QUALCOMM INC/DE
For the period ended Jun 28, 2026. Filed Jul 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.
Jun 28, 2026 · Filed Jul 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 2026-03-29; filed 2026-04-29.
0000804328-26-000061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-28; filed 2026-07-29.
0000804328-26-000086
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 101 previous paragraphs and 109 current paragraphs.
48 unchanged; 36 reworded; 21 added; 14 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 11 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 (21)
Current report
Third Quarter Fiscal 2026 Overview
Current report
•QTL revenues decreased by 3% in the third quarter of fiscal 2026 compared to the year ago quarter.
Current report
•Investment and other income, net increased by $656 million compared to the year ago quarter, primarily due to higher net gains from initial public offerings of certain QSI equity investments.
Current report
+$101 million increase in share-based compensation expense
Current report
+$269 million increase in share-based compensation expense
Current report
+$62 million increase in share-based compensation expense
Current report
+$27 million increase in sales and marketing expenses (including investments in growth and diversification initiatives)
Current report
+$24 million increase in expenses driven by the revaluation of our deferred compensation obligation (which resulted in a corresponding increase in net gains on deferred compensation plan assets within investment and other income, net due to the revaluation of the related assets)
Current report
+$184 million increase in share-based compensation expense
Current report
+$64 million increase in sales and marketing expenses (including investments in growth and diversification initiatives)
Current report
Third quarter and first nine months 2026 vs. 2025
Current report
Other expenses in the third quarter and first nine months of fiscal 2026 consisted of restructuring and restructuring-related charges (substantially all of which related to severance costs).
Current report
The decrease in QCT revenues in the third quarter of fiscal 2026 was primarily due to:
Current report
The decrease in QCT revenues in the first nine months of fiscal 2026 was primarily due to:
Current report
QCT EBT as a percentage of revenues decreased in the first nine months of fiscal 2026 primarily due to:
Current report
-$25 million in lower royalty revenues recognized related to devices sold in prior periods
Current report
QTL EBT as a percentage of revenues decreased in the third quarter of fiscal 2026 primarily due to:
Current report
-$65 million in lower royalty revenues recognized related to devices sold in prior periods
Current report
QTL EBT as a percentage of revenues remained approximately flat in the first nine months of fiscal 2026.
Current report
QSI EBT increased in the third quarter of fiscal 2026 primarily due to higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments.
Current report
•The semiconductor industry is experiencing a broad-based increase in input costs and capacity constraints across wafer fabrication, assembly, test, advanced packaging, memory and other materials, due in part to increasing demand for leading-edge technologies, AI and data center applications. As a result, we continue to see increased product costs from certain of our key suppliers, which could negatively impact our margins. Further, if these supply and capacity constraints limit the availability of components, manufacturing capacity or related services from our suppliers, we may be unable to fully satisfy customer demand, which could result in lost or delayed revenue and adversely affect our results of operations, cash flows and financial condition.
Removed paragraphs (14)
Previous report
Second Quarter Fiscal 2026 Overview
Previous 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.
Previous report
The increase in revenues in the first six months of fiscal 2026 was primarily due to:
Previous report
+$83 million increase in share-based compensation expense
Previous report
+$168 million increase in share-based compensation expense
Previous report
+$72 million increase in share-based compensation expense
Previous report
+$123 million increase in share-based compensation expense
Previous report
-lower revenues
Previous report
The increase in QCT revenues in the first six months of fiscal 2026 was primarily due to:
Previous report
QCT EBT as a percentage of revenues decreased in the first six months of fiscal 2026 primarily due to:
Previous report
QTL EBT as a percentage of revenues increased in the second quarter of fiscal 2026 primarily due to higher revenues.
Previous report
QTL EBT as a percentage of revenues increased in the first six months of fiscal 2026 primarily due to higher revenues.
Previous 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.
Previous report
•We expect leading process technology nodes to continue to drive product cost increases from certain of our key semiconductor wafer suppliers.
Reworded paragraphs (36)
Previous 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:
Current wording
Revenues for the third quarter of fiscal 2026 were $9.9 billion, a decrease of 4% compared to the year ago quarter, with net income of $2.0 billion, a decrease of 25% compared to the year ago quarter. Key items from the third quarter of fiscal 2026 included:
Previous 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.
Current wording
•QCT revenues decreased by 5% in the third 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
The decrease in revenues in the second quarter fiscal 2026 was primarily due to:
Current wording
The decrease in revenues in the third quarter of fiscal 2026 was primarily due to:
Previous wording
-$393 million in lower equipment and services revenues from our QCT segment
Current wording
-$502 million in lower equipment and services revenues from our QCT segment
Previous wording
$120 million in higher licensing revenues from our QTL segment
Current wording
-$40 million in lower licensing revenues from our QTL segment
Previous wording
$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 wording
$88 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
Previous wording
$135 million in higher equipment and services revenues from our QCT segment
Current wording
$367 million in lower equipment and services revenues from our QCT segment
Previous wording
$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 wording
$182 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
Previous wording
$63 million in higher licensing revenues from our QTL segment
Current wording
$80 million in higher licensing revenues from our QTL segment
Previous wording
Second quarter and first six months 2026 vs. 2025
Current wording
Third quarter and first nine months 2026 vs. 2025
Previous 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.
Current wording
Gross margin percentage decreased in the third quarter and first nine 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 second quarter of fiscal 2026 was primarily due to:
Current wording
The increase in research and development expenses in the third quarter of fiscal 2026 was primarily due to:
Previous 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
Current wording
+$244 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 lower non-recurring engineering cost reimbursements for product-related development work
Previous wording
The increase in research and development expenses in the first six months of fiscal 2026 was primarily due to:
Current wording
The increase in research and development expenses in the first nine months of fiscal 2026 was primarily due to:
Previous wording
+$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 wording
+$541 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 lower non-recurring engineering cost reimbursements for product-related development work and an increase in employee-related expenses
Previous wording
The increase in selling, general and administrative expenses in the second quarter of fiscal 2026 was primarily due to:
Current wording
The increase in selling, general and administrative expenses in the third quarter of fiscal 2026 was primarily due to:
Previous wording
The increase in selling, general and administrative expenses in the first six months of fiscal 2026 was primarily due to:
Current wording
The increase in selling, general and administrative expenses in the first nine months of fiscal 2026 was primarily due to:
Previous wording
+$44 million increase in acquisition-related expenses
Current wording
+$91 million increase in acquisition-related expenses
Previous wording
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 wording
Net gains on marketable securities in the third quarter and first nine months of fiscal 2026 was primarily driven by the initial public offerings of certain QSI equity investments.
Previous 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.
Current wording
Net gains on other investments in the first nine months of fiscal 2026 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments. The increase in net earnings of investees in the first nine months of fiscal 2026 was primarily driven by an increase in our share of earnings in certain QSI equity method investments. The decrease in interest and dividend income in the first nine months of fiscal 2026 was primarily due to lower balances of interest-bearing securities.
Previous wording
Unrecognized tax benefits were $2.9 billion and $2.7 billion at March 29, 2026 and September 28, 2025, respectively. We believe that it is reasonably possible that our unrecognized tax benefits will change within the next twelve months.
Current wording
Unrecognized tax benefits were $3.0 billion and $2.7 billion at June 28, 2026 and September 28, 2025, respectively. We believe that it is reasonably possible that our unrecognized tax benefits will change within the next twelve months.
Previous 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.”
Current wording
The following should be read in conjunction with our financial results for the third 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 $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.
Current wording
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $8.3 billion and $8.8 billion in the third quarter of fiscal 2026 and 2025, respectively, and $27.7 billion and $28.0 billion in the first nine 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 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 wording
higher automotive revenues, due to a $381 million increase in revenues per unit driven by favorable mix and higher average selling prices and $223 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and advanced driver assistance and automated driving (ADAS/AD) products
Previous wording
QCT EBT as a percentage of revenues decreased in the second quarter of fiscal 2026 primarily due to:
Current wording
QCT EBT as a percentage of revenues decreased in the third quarter of fiscal 2026 primarily due to:
Previous 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
Current wording
higher automotive revenues, due to a $560 million increase in revenues per unit driven by favorable mix and higher average selling prices and $551 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and ADAS/AD products
Previous wording
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 wording
The decrease in QTL licensing revenues in the third quarter of fiscal 2026 was primarily due to:
Previous 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.
Current wording
+$59 million increase in revenues per unit, which was primarily driven by favorable 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
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.
Current wording
The increase in QTL licensing revenues in the first nine months of fiscal 2026 was primarily due to:
Previous 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.
Current wording
QSI EBT increased in the first nine months of fiscal 2026 primarily due to $380 million in higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments, $207 million in higher net gains from observable price changes on certain of our non-marketable equity investments and a $136 million increase in our share of earnings in equity method investments.
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 March 29, 2026 and September 28, 2025 and for the first six 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 June 28, 2026 and September 28, 2025 and for the first nine months of fiscal 2026 and 2025 (in millions):
Previous 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.
Current wording
(2) Consists of our issued debt, including $2.0 billion classified as current and maturing in May 2027, and $498 million of outstanding commercial paper reported as short-term debt as of June 28, 2026. At June 28, 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 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.
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 nine months of fiscal 2026 was primarily due to $6.8 billion in payments to repurchase 42 million shares of our common stock (which includes repurchases that offset share issuances in connection with the acquisition of Alphawave), $2.9 billion in cash dividends paid, $1.6 billion in capital expenditures, $1.6 billion in cash paid for acquisitions and other investments (net of cash acquired) and $888 million in payments of tax withholdings related to the vesting of share-based awards, partially offset by cash provided by operating activities and $495 million in net proceeds of commercial paper.
Previous wording
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.
Current wording
During the first nine 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.
Previous 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.
Current wording
Net changes in our operating assets and liabilities for the first nine months of fiscal 2026 negatively impacted our operating cash flows primarily driven by an increase in inventory reflecting certain customer demand impacts from memory supply constraints, partially offset by a decrease in other assets and increase in payroll, benefits and other liabilities. The decrease in other assets is primarily due to the utilization of prior advanced supply agreement payments. The increase in payroll, benefits and other liabilities is primarily due to an increase in accrued customer incentives, which included the impact of timing of related payments, partially offset by payments related to our employee cash incentive program.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The decrease in revenues in the first nine months of fiscal 2026 was primarily due to:
Current report — wording carried from elsewhere
-$67 million decrease in estimated sales of cellular products
Current report — wording carried from elsewhere
+$111 million increase in revenues per unit, which was primarily driven by favorable mix
Current report — wording carried from elsewhere
+$53 million increase in estimated sales of cellular products
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
-$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
Previous report — wording carried elsewhere
+$84 million increase in acquisition-related expenses
Previous report — wording carried elsewhere
The decrease in QCT revenues in the second quarter of fiscal 2026 was primarily due to: