Overview
Qualcomm
QCOM · NASDAQQ4 FY2026Semiconductors · Mobile Processors and Patent Licensing
Since the Report − 7.5%
Revenue fell 8.4% year over year, EPS beat the estimate by 0.5%; the stock fell 7.4% in its first reaction.
- RevenueQ4
- $10.32B
- ▼ 8.4% YoY Beat Estimate by 2.0%
- EPSAdjusted
- $2.17
- Estimate $2.16 · Beat by 0.5%
Verdict
HOLDQualcomm edged past estimates in its fiscal fourth quarter, with automotive revenue up 89% to $1.99 billion. The stock fell 7.4% after hours as the memory shortage cut handset revenue by 26% and the margin outlook slipped. The next thing to watch is when price increases lift the QCT margin back above 24%.
Close on Report DayNov 4
$173.19▼ 7.4%Report-Day Move
- Market Cap(Today)
- ≈ $168 B
- 1Y Return(At Report)
- + 0%
- P/E(At Today's Price · $10.54 · Trailing 12M)
- 15.2
- Net Margin(Trailing 12M)
- 21.0%
Earnings Summary
In 30 Seconds- Revenue of $10.32 billion beat expectations by 2%, while adjusted EPS of $2.17 was in line.
- Automotive revenue grew 89% to $1.99 billion, but handset revenue fell 26% on the memory shortage.
- The stock fell 7.4% after hours as the December-quarter QCT margin guide dropped to 20% to 22%.
The Numbers
Automotive Revenue
$1.99B
▲ 89% YoY · Beat Estimate by 20%
Handset Revenue
$5.14B
▼ 26% YoY · 1.4% Below Estimate
QCT Pre-Tax Margin
24%
29% a Year Ago · 5-Point Contraction
Stock Reaction
▼ 7.4%
After Hours 8 P.m. ET · Base $173.19
Quarterly Revenue ($ Billion)
11.27
Q4 25 · $11.3 B
12.25
Q1 26 · $12.3 B · QoQ + 8.7%
10.60
Q2 26 · $10.6 B · QoQ − 13.5%
9.95
Q3 26 · $9.95 B · QoQ − 6.2%
10.32
Q4 26 · $10.3 B · QoQ + 3.8% · YoY − 8.4%
10.4–11.2
Q1 27E · 10.4–11.2 · QoQ + 4.6% · YoY − 11.9%
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26
- Q1 27E
Q1 FY27 Company Guidance
- Revenue10.4 – 11.2 billion10.4 billion11.2 billion
Midpoint 10.80 · Market Expectation 10.483.1% Above Estimate ▲
- Adjusted EPS2.15 – 2.35 $2.15 $2.35 $
Midpoint 2.25 · Market Expectation 2.270.9% Below Estimate ▼
- QCT Revenue9.0 – 9.6 billion9.0 billion9.6 billion
Midpoint 9.30 · Q4 Actual 9.02 · Includes Data Center3.2% Sequential Increase ▲
- QTL Revenue1.3 – 1.5 billion1.3 billion1.5 billion
Midpoint 1.40 · Q4 Actual 1.307.4% Sequential Increase ▲
- QCT Pre-Tax Margin20% – 22%20%22%
Q4 Actual 24% · About 3 Points From Data Center3.0-Point Contraction ▼
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±8.2% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Handsets$5.14 BShare 49.8%▼ 26.0% YoY
- Automotive$1.99 BShare 19.3%▲ 89.0% YoY
- Internet of Things (IoT)$1.89 BShare 18.3%▲ 4.0% YoY
- Patent Licensing (QTL)$1.30 BShare 12.6%▼ 7.0% YoY
Separate operating segment
Key Metrics
Operating Cash Flow (FY2026)
$11.1 B
▼ 20.5% YoYPress Release
Capital Expenditures (FY2026)
$2.49 B
▲ 109.2% YoYPress Release
Inventories
$8.64 B
▲ 32.4% YoYPress Release
Share Repurchases (Q4)
$1.01 B
Press Release
Dividends Paid (Q4)
$987 M
Press Release
QTL Pre-Tax Margin
70.0%
Press Release
Shares are computed over the segment total: $10.3 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We don't have a demand issue; it's a supply issue. If I had more supply, I would probably be doing better.”
- Memory-driven Supply Shortage
- Data Center Ramp
- Margin Recovery Through Pricing
Summary and Review
Summary
Qualcomm reported $10.32 billion in revenue for the quarter ended in September. That is an 8.4% decline from the same quarter a year earlier. Adjusted revenue, the company's guidance basis, was $10.44 billion and beat the $10.12 billion market expectation by 3.2%. Adjusted EPS was $2.17 against an expected $2.16, a gap of only 0.5%. The $2.25 EPS midpoint for the December quarter was also 0.9% below the $2.27 expectation.
The stock closed the regular session up 5.3% at $173.19. After the report it fell to $160.37 after hours, a 7.4% drop, with a low of $158.29. The selling was about margin, not revenue. The QCT unit's pre-tax margin fell from 29% to 24% in a year. The 20% to 22% range guided for the December quarter shows the squeeze continuing. The market did not read this report as a growth story but as a cost story.
Our score is 56 and our view is hold. The revenue gate is open, while the earnings and guidance gates are in line with expectations. Automotive and data center offer real diversification, and the company expects non-handset revenue to grow more than 60% in fiscal 2027. Handsets are still half of revenue, though, and Apple modem orders are gone. The full benefit of price increases arrives only in the second half of fiscal 2027.
Full Review
Handset revenue hit by the memory shortage.
Handset chip revenue was $5.14 billion. That is a 26% decline from a year earlier. The market expected $5.21 billion, so the result came in 1.4% short. There are two reasons for the drop. The first is Apple's shift to its own modem. The second is higher memory prices shrinking handset makers' production volumes. CEO Cristiano Amon said on the earnings call that the problem is supply, not demand. He added that the China Android business bottomed in the June quarter and grew sequentially in September. Even so, the company expects handset revenue to decline by a mid-single-digit percentage sequentially in the December quarter. Its plan assumes global handset units will be flat to down in 2027. That means no near-term recovery is expected on the handset side.
Automotive nears $2 billion for the first time.
Automotive revenue was $1.99 billion. That is up 89% year over year and a company record. The market expected $1.66 billion, so the result beat by 20%. IoT revenue rose 4% to $1.89 billion. According to the release, automotive and IoT together grew 36% year over year. Per the earnings call, automotive exited the fiscal year at an $8 billion annualized run rate. That is $1 billion ahead of the company's own expectation. The share of these two non-handset lines in QCT revenue rose from 29% to 43% in a year. Diversification is no longer a presentation slide but a line on the income statement. Automotive alone carried most of last year's non-handset growth. The company expects that momentum to continue, with non-handset revenue up more than 60% in 2027.
Input costs are eroding the margin.
The QCT unit's pre-tax margin was 24%. A year ago it was 29%, a 5-point contraction. GAAP gross margin fell to 50.7% from 55.3% in the same quarter last year. In the release the company cites an industry-wide rise in wafer, packaging, test and memory costs. It is raising product prices in response. But the full benefit of these actions on QCT gross margin only arrives in the second half of fiscal 2027. The QCT margin guided for the December quarter is 20% to 22%. Per the call, about 3 points of that comes from data center being included for the first time. Inventories also rose 32% in a year to $8.64 billion. That stock, built with expensive inputs, could weigh on margins for a few more quarters.
The data center ramp starts in December.
The company reiterated its $5 billion data center revenue target for fiscal 2027 in the release. Amon said data center revenue will exceed $650 million in the December quarter. In September Qualcomm announced a multi-generational AI data center collaboration with Amazon. On the call it also repeated its fiscal 2029 targets of $40 billion in non-handset revenue, with over $15 billion from data center. On licensing, long-term agreements with Apple, Huawei and Transsion were renewed. QTL revenue fell 7% to $1.30 billion, with a 70% margin. Operating cash flow for the fiscal year was $11.15 billion. Over the same period the company returned $11.67 billion to shareholders, of which $7.82 billion was share buybacks.
One metric for next quarter: QCT margin.
The key to reading this report sits on a single line: the QCT pre-tax margin. The December quarter guide is 20% to 22%. If the margin rises above 22% in the March quarter, the price increases are working. If it stays below 20%, cost pressure is moving faster than pricing power. The second metric is data center revenue. If it does not clear $650 million, the $5 billion annual target gets harder. The third is handset revenue. The company expects a mid-single-digit sequential decline in December; a steeper drop would signal a deeper memory squeeze. A handset decline alone is not an alarm. If margin and data center hold together, the story stands. For how to read an earnings day, see our guide.
Looking Ahead
Strengths and Risks
5 Strengths · 5 RisksStrengths
5- Automotive revenue rose 89% year over year to $1.99 billion, beating expectations by 20%.
- Automotive and IoT revenue together grew 36% year over year.
- The company renewed long-term license agreements with Apple, Huawei and Transsion.
- Data center revenue will exceed $650 million in the December quarterThe fiscal 2027 target is $5 billion.
- The company returned $11.67 billion to shareholders in fiscal 2026, including $7.82 billion in buybacks.
Risks
5- Handset revenue fell 26% year over year, and the company expects global handset units to be flat to down in 2027.
- The QCT pre-tax margin fell from 29% to 24% in a yearThe December quarter guide is 20% to 22%.
- The full pass-through of higher input costs into pricing is pushed to the second half of fiscal 2027.
- The loss of Apple modem orders leaves a lasting revenue gap on the handset side.
- Inventories rose 32% in a year to $8.64 billion.
What to Watch
5- A $0.92 per share dividend will be paid on December 17, 2026, to holders of record on December 3.
- Data center revenue is expected to exceed $650 million for the first time in the December quarter.
- The full benefit of price increases on QCT gross margin is expected in the second half of fiscal 2027.
- The company expects non-handset revenue to grow more than 60% in fiscal 2027.
- Q1 FY27 earnings are expected in early February 2027.
Upcoming Earnings
To Understand This