QUALCOMM INCDE
For the period ended Dec 29, 2024. Filed Feb 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 29, 2024 · Filed Feb 5, 2025
QCOM$165.41+5.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-23; filed 2024-07-31.
0000804328-24-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-29; filed 2025-02-05.
0000804328-25-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 257 previous paragraphs and 74 current paragraphs.
27 unchanged; 31 reworded; 14 added; 194 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
First Quarter Fiscal 2025 Overview
Current report
+$75 million in higher licensing revenues from our QTL segment
Current report
Gross margin percentage decreased in the first quarter of fiscal 2025 primarily due to a decrease in the proportion of total revenues related to QTL licensing revenues (which have a higher margin contribution).
Current report
-$31 million decrease in expenses driven by the revaluation of our deferred compensation obligation (which resulted in a corresponding decrease in net gains on deferred compensation plan assets within investment and other income, net due to the revaluation of the related assets)
Current report
The Organization for Economic Co-operation and Development (OECD) has announced a framework to implement a global minimum tax of 15% (referred to as Pillar Two). Certain countries have implemented or are in the process of implementing the Pillar Two legislation, which applies to us beginning in fiscal 2025. While we do not currently expect this to materially impact our consolidated financial statements, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance.
Current report
+higher IoT revenues, due to $513 million in higher shipments across consumer, industrial and edge networking products, partially offset by unfavorable product mix
Current report
+higher revenues
Current report
-higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
Current report
Gross margin percentage remained approximately flat in the first quarter of fiscal 2025, primarily driven by higher product costs, offset by higher average selling prices.
Current report
+$32 million increase in estimated sales of 3G/4G/5G-based multimode products
Current report
+$30 million in higher royalty revenues recognized related to devices sold in prior periods
Current report
QTL EBT as a percentage of revenues increased in the first quarter of fiscal 2025 primarily due to higher revenues.
Current report
We have recently entered into comprehensive 4G and 5G license agreements with Shenzhen Transsion Holdings Limited (a growing, China-headquartered OEM that sells primarily in developing regions). As a result of our agreements with Transsion, all outstanding litigation between the parties has been, or is in the process of being, dismissed.
Current report
We are also involved in other legal proceedings, including those described in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 5. Commitments and Contingencies.” Litigation is inherently uncertain, and, while we intend to continue to vigorously defend ourselves in such matters, the unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows.
Removed paragraphs (194)
Previous report
Third Quarter Fiscal 2024 Overview
Previous report
Gross margin percentage increased in the third quarter of fiscal 2024 primarily due to an increase in QCT gross margin.
Previous report
Gross margin percentage remained flat in the first nine months of fiscal 2024.
Previous report
Research and development expenses remained approximately flat in the third quarter of fiscal 2024.
Previous report
+$29 million increase in litigation costs
Previous report
Third quarter and first nine months 2024 vs. 2023
Previous report
Other expenses in the third quarter and first nine months of fiscal 2024 primarily consisted of a $75 million charge related to the proposed settlement of the securities class action lawsuit.
Previous report
Other expenses in the first nine months of fiscal 2023 included certain restructuring amounts (substantially all of which related to accrued severance costs) from cost reduction actions initiated in fiscal 2023.
Previous report
The increase in interest and dividend income in the third quarter and first nine months of fiscal 2024 was primarily due to higher interest rates earned on higher balances of interest-bearing securities.
Previous report
Net gains on other investments in the first nine months of fiscal 2024 was primarily driven by certain of our QSI non-marketable equity investments.
Previous report
The increase in QCT revenues in the third quarter of fiscal 2024 was primarily due to:
Previous report
-lower IoT revenues, primarily driven by unfavorable mix
Previous report
+higher gross margin percentage, primarily driven by lower net product reserve charges
Previous report
The increase in QCT revenues in the first nine months of fiscal 2024 was primarily due to:
Previous report
+higher handsets revenues, due to $885 million in higher chipset shipments driven by certain major OEMs (primarily driven by the normalization of customer inventory levels, which were elevated in the prior year) and $741 million in higher revenues per chipset primarily driven by favorable mix toward higher-tier Snapdragon platforms
Previous report
-lower IoT revenues, due to $616 million in lower revenues per unit primarily driven by unfavorable mix and $200 million decrease in demand (primarily in edge networking products as customers continue drawing down on their elevated inventory levels, partially offset by consumer products)
Previous report
QCT EBT as a percentage of revenues increased in the first nine months of fiscal 2024 primarily due to:
Previous report
+lower research and development expenses
Previous report
QTL EBT as a percentage of revenues increased in the third quarter of fiscal 2024 primarily due to:
Previous report
+lower cost of sales driven by a decrease in amortization expense related to acquired patents
Previous report
+$188 million increase in estimated sales of 3G/4G/5G-based multimode products
Previous report
-$115 million decrease in estimated revenues per unit
Previous report
-$68 million decrease in revenues from the ending of the recognition of certain upfront license fee consideration in the first quarter of fiscal 2023 from our long-term license agreement with Nokia
Previous report
QTL EBT as a percentage of revenues increased in the first nine months of fiscal 2024 primarily due to lower cost of sales driven by a decrease in amortization expense related to acquired patents.
Previous report
QSI EBT increased in the first nine months of fiscal 2024 primarily due to net gains on certain of our non-marketable equity investments.
Previous report
•We expect certain IoT customers (primarily in edge networking) will continue to draw down on their inventory (which remains at elevated levels), which will continue to have a negative impact on our revenues, results of operations and cash flows.
Previous report
•Our inventory levels continue to be elevated, and we expect this will continue in the near term. If we overestimate future customer demand, it may result in increased excess or obsolete inventory or reserve charges, negatively impacting our results of operations and cash flows.
Previous report
We have recently extended, renewed or entered into license agreements with several key OEMs. We are currently pursuing negotiations with other key OEMs whose agreements expire in early fiscal 2025 (including Huawei). In addition, we have recently entered into a license agreement with Shenzhen Transsion Holdings Limited (a growing, China-headquartered OEM that sells primarily in developing regions) for its 5G products. While we continue to engage in negotiations toward a comprehensive resolution, we have initiated litigation against Transsion in multiple jurisdictions to enforce our intellectual property rights against certain of its unlicensed products. See “Risk Factors” in this Quarterly Report, including the Risk Factors titled “The continued and future success of our licensing programs requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring” and“The enforcement and protection of our intellectual property may be expensive, could fail to prevent misappropriation or unauthorized use of our intellectual property, could result in the loss of our ability to enforce one or more patents, and could be adversely affected by changes in patent laws, by laws in certain foreign jurisdictions that may not effectively protect our intellectual property and by ineffective enforcement of laws in such jurisdictions.”
Previous report
(1) Excludes $77 million of cash and cash equivalents classified as held for sale at September 24, 2023.
Previous report
During the first nine months of fiscal 2024, income taxes paid were in excess of our provision, negatively impacting net cash provided by operating activities. This was primarily driven by the adverse impact of the requirement to capitalize and amortize research and development expenditures for federal income tax purposes, our payment of $1.0 billion related to certain previously postponed U.S. federal income tax-payments from fiscal 2023 and an installment payment for a one-time U.S. repatriation tax accrued in fiscal 2018 of $414 million.
Previous report
Risk Factors
Previous report
You should consider each of the following factors in evaluating our business and our prospects, any of which could negatively impact our business, results of operations, cash flows and financial condition, and require significant management time and attention. Further, the risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also negatively impact our business, results of operations, cash flows and financial condition, and require significant management time and attention. In such cases, the trading price of our common stock could decline. You should also consider the other information set forth in this Quarterly Report in evaluating our business and our prospects, including but not limited to our financial statements and the related notes, and “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” References to “and,” “or” and “and/or” should be read to include the others, as appropriate.
Previous report
RISKS RELATED TO OUR OPERATING BUSINESSES
Previous report
We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium tier handset devices. If revenues derived from these customers or licensees decrease or the timing of such revenues fluctuates, our business and results of operations could be negatively affected.
Previous report
We derive a significant portion of our revenues from a small number of customers and licensees, and particularly from their sale of premium tier handset devices, and we expect this trend to continue in the foreseeable future. The mobile industry is experiencing and may continue to experience concentration of device share among a few companies, particularly at the premium tier, contributing to this trend. Certain Chinese original equipment manufacturers (OEMs) have increased and may continue to increase their device share in China and in certain regions outside of China, and we derive a significant portion of our revenues from a small number of these OEMs as well. See also “Notes to Condensed Consolidated Financial Statements, Note 2. Composition of Certain Financial Statement Items - Concentrations.”
Previous report
In addition, a number of our largest customers have developed, are developing or may develop their own integrated circuit products, or may choose our competitors’ integrated circuit products, which they have in the past utilized, currently utilize and may in the future utilize in some or all of their devices, rather than our products, which could significantly reduce the revenues we derive from these customers. See also the Risk Factor titled “Our business, particularly our semiconductor business, may suffer as a result of our customers vertically integrating (i.e., developing their own integrated circuit products).”
Previous report
Further, political actions, including trade and/or national security protection policies, or other actions by governments, particularly the U.S. and Chinese governments, have in the past, currently are and could in the future limit or prevent us from transacting business with certain of our customers, limit, prevent or discourage those customers from transacting business with us, or make it more expensive to do so, any of which could also significantly reduce the revenues we derive from these customers. See also the Risk Factor titled “A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.”
Previous report
In addition, we spend a significant amount of engineering and development time, funds and resources in understanding our key customers’ feedback and/or specifications and attempt to incorporate such input into our product launches and technologies. These efforts may not require or result in purchase commitments from such customers or we may have lower purchases from such customers than expected, and consequently, we may not achieve the anticipated revenues from these efforts, or these efforts may result in non-recoverable costs.
Previous report
The loss of any one of our significant customers, a reduction in the purchases of our products by any of these customers or the cancellation of significant purchases by any of these customers, whether due to the use of their own integrated circuit products or our competitors’ integrated circuit products, government restrictions, a decline in global, regional or local economic conditions, a decline in consumer demand (or a shift in consumer demand away from new devices in favor of refurbished or secondhand devices), elevated inventory levels at our customers or otherwise, would reduce our revenues and could harm our ability to achieve or sustain expected results of operations. A delay of significant purchases, even if only temporary, would reduce our revenues in the period of the delay. Any such reduction in revenues would also impact our cash resources available for other purposes, such as research and development.
Previous report
Further, the concentration of device share among a few companies, and the corresponding purchasing power of these companies, may result in lower prices for our products, which could have an adverse effect on our revenues and margins. In addition, the timing and size of purchases by our significant customers may be impacted by the timing of such customers’ new or next generation product introductions, over which we have no control, and the timing and success of such introductions may cause our revenues and results of operations to fluctuate.
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Reworded paragraphs (31)
Previous wording
This Quarterly Report (including but not limited to this section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “would” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Quarterly Report. Additionally, statements concerning future matters such as our future business, prospects, results of operations or financial condition; research and development or technology investments; new or enhanced products, services or technologies; emerging industries or business models; design wins or product launches; industry, market or technology trends, dynamics or transitions; our expectations regarding future demand or supply conditions; strategic investments or acquisitions, and the anticipated timing or benefits thereof; legal or regulatory matters; U.S./China trade or national security tensions; vertical integration by our customers; competition; annual effective tax rates; and other statements regarding matters that are not historical are also forward-looking statements.
Current wording
This Quarterly Report (including but not limited to this section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “would” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Quarterly Report. Additionally, statements concerning future matters such as our future business, prospects, results of operations or financial condition; research and development or technology investments; new or enhanced products, services or technologies; emerging industries or business models; design wins or product launches; industry, market or technology trends, dynamics or transitions; our expectations regarding future demand or supply conditions; strategic investments or acquisitions, and the anticipated timing or benefits thereof; licensing discussions and negotiations; legal or regulatory matters, including the expected impacts of pending tax or other regulatory changes; U.S./China trade or national security tensions; vertical integration by our customers; competition; annual effective tax rates; and other statements regarding matters that are not historical are also forward-looking statements.
Previous wording
Revenues for the third quarter of fiscal 2024 were $9.4 billion, an increase of 11% compared to the year ago quarter, with net income of $2.1 billion, an increase of 18% compared to the year ago quarter. Key items from the third quarter of fiscal 2024 included:
Current wording
Revenues for the first quarter of fiscal 2025 were $11.7 billion, an increase of 17% compared to the year ago quarter, with net income of $3.2 billion, an increase of 15% compared to the year ago quarter. Key items from the first quarter of fiscal 2025 included:
Previous wording
•QCT revenues increased by 12% in the third quarter of fiscal 2024 compared to the year ago quarter, due to higher handsets and automotive revenues, partially offset by lower IoT revenues.
Current wording
•QCT revenues increased by 20% in the first quarter of fiscal 2025 compared to the year ago quarter, due to higher handsets, IoT and automotive revenues.
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•QTL revenues increased by 3% in the third quarter of fiscal 2024 compared to the year ago quarter, due to an increase in estimated sales of 3G/4G/5G-based multimode products.
Current wording
•QTL revenues increased by 5% in the first quarter of fiscal 2025 compared to the year ago quarter.
Previous wording
Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries. QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent portfolio. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering and research and development functions are operated by Qualcomm Technologies, Inc. (QTI), a wholly-owned subsidiary of QUALCOMM Incorporated, and QTI’s subsidiaries. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated.
Current wording
Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering and research and development functions are operated by Qualcomm Technologies, Inc. (QTI), a wholly-owned subsidiary of QUALCOMM Incorporated, and QTI’s subsidiaries. QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent portfolio. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated.
Previous wording
Seasonality. Many of our products and much of our intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand. Our revenues have historically fluctuated based on consumer demand for devices, as well as on the timing of customer/licensee device launches and/or innovation cycles (such as the transition to the next generation of wireless technologies). This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products and in QTL revenues when licensees’ sales occur. These trends may or may not continue in the future. Further, the trends for QTL have been, and may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings.
Current wording
Seasonality. Many of our products and much of our intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand. Our revenues have historically fluctuated based on consumer demand for devices, as well as on the timing of customer/licensee device launches and/or innovation cycles (such as the transition to the next generation of wireless technologies). This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products (for example, certain major handset OEMs accelerated their premium-tier device launches into the first quarter of fiscal 2025) and in QTL revenues when licensees’ sales occur. These trends may or may not continue in the future. Further, the trends for QTL have been, and may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings.
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The increase in revenues in the third quarter of fiscal 2024 was primarily due to $880 million in higher equipment and services revenues from our QCT segment.
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The increase in revenues in the first quarter of fiscal 2025 was primarily due to:
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The increase in revenues in the first nine months of fiscal 2024 was primarily due to $1.5 billion in higher equipment and services revenues from our QCT segment.
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+$1.6 billion in higher equipment and services revenues from our QCT segment
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The decrease in research and development expenses in the first nine months of fiscal 2024 was primarily due to:
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The increase in research and development expenses in the first quarter of fiscal 2025 was primarily due to:
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+$49 million increase in share-based compensation expense
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+$103 million increase in share-based compensation expense
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-$174 million decrease driven by lower costs related to the development of wireless and integrated circuit technologies (including 5G and application processor technologies). This was primarily driven by a decrease in employee-related costs as a result of certain restructuring actions initiated in fiscal 2023 (which were substantially completed by the first quarter of fiscal 2024) to fund continued investments in key growth and diversification opportunities, partially offset by higher employee cash incentive program costs.
Current wording
+$61 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities)
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The increase in selling, general and administrative expenses in the first nine months of fiscal 2024 was primarily due to:
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The increase in selling, general and administrative expenses in the first quarter of fiscal 2025 was primarily due to:
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+$34 million increase in sales and marketing expenses
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+$46 million increase in sales and marketing expenses
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+$22 million increase in expenses driven by revaluation of our deferred compensation obligation
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$19 million decrease in expenses driven by the revaluation of our deferred compensation obligation
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For the third quarter of fiscal 2024, we estimated our annual effective income tax rate to be 7% for fiscal 2024, which is lower than the U.S. federal statutory rate, and excluded the effects of an intra-group transfer of intellectual property to better align certain intellectual property ownership within our QCT business that is expected to be completed in the fourth quarter of fiscal 2024. While we continue to assess the accounting impact of the transfer, we currently expect that such transfer will result in the recognition of a tax benefit of approximately $400 million during the fourth quarter of fiscal 2024 from the establishment of a deferred tax asset. Additional information regarding our annual effective income tax rate and income tax expense is provided in this Quarterly Report in “Notes to Condensed Consolidated Statements, Note 3. Income Taxes.”
Current wording
We estimate our annual effective income tax rate to be 11% for fiscal 2025, which is lower than the U.S. federal statutory rate. Additional information regarding our annual effective income tax rate and income tax expense is provided in this Quarterly Report in “Notes to Condensed Consolidated Statements, Note 3. Income Taxes.”
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Discontinued operations in the third quarter and first nine months of fiscal 2024 and 2023 are related to the Non-Arriver businesses. Information regarding the Non-Arriver businesses is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 2. Composition of Certain Financial Statement Items - Discontinued Operations.”
Current wording
Discontinued operations in the first quarter of fiscal 2024 are related to the Non-Arriver businesses. Information regarding the Non-Arriver businesses is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 2. Composition of Certain Financial Statement Items - Discontinued Operations.”
Previous wording
The following should be read in conjunction with our financial results for the third quarter of fiscal 2024 for each reportable segment included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Segment Information.”
Current wording
The following should be read in conjunction with our financial results for the first quarter of fiscal 2025 for each reportable segment included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Segment Information.”
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Substantially all of QCT’s revenues consist of equipment and services revenues, which were $7.9 billion and $7.1 billion in the third quarter of fiscal 2024 and 2023, respectively, and $24.1 billion and $22.6 billion in the first nine months of fiscal 2024 and 2023, respectively. QCT handsets, automotive and IoT revenues mostly relate to sales of our Snapdragon platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of 4G, 5G sub 6 and 5G millimeter wave RFFE products.
Current wording
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $9.9 billion and $8.3 billion in the first quarter of fiscal 2025 and 2024, respectively. QCT handsets, automotive and IoT revenues mostly relate to sales of our Snapdragon platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of 4G, 5G sub 6 and 5G millimeter wave RFFE products.
Previous wording
+higher handsets revenues, due to $443 million in higher chipset shipments driven by certain major OEMs (primarily driven by the normalization of customer inventory levels, which were elevated in the prior year) and $159 million in higher revenues per chipset driven by favorable mix toward higher-tier Snapdragon platforms
Current wording
+higher handsets revenues, primarily due to $448 million in higher chipset shipments driven by certain major OEMs, and $424 million in higher revenues per chipset (driven by higher average selling prices and favorable mix), both of which benefited from an increase in demand in premium-tier Snapdragon platforms
Previous wording
+higher automotive revenues, primarily driven by an increase in demand from new vehicle launches with our Snapdragon digital cockpit products
Current wording
+higher automotive revenues, primarily driven by an increase in shipments from new vehicle launches with our Snapdragon digital cockpit products
Previous wording
QCT EBT as a percentage of revenues increased in the third quarter of fiscal 2024 primarily due to:
Current wording
QCT EBT as a percentage of revenues increased in the first quarter of fiscal 2025 primarily due to:
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The increase in QTL licensing revenues in the first nine months of fiscal 2024 was primarily due to:
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The increase in QTL licensing revenues in the first quarter of fiscal 2025 was primarily due to:
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QSI segment results were not material in the third quarter of fiscal 2024 and 2023.
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QSI segment results were not material in the first quarter of fiscal 2025 and 2024.
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We believe that 5G combined with high-performance, low-power processing and on-device intelligence will continue to drive adoption of certain technologies that are already commonly used in smartphones by industries and applications beyond mobile handsets, such as automotive and IoT. We believe it is important that we remain a leader in 5G technology development, standardization, intellectual property creation and licensing, and a leading developer and supplier of 5G integrated circuit products in order to sustain and grow our business long-term.
Current wording
We believe that 5G combined with high-performance, low-power computing and on-device artificial intelligence will continue to drive adoption of certain technologies that are already commonly used in smartphones by industries and applications beyond mobile handsets, such as automotive and IoT. We believe it is important that we remain a leader in 5G technology development, standardization, intellectual property creation and licensing, and a leading developer and supplier of 5G integrated circuit products in order to sustain and grow our business long-term.
Previous wording
•We expect continued intense competition, including from vertical integration by certain of our customers.
Current wording
•We expect continued intense competition, including from vertical integration by certain of our customers (e.g., Apple).
Previous wording
The continued and future success of our licensing programs requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring.
Current wording
Further, we have finalized renewal negotiations for long-term licenses with two key Chinese OEMs, and expect to execute final agreements shortly. We are also in discussions with Huawei, whose agreement has expired. See “Risk Factors” in this Quarterly Report, including the Risk Factors titled “The continued and future success of our licensing programs requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring.”
Previous wording
Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and cash provided by our debt programs. The following tables present selected financial information related to our liquidity at June 23, 2024 and September 24, 2023 and for the first nine months of fiscal 2024 and 2023 (in millions):
Current wording
Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities, cash generated from operations and cash provided by our debt programs. The following tables present selected financial information related to our liquidity at December 29, 2024 and September 29, 2024 and for the first three months of fiscal 2025 and 2024 (in millions):
Previous wording
(2) Includes our issued debt reported as long-term and short-term. We had $1.4 billion (which matures in May 2025) and $914 million (which matured in May 2024) reported as short-term debt at June 23, 2024 and September 24, 2023, respectively. As of June 23, 2024 and September 24, 2023, our credit facility was undrawn, and we had no commercial paper outstanding.
Current wording
(1) Includes our issued debt reported as long-term and $1.4 billion reported as short-term debt (which matures in May 2025). As of December 29, 2024 and September 29, 2024, our credit facility was undrawn, and we had no commercial paper outstanding.
Previous wording
Cash, cash equivalents and marketable securities. The net increase in cash, cash equivalents and marketable securities for the first nine months of fiscal 2024 was primarily due to net cash provided by operating activities, partially offset by $2.8 billion in payments to repurchase 18 million shares of our common stock, $2.7 billion in cash dividends paid, $914 million in repayment of fixed-rate notes that matured in May 2024, $797 million in payments of tax withholdings related to the vesting of share-based awards and $785 million in capital expenditures.
Current wording
Cash, cash equivalents and marketable securities. The net increase in cash, cash equivalents and marketable securities for the first three months of fiscal 2025 was primarily due to net cash provided by operating activities, partially offset by $1.8 billion in payments to repurchase 11 million shares of our common stock, $942 million in cash dividends paid, $315 million in payments of tax withholdings related to the vesting of share-based awards, $277 million in capital expenditures and $260 million in cash paid for acquisitions and other investments.
Previous wording
Net changes in our operating assets and liabilities for the first nine months of fiscal 2024 positively impacted our operating cash flows primarily from an increase in accounts payable due to timing and amount of inventory purchases, an increase in accrued customer incentives, which included the impact of timing of related payments, and a decrease in inventory as we sold a portion of our elevated inventory. This was partially offset by approximately $385 million in severance payments related to restructuring actions initiated in fiscal 2023.
Current wording
The impact on our operating cash flows from net changes in our operating assets and liabilities for the first three months of fiscal 2025 was largely flat primarily from a decrease in accounts receivable (despite having higher revenues compared to the fourth quarter of fiscal 2024) due to the timing of integrated circuit shipments during the period and an increase in customer incentive arrangements that are included in accounts receivable, which included the impact of timing of related payments. This was largely offset by a decrease in payroll and other benefit related liabilities primarily driven by payments related to our employee cash incentive program.
Previous wording
Information regarding recent accounting guidance and the impact of such guidance on our condensed consolidated financial statements is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 1. Basis of Presentation and Significant Accounting Policies Update.”
Current wording
Information regarding recent accounting guidance and the impact of such guidance on our condensed consolidated financial statements is provided in this Quarterly Report in the “Notes to Condensed Consolidated Financial Statements, Note 1. Basis of Presentation and Significant Accounting Policies Update.”
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Current report — wording carried from elsewhere
+$48 million increase in share-based compensation expense
Current report — wording carried from elsewhere
The increase in QCT revenues in the first quarter of fiscal 2025 was primarily due to:
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Previous report — wording carried elsewhere
The increase in selling, general and administrative expenses in the third quarter of fiscal 2024 was primarily due to an increase in sales and marketing expenses.
Previous report — wording carried elsewhere
+higher automotive revenues, primarily driven by an increase in demand from new vehicle launches with our Snapdragon digital cockpit products
Previous report — wording carried elsewhere
The increase in QTL licensing revenues in the third quarter of fiscal 2024 was primarily due to an increase in estimated sales of 3G/4G/5G-based multimode products.
Previous report — wording carried elsewhere
A significant portion of our business is concentrated in China, and the risks of such concentration are exacerbated by U.S./China trade and national security tensions.
Previous report — wording carried elsewhere
•remain a leader in 5G technology development, standardization, intellectual property creation and licensing, and develop, commercialize and remain a leading supplier of 5G integrated circuit products, including RFFE products;