QUALCOMM INC/DE Q4 FY2024 earnings call

Key Highlights:

• In fiscal Q4, non-GAAP revenues were $10.2 billion and EPS was $2.69. Progress on growth and diversification strategy, with focus on edge AI.
• Partnerships with Meta, Amazon, etc., to drive AI-enabled edge computing. Unveiled Snapdragon 8 Elite, Snapdragon X Plus platform, Qualcomm IQ Series, Networking Pro A7 Elite, and Snapdragon Cockpit Elite and Ride Elite automotive platforms.
• Snapdragon 8 Elite is the world's fastest mobile processor, Snapdragon X Plus 8-core expands personal computing portfolio, and Qualcomm IQ Series targets industrial IoT. Automotive platforms like Snapdragon Cockpit Elite and Ride Elite are adopted by leading car manufacturers.

In fiscal Q4, Qualcomm delivered non-GAAP revenues of $10.2 billion. Chipset business revenues were $8.7 billion, and licensing business revenues were $1.5 billion. QTL (licensing) had revenues of $1.5 billion with an EBT margin of 74%. QCT (chipset) had revenues of $8.7 billion with an EBT margin of 28%. QCT handset revenues were $6.1 billion, QCT IoT revenues were $1.7 billion, an increase of 24% from the prior quarter. QCT automotive revenues were $899 million, marking the 5th consecutive quarter of record revenues, with 11% sequential growth and 68% year-over-year growth.

Fiscal Q1 '25 Guidance:

• Forecasts revenues of $10.5 billion to $11.3 billion and non-GAAP EPS of $2.85 to $3.05.
• QTL revenues estimated at $1.45 billion to $1.65 billion with EBT margins 73% to 77%.
• QCT revenues expected to be $9 billion to $9.6 billion with EBT margins 29% to 31%. QCT handset revenues to grow mid-single-digit YoY, IoT revenues >20% YoY, automotive revenues 50% YoY growth.
• Non-GAAP operating expenses estimated at approximately $2.2 billion.

Risk Mentioned:

• A large customer potentially going internal over several quarters, with planning assumption of share ramping down to 20% by fiscal 2026 for phone launches under a 3-year agreement.

Q: Joe Moore with Morgan Stanley asks about auto strength and environment impact.

A: Cristiano Amon states auto growth is related to new model launches and share gain, not significantly affected by macro environment.

Q: Samik Chatterjee with JPMorgan asks about IoT acceleration and sustainability.

A: Akash Palkhiwala mentions new product launches and upcoming Investor Day for more details.

Q: Stacy Rasgon with Bernstein Research asks about chipset gross margins.

A: Akash Palkhiwala discusses mix and guidance, stating guidance is in line with fourth quarter.

Q: Joshua Buchalter with TD Cowen asks about auto exposure and ADAS/infotainment.

A: Akash and Cristiano talk about global design wins and ADAS ramp over the next couple of years.

Q: Chris Caso with Wolfe Research asks about handset market rebound.

A: Akash talks about premium-tier chipset launches and OEM acceleration.

Q: Tal Liani with Bank of America asks about connecting to other vendors' trends.

A: Cristiano talks about product roadmap strength and premium tier expansion.

Q: Timothy Arcuri with UBS asks about China Android growth.

A: Akash explains launch cadences and timing of chipset purchases from customers.

Q: Christopher Muse with Cantor Fitzgerald asks about IoT and industrial inventory.

A: Akash talks about new product launches and Investor Day details on industrial IoT.

Q: Christopher Muse follows up on large customer risk.

A: Akash discusses planning assumptions and the 3-year agreement framework.