue grew 7% to $6.33 billion.
QTL licensing revenue rose 4% to $1.32 billion, and QTL EBT margin reached 71%.
Capital returned to stockholders totaled $3.8 billion in the quarter, including $967 million in dividends and $2.8 billion in buybacks of 19 million shares. Management says it is on track for its fiscal 2025 accelerated buyback commitment.
Long-term debt increased to $14.8 billion from $13.3 billion, and short-term debt was fully repaid. Restricted cash of $2.3 billion appeared on the balance sheet.
Business Outlook guidance is not included in the excerpt provided. The filing notes that fourth-quarter GAAP EPS will be affected by R&D capitalization for tax purposes.

03—Questions

Frequently Asked Questions

Why does non-GAAP EPS ($2.77) differ so much from GAAP EPS ($2.43)?
Non-GAAP results exclude share-based compensation ($0.48 per diluted share in the quarter), the QSI strategic investments segment ($0.11), and other items ($0.03), including acquisition-related charges, deferred compensation revaluation, and a tax benefit. Share-based compensation is the largest adjustment, so investors should assess how much of their view depends on treating it as a non-cash cost.
How strong is the shift away from handsets?
Handsets still represent the largest share of QCT revenue at $6.33 billion, or about 70% of QCT. However, Automotive and IoT together reached $2.67 billion, roughly 30% of QCT, and grew at about 23% compared with about 7% for handsets. The trend supports the diversification thesis, but handsets remain the dominant driver of total revenue.
Is Qualcomm's shareholder return sustainable given the rising debt?
The company returned $3.8 billion this quarter, and nine-month operating cash flow of $10.0 billion covered nine-month capital expenditures of $785 million, dividends of $2.85 billion, and buybacks of $6.35 billion. The gap was filled by net financing, including new long-term debt of $1.49 billion and cash reduction. Long-term debt increased by about $1.5 billion year to date, so the sustainability of returns depends on continued cash generation and the company's debt management.
What do the QTL licensing results indicate about the business?
QTL revenue grew 4% to $1.32 billion and its EBT margin was 71%, which highlights the high profitability of the patent licensing model. Growth was modest relative to the company's product businesses. Investors should monitor licensing renewals and OEM royalty disputes, which are listed as risk factors in the filing.
What should investors watch in the next filings?
Investors should review the full Business Outlook for fourth-quarter revenue and EPS guidance, which is not included in this excerpt, and track whether the accelerated buyback is completed in fiscal 2025. They should also watch the QCT Automotive and IoT growth rates, China exposure, and the accounting effects of the R&D capitalization requirement on tax expense.

04—Continue

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