QUALCOMM INC/DE Q3 FY2025 earnings call

• Handset: Extended Xiaomi collaboration with multiyear agreement, Snapdragon 8 Series powering Xiaomi flagship devices, AI usage in smartphones increasing.
• AI PCs: Steady progress with Snapdragon X Series platforms, over 100 designs to be commercialized by 2026.
• XR: Snapdragon as platform of choice for smart glasses, 19 designs, Meta and Xiaomi smart glasses well received, world's first demo of 1 billion parameter model on smart glasses.
• Automotive: Snapdragon Digital Chassis with 12 new designs, 50 vehicle launches, BMW Neue Klasse vehicles with safety-certified ADAS stack, Snapdragon Ride platforms gaining momentum.
• Industrial IoT: Expanded ecosystem, Dragonwing platforms traction, collaborations with DigiWin, Aetina, IBM, strong edge networking.
• Data center: New growth opportunity, building NPU-based AI inference accelerator cards, acquired Alphawave IP Group, engaged with hyperscalers.

In fiscal Q3, Qualcomm delivered revenues of $10.4 billion. The chipset business had revenues of $9 billion. Licensing business revenues were $1.3 billion. QTL (Licensing) had revenues of $1.3 billion and EBT margin of 71%. QCT (Chipset) delivered revenues of $9 billion, with year-over-year growth of 11% and EBT of $2.7 billion, EBT margin 30%. Handset revenues increased 7% Y/Y to $6.3 billion. IoT revenues grew 24% Y/Y to $1.7 billion. Automotive revenues were $984 million, up 21% Y/Y.

• Fiscal Q4 revenues forecast $10.3B - $11.1B, non-GAAP EPS $2.75 - $2.95.
• QTL revenues estimated $1.25B - $1.45B, EBT margin 69% - 73%.
• QCT revenues $9B - $9.6B, EBT margin 27% - 29%.
• QCT handset revenues expected ~5% Q/Q growth.
• QCT IoT revenues flat Q/Q, automotive revenues $1B in Q4.
• Target for combined automotive and IoT revenues $22B by fiscal '29.

Q: Start with handset market growth despite lower Apple share and pull-in concerns.

A: Akash says no evidence of pull-in, upside in Q3 handset revenue due to new product launch, upcoming chip launch driving demand.

Q: Details on data center hyperscaler engagement.

A: Cristiano says in advanced discussions, developing products with Alphawave IP, expect to share more as discussions conclude.

Q: Handset growth in 3Q vs guidance, parts of market weaker.

A: Akash says slightly weaker mix in 3Q due to seasonal factors, September quarter strong with new chip launch.

Q: Seasonal trends in December quarter.

A: Akash says December is strongest quarter, trends continue despite lower Apple share.

Q: Lift in December quarter and impact on March quarter.

A: Akash says business strong, December still strongest quarter, no unique factors affecting March quarter.

Q: Data center spending and impact of Alphawave acquisition.

A: Akash says managing OpEx carefully, hiring focused on new skills, Alphawave acquisition to complement road map.

Q: Samsung processor launch vs Qualcomm, margin implications.

A: Cristiano says Samsung agreement assumes 75% share, Akash says Android business strong, margin target remains 30%.

Q: China handsets, competition, margins.

A: Akash says strong position in China, partnerships with Xiaomi, margins to remain healthy due to growth in auto, IoT.

Q: Data center acquisition strategy, AI in Android.

A: Cristiano says focused on Alphawave closure, Android ecosystem strong in AI, agentic use cases driving growth.