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DATE

Wednesday, Nov. 5, 2025, at 4:45 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Cristiano Renno Amon
  • Chief Financial Officer — Akash Palkhiwala
  • Executive Vice President, Licensing and Corporate Development — Alex Rogers
  • Vice President, Investor Relations — Mauricio Lopez-Hodoyan

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TAKEAWAYS

  • Total revenue -- The company reported $11.3 billion in non-GAAP revenue for the fiscal fourth quarter ended Sept. 28, 2025, above the high end of guidance, driven by demand for premium Snapdragon-powered Android handsets, automotive, and IoT.
  • Non-GAAP EPS -- $3, exceeding the high end of guidance (non-GAAP) for the fiscal fourth quarter ended Sept. 28, 2025, reflecting broad-based segment performance.
  • QCT revenue -- $9.8 billion in QCT revenue for the fiscal fourth quarter ended Sept. 28, 2025, up 9% sequentially and 13% year over year non-GAAP revenue growth in fiscal 2025, supported by record automotive revenue above $1 billion and strong IoT demand.
  • QCT handset revenue -- $7 billion in non-GAAP revenue for the fiscal fourth quarter ended Sept. 28, 2025, up 14% year over year, attributed to Snapdragon 8 Elite Gen 5 launches and ongoing premium Android strength.
  • QCT IoT revenue -- $1.8 billion in non-GAAP revenue for the fiscal fourth quarter ended Sept. 28, 2025, up 7% year over year, fueled by industrial, networking, and smart glasses demand.
  • QCT automotive revenue -- Surpassed the $1 billion quarterly mark, up 17% year over year on increasing Snapdragon digital chassis adoption.
  • QTL revenue -- $1.4 billion in QTL revenue for the fiscal fourth quarter ended Sept. 28, 2025, with 72% non-GAAP EBT margin for the quarter, both above midpoint of guidance, supported by increased handset units.
  • Non-GAAP full-year revenue -- $44 billion in non-GAAP revenue for fiscal 2025; non-GAAP EPS of $12.3 for the full year.
  • Non-Apple QCT revenue growth -- 18% year-over-year growth in total QCT non-Apple revenue for fiscal 2025.
  • Record free cash flow -- $12.8 billion in free cash flow generated in fiscal 2025, with nearly 100% returned to stockholders through repurchases and dividends.
  • QCT EBT margin -- 29% in the most recent quarter, at the high end of guidance; full-year non-GAAP QCT operating margin of 30%, meeting the long-term target.
  • Automotive and IoT annual growth -- Automotive up 36% and IoT up 22% year over year in fiscal 2025 (non-GAAP), supporting company progress toward 2029 targets.
  • Fiscal first quarter 2026 guidance -- Projected non-GAAP revenue of $11.8 billion-$12.6 billion and non-GAAP EPS of $3.3-$3.5; QCT expected to deliver $10.3 billion-$10.9 billion in revenue and 30%-32% EBT margin.
  • QTL fiscal first quarter guidance -- Anticipated non-GAAP QTL revenue between $1 billion and $1.4 billion, with EBITDA margin of 74%-78%.
  • QCT handset growth outlook -- Management expects "low teens percentage sequential growth" in QCT handset revenue for the fiscal first quarter ending Dec. 28, 2025, according to Akash Palkhiwala, citing new flagship Android launches.
  • IoT sequential trend -- A sequential revenue decline is anticipated in IoT for the fiscal first quarter ending Dec. 28, 2025, reflecting seasonality in consumer products and aligning with historical patterns.
  • Automotive next quarter guidance -- Automotive revenue is expected to be "flat to slightly up on a sequential basis" for the fiscal first quarter ending Dec. 28, 2025, according to Akash Palkhiwala following a record quarter.
  • Non-GAAP tax rate impact -- Newly enacted tax legislation results in an expected ongoing non-GAAP tax rate of 13%-14% going forward and lower cash tax payments; a non-cash $5.7 billion deferred tax asset charge in the fiscal fourth quarter ended Sept. 28, 2025, impacts GAAP results but is excluded from non-GAAP metrics.
  • Snapdragon brand recognition -- Debuted at number 39 on Interbrand Top 100 Global Brands for 2025; first inclusion on Kantar's Brand Z Most Valuable Global Brands at number 38.
  • Data center revenue timing -- Management now anticipates material data center revenue to begin in fiscal 2026, pulled forward from fiscal 2027 due to progress with new customers and AI inference accelerators.
  • 2029 segment revenue targets -- Management reiterated confidence in achieving $8 billion automotive and $14 billion IoT annual revenue targets for fiscal 2029, based on fiscal 2025 performance.
  • QCT segment share assumption -- Regarding a major Android OEM, Amon said, "Our assumption for any new Galaxy is always going to be 75%," referring to the expected share for upcoming Galaxy models, setting the baseline for internal forecasts.

SUMMARY

Qualcomm (QCOM 3.13%) management confirmed sequential and year-over-year growth across QCT, QCT handset, automotive, and IoT in the fiscal fourth quarter ended Sept. 28, 2025, on a non-GAAP basis, with all major revenue streams exceeding company expectations and setting new records. Data center initiatives advanced, with plans for an accelerated revenue ramp and specific mention of the Humane customer engagement and a future pipeline with hyperscalers in fiscal 2026 and fiscal 2027. New product launches, such as the Snapdragon 8 Elite Gen 5 for mobile and X2 Elite for laptops, were highlighted for claimed technical leadership and broad OEM adoption momentum. Recent acquisitions, including Arduino, expanded the industrial IoT user base to over 30 million, indicating substantial customer reach for edge AI solutions. Shareholder returns remained a priority, with free cash flow returned almost entirely through repurchases and dividends.

  • On licensing, Alex Rogers said, "discussions [with Huawei] are still underway," indicating unresolved negotiations with a major handset maker.
  • Akash Palkhiwala confirmed, "we are forecasting approximately low teens sequential revenue growth" in QCT handsets for the fiscal first quarter ending Dec. 28, 2025 (non-GAAP), mainly due to new Android flagship launches.
  • Cristiano Renno Amon stated the shift to premium devices is driving content and average selling price increases across both developed and developing markets.
  • Akash Palkhiwala noted, "there is some benefit from Apple, but the primary driver for the growth quarter over quarter is actually Android premium tier shipments."
  • Ongoing data center customer engagement includes hyperscalers, with details promised for an investor update in 2026.
  • Akash Palkhiwala clarified, "we are investing in the data center area," describing operating expense increases as focused on new growth opportunities.
  • Snapdragon-powered smart glasses and AI wearables are described as "significantly ahead of guidance," presenting a possible multibillion-dollar opportunity in the coming years, as discussed by management on the fiscal fourth quarter 2025 earnings call.
  • Seasonality in handsets is expected to persist, with the first and second fiscal quarters typically stronger, and the third being the weakest.

INDUSTRY GLOSSARY

  • QCT (Qualcomm CDMA Technologies): Segment for integrated circuits and system software encompassing wireless and data communications, automotive, IoT, and related technologies.
  • QTL (Qualcomm Technology Licensing): Segment granting intellectual property licenses for wireless standards and generating royalty revenues.
  • EBT (Earnings Before Tax): Segment-level profitability measure before income taxes, frequently cited in segment reporting.
  • EBITDA margin: Earnings before interest, taxes, depreciation, and amortization divided by revenue, shown as a percentage.
  • ASP (Average Selling Price): The average price at which products (such as chipsets) are sold to customers or partners, affecting revenue trends.
  • AI inference: The application of trained artificial intelligence models in real-time environments, including data center and edge devices, as opposed to initial model training.
  • XR: Extended reality, combining augmented, virtual, and mixed reality product segments, as referenced for smart glasses and headsets.
  • NPU (Neural Processing Unit): Specialized hardware within processors designed for accelerating artificial intelligence computation.
  • SoC (System on Chip): An integrated circuit that incorporates all major components of a computer or device system onto a single chip.

Full Conference Call Transcript

Cristiano Renno Amon: Thank you, Mauricio. Good afternoon, everyone. Thanks for joining us today. In fiscal Q4, we delivered another strong quarter with revenues of $11.3 billion and non-GAAP earnings per share of $3, both of which exceeded the high end of our guidance range. QCT revenues of $9.8 billion, up 9% sequentially, were driven by strong end customer demand for Snapdragon-powered premium tier Android handsets, continued demand for automotive Snapdragon digital chassis, and strength in IoT across industrial, Wi-Fi 7 access points, 5G fixed wireless, and smart glasses. In addition, all three QCT revenue streams exceeded our expectations, including record automotive quarterly revenues in excess of $1 billion. Licensing business revenues were $1.4 billion.

Fiscal 2025 non-GAAP revenues of $44 billion were up 13% year over year, with record QCT annual revenues of $38.4 billion, up 16% year over year, including automotive and IoT revenue growth of 36% and 22% year over year, respectively. We delivered 18% year-over-year growth in total QCT non-Apple revenues above our prior estimates. We remain on track to achieve our fiscal 2019 long-term revenue commitment as outlined at our 2024 Investor Day.

At Snapdragon Summit in September, we introduced our Snapdragon 8 Elite Gen 5 mobile platform for next-generation flagship AI smartphones. This platform is equipped with our custom-built third-generation Orion CPU, the fastest mobile CPU ever, along with an upgraded NPU and GPU. With the Snapdragon 8 Elite Gen 5, we continue to set the pace of innovation in mobile processors. This year marked our tenth Snapdragon Summit, with simultaneous events held in Maui and Beijing. Validating the strength of our Snapdragon ecosystem, leading China OEMs, including Xiaomi, Honor, Vivo, and OnePlus, announced their flagship phones at our event.

More than 1,100 partners, analysts, tech influencers, and press attended in person, and our keynotes captured over 26 million unique views across both events. Together with our announcement, Snapdragon Summit generated over 547 million social media impressions. In addition, our Snapdragon insiders community of tech enthusiasts, developers, and fans has grown to more than 20 million members worldwide. Our highly differentiated technology continues to drive increased brand visibility, and during the quarter, QUALCOMM Incorporated debuted at 39 on the Interbrand Top 100 Global Brands list for '25, reflecting the strength of Snapdragon. And for the first time ever, Kantar's Brand Z Most Valuable Global Brands list included Snapdragon, where we ranked number 38.

Also at Summit, we unveiled our newest platform for premium laptops, the Snapdragon X2 Elite and X2 Elite Extreme. Once again, our industry-leading processors continue to outperform competitors, surpassing Intel and AMD in both speed and power efficiency. Our latest NPU sets a new benchmark as the world's fastest AI engine for laptops, also exceeding Intel and AMD in performance. And with the new Orion Gen 3, we have the world's first 5 GHz CPU for the ultra-mobile laptop category with extended battery life. We now expect approximately 150 designs to be commercialized through 2026 and remain optimistic about the continued momentum for Snapdragon-powered AI PCs.

As AI transforms human-computer interactions, intelligent wearables, and specifically smart glasses, are evolving into personal AI devices that can connect the user directly to an AI agent or model. This emerging category is growing at a remarkable pace and has reached an inflection point, fueled by very strong demand for smart glasses from Meta. This quarter alone, Meta introduced several new Snapdragon-powered styles, including the Ray-Ban Meta and the Meta Ray-Ban display and Neural Band. In addition to Meta, our leadership in this space is reflected by the 30 designs in production or development with our global partners.

They include Samsung, which recently launched Galaxy XR, a truly multimodal AI headset and the first device for Google's new AI-native operating system, Android XR.

We achieved a significant milestone in automotive with the launch of Snapdragon Ride Pilot, our first full system solution for L2+ automated driving. Developed in close collaboration with BMW, it debuted in the automaker's BMW iX3 EV SUV. Powered by our advanced self-driving software stack, Snapdragon Ride Pilot sets a new standard in automated driving. It's designed for universal compatibility and seamless integration with automakers, unlocking L2+ driver assistant features like hands-free highway driving and urban navigation for vehicles worldwide. Snapdragon Ride Pilot is currently validated in 60 countries and extends to 100 in 2026. The broad interest from leading automakers globally is exceeding our expectations.

At IAA Mobility, QUALCOMM Incorporated and Google announced an expanded partnership, including the integration of Google Gemini models into our suite of Snapdragon digital chassis solutions. Together, we will enable automakers to build and deploy personalized AI agents to act as in-vehicle assistants, bringing multimodal edge-to-cloud AI to next-generation software-defined vehicles.

In industrial IoT, we completed our acquisition of Arduino, a premier open-source hardware and software company with an IoT development ecosystem of more than 30 million users worldwide. This builds on our acquisitions of Edge Impulse and Foundries.io and accelerates our plans to provide a comprehensive Edge AI development platform for a broad set of applications. With these new assets, we are expanding our portfolio to a wide range of customers and verticals, further cementing our position as a leader of AI for the edge.

Additionally, we recently released the Arduino Uno Q single-board computer, powered by a Dragon Wing processor. This full-stack edge AI platform enables the rapid development of solutions for applications ranging from smart home automation to industrial robotics, drones, and more. AI data center growth is moving from training to dedicated inference workloads, and this trend is expected to accelerate in the coming years. The mass adoption and continuous use of AI applications are driving the industry to look for competitive alternatives that prioritize power-efficient performance and cost. We announced our entry into this market and recently unveiled our AI inference-optimized AI 200 and AI 250 SoCs and associated accelerator cards and racks.

We are very pleased to have Humane as our first customer for these solutions, with a target deployment of 200 megawatts starting in 2026. Looking ahead, we are executing on a multi-generation roadmap with an annual cadence. I would like to share that we are looking forward to providing an update in 2026 on our data center plans, including our roadmap performance and differentiated memory and compute technology. We will also highlight our progress in other areas, including advanced robotics, next-generation ADAS, industrial edge AI, and 6G devices and AI-powered RAN.

As we execute on our strategy and expand our IP and capabilities, we believe we are one of the best-positioned companies to lead the expansion of AI to the edge, edge-to-cloud hybrid AI, and develop a power-efficient cloud inferencing solution. I will now turn the call over to Akash.

Akash Palkhiwala: Thank you, Cristiano, good afternoon, everyone. Let me begin with our fourth fiscal quarter results. We are pleased with our strong non-GAAP performance, with revenues of $11.3 billion and EPS of $3, both of which were above the high end of our guidance. QTL revenues of $1.4 billion and EBT margin of 72% were above the midpoint of our guidance, driven by slightly higher handset units. QCT delivered revenues of $9.8 billion and EBT of $2.9 billion, with year-over-year growth of 13% and 17%, respectively. QCT EBT margin of 29% was at the high end of our guidance.

QCT handset revenues of $7 billion increased 14% on a year-over-year basis, reflecting increased demand for premium Android handsets powered by our Snapdragon 8 Elite Gen 5 platform. QCT IoT revenues of $1.8 billion grew 7% year over year, driven by strength across industrial and networking products, and increased demand for AI smart glasses powered by our Snapdragon platform. In QCT Automotive, we surpassed the $1 billion quarterly revenue milestone, delivering 17% year-over-year revenue growth as the adoption of our Snapdragon digital chassis platform continues to accelerate.

With the recent enactment of the One Big Beautiful tax bill, we now expect our non-GAAP tax rate to remain in the 13% to 14% range going forward, and we anticipate lower cash tax payments relative to prior expectations. This new legislation resulted in a non-cash charge of $5.7 billion in the fourth fiscal quarter to reduce the value of our deferred tax assets. This charge is excluded from non-GAAP metrics but impacts our GAAP results.

Before turning to guidance, I would like to take a moment to highlight our strong performance in fiscal 2025. We are incredibly pleased with our execution, with non-GAAP revenues of $44 billion and EPS of $12.3, representing year-over-year growth of 13% and 18%, respectively. In QCT, we achieved 16% year-over-year revenue growth, driven by double-digit increases across all revenue streams, IoT up 22%, and automotive growing 36%. We also delivered QCT operating margins of 30%, in line with our long-term target we previously outlined. Over the past five years, our non-Apple QCT revenues grew at a 15% compounded annual growth rate. Similarly, over the last two years, our non-Apple QCT revenues grew by 17% and 18%, respectively.

Lastly, we generated record free cash flow of $12.8 billion. Consistent with our commitment, we returned nearly 100% to stockholders through repurchases and dividends through the year.

Now turning to guidance. In the first fiscal quarter, we expect to deliver record results, with revenues in the range of $11.8 billion to $12.6 billion and non-GAAP EPS of $3.3 to $3.5. In QTL, we estimate revenues of $1.4 billion to $1 billion and EBITDA margins of 74% to 78%. In QCT, we expect record revenues of $10.3 billion to $10.9 billion and EBT margins of 30% to 32%. We anticipate record QCT handset revenues with low teens percentage growth sequentially, primarily driven by new flagship Android handset launches powered by Snapdragon. Following our outperformance for QCT IoT revenues in the fourth quarter, we expect a sequential decline consistent with last year, driven by seasonality in consumer products.

In QCT Automotive, following a record fourth quarter, we estimate revenues in the first fiscal quarter to remain flat to slightly up on a sequential basis. Lastly, we forecast non-GAAP operating expenses to be approximately $2.45 billion in the quarter.

In closing, as we approach one year since outlining our growth strategy at Investor Day, I would like to provide an update on the progress towards our $22 billion fiscal 2029 revenue target across automotive and IoT. In Automotive, we have established ourselves as the most strategic silicon partner for OEMs globally. The accelerating adoption of our Snapdragon digital chassis platform and 36% year-over-year revenue growth in fiscal 2025 puts us on track to achieve our $8 billion revenue target. Across IoT, the increasing importance of artificial intelligence, high-performance low-power computing, and connectivity, validated by our 22% year-over-year revenue growth in fiscal 2025, reinforces our confidence in achieving our $14 billion revenue target.

In Industrial, increasing customer engagement and growth in design win pipeline, combined with our recent acquisitions to unlock access to 30 million users, underlines our confidence in strong revenue growth through the end of the decade. In XR, we are exceeding prior expectations on strong demand for AI smart glasses, and we remain the platform of choice for smart glasses and mixed reality devices across leading global OEMs and ecosystems. In PCs, we extended our technology leadership with the recent launch of Snapdragon X2 Elite and X2 Elite Extreme platforms, which deliver multigenerational performance increases across CPU, GPU, and AI.

Given our strong pipeline of approximately 150 design wins, we are optimistic about the growth potential for Snapdragon-powered AI PCs as we expand our presence across global consumer and enterprise channels. In networking, our continued innovation and leadership in Wi-Fi, 5G, edge processing, and AI, combined with our integrated platform approach, positions us to drive content growth and adoption globally. As Cristiano outlined, beyond our revenue target, we are also pursuing incremental opportunities across data center and robotics. Finally, I want to thank our employees for exceptional execution and continuing to deliver industry-leading technologies and products. This concludes our prepared remarks. Back to you, Mauricio.

Mauricio Lopez-Hodoyan: Thank you, Akash. Operator, we are now ready for questions. Thank you.

Operator: The first question will come from the line of Joshua Buchalter with TD Cowen. Please proceed with your question.

Joshua Buchalter: Hey, guys. Thanks for taking my question and congrats on a stellar set of results in a bumpy backdrop. I wanted to start with the data center business. I realize you are going to provide more details in the first half of 2026, and my questions might get punted as a result. But maybe you could spend a few minutes talking about what you see as QUALCOMM Incorporated's right to win in the data center space and any details you can provide on the specs of the AI-200 and AI-250 beyond what you were able to offer in the press release when the Humane engagement was announced?

And then lastly on this topic, last quarter you called out, I believe, a hyperscale engagement. I assume that's distinct from the Humane engagement, and any details on timing there? Thank you.

Cristiano Renno Amon: Hey, Josh. Thanks for your question. And thank you. Yes, look, we are very excited. I think this is the next chapter of the process we have been in at QUALCOMM Incorporated to change the company, expanding our IP. I think that's one of the reasons we made a position such as Alpha Wave. We think there are two areas that we outlined that we can participate in the data center. We are incredibly excited about the size of the opportunity and the next phase of data center build-out where there's going to be real growth as we go from training to inference. We have been focused on two areas.

One is we believe we have one very strategic asset in the industry, which is a very competitive, power-efficient CPU. That is both for the head node of AI clusters as well as general-purpose compute. And then we also have been building what we think is a new architecture dedicated to inference. I think the focus has been increased compute density and simplified architecture for the data center in terms of increased performance per watt. I think it's all going to be about generating the most amount of tokens with the least amount of power, and that's our right to play. We are excited about what we are doing. There has been development.

It's something that we are actually doing in a very disciplined manner. We spent a lot of time with our early experimentation with AI-100 to develop the software, and then we are now building AI-200, AI-250, both the SoC, the card, and rack solutions. And I think we are pleased with what we are seeing. We will provide more details on that, as you outlined, early next year. Specific to your questions, we were in discussion with our hyperscaler.

We are very pleased with the progress of that conversation, and that's going to be part of our update when we provide details on the roadmap, performance, the KPI, and we will be able to show details of the solution as well as our customer engagement. We are in discussions with a lot of companies. It's clear the market wants competition for this. But in a typical QUALCOMM Incorporated way, we are just going to be focused on executing and showing the product performing. Like I said, this is exciting, the new chapter of our expansion, and alongside robotics, those are kind of new opportunities for us.

Joshua Buchalter: Appreciate all the color there and looking forward to the updates. My follow-up, I wanted to ask about the handset market. So you highlighted your ongoing momentum in the Android space as driving growth in the fourth quarter. Excuse me, calendar fourth quarter in your prepared remarks. There's been a lot of noise, I think, about your lead Android customer potentially looking to use an internal modem more than they have in recent years. Could you maybe just talk about your visibility into your share at that customer and any sort of share that you would expect to how that you would expect that over the next year or so? Thank you.

Cristiano Renno Amon: Look, thanks for the question. I actually want to spend a little bit of time on this because I sense that there is potential for a lot of noise when noise is actually not required. I think, first of all, there is one thing that is happening with our Snapdragon and our premium tier Snapdragon Android, which has been very consistent, and this has happened over the past few years. The premium tier is expanding. If we look at the overall market, we have a trend that is very healthy, and the premium tier is expanding and is adding more compute.

That is the reason why our Android business, even in a market that is relatively flat, which is a handset market, we continue to grow our content, ASPs, and earnings because we see the premium tier expanding. A lot of the upside we have in the handsets is primarily driven by the Android premium tier. The second part is our relationship with Samsung. We have said for a number of years, for a number of reasons, and this has been true in the past several years, that what used to be a normal relationship at a 50% share, the new baseline is about 75% share. And that is always going to be our financial assumption.

When we out-execute, sometimes we get more than 75% on Galaxy, 25%, we got 100%. Our assumption for any new Galaxy is always going to be 75%. That's our assumption for Galaxy S26.

Operator: The next question comes from the line of Samik Chatterjee with JPMorgan. Please proceed with your questions.

Samik Chatterjee: Hi. Thanks for taking my question. Cristiano, you mentioned on the data center side, starting with that, you mentioned the price performance for the inferencing performance that you are trying to deliver. I mean, of the training clusters that we have sort of seen, other incumbents sort of talk about the ranges of installation costs is somewhere in the sort of $30 billion to $40 billion per gigawatt we are hearing of. Can you just right-size us in terms of when you are thinking about the deployment on a gigawatt basis, what kind of cost performance or price performance are you thinking of relative to these inferencing workloads that you can support on the AI-200 or AI-250?

And I'm also trying to get to sort of what revenue implications are for Humane when you sort of deploy 200 megawatts with them? And I have a follow-up. Please.

Cristiano Renno Amon: Okay. I'm going to try to give as much color as I can without getting ahead of the update we are going to provide next year. So first, let's just have a broader discussion about revenue. What we said before is that we expect data center products to start leading to a revenue ramp beginning in '20. I think as a result of the Humane engagement and our progress on the AI accelerator, I think we are pulling this forward into fiscal 2027. So you should expect now from what we said before, I think data center revenue is going to start to become material in fiscal 2026.

So I think that's the extent of what I can provide at this moment is about a one-year pull-in. The second thing is we are getting interest. You should assume the companies are having to deploy as much compute as they need in the data center for inference, especially now that you see the constraints that you have on power, the constraints that you have on the amount of computer density. I think we have a lot of folks interested. We will not be having conversations if we did not have a solution that is competitive. But we will show the performance of the platform, I think, when we have a roadmap update early next year.

Samik Chatterjee: Okay. Got it. And maybe the second one, similar to Josh's question, I think Akash, if I'm interpreting the market reaction to your strong numbers, there seems to be that concern about what March looks like with the change in share at the primary Android customer. Typically on the handset side, your quarter-over-quarter decline into March has been sort of this high single-digit piece. Is that still a good run rate with sort of the lower level of share? Or would you sort of guide us otherwise? Because I think that's really what the market seems to be sort of concerned about at this point. Thank you.

Akash Palkhiwala: Yes, Samik, thanks for the question. We are not guiding beyond the first quarter at this point. But when you look at our strong business momentum, exiting fiscal 2025, you see the benefit of that showed up in our results. Also showing up in the December guidance. And so that carries forward into the rest of the fiscal year. The only additional thing I would note is just a reminder that we expect to close our Alphawave acquisition in 2026. But otherwise, I think the business momentum is strong. And just a couple of factors that you outlined.

Operator: The next question comes from the line of Timothy Arcuri with UBS. Please proceed with your question.

Timothy Arcuri: Thanks a lot. Akash, when you talked about September, you said that the beat was driven mostly by premium Android, but it seemed like it came a little more from your top customer because before you were saying to take like 30% of units out and that was like $500 million roughly. It seems like nowhere near that much came out from that customer. So I mean, it was kind of barely down year over year. So can you just square that? And then also as part of that, you speak to how much that customer is as a baseline assumption for December.

I think we've seen that the model that has their modem and it's not really selling very well. So I would assume that's a tailwind for you also in calendar Q4. And then I had a second question. Thanks.

Akash Palkhiwala: Sure, Tim. So as we had said earlier, we expected to be in three of the four models of the phone that was launched. And so that is exactly what happened. And share, of course, is based on how sell-through plays out. Specifically on the September question, we already had kind of demand from the customer that was factored into the guidance we gave. So the upside we saw was not from Apple. It was really driven by Android customers and primarily premium tier with the launch of our new Snapdragon chip. When you look at the sequential trend as well, as I mentioned, we are forecasting approximately low teens sequential revenue growth in the handset revenue stream for QCT.

And primarily driven by Android as well. So there is some benefit from Apple, but the primary driver for the growth quarter over quarter is actually Android premium tier shipments.

Timothy Arcuri: Okay. Thanks. And then is there any update on the negotiation with Huawei for a license? It seems like it's kind of dragging on a little bit. Can you just talk about that?

Alex Rogers: Yeah, this is Alex. Thanks for the question. No, we actually do not have an update now. Discussions are still underway. Really nothing substantive to say beyond that.

Operator: The next question comes from the line of Stacy Rasgon with Bernstein Research. Please proceed with your question.

Stacy Rasgon: Hi, guys. Thanks for taking my questions. So you noted the non-Apple QCT revenue was up 18% year over year. And even if I take out the auto and the IoT, it's clear that the Android piece was up like pretty strong double digits year over year. So am I right in assuming that's all content or primarily content given I do not think units grew that much and is that the right sort of pace of like further content increase that we ought to be about as we go forward?

Akash Palkhiwala: Yeah. So, Stacy, you are obviously doing the math right. There are two primary drivers on this. One is just the mix shift of units up. And so this is a trend that we have seen over the last several years. And sometimes it's thought of as a developed market trend, but that's not true. It's across all developing regions as well. The devices that are purchased continue to move up. And so that shows up in the benefit to our revenue stream. The second trend is within the premium tier. Content continues to grow as we deliver more and more capable chips and more capable handsets are being delivered as a result of it.

And those are the two primary drivers of kind of the long-term trend of our handset business.

Stacy Rasgon: Got it. Thanks. And if I could have a quick follow-up. Just the Snapdragon Android strength in September and December, is that primarily China? And is there any concerns there? I mean, that just the timing of the launches? Like any thoughts on pull forward or anything like that? Anything we ought to be thinking about?

Akash Palkhiwala: Yeah. No. There's no pull forward there. I think what we have seen is all of our most of our China customers, actually all the major customers have already launched devices and the initial reception to the devices has been very positive. We will see a lot of our global customers launch devices as well later this quarter going into early next year. And so it's just a reflection of kind of normal purchase patterns around the launch of these devices. And the great initial consumer reaction to the launches.

Operator: The next question is from the line of Chris Caso with Wolfe Research. Please proceed with your questions.

Chris Caso: Yes, thank you. And a question again on AI data center and I realize you are going to provide some details coming up, but there are some specs out there, so which is why we ask. But from what we have seen, what was in the press release was perhaps a different architecture than what we have seen others attack the market with. DDR memory, PCI Express in that. Should we interpret that as sort of a first approach by QUALCOMM Incorporated with more to come? Or is this rather a different sort of philosophy for attacking the market? You talked about being more efficient on power consumption.

Is this sort of attacking the market differently than what's in the market today?

Cristiano Renno Amon: I think the answer to the question is yes. For us, I think we are approaching this thinking about what the future architecture should look like. We had said before, and I think that's we have thought about this for the edge as well. Which means when we think about dedicated inferencing clusters and the goal is to actually have the highest possible compute density at the lowest possible cost and energy consumption to generate tokens, we thought that maybe an architecture that is beyond the GPU and what you have traditionally been doing with GPU and HBM is what we should be doing. That's what we are developing, and we have to execute.

And that's the focus of the company right now.

Chris Caso: Got it. With just back on handsets and you talked about a mix shift towards the premium tier. To what extent has the growth that you have seen in handsets been driven by Snapdragon ASPs? And obviously wafer prices are going up as you go to finer geometries. Maybe talk about the impact of higher ASPs on handset growth both now and going forward and how the industry absorbs those higher ASPs?

Akash Palkhiwala: Yes. So I think there's a long-term trend that we have seen. This is a conversation that we have every year, but we continue to see just very strong demand for more capable chips, more capable processing in these premium tier chips. And so the competition between the OEMs drives it, the demand for consumers doing more activity on the phone drives it. And we know the next couple of chips that we are making, and we are already in advanced discussions with our customers. So we feel pretty confident that there is legs to this trend over the next several years.

The second factor that I outlined is important to keep in mind as well is this very significant mix shift towards more premium devices. And that's not about content growth within the tier, but it's more about more capable devices being purchased by consumers. And that is a multiyear trend as well that we are continuing to see going forward.

Operator: The next question is from the line of Tal Liani with Bank of America. Please proceed with your question.

Tal Liani: Hi, guys. Thank you. If I look at this quarter, you grew handsets by 14% and it looks like next quarter you are guiding against 600 basis points above market growth or above market expectations for QCT. When you look at next quarter, what are the components of this outperformance? Can you go over kind of IoT, autos, and handsets? Where do you think you can perform better than you initially thought last quarter, etcetera? Can you give us a little bit of a color on how next quarter is behaving in terms of the QCT breakdown? Thanks.

Akash Palkhiwala: Tal, just to confirm, your question is about the December, first fiscal quarter?

Tal Liani: Yes, first fiscal quarter, sorry. The question is about the guidance for next quarter.

Akash Palkhiwala: Yes, perfect. So specifically in automotive, we had a record quarter in September, so approximately $1.1 billion. And we are guiding flat to slightly up in automotive. We do think that we are in this very strong position as additional cars get launched with our capabilities in them. We will continue to grow revenue through the year. IoT is similarly positioned, right? We saw significant upside relative to our guidance within September, and we are positioned to continue to grow revenue starting in the first quarter going into the rest of the fiscal year as well. Within handsets, the upside that you are seeing in December is really the success of our launch of our new chip.

We have seen all the major OEMs launch devices with it. As I said earlier, strong consumer reaction, and that is reflected in our financial forecast. On a sequential basis, as I mentioned earlier, we are forecasting low teens sequential revenue growth in the handset stream in QCT.

Tal Liani: And my follow-up is on a historical perspective. When you launch a product into China and it's into the New Year's, the Chinese New Year, etcetera, is the first fiscal quarter the strongest quarter? What happens from a seasonality point of view? What happens for the next few quarters from a historical perspective?

Akash Palkhiwala: I mean, as you have seen in the past, we expect our first fiscal and second fiscal quarters to be the stronger quarters in the year, and usually the June, the third fiscal quarter is the lower. So that seasonality should be consistent with what you have seen before in the handset business.

Operator: The next question comes from the line of C.J. Muse with Cantor Fitzgerald. Please proceed with your question.

C.J. Muse: Yes, good afternoon. Thank you for taking the question. I wanted to kind of focus on QCT EBT margins and revenues grew 5% year on year, yet margins were down 100 plus bps. And I'm curious, is that a function of mix or is that a function of higher manufacturing costs? Or is it simply R&D investments for future revenue growth?

Akash Palkhiwala: Yes. I think when you look at the year-over-year trend, I think you should think of we are investing in the data center area. Which over the last several years, we have been kind of just focusing OpEx on moving from mature businesses into growth areas. Data center is incremental to the investment profile that we have.

C.J. Muse: Okay. It's very helpful. And then I guess just to hone in on your non-Android handset business. Is there an update in terms of how we should model that for calendar 2026?

Akash Palkhiwala: No change to what we have said on with Apple versus what we have said in the past.

Operator: The next question comes from the line of Benjamin Alexander Reitzes with Melius Research. Please proceed with your question.

Benjamin Alexander Reitzes: Hey, guys, thanks a lot. Just wanted to touch back on the data center event. So you will be updating us in the next calendar year. Previously, you had an Analyst Day where you put out these long-term targets for FY 2029. I would assume that the smallest opportunity was an XR at $2 billion. I would assume if we are going to have an event and go through something like this, this has the opportunity to be something pretty material, more than the smallest opportunity outlined at the last Analyst Day, which was $2 billion for XR by 2029, and more like another multibillion opportunity. Can we just can you guys clarify that?

Akash Palkhiwala: Yes, Ben, that's a great observation. I think we are seeing this market take off very fast, AI smart glasses. And so we definitely feel like we are significantly ahead of the guidance that we had provided and very significant upside opportunity. I mean, if you just kind of step back and think about the broader opportunity around personal AI, and you could think of it as the glasses form factor or the watch form factor or hearables form factor. This could be a very, very large market. And so if that plays out as we suspect it might, it would create significant upside opportunity.

Benjamin Alexander Reitzes: Yes. Sorry, just to clarify though my question, I appreciate that. If you are going to outline the data center opportunity and have a special event, could we assume that it's a multibillion opportunity, something that's you would call out that's at least as big, if not bigger than anything you laid out at your last Analyst Day? Which is the smaller opportunities are $2 billion to $4 billion.

Cristiano Renno Amon: Ben, no, thanks for the question. I understand it now. Yes, it's upside on the number and success in this area, I think, presents to us a potential multibillion-dollar revenue opportunity in a couple of years, and that's how we are thinking about it right now.

Operator: Thank you. That concludes today's question and answer session. Mr. Amon, do you have anything further to add before joining the call?

Cristiano Renno Amon: I just want to thank all of our partners, our employees, and we are continuing to change QUALCOMM Incorporated into a very diversified company. We are probably one of the few companies among all the semiconductor companies that can go from five watts to 500 watts. With very flexible and very broad technology capabilities. I think one thing that we take pride in is that in every industry that we enter, we have a platform that is a leading technology platform, and we are excited about the future of the company, and we are just going to keep executing on this strategy. Thank you very much for supporting our call.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.