[QCOM] Qualcomm: Q4 FY2026 earnings preview on Android recovery and Apple modem loss

Qualcomm, one of the world's main smartphone chip designers and cellular patent licensors, is scheduled to hold its earnings call on 2026-11-04[1], reporting results for the fourth quarter of fiscal 2026, the three months ended September 27, 2026[2]. Ahead of that Qualcomm Q4 FY2026 earnings preview, the latest disclosed period is the third quarter of fiscal 2026, ended June 28, 2026: revenue was $9.947 billion, down 4% year over year, and net income was $2.002 billion, down 25%[3]. Inside the chip business (QCT), handset revenue was $5.086 billion, down 20%, while automotive revenue was $1.588 billion, up 61%[4], and gross margin was about 53.1% against about 55.6% a year earlier[5]. The company guided fourth-quarter revenue to $9.7 billion to $10.5 billion and non-GAAP diluted EPS to $2.05 to $2.25, including handset revenue of about $5.2 billion and a QCT pre-tax (EBT) margin of 23% to 25%[2][6]. The revenue consensus compiled by Drillr from 17 analysts is $10.147 billion, and the EPS consensus from 18 analysts is $2.17; both sit inside the company's guidance ranges[7].

Three things matter most in this report. The first is whether handset revenue holds at about $5.2 billion: June-quarter handset revenue was $1.242 billion lower than a year earlier, more than QCT's overall decline of $489 million[4], and management said sequential Android growth in the fourth quarter would be offset by materially lower Apple revenue[6], so the actual figure will show whether Chinese Android customers have really begun rebuilding after the memory shortage. The second is where the chip business's margin lands within the 23% to 25% guidance: QCT's EBT margin already fell from 30% a year earlier to 26% in the June quarter[8], the company said its double-digit price increases will phase in as contracts expire[9], and the fourth quarter therefore tests both how fast costs are being passed through and whether $8.379 billion of inventory can start to come down[10]. The third is whether automotive revenue grows about 60% year over year as the company said, and whether the December-quarter outlook starts to include data center revenue[6][11]; the company treats these two businesses as the main replacement for lost Apple revenue, and whether they ramp on time decides whether the fiscal 2027 revenue mix shifts as planned[12].

Company Background and Business Structure

Qualcomm is a chip and patent company built on wireless communications technology: most of its revenue comes from chip sales, while a large share of its profit comes from patent licensing. Founded in 1985 and headquartered in San Diego, California, the company is led by CEO Cristiano Amon, with Akash Palkhiwala as CFO and COO, and it holds a large portfolio of 3G, 4G and 5G cellular standard-essential patents[13]. It has three reportable segments. QCT designs and sells Snapdragon mobile platforms, modems, RF front-end parts, automotive Digital Chassis products and IoT chips; it generated $38.367 billion in fiscal 2025, or 86.6% of consolidated revenue, split into handsets at $27.793 billion, automotive at $3.957 billion and IoT at $6.617 billion[14]. QTL licenses cellular patents to device makers and earned $5.582 billion in fiscal 2025 at a 72% EBT margin[15]. QSI makes strategic investments; its revenue is close to zero, but gains when portfolio companies go public flow into profit[3].

Qualcomm's chip business uses a fabless model, so its order rhythm is set by customers' build plans. The company designs chips and system software, relies mainly on TSMC, Samsung and GlobalFoundries for wafers and on ASE, Amkor and others for assembly and test, and makes only some RF front-end modules and filters in its own facilities[16]. Handset makers, automakers and IoT device makers order according to their own production schedules, and Qualcomm recognizes chip revenue at shipment. Handset customers buy their own memory, so a memory shortage directly cuts their device output and their orders to Qualcomm[17]. Apple buys only stand-alone modems without an integrated application processor, which carry lower revenue and margin than integrated platforms, and Apple is steadily replacing them with its own modems[18]. QTL licensees pay quarterly royalties based on a percentage of the wholesale price of complete devices, so licensing revenue follows end-market handset volumes rather than Qualcomm's own chip share[19].

Qualcomm's customer concentration is high, and its new data center business has not yet produced revenue. In fiscal 2025, Apple, Samsung and Xiaomi each accounted for 10% or more of consolidated revenue[20], and a significant portion of revenue comes from Chinese handset makers[21]. On December 18, 2025, Qualcomm completed its $2.3 billion acquisition of Alphawave and allocated the related goodwill to a new Data Center operating segment[22]. The company said custom silicon for two global hyperscalers has started wafer production and will begin generating revenue in the December 2026 quarter[11].

Financial History and Current Position

Qualcomm's annual revenue has gone through a full cycle over five fiscal years, and fiscal 2025 returned to the fiscal 2022 peak. Revenue rose from $33.566 billion in fiscal 2021 to $44.200 billion in fiscal 2022, fell to $35.820 billion in fiscal 2023 as handset demand weakened and customers cut inventory, recovered to $38.962 billion in fiscal 2024 and reached $44.284 billion in fiscal 2025, up 14%[23]. In fiscal 2025, QCT revenue grew 16% and QCT EBT was $11.670 billion, a 30% margin[14]; handset growth came mainly from $2.5 billion of higher revenue per chipset driven by premium Android devices[24]. QTL revenue of $5.582 billion and EBT of $4.043 billion were roughly flat with the prior year[15]. Consolidated gross margin was 55%, and research and development spending was about 20% of revenue[25].

Two tax adjustments in opposite directions mean that net income in fiscal 2025 and in the second quarter of fiscal 2026 does not directly reflect operating change. Fiscal 2025 net income was $5.541 billion, down 45%, mainly because the company recorded a $5.7 billion charge in the fourth quarter to establish a full allowance against its federal deferred tax assets[23][26]. In the second quarter of fiscal 2026, after the U.S. Treasury and the IRS issued further guidance on the corporate alternative minimum tax (CAMT), the company released that $5.7 billion, lifting second-quarter net income to $7.370 billion[27]. Fiscal 2025 operating cash flow was $14.012 billion[25]; during the year the company spent $8.8 billion on buybacks, $3.8 billion on dividends and $1.2 billion on capital expenditures[28], and it ended the year with $12.478 billion of cash and marketable securities (including restricted cash) against $14.811 billion of debt[29].

Quarterly revenue in fiscal 2026 has fallen for two straight quarters from a record first quarter, with handsets the main drag. First-quarter revenue was a record $12.252 billion, up 5% year over year[30], including handset revenue of about $7.824 billion (first-half handset revenue of $13.848 billion minus the second quarter's $6.024 billion)[31]. From the second quarter, the memory shortage cut handset makers' output, and revenue fell to $10.599 billion, down 3% year over year[27]. Third-quarter revenue was $9.947 billion, with handsets at $5.086 billion, automotive at $1.588 billion and IoT at $1.830 billion, IoT up 9% year over year[4]; QTL revenue was $1.278 billion, down 3%[8]. Third-quarter operating income was $1.626 billion against $2.762 billion a year earlier, diluted EPS was $1.87[5], and non-GAAP EPS was $2.21, at the high end of prior guidance[32].

Cash flow in the first nine months of fiscal 2026 was clearly weaker than a year earlier, as inventory growth and shareholder returns together drew down cash. Inventory was $8.379 billion at the end of June against $6.526 billion at the end of fiscal 2025[10], and nine-month operating cash flow was $8.405 billion against $10.016 billion a year earlier[33]. Over the same period the company repurchased $6.8 billion of stock and paid $2.9 billion in dividends[34]; by the end of June, cash and marketable securities had fallen to $8.304 billion while debt had risen to $15.270 billion[35].

Operating Model

Qualcomm's consolidated revenue breaks into chips, licensing and investments, each with its own drivers. QCT revenue is the sum of handset revenue (Android chipset units times revenue per chipset, plus Apple stand-alone modem revenue), automotive revenue (vehicles equipped times content per vehicle) and IoT revenue (industrial, networking and consumer device shipments times revenue per unit); chips are recognized at shipment, so customers' build plans flow into revenue in the same quarter[4]. QTL revenue equals estimated licensed device sales times a per-unit royalty based on the device's wholesale price, plus or minus adjustments for prior periods, and it is recognized as licensees report quarterly sales[36]. In the third quarter of fiscal 2026, handsets at $5.086 billion, automotive at $1.588 billion and IoT at $1.830 billion summed to QCT revenue of $8.504 billion; adding QTL's $1.278 billion and other reconciling items gave consolidated revenue of $9.947 billion[5].

Operating income depends on gross margin and rising R&D spending, while QTL's weight in segment profit far exceeds its share of revenue. In the third quarter, revenue of $9.947 billion less cost of revenues of $4.670 billion, R&D of $2.607 billion, SG&A of $976 million and other expense of $68 million left operating income of $1.626 billion; adding $1.014 billion of investment and other income (mainly gains from IPOs of QSI holdings) and subtracting $178 million of interest gave pre-tax income of $2.462 billion[5], and after $460 million of tax at a 19% effective rate, net income was $2.002 billion[37]. On a segment basis, QCT EBT was $2.192 billion at a 26% margin and QTL EBT was $881 million at a 69% margin[8], so QTL produced about a quarter of segment profit from about 13% of revenue. Gross margin is set by wafer, assembly, test and memory costs relative to average selling prices, while R&D rises with data center investment; third-quarter R&D was about $380 million higher than the $2.226 billion of a year earlier[5].

Qualcomm's capital spending is small, so swings in operating cash flow come mainly from working capital and taxes, and most free cash flow goes to buybacks and dividends. In the first nine months of fiscal 2026, capital expenditures were $1.6 billion and higher inventory absorbed $1.798 billion of operating cash flow[33]; the company also paid a final $663 million installment of a one-time repatriation tax and spent a net $1.6 billion on acquisitions[34]. Debt at the end of June included $2.0 billion of notes maturing in May 2027 and $498 million of commercial paper, and the credit facility was undrawn[35]. On the other side, the new U.S. tax law restored immediate deduction of domestic R&D spending, which the company said will lower cash tax payments from fiscal 2026 compared with fiscal 2025[28], while the company became subject to the 15% corporate alternative minimum tax from fiscal 2026[26].

Industry and Competitive Position

Qualcomm is the main supplier of premium Android smartphone chips and cellular patent licenses, but it faces strong rivals and customer in-house designs in every end market. The company said it powers about 70% of Samsung's flagship devices[11]. Competitors named in its 10-K include MediaTek, UNISOC, HiSilicon, Nvidia, Mobileye, NXP, Texas Instruments and Broadcom[38], and large customers such as Apple, Samsung and Xiaomi also use their own chips in some devices[21]. In automotive, Qualcomm competes with Nvidia, Mobileye, NXP and Texas Instruments; in data centers, it is a new entrant facing Nvidia, Broadcom and others.

Qualcomm's competitive strengths sit in premium platforms and patent coverage, while its weaknesses lie in price competition and customer vertical integration. The 10-K says some competitors are willing to accept lower prices and margins, particularly in China[38], and China's push for semiconductor self-sufficiency, along with industry supply constraints, encourages customers to move to their own chips[21]. Qualcomm's advantages are its premium mobile platforms, modem technology and a licensing program that covers almost every handset maker; that program gives management a view of end-device sales, which Amon used on the first-quarter call to say handset demand and sell-through were strong and that lower orders were caused entirely by memory supply[39]. A limit of the available disclosure is that the company does not split handset revenue by region or customer, so share comparisons with MediaTek and other rivals cannot be drawn directly from these materials.

Core Debates

Qualcomm's handset chip revenue fell 20% year over year in the June quarter, and the company expects it to steady at about $5.2 billion in the September quarter. Can Chinese Android customers rebuilding after the memory shortage offset the faster loss of share in Apple's new iPhones?

Handset chips are Qualcomm's largest source of revenue and profit, so whether handset revenue has bottomed sets the direction of the year's results. Handsets accounted for 62.8% of fiscal 2025 consolidated revenue and are the main source of QCT profit[14]. June-quarter handset revenue was $5.086 billion, $1.242 billion lower than a year earlier, more than offsetting $753 million of combined automotive and IoT growth[4]. The year-over-year base for the fourth quarter is about $6.962 billion in the fourth quarter of fiscal 2025 (full-year $27.793 billion minus the first nine months' $20.831 billion), and this is also the first quarter of an accelerated decline in Apple share.

The evidence shows that the handset decline comes mainly from memory supply, while Apple's exit is speeding up. Handset growth in fiscal 2025 came mainly from higher revenue per chipset in premium Android devices[24]. From the second quarter of fiscal 2026, data centers took priority for DRAM capacity, and handset makers cut build plans and reduced inventory[39][40]; handset revenue fell from about $7.824 billion in the first quarter to $6.024 billion in the second and $5.086 billion in the third[31]. On the second-quarter call, management said handset revenue from Chinese customers would bottom in the third quarter and return to sequential growth in the fourth[41]. At the same time, Qualcomm's share of the new iPhones will be materially below the earlier 20% estimate, and Apple revenue in the December quarter is set to fall about 50% sequentially[42][12]. Management said this was not a deliberate choice to shift capacity to other businesses, that supply constraints were only one factor, and that fiscal 2027 Apple revenue will be below the earlier guidance of just over $2 billion[43].

The financial transmission is clear, but there is another reading of the quality of any Android rebound. Data centers take DRAM first, Android handset makers cut output and shift to previous-generation chips because memory is scarce and more expensive, and Snapdragon shipments and premium mix fall as a result; meanwhile Apple replaces Qualcomm with its own modems, Apple stand-alone modem revenue shrinks, and both forces push QCT handset revenue down. The alternative reading is that Android customers are moving to older chips to offset memory price increases[9], so even if unit output recovers, premium mix and revenue per chipset may not return to 2025 levels. QTL serves as a cross-check on end-market volumes: June-quarter QTL revenue fell 3%, with lower estimated device sales cutting revenue by $67 million and higher revenue per unit offsetting $59 million[36]; QTL's fourth-quarter year-over-year base is about $1.410 billion (full-year $5.582 billion minus the first nine months' $4.172 billion)[15][33]. The company does not separately disclose Apple, Android or Chinese customer revenue, so this part of the debate depends on management's qualitative statements.

The fourth-quarter report can separate these two readings, but it cannot by itself prove the handset business has bottomed. The items to watch are whether fourth-quarter handset revenue is at least about $5.2 billion, whether management confirms sequential growth in handset revenue from Chinese customers, whether QTL revenue lands inside the $1.2 billion to $1.4 billion guidance range with a narrower decline in estimated device sales[2], and whether the roughly 50% sequential decline in December-quarter Apple revenue changes. If handset revenue falls below the third quarter's $5.086 billion, the Android rebound case does not hold; if Apple revenue declines more than the company indicated, the handset bottom moves further out.

Broad increases in wafer, packaging and memory costs, along with handset customers shifting to older chips, pushed Qualcomm's gross margin down to about 53% in the June quarter. Can double-digit price increases hold the chip business's September-quarter margin within the 23%-25% guidance and start to work down $8.4 billion of inventory?

The chip business's margin decides how much profit and cash Qualcomm can protect through the handset trough. QCT contributes about 87% of revenue and most of the profit, and June-quarter QCT EBT fell $479 million year over year, with lower gross margin a main cause[8]. Fourth-quarter guidance puts the QCT margin at 23% to 25%, another 1 to 3 points below the third quarter's 26%, while the year-ago fourth quarter of fiscal 2025 was about 29.5% (EBT of $2.896 billion on revenue of $9.821 billion, derived as full year minus nine months)[14]. Inventory growth and the repatriation tax left nine-month operating cash flow about $1.6 billion below the prior year, yet the company still repurchased $6.8 billion of stock over the same period[33][34].

The company attributes the margin decline to cost inflation and a weaker product mix, and it has committed to repairing it gradually through price increases. The 10-Q says the third-quarter QCT margin fell mainly because of higher product costs (partly offset by higher selling prices) and lower revenue[44]. The 8-K says the semiconductor industry is seeing broad-based increases in wafer fabrication, assembly, test, advanced packaging and memory costs, that the company is adjusting product prices, and that gross margins will benefit as pricing changes gradually take effect[45]. On the call, management said the increases are double-digit and span all end markets, will phase in over the next couple of quarters as existing contracts and product cycles roll over, and should bring gross margins back to the historical range once fully in place[9]; it also acknowledged that QCT gross margin is currently slightly below that range[42]. Consolidated gross margin was about 53.1% in the third quarter, against about 55.3% in the fourth quarter of fiscal 2025 (revenue of $11.271 billion and cost of revenues of about $5.034 billion, derived) and 55% for fiscal 2025 as a whole[5][25].

Cost inflation has both squeezed gross margin and tied up cash, and there are competing readings of whether pricing can pass it through in full. Data center demand has driven up wafer, assembly, test, advanced packaging and memory prices, raising Qualcomm's unit costs, while Android customers' shift to older chips has worsened the mix, so gross margin fell; it recovers only as price increases take effect when contracts roll over. When customers cut build plans, wafers already in production stayed in Qualcomm's inventory: inventory rose from $6.526 billion at the end of fiscal 2025 to $7.368 billion at the end of March and $8.379 billion at the end of June, including $5.005 billion of work in process, $2.692 billion of finished goods and $682 million of raw materials[10][33]. Third-quarter operating cash flow was about $991 million (nine-month $8.405 billion minus first-half $7.414 billion), against about $3.996 billion in the fourth quarter of fiscal 2025[25]. The alternative reading is that price increases can pass through only part of the cost, while early data center revenue carries a lower gross margin that will drag QCT gross margin by 1.5 to 2 points[42] and R&D spending keeps rising, so the QCT margin will not return to around 30% even with higher prices.

Whether fourth-quarter gross margin stops falling, where the QCT margin lands in its guidance and what management says about the pace of pricing can separate these readings. The items to watch are where the QCT EBT margin falls within the 23% to 25% guidance, whether consolidated gross margin is at least the third quarter's roughly 53.1%, whether inventory comes down from $8.379 billion, and whether quarterly operating cash flow returns above $3 billion. If the QCT margin falls below 23%, cost pass-through is slower than the company estimated; if inventory keeps rising, the risk of demand mismatch and write-downs is still growing.

Qualcomm's automotive chip revenue grew 61% in the June quarter, and the company expects growth of about 60% in the September quarter, with data center revenue set to begin in the December quarter. Will the fifth-generation Digital Chassis ramp and the data center start arrive on schedule?

The company is counting on non-handset businesses to replace lost Apple revenue and the handset decline, and automotive is the fastest-growing part that can be checked quarter by quarter. Management said non-handset year-over-year growth would accelerate from 24% in fiscal 2026 to more than 60% in fiscal 2027, fully replacing lost Apple revenue in fiscal 2027, and that non-handset revenue would exceed half of QCT revenue in fiscal 2027; its data center revenue targets are $5 billion in fiscal 2027 and $15 billion in fiscal 2029[12]. Non-handset revenue within QCT grew 28% year over year in the June quarter[32].

Automotive growth has now run for several quarters and depends increasingly on higher content per vehicle. In fiscal 2025, automotive revenue grew 36% to $3.957 billion and IoT revenue grew 22% to $6.617 billion[14]; in fiscal 2026, automotive revenue rose from about $1.101 billion in the first quarter to $1.326 billion in the second and $1.588 billion in the third[31]. Of the third-quarter automotive increase, higher revenue per unit contributed $381 million and higher shipments $223 million, showing a rising share of higher-priced products such as driver assistance; IoT grew 9% in the third quarter, also mainly on revenue per unit[44]. The company raised its fiscal 2026 exit-rate target for annualized automotive revenue from $6 billion to $7 billion[12], signed an expanded agreement with BMW, said the fifth-generation Snapdragon Digital Chassis would begin ramping in September 2026, and reported an industrial design-win pipeline above $7 billion[11].

Turning design wins into revenue takes time, and both automotive and data centers could slow down or dilute margins. After an automaker awards a design, new models enter production with Snapdragon digital cockpit and driver-assistance products, shipments and content per vehicle rise, and automotive revenue follows. Industrial and networking design wins turn into industrial IoT shipments, while consumer IoT is held back by the memory shortage: fourth-quarter IoT revenue is guided flat year over year, with double-digit growth in industrial networking and robotics offset by weaker consumer products such as tablets[6]. Hyperscaler custom silicon wafers are already in production, and data center revenue is set to be recognized from the December quarter. The fourth-quarter year-over-year bases are about $1.053 billion for automotive (full-year $3.957 billion minus nine-month $2.904 billion) and about $1.806 billion for IoT (full-year $6.617 billion minus nine-month $4.811 billion)[4]. The alternative reading is that part of the automotive growth comes from a one-time mix uplift and that the ramp of new models may leave a gap before the fifth-generation platform takes over; data center revenue carries a lower gross margin and will weigh on QCT gross margin even if it starts on time[42], and which reportable segment will hold that revenue will only be confirmed at its first disclosure.

Fourth-quarter automotive growth with its shipment and price split, IoT's year-over-year change and the December-quarter outlook can test these views. The items to watch are whether fourth-quarter automotive revenue is at least about $1.685 billion (roughly 60% growth), whether shipments still contribute positively to the automotive increase, whether IoT revenue is at least the year-ago $1.806 billion, and whether the December-quarter outlook includes data center revenue. If automotive growth falls below 50%, the ramp has hit a gap; if the data center start slips, the timetable for replacing lost Apple revenue in fiscal 2027 loses its footing.

Risks and Falsifiers

Customer concentration in China and U.S.-China policy are the hardest risks to quantify in Qualcomm's revenue base. A significant portion of revenue comes from Chinese handset makers, and some Chinese customers have developed their own chips under their government's push for semiconductor self-sufficiency[21]; in fiscal 2025, Xiaomi, like Apple and Samsung, accounted for 10% or more of consolidated revenue[20]. The exposed lines are the Chinese-customer portions of QCT handset revenue and QTL licensing revenue, although the company does not split handset revenue by region. U.S. restrictions on data center technology exports to China could also affect the new business, though management said current engagements are not restricted[42]. If the fourth-quarter report and call disclose no new export restrictions and no major Chinese customer switching to its own chips, the risk has not materialized this quarter.

The licensing business faces negotiation and expiry risk that could create revenue gaps or one-time swings. Huawei's license agreement has expired, and QTL revenue has excluded Huawei royalties since the second quarter of fiscal 2025[46]; renewals with major licensees could also lead to disputes. The exposed line is QTL licensing revenue, $5.582 billion in fiscal 2025 at a 72% EBT margin, which also fluctuates seasonally with the timing of licensees' sales[47]. If fourth-quarter QTL revenue lands within the $1.2 billion to $1.4 billion guidance and no new major licensee stops paying, the current understanding stands.

If the memory shortage extends into fiscal 2027, Android handset makers would keep build plans low and, combined with further Apple share loss, handset revenue could stay around $5 billion for a long time. The exposed line is QCT handset revenue, $5.086 billion in the third quarter of fiscal 2026 against about $6.962 billion in the fourth quarter of fiscal 2025; every $500 million less handset revenue would cut QCT pre-tax profit by roughly $130 million at the third quarter's 26% QCT EBT margin. Management said the handset market would shrink by a low double-digit percentage between fiscal 2025 and fiscal 2026, with QCT Android revenue down 20% year over year and an EPS impact of more than $1.50, and said this should reverse as market conditions stabilize[42]. If fourth-quarter handset revenue is at least about $5.2 billion and management confirms sequential growth from Chinese customers, the risk has not widened.

Price increases could take effect more slowly than costs rise, and together with Android customers moving to lower-tier chips and the start of low-margin data center revenue, QCT gross margin could stay below its historical range. The exposed lines are QCT EBT ($2.192 billion in the third quarter) and consolidated gross margin: on fourth-quarter QCT revenue of $8.4 billion to $9.0 billion, every point of margin is worth roughly $84 million to $90 million of QCT pre-tax profit, and the start of data center revenue is set to drag QCT gross margin by 1.5 to 2 points[42]. If the fourth-quarter QCT EBT margin is at least 25% and consolidated gross margin is at least about 53.1%, this risk is falsified.

Slow recovery in customer demand could leave inventory piling up, leading to write-downs and absorbing cash needed for buybacks and dividends. The exposed items are $8.379 billion of inventory and operating cash flow: nine-month operating cash flow was $8.405 billion against $10.016 billion a year earlier, while the company repurchased $6.8 billion of stock and paid $2.9 billion in dividends, and at the end of June cash and marketable securities were $8.304 billion against $15.270 billion of debt[35]. If inventory at the end of the fourth quarter is below $8.379 billion and quarterly operating cash flow is at least $3 billion, the risk is easing.

If new-model automotive ramps and the start of data center revenue lag the company's timetable, non-handset businesses cannot replace lost handset and Apple revenue as planned. The exposed lines are QCT automotive and IoT revenue ($3.418 billion combined in the third quarter) and the company's $5 billion fiscal 2027 data center revenue target; data center revenue carries a lower gross margin at the start and is set to drag QCT gross margin by 1.5 to 2 points[12][42]. If fourth-quarter automotive revenue grows at least about 60% and the December-quarter outlook includes data center revenue, the risk has not materialized.

What to Watch Next

• Android rebound versus Apple loss: QCT handset revenue was $5.086 billion in the June quarter (down 20%) against about $6.962 billion a year earlier. Watch whether it reaches at least about $5.2 billion; a figure below $5.086 billion breaks the Android rebound case.
• Chinese customers: management said handset revenue from Chinese customers bottomed in the June quarter. Watch whether management confirms sequential growth; without it, the bottom moves out.
• QTL licensing: revenue was $1.278 billion (down 3%) against about $1.410 billion a year earlier. Watch whether it lands in the $1.2 billion to $1.4 billion guidance with a narrower decline in estimated device sales.
• Apple in the December quarter: Apple revenue is set to fall about 50% sequentially. A steeper drop pushes the handset bottom further out.
• QCT margin: the EBT margin was 26% in the June quarter against about 29.5% a year earlier. Watch its position within the 23% to 25% guidance; below 23% means slower cost pass-through.
• Gross margin: about 53.1% in the June quarter against about 55.3% a year earlier. A further decline means pricing has not offset costs.
• Inventory and cash: inventory was $8.379 billion and June-quarter operating cash flow about $991 million. Watch for lower inventory and operating cash flow above $3 billion; rising inventory signals growing mismatch and write-down risk.
• Automotive: revenue was $1.588 billion (up 61%) against about $1.053 billion a year earlier. Watch for at least about $1.685 billion with a positive shipment contribution; growth below 50% signals a ramp gap.
• IoT: revenue was $1.830 billion (up 9%) against about $1.806 billion a year earlier. A year-over-year decline would mean the consumer drag outweighs industrial growth.
• Data center: custom silicon for two hyperscalers is in wafer production with no revenue yet. Watch whether the December-quarter outlook includes data center revenue; a delay undermines the fiscal 2027 plan to replace Apple revenue.

Conclusion

Qualcomm's results are driven by three forces: handset chips that make up about 60% of revenue, patent royalties tied to end-device volumes, and an accelerating automotive and IoT business alongside a data center business that has not yet produced revenue. In the third quarter of fiscal 2026, revenue was $9.947 billion, gross margin about 53.1% and the QCT EBT margin 26%; inventory had risen to $8.379 billion, and cash and marketable securities of $8.304 billion sat below $15.270 billion of debt[5][8][10][35]. The central open question is whether, before automotive and data centers can take over, the Android rebound and double-digit price increases can together offset Apple losses and cost inflation enough to stop the handset decline and stabilize margins.

Since the June-quarter report, only one verifiable independent commentary has appeared. In a July 30, 2026 column, Computerworld's Jonny Evans argued that Apple may be moving faster than expected in its modem development work, that this almost certainly explains Qualcomm's lower expectations for Apple, and that Apple's next 18-series devices will keep using Apple's own modems[48]. His view attributes Qualcomm's falling iPhone share mainly to Apple's in-house progress, whereas Qualcomm's management said supply constraints were only one factor and that the company did not deliberately give up capacity[43]; the disagreement is over how much of the Apple loss is reversible. If Apple's transition is indeed nearly complete, handset revenue from the fourth quarter onward will be decided mainly by Android customers, and the answer to the first core debate will depend even more on the recovery of Chinese customers. Other coverage since the June-quarter report has mostly been results recaps and news briefs, with no second independent commentary taking a different position and offering a verifiable argument, so this is one columnist's interpretation rather than a shared market view.

What would materially strengthen the current understanding is a set of observations arriving together: fourth-quarter handset revenue of at least about $5.2 billion with management confirming sequential growth from Chinese customers, QTL revenue inside its guidance range, a QCT margin between 23% and 25% with no further decline in consolidated gross margin, falling inventory with quarterly operating cash flow back above $3 billion, automotive growth of about 60%, and a December-quarter outlook that includes data center revenue. Conversely, handset revenue below $5.086 billion, a QCT margin under 23%, rising inventory or a delayed data center start would materially weaken it.

Sources

[1] Drillr earnings calendar (updated 2026-10-15) · QCOM 2026-11-04 call · 2026-10-15 · Drillr earnings calendar

[2] QCOM 8-K filed 2026-07-29 · Q4 fiscal 2026 guidance · 2026-07-29 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000804328&type=8-K&dateb=20260729&owner=include&count=10

[3] QCOM 10-Q filed 2026-07-29 · third quarter fiscal 2026 overview · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[4] QCOM 10-Q filed 2026-07-29 · QCT segment third quarter fiscal 2026 · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[5] QCOM 10-Q filed 2026-07-29 · condensed consolidated statements of operations · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[6] QCOM Q3 FY2026 earnings call 2026-07-29 · Q4 fiscal 2026 guidance detail · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[7] Drillr analyst_financial_estimates (updated 2026-10-15) · QCOM quarter ending 2026-09-28 · 2026-10-15 · Drillr analyst_financial_estimates · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000804328&type=consensus-data&dateb=20261015&owner=include&count=10

[8] QCOM 8-K filed 2026-07-29 · Q3 fiscal 2026 segment results · 2026-07-29 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000804328&type=8-K&dateb=20260729&owner=include&count=10

[9] QCOM Q3 FY2026 earnings call 2026-07-29 · gross margin and pricing Q&A · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[10] QCOM 10-Q filed 2026-07-29 · inventories · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[11] QCOM Q3 FY2026 earnings call 2026-07-29 · operational updates · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[12] QCOM Q3 FY2026 earnings call 2026-07-29 · longer-term and December-quarter outlook · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[13] QCOM 10-K filed 2025-11-05 · QTL licensing scope · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[14] QCOM 10-K filed 2025-11-05 · QCT segment revenues and EBT 2025 vs 2024 · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[15] QCOM 10-K filed 2025-11-05 · QTL segment revenues and EBT 2025 vs 2024 · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[16] QCOM 10-K filed 2025-11-05 · QCT fabless production model · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[17] QCOM Q1 FY2026 earnings call 2026-02-04 · memory purchasing Q&A · 2026-02-04 · earnings-call · https://gateway.drillr.ai/mcp/private

[18] QCOM 10-K filed 2025-11-05 · Apple modem and MDM risk · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[19] QCOM 10-K filed 2025-11-05 · QTL per-unit royalty model · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[20] QCOM 10-K filed 2025-11-05 · significant customers · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[21] QCOM 10-K filed 2025-11-05 · customer vertical integration and China · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[22] QCOM 10-Q filed 2026-07-29 · Alphawave acquisition · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[23] QCOM 10-K filed 2025-11-05 · fiscal 2025 overview · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[24] QCOM 10-K filed 2025-11-05 · QCT 2025 vs 2024 drivers · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[25] QCOM 10-K filed 2025-11-05 · XBRL annual facts · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[26] QCOM 10-K filed 2025-11-05 · OBBB, CAMT and valuation allowance · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[27] QCOM 10-Q filed 2026-04-29 · second quarter fiscal 2026 overview · 2026-04-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000061/

[28] QCOM 10-K filed 2025-11-05 · fiscal 2025 uses of cash · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[29] QCOM 10-K filed 2025-11-05 · liquidity and debt at fiscal year end · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[30] QCOM 10-Q filed 2026-02-04 · first quarter fiscal 2026 overview · 2026-02-04 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000017/

[31] QCOM 10-Q filed 2026-04-29 · QCT segment second quarter fiscal 2026 · 2026-04-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000061/

[32] QCOM Q3 FY2026 earnings call 2026-07-29 · segment performance · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[33] QCOM 10-Q filed 2026-07-29 · XBRL interim facts · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[34] QCOM 10-Q filed 2026-07-29 · nine-month cash uses and operating cash drivers · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[35] QCOM 10-Q filed 2026-07-29 · liquidity and debt · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[36] QCOM 10-Q filed 2026-07-29 · QTL third quarter 2026 vs 2025 drivers · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[37] QCOM 10-Q filed 2026-07-29 · effective tax rate · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[38] QCOM 10-K filed 2025-11-05 · competitors · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[39] QCOM Q1 FY2026 earnings call 2026-02-04 · memory constraint Q&A · 2026-02-04 · earnings-call · https://gateway.drillr.ai/mcp/private

[40] QCOM 10-Q filed 2026-04-29 · QCT second quarter 2026 vs 2025 drivers · 2026-04-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000061/

[41] QCOM Q2 FY2026 earnings call 2026-04-29 · guidance and highlights · 2026-04-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[42] QCOM Q3 FY2026 earnings call 2026-07-29 · stated risks · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[43] QCOM Q3 FY2026 earnings call 2026-07-29 · Apple share Q&A · 2026-07-29 · earnings-call · https://gateway.drillr.ai/mcp/private

[44] QCOM 10-Q filed 2026-07-29 · QCT third quarter 2026 vs 2025 drivers · 2026-07-29 · 10-Q · https://www.sec.gov/Archives/edgar/data/804328/000080432826000086/

[45] QCOM 8-K filed 2026-07-29 · business outlook and capital return · 2026-07-29 · 8-K · https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000804328&type=8-K&dateb=20260729&owner=include&count=10

[46] QCOM 10-K filed 2025-11-05 · QTL 2025 vs 2024 and Huawei license expiry · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[47] QCOM 10-K filed 2025-11-05 · seasonality · 2025-11-05 · 10-K · https://www.sec.gov/Archives/edgar/data/804328/000080432825000085/

[48] Computerworld 2026-07-30 · Jonny Evans on Apple's modem transition · 2026-07-30 · Computerworld · https://www.computerworld.com/article/4203487/qualcomm-shows-apples-modem-transition-is-almost-complete.html