QUALCOMM INC/DE
For the period ended Mar 29, 2026. Filed Apr 29, 2026.
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 29, 2026 · Filed Apr 29, 2026
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 2025-12-28; filed 2026-02-04.
0000804328-26-000017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-29; filed 2026-04-29.
0000804328-26-000061
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 78 previous paragraphs and 101 current paragraphs.
37 unchanged; 32 reworded; 24 added; 9 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 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 (24)
Current report
Second Quarter Fiscal 2026 Overview
Current report
•We recorded a $5.7 billion income tax benefit to release a valuation allowance in the second quarter of fiscal 2026 as we now expect to realize substantially all of our existing federal deferred tax assets as a result of additional guidance issued on corporate alternative minimum tax (CAMT) by the U.S. Department of Treasury and the Internal Revenue Service.
Current report
-$393 million in lower equipment and services revenues from our QCT segment
Current report
-$143 million in licensing revenues from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results
Current report
$97 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026
Current report
The increase in revenues in the first six months of fiscal 2026 was primarily due to:
Current report
$94 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026
Current report
-$143 million in licensing revenues from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results
Current report
Second quarter and first six months 2026 vs. 2025
Current report
+$83 million increase in share-based compensation expense
Current report
+$168 million increase in share-based compensation expense
Current report
+$72 million increase in share-based compensation expense
Current report
+$123 million increase in share-based compensation expense
Current report
Net losses on marketable securities in the second quarter and first six months of fiscal 2026 was primarily driven by the change in fair value of certain of our QSI marketable equity investments.
Current report
In the second quarter of fiscal 2026, the U.S. Department of Treasury and the Internal Revenue Service issued Notice 2026-07, which, among other items, allows us to reduce CAMT by certain previously capitalized domestic R&D expenditures. As a result, we no longer expect to be subject to CAMT in the foreseeable future, and therefore, we now expect to realize our existing federal deferred tax assets. Accordingly, we released our valuation allowance on our federal deferred tax assets resulting in a $5.7 billion income tax benefit in the second quarter of fiscal 2026. Changes in future taxable income, tax laws and other factors may change our determination regarding whether we will be able to realize our deferred tax assets.
Current report
The decrease in QCT revenues in the second quarter of fiscal 2026 was primarily due to:
Current report
higher automotive revenues, due to $191 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and advanced driver assistance and automated driving (ADAS/AD) products and a $176 million increase in revenues per unit driven by favorable mix and higher average selling prices
Current report
higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix
Current report
-lower revenues
Current report
higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix
Current report
-lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases)
Current report
The increase in QTL licensing revenues in the second quarter of fiscal 2026 was primarily due to an increase in estimated revenues per unit, which was primarily driven by favorable mix.
Current report
QSI EBT decreased in the second quarter of fiscal 2026 primarily due to net losses from the change in fair value of certain of our marketable equity investments.
Current report
During the first six months of fiscal 2026, income taxes paid were greater than our provision. This was primarily driven by the $5.7 billion release of our valuation allowance on federal deferred tax assets in the second quarter of fiscal 2026 and our final installment payment for a one-time U.S. repatriation tax accrued in fiscal 2018 of $663 million. The OBBB includes significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). We expect this change will have a favorable effect on our cash flows from operations due to significantly lower cash tax payments.
Removed paragraphs (9)
Previous report
First Quarter Fiscal 2026 Overview
Previous report
•On December 18, 2025, we completed the acquisition of Alphawave IP Group plc (Alphawave) for $2.3 billion. Alphawave develops high-speed wired connectivity technologies delivering IP, custom silicon and connectivity products. The acquisition is intended to further accelerate, and provide key assets for, our expansion into data centers. Additional information related to this acquisition is included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 8. Acquisitions.”
Previous report
+$85 million increase in share-based compensation expense
Previous report
+$50 million increase in share-based compensation expense
Previous report
+$31 million increase in sales and marketing expenses (including investments in key growth and diversification initiatives)
Previous report
(under prior law such expenditures were capitalized and amortized over five years). The current deduction of domestic research and development expenditures will have a favorable effect on our cash flows from operations due to significantly lower cash tax payments compared to fiscal 2025. However, it adversely affects our effective tax rate by reducing our FDDEI benefits beginning in fiscal 2026. As a result of these changes, we expect to be subject tocorporate alternative minimum tax (CAMT), which imposes a 15% federal minimum tax on adjusted financial statement income, reduced by general business credits, including research and development credits. As we expect to perpetually be subject to CAMT, we have established a valuation allowance on substantially all of our existing federal deferred tax assets since the fourth quarter of fiscal 2025. Changes in future taxable income (including less of our income qualifying for preferential treatment as FDDEI), tax laws (including changes to the CAMT rules) and other factors may change our determination regarding whether we will be able to realize our deferred tax assets.
Previous report
+higher IoT revenues, due to $244 million in higher shipments primarily across edge networking and consumer products, partially offset by unfavorable product mix
Previous report
+higher revenues
Previous report
+higher revenues
Reworded paragraphs (32)
Previous wording
Revenues for the first quarter of fiscal 2026 were $12.3 billion, an increase of 5% compared to the year ago quarter, with net income of $3.0 billion, a decrease of 6% compared to the year ago quarter. Key items from the first quarter of fiscal 2026 included:
Current wording
Revenues for the second quarter of fiscal 2026 were $10.6 billion, a decrease of 3% compared to the year ago quarter, with net income of $7.4 billion, an increase of 162% compared to the year ago quarter. Key items from the second quarter of fiscal 2026 included:
Previous wording
•QCT revenues increased by 5% in the first quarter of fiscal 2026 compared to the year ago quarter due to higher handsets, automotive and IoT revenues.
Current wording
•QCT revenues decreased by 4% in the second quarter of fiscal 2026 compared to the year ago quarter due to lower handset revenues, partially offset by higher automotive and IoT revenues.
Previous wording
•QTL revenues increased by 4% in the first quarter of fiscal 2026 compared to the year ago quarter, primarily due to an increase in estimated sales of cellular products.
Current wording
•QTL revenues increased by 5% in the second quarter of fiscal 2026 compared to the year ago quarter, primarily due to an increase in estimated revenues per unit, which was primarily driven by favorable mix.
Previous wording
The increase in revenues in the first quarter fiscal 2026 was primarily due to:
Current wording
The decrease in revenues in the second quarter fiscal 2026 was primarily due to:
Previous wording
$57 million in higher licensing revenues from our QTL segment
Current wording
$63 million in higher licensing revenues from our QTL segment
Previous wording
$528 million in higher equipment and services revenues from our QCT segment
Current wording
$135 million in higher equipment and services revenues from our QCT segment
Previous wording
Gross margin percentage decreased in the first quarter of fiscal 2026 primarily due to a decrease in QCT gross margin percentage.
Current wording
Gross margin percentage decreased in the second quarter and first six months of fiscal 2026 primarily due to a decrease in QCT gross margin percentage.
Previous wording
The increase in research and development expenses in the first quarter of fiscal 2026 was primarily due to:
Current wording
The increase in research and development expenses in the second quarter of fiscal 2026 was primarily due to:
Previous wording
+$121 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
+$298 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 expenses
Previous wording
The increase in selling, general and administrative expenses in the first quarter of fiscal 2026 was primarily due to:
Current wording
The increase in selling, general and administrative expenses in the second quarter of fiscal 2026 was primarily due to:
Previous wording
+$40 million increase in acquisition-related expenses
Current wording
+$44 million increase in acquisition-related expenses
Previous wording
Net gains on other investments in the first quarter of fiscal 2026 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments.
Current wording
Net gains on other investments in the first six months of fiscal 2026 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments.
Previous wording
We estimate our annual effective income tax rate to be 15% for fiscal 2026, 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 Financial Statements, Note 3. Income Taxes.”
Current wording
We estimate our annual effective income tax rate to be 40% benefit for fiscal 2026, 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 Financial Statements, Note 3. Income Taxes.”
Previous wording
During the fourth quarter of fiscal 2025, tax reform legislation included in the One Big Beautiful Bill Act (OBBB) was enacted in the United States. The OBBB included significant corporate tax reforms, including changes to the FDDEI regime and changes allowing domestic research and development expenditures to be deducted as incurred beginning in fiscal 2026
Current wording
In the fourth quarter of fiscal 2025, tax reform legislation included in the One Big Beautiful Bill Act (OBBB) was enacted in the United States. The OBBB included significant corporate tax reforms, including changes to the foreign-derived deduction eligible income (FDDEI) regime and changes allowing domestic research and development (R&D) expenditures to be deducted as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). As a result, we expected to be perpetually subject to CAMT and established a $5.7 billion valuation allowance on our federal deferred tax assets in fiscal 2025.
Previous wording
The following should be read in conjunction with our financial results for the first quarter of fiscal 2026 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 2026 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 $10.4 billion and $9.9 billion in the first quarter of fiscal 2026 and 2025, respectively. QCT revenues mostly relate to sales of our Snapdragon and Dragonwing 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 $8.9 billion and $9.3 billion in the second quarter of fiscal 2026 and 2025, respectively, and $19.3 billion and $19.2 billion in the first six months of fiscal 2026 and 2025, respectively. QCT revenues mostly relate to sales of our Snapdragon and Dragonwing 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, primarily due to higher chipset shipments to certain major OEMs
Current wording
-lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases)
Previous wording
QCT EBT as a percentage of revenues decreased in the first quarter of fiscal 2026 primarily due to:
Current wording
QCT EBT as a percentage of revenues decreased in the second quarter of fiscal 2026 primarily due to:
Previous wording
-lower gross margin, primarily driven by unfavorable product cost, partially offset by higher average selling prices
Current wording
-lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices
Previous wording
The increase in QCT revenues in the first quarter of fiscal 2026 was primarily due to:
Current wording
The increase in QCT revenues in the first six months of fiscal 2026 was primarily due to:
Previous wording
+higher automotive revenues, primarily driven by an increase in shipments from new vehicle launches with our Snapdragon digital cockpit products
Current wording
higher automotive revenues, due to $328 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and ADAS/AD products and a $179 million increase in revenues per unit driven by favorable mix and higher average selling prices
Previous wording
+lower operating expenses, primarily driven by lower research and development expenses
Current wording
-higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
Previous wording
QTL EBT as a percentage of revenues increased in the first quarter of fiscal 2026 due to:
Current wording
QTL EBT as a percentage of revenues increased in the second quarter of fiscal 2026 primarily due to higher revenues.
Previous wording
The increase in QTL licensing revenues in the first quarter of fiscal 2026 was primarily due to an increase in estimated sales of cellular products.
Current wording
The increase in QTL licensing revenues in the first six months of fiscal 2026 was primarily due to an increase in estimated sales of cellular products.
Previous wording
QSI EBT increased in the first quarter of fiscal 2026 primarily due to higher net gains from observable price changes on certain of our non-marketable equity investments, partially offset by losses from the change in fair value of certain of our marketable equity investments.
Current wording
QSI EBT increased in the first six months of fiscal 2026 primarily due to higher net gains from observable price changes on certain of our non-marketable equity investments and an increase in our share of earnings in equity method investments, partially offset by net losses from the change in fair value of certain of our marketable equity investments.
Previous wording
•We expect recent memory supply constraints and related pricing increases to adversely affect demand from several handset customers, which will negatively impact our financial results. The extent to which these conditions may affect our business will depend on future developments, including memory supply availability, memory and handset pricing dynamics and end‑consumer demand for handsets, all of which remain uncertain.
Current wording
•We expect recent memory supply constraints and related pricing increases to adversely affect demand from several handset OEMs, which will negatively impact our financial results. The extent to which these conditions may affect our business will depend on future developments, including memory supply availability, memory and device pricing dynamics and end‑consumer demand for devices, all of which remain uncertain.
Previous wording
•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 wording
•We continue to monitor 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.”
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 28, 2025 and September 28, 2025 and for the first three months of fiscal 2026 and 2025 (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 29, 2026 and September 28, 2025 and for the first six months of fiscal 2026 and 2025 (in millions):
Previous wording
(1) In connection with the acquisition of Alphawave, which closed in the first quarter of fiscal 2026, we agreed to restrict the use of approximately $2.3 billion of cash to be held for purposes of satisfying payment of the consideration to effect the acquisition. Additional information regarding our acquisition of Alphawave is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 8. Acquisitions.”
Current wording
(1) In connection with the acquisition of Alphawave, which closed in the first quarter of fiscal 2026, we had agreed to restrict the use of approximately $2.3 billion of cash to be held for purposes of satisfying payment of the consideration to effect the acquisition. Additional information regarding our acquisition of Alphawave is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 8. Acquisitions.”
Previous wording
(2) Includes our issued debt which is reported as long-term. At December 28, 2025, our credit facility was undrawn, and we had no commercial paper outstanding.
Current wording
(2) Includes our issued debt which is reported as long-term and $498 million of outstanding commercial paper reported as short-term debt as of March 29, 2026. At March 29, 2026, our credit facility was undrawn.
Previous wording
Cash, cash equivalents and marketable securities (including restricted cash). The net decrease in cash, cash equivalents and marketable securities (including restricted cash) for the first three months of fiscal 2026 was primarily due to $2.65 billion in payments to repurchase 15 million shares of our common stock (which includes repurchases that offset share issuances in connection with the acquisition of Alphawave), $1.1 billion in cash paid for acquisitions and other investments (net of cash acquired), $949 million in cash dividends paid and $549 million in capital expenditures, partially offset by net cash provided by operating activities.
Current wording
Cash, cash equivalents and marketable securities (including restricted cash). The net decrease in cash, cash equivalents and marketable securities (including restricted cash) for the first six months of fiscal 2026 was primarily due to $5.4 billion in payments to repurchase 34 million shares of our common stock (which includes repurchases that offset share issuances in connection with the acquisition of Alphawave), $1.9 billion in cash dividends paid, $1.2 billion in cash paid for acquisitions and other investments (net of cash acquired), $1.1 billion in capital expenditures and $536 million in payments of tax withholdings related to the vesting of share-based awards, partially offset by cash provided by operating activities and $496 million in net proceeds of commercial paper.
Previous wording
Net changes in our operating assets and liabilities for the first three months of fiscal 2026 positively impacted our operating cash flows primarily from a decrease in other assets which was primarily driven by utilization of prior advanced supply agreement payments.
Current wording
Net changes in our operating assets and liabilities for the first six months of fiscal 2026 positively impacted our operating cash flows primarily driven by a decrease in other assets primarily due to utilization of prior advanced supply agreement payments, partially offset by an increase in inventory reflecting certain customer demand impacts from memory supply constraints.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
$120 million in higher licensing revenues from our QTL segment
Current report — wording carried from elsewhere
+$177 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 expenses and lower non-recurring engineering cost reimbursements for product-related development work
Current report — wording carried from elsewhere
The increase in research and development expenses in the first six months of fiscal 2026 was primarily due to:
Current report — wording carried from elsewhere
The increase in selling, general and administrative expenses in the first six months of fiscal 2026 was primarily due to:
Current report — wording carried from elsewhere
+$84 million increase in acquisition-related expenses
Current report — wording carried from elsewhere
QCT EBT as a percentage of revenues decreased in the first six months of fiscal 2026 primarily due to:
Current report — wording carried from elsewhere
-lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices
Current report — wording carried from elsewhere
QTL EBT as a percentage of revenues increased in the first six months of fiscal 2026 primarily due to higher revenues.