Here's our initial take on Qualcomm's (QCOM 11.46%) third-quarter financial report.
Key Metrics
| Metric | Q3 2024 | Q3 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $9.4 billion | $10.4 billion | +10% | Beat |
| Earnings per share (adjusted) | $2.33 | $2.77 | +19% | Beat |
| Non-smartphone revenue | $2.2 billion | $2.7 billion | +23% | n/a |
| QTL revenue | $1.27 billion | $1.32 billion | +4% | n/a |
Diversifying Away From Smartphones
Qualcomm beat analyst expectations for revenue and earnings in the third quarter of fiscal 2025 thanks in part to strong growth outside of its core smartphone-related business. The company's chips power a sizable fraction of smartphones around the world, but other revenue streams are growing much faster.
Revenue related to smartphones grew by 7% year over year to $6.3 billion. Meanwhile, automotive revenue surged by 21% to $984 million, and Internet of Things revenue jumped 24% to $1.7 billion. The company's next-generation augmented reality platform was recently on display powering Meta Platforms' (META +0.71%) AI smart glasses, enabling a 1 billion parameter AI model to be run locally.
Qualcomm is also making a push into the PC industry. The company's Snapdragon X platform is expected to power more than 100 models by the end of 2026 from all of the major PC OEMs.
Revenue from the technology licensing segment was $1.32 billion, up 4% year over year. Growth across Qualcomm's segments helped push adjusted earnings per share up 19% year over year in the third quarter.
NASDAQ: QCOM
Key Data Points
Immediate Market Reaction
Despite a solid third-quarter report that featured better-than-expected revenue growth, shares of Qualcomm were down about 5% in after-hours trading on Wednesday. Qualcomm stock has been a laggard so far this year, up just 4% year to date going into the third-quarter report.
What to Watch
On top of Qualcomm getting its chips into PCs and augmented reality devices, the company is going after the AI infrastructure market as well. Qualcomm offers server CPUs as well as AI inference chips, and the company announced the acquisition of Alphawave Semi in June. Alphawave specializes in high-speed wired connectivity products, which will help fill out Qualcomm's data center portfolio as demand for AI infrastructure booms.
For the fourth quarter, Qualcomm expects to produce revenue between $10.3 billion and $11.1 billion, along with adjusted EPS between $2.75 and $2.95. While Qualcomm stock didn't cooperate in after-hours trading, the company is producing solid results as it diversifies its business and goes after the AI opportunity.
