QUALCOMM INCDE
For the period ended Mar 30, 2025. Filed Apr 30, 2025.
View on SEC.govAbout this filing
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.
Mar 30, 2025 · Filed Apr 30, 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 2024-12-29; filed 2025-02-05.
0000804328-25-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-30; filed 2025-04-30.
0000804328-25-000031
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 74 previous paragraphs and 98 current paragraphs.
35 unchanged; 35 reworded; 20 added; 4 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 12 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 (20)
Current report
Second Quarter Fiscal 2025 Overview
Current report
+$143 million in licensing revenues resulting from a recent settlement of a licensing dispute, which was not allocated to our segment results
Current report
+$143 million in licensing revenues resulting from a recent settlement of a licensing dispute, which was not allocated to our segment results
Current report
The decrease in research and development expenses in the second quarter of fiscal 2025 was primarily due to:
Current report
-$88 million decrease in expenses driven by the revaluation of our deferred compensation obligation
Current report
Selling, general and administrative expenses remained approximately flat in the second quarter of fiscal 2025 primarily due to:
Current report
$37 million decrease in expenses driven by the revaluation of our deferred compensation obligation
Current report
+$29 million increase in employee-related expenses
Current report
$56 million decrease in expenses driven by the revaluation of our deferred compensation obligation
Current report
Net gains on other investments in the second quarter and first six months of fiscal 2024 was primarily driven by certain of our QSI non-marketable equity investments.
Current report
+higher IoT revenues, primarily due to $410 million in higher shipments primarily across edge networking and industrial products
Current report
-lower gross margin percentage, primarily driven by increased product costs, partially offset by increases in average selling prices
Current report
The increase in QCT revenues in the first six months of fiscal 2025 was primarily due to:
Current report
QCT EBT as a percentage of revenues increased in the first six months of fiscal 2025 primarily due to:
Current report
+higher revenues
Current report
QTL licensing revenues and EBT remained approximately flat in the second quarter of fiscal 2025.
Current report
Second quarter and first six months 2025 vs. 2024
Current report
QSI EBT decreased in the second quarter and first six months of fiscal 2025 primarily due to lower net gains on certain of our equity investments.
Current report
•We continue to monitor the recent changes in global trade policy, including tariffs and related trade actions announced by the U.S., China and other countries. The degree to which such tariffs and other related actions impact our business, financial condition and results of operations will depend on future developments, which are uncertain. Changes to global trade policies may negatively impact demand, pricing and cost for our products and technologies, and contribute to the inherent uncertainties in estimating future customer demand, which may result in increased excess or obsolete inventory or reserve charges, negatively impacting our results of operations and cash flows. See “Risk Factors” in this Quarterly Report, including the Risk Factor titled “We operate in the highly cyclical semiconductor industry, which is subject to significant downturns. We are also susceptible to declines in global, regional and local economic conditions generally. Our stock price and financial results are subject to substantial quarterly and annual fluctuations due to these dynamics, among others.”
Current report
During the first six months of fiscal 2025, income taxes paid were in excess of our provision, negatively impacting net cash provided by operating activities. This was driven primarily by our installment payment for a one-time U.S. repatriation tax accrued in fiscal 2018 of $530 million and the adverse impact of the requirement to capitalize and amortize research and development expenditures for federal income tax purposes.
Removed paragraphs (4)
Previous report
First Quarter Fiscal 2025 Overview
Previous report
$19 million decrease in expenses driven by the revaluation of our deferred compensation obligation
Previous report
QSI segment results were not material in the first quarter of fiscal 2025 and 2024.
Previous report
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.”
Reworded paragraphs (35)
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; 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.
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; 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 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:
Current wording
Revenues for the second quarter of fiscal 2025 were $11.0 billion, an increase of 17% compared to the year ago quarter, with net income of $2.8 billion, an increase of 21% compared to the year ago quarter. Key items from the second quarter of fiscal 2025 included:
Previous 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.
Current wording
•QCT revenues increased by 18% in the second quarter of fiscal 2025 compared to the year ago quarter, due to higher handsets, automotive and IoT revenues.
Previous wording
•QTL revenues increased by 5% in the first quarter of fiscal 2025 compared to the year ago quarter.
Current wording
•QTL revenues remained approximately flat in the second quarter of fiscal 2025 compared to the year ago quarter.
Previous wording
The increase in revenues in the first quarter of fiscal 2025 was primarily due to:
Current wording
The increase in revenues in the second quarter of fiscal 2025 was primarily due to:
Previous wording
+$1.6 billion in higher equipment and services revenues from our QCT segment
Current wording
+$1.4 billion in higher equipment and services revenues from our QCT segment
Previous wording
+$75 million in higher licensing revenues from our QTL segment
Current wording
+$76 million in higher licensing revenues from our QTL segment
Previous wording
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 wording
Gross margin percentage decreased in the first six months 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).
Previous wording
-$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 wording
-$57 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)
Previous 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)
Current wording
+$20 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), which included higher employee-related costs, offset by higher non-recurring engineering cost reimbursements
Previous wording
The increase in research and development expenses in the first quarter of fiscal 2025 was primarily due to:
Current wording
The increase in research and development expenses in the first six months of fiscal 2025 was primarily due to:
Previous wording
+$103 million increase in share-based compensation expense
Current wording
+$120 million increase in share-based compensation expense
Previous wording
+$46 million increase in sales and marketing expenses
Current wording
+$48 million increase in sales and marketing expenses
Previous wording
The increase in selling, general and administrative expenses in the first quarter of fiscal 2025 was primarily due to:
Current wording
The increase in selling, general and administrative expenses in the first six months of fiscal 2025 was primarily due to:
Previous wording
+$48 million increase in share-based compensation expense
Current wording
+$29 million increase in share-based compensation expense
Previous 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.”
Current wording
Discontinued operations in the second quarter and first six months 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 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.”
Current wording
The following should be read in conjunction with our financial results for the second quarter of fiscal 2025 for each reportable segment included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Segment Information.”
Previous 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.
Current wording
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $9.3 billion and $7.9 billion in the second quarter of fiscal 2025 and 2024, respectively, and $19.2 billion and $16.2 billion in the first six months 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
The increase in QCT revenues in the first quarter of fiscal 2025 was primarily due to:
Current wording
The increase in QCT revenues in the second quarter of fiscal 2025 was primarily due to:
Previous 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
Current wording
+higher handsets revenues, primarily due to $381 million in higher chipset shipments driven by certain major OEMs, and $368 million in higher revenues per chipset (primarily driven by higher average selling prices), both of which benefited from an increase in demand in premium-tier Snapdragon platforms
Previous wording
QCT EBT as a percentage of revenues increased in the first quarter of fiscal 2025 primarily due to:
Current wording
QCT EBT as a percentage of revenues increased in the second quarter of fiscal 2025 primarily due to:
Previous wording
+higher IoT revenues, due to $513 million in higher shipments across consumer, industrial and edge networking products, partially offset by unfavorable product mix
Current wording
+higher IoT revenues, due to $924 million in higher shipments across consumer, edge networking and industrial products, partially offset by unfavorable product mix
Previous wording
-higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
Current wording
-higher operating expenses, primarily driven by higher selling, general and administrative expenses
Previous wording
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 wording
Gross margin percentage remained approximately flat in the first six months of fiscal 2025, primarily driven by higher product costs, partially offset by higher average selling prices.
Previous wording
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 wording
During the second quarter of fiscal 2025, we executed final agreements for new long-term licenses with two key Chinese OEMs (for which the initial terms had expired). We also recently entered into comprehensive 4G and 5G license agreements with Transsion (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 dismissed. QTL revenues for the second quarter and first six months of fiscal 2025 included estimated royalties due from Transsion for sales made in the March 2025 quarter. We did not record QTL revenues in the second quarter of fiscal 2025 from Huawei, whose license agreement has expired.
Previous wording
The increase in QTL licensing revenues in the first quarter of fiscal 2025 was primarily due to:
Current wording
The increase in QTL licensing revenues in the first six months of fiscal 2025 was primarily due to:
Previous wording
+$32 million increase in estimated sales of 3G/4G/5G-based multimode products
Current wording
+$39 million increase in estimated sales of 3G/4G/5G-based multimode products
Previous wording
+$30 million in higher royalty revenues recognized related to devices sold in prior periods
Current wording
+$37 million in higher royalty revenues recognized related to devices sold in prior periods
Previous wording
QTL EBT as a percentage of revenues increased in the first quarter of fiscal 2025 primarily due to higher revenues.
Current wording
QTL EBT as a percentage of revenues increased in the first six months of fiscal 2025 primarily due to higher revenues.
Previous wording
•We expect continued intense competition, including from vertical integration by certain of our customers (e.g., Apple).
Current wording
•We expect continued intense competition, including from vertical integration by certain of our customers. Specifically, Apple began utilizing its own modem (rather than our products) in its recently released smartphone and we expect that Apple will increasingly use its own modem products, rather than our products, in its future devices, which will have a significant negative impact on our QCT revenues, results of operations and cash flows.
Previous wording
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.
Current wording
We are also involved in certain 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.
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 December 29, 2024 and September 29, 2024 and for the first three months of fiscal 2025 and 2024 (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 March 30, 2025 and September 29, 2024 and for the first six months of fiscal 2025 and 2024 (in millions):
Previous 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.
Current wording
Cash, cash equivalents and marketable securities. The net increase in cash, cash equivalents and marketable securities for the first six months of fiscal 2025 was primarily due to net cash provided by operating activities, partially offset by $3.5 billion in payments to repurchase 22 million shares of our common stock, $1.9 billion in cash dividends paid, $609 million in payments of tax withholdings related to the vesting of share-based awards, $491 million in capital expenditures and $341 million in cash paid for acquisitions and other investments.
Previous 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.
Current wording
Net changes in our operating assets and liabilities for the first six months of fiscal 2025 negatively impacted our operating cash flows primarily from a decrease in payroll and other benefit related liabilities primarily driven by payments related to our employee cash incentive program. This was partially offset by a decrease in other assets primarily driven by utilization of prior advanced supply agreement payments.
Previous wording
Capital Return Program. Our stock repurchase program is subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, and we may accelerate, suspend, delay or discontinue repurchases at any time. We currently intend to continue to use cash dividends as a means of returning capital to stockholders, subject to capital availability and our view that cash dividends are in the best interests of our stockholders, among other factors. Additional information regarding our capital returns is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 4. Capital Stock.”
Current wording
On March 18, 2025, we announced an increase in our quarterly dividend per share of common stock from $0.85 to $0.89, which is effective for dividends payable after March 27, 2025. We currently intend to continue to use cash dividends as a means of returning capital to stockholders, subject to capital availability and our view that cash dividends are in the best interests of our stockholders, among other factors. Additional information regarding our capital returns is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 4. Capital Stock.”
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The increase in revenues in the first six months of fiscal 2025 was primarily due to:
Current report — wording carried from elsewhere
+$3.0 billion in higher equipment and services revenues from our QCT segment
Current report — wording carried from elsewhere
Gross margin percentage decreased in the second quarter of fiscal 2025 primarily due to a decrease in QCT gross margin.
Current report — wording carried from elsewhere
+$81 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), primarily driven by an increase in employee-related costs, partially offset by higher non-recurring engineering cost reimbursements
Current report — wording carried from elsewhere
+$94 million increase in sales and marketing expenses
Current report — wording carried from elsewhere
+higher handsets revenues, primarily due to $854 million in higher revenues per chipset (primarily driven by higher average selling prices), and $783 million in higher chipset shipments driven by certain major OEMs, both of which benefited from an increase in demand in premium-tier Snapdragon platforms
Current report — wording carried from elsewhere
+higher automotive revenues, primarily driven by an increase in shipments from new vehicle launches with our Snapdragon digital cockpit products
Current report — wording carried from elsewhere
Capital Return Program. Our stock repurchase program is subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, and we may accelerate, suspend, delay or discontinue repurchases at any time.