Semiconductor specialist Qualcomm (QCOM -0.69%) reported its fiscal year 2024 second-quarter financial results on Wednesday, May 1, that exceeded analysts' expectations on both adjusted earnings per share (EPS) and revenue.
Qualcomm's fiscal Q2 data demonstrates robust financial health amid a competitive landscape.
| Metrics | Q2 Fiscal 2024 | Analyst Estimates | Q2 Fiscal 2023 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $9.39 billion | $9.35 billion | $9.27 billion | +1% |
| Adjusted EPS | $2.44 | $2.33 | $2.15 | +13% |
| Handsets revenue | $6.18 billion | N/A | $6.11 billion | +1% |
| IoT revenue | $1.24 billion | N/A | $1.39 billion | -11% |
| Automotive revenue | $603 million | N/A | $447 million | +35% |
Data sources: Company results from company. Analyst estimates from FactSet. YOY = Year over year. EPS = Earnings per share. IoT = Internet of Things.
Qualcomm at a glance
Qualcomm has earned a positive reputation for its contributions to wireless technology, especially in powering the majority of the world's smartphones with its Snapdragon chipsets. Beyond mobile, the company has been expanding its reach into the automotive and Internet of Things (IoT) sectors, aiming to capitalize on the growing demand for connected devices and vehicles.
Despite a highly competitive environment, Qualcomm's focus on research and development has kept it at the forefront of 5G technology, ensuring its chipsets are integral to the next generation of wireless communication.
Quarterly highlights
The second quarter (which ended March 24) saw Qualcomm report impressive growth in its automotive segment, with revenue surging 35% year over year to $603 million. This growth reflects Qualcomm's successful dive into the automotive technology space, highlighting increased demand for its Snapdragon Automotive platforms.
Handset sales, which make up the majority of Qualcomm's revenue, rose 1% year over year to $6.18 billion. The growth could be a signal that the smartphone market is recovering from a slump that came after pandemic pressures eased.
However, the quarter wasn't without its hurdles. Internet of Things (IoT) revenue fell by 11% year over year to $1.24 billion, hinting at fierce competition and shifting market dynamics. Qualcomm's licensing segment (QTL) continued its steady performance, posting a slight 2% year-over-year increase in revenue, underscoring the enduring value of Qualcomm's vast patent portfolio.
One of the quarter's standout developments was the continued dominance of Qualcomm's chipsets in the mobile market, with ongoing innovations in AI and 5G technologies bolstering its market position. Yet, the narrative was complex, with competitive pressures from Asian companies like Huawei and MediaTek requiring constant vigilance and innovation.
Looking ahead
For the third fiscal quarter of 2024 now underway, Qualcomm management anticipates revenue to be between $8.8 billion and $9.6 billion (up 9.5% at the midpoint from 2023 results) and adjusted EPS between $2.15 and $2.35 (up 20% at the midpoint from 2023 results). Analysts were looking for earnings guidance of $2.17 per share. This guidance indicates an optimistic outlook, balancing the potential for growth with the recognition of the competitive and regulatory challenges ahead.
Investors and stakeholders should watch Qualcomm's strategic moves in the automotive and IoT sectors closely, as these areas represent significant growth opportunities.
