QUALCOMM INC/DE
For the period ended Sep 27, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Nov 4, 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-K
Period ended 2025-09-28; filed 2025-11-05.
0000804328-25-000085
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-09-27; filed 2026-11-04.
0000804328-26-000128
Item 7. 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 91 previous paragraphs and 96 current paragraphs.
31 unchanged; 44 reworded; 17 added; 15 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 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 (17)
Current report
Results of Operations
Current report
$235 million in higher equipment and services revenues from our Data Center business, primarily driven by our acquisition of Alphawave IP Group plc (Alphawave) in the first quarter of fiscal 2026
Current report
+$84 million increase in acquisition-related expenses
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
-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
+higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix
Current report
-lower revenues
Current report
The decrease in QTL revenues in fiscal 2026 was primarily due to:
Current report
-$194 million decrease in estimated sales of cellular products
Current report
-$43 million in lower royalty revenues recognized related to devices sold in prior periods
Current report
+$238 million increase in revenues per unit, which was primarily driven by mix
Current report
QTL EBT as a percentage of revenue remained flat in fiscal 2026.
Current report
•We expect current 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.
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 have and will continue to negatively impact our margins. In response to these higher costs, we are taking actions to increase our product pricing. We expect the full benefit of these actions to be reflected in our gross margins in the second half of fiscal 2027. 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.
Current report
•Beginning in the first quarter of fiscal 2027, we expect Data Center revenue growth as shipments begin to ramp under our previously announced custom silicon agreements with certain large hyperscale customers.
Current report
(2) Includes our issued term debt and commercial paper outstanding.
Current report
Debt. At September 27, 2026, we had $15.1 billion of principal fixed-rate notes outstanding, $2.0 billion of which matures in 2027. The remaining debt has maturity dates in 2028 through 2053.
Removed paragraphs (15)
Previous report
$143 million in licensing revenues resulting from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results
Previous report
+$231 million increase in sales and marketing expenses (including investments in key growth and diversification initiatives)
Previous report
Other expenses in fiscal 2024 primarily consisted of $107 million in restructuring and restructuring-related charges (substantially all of which related to severance costs) and a $75 million charge related to the settlement of a securities class action lawsuit.
Previous report
Beginning in fiscal 2023 and through fiscal 2025, for federal income tax purposes, we were required to capitalize and amortize domestic research and development expenditures over five years (such expenditures were previously deducted as incurred). Our cash flows from operations were adversely affected due to significantly higher cash tax payments. However, since the resulting deferred tax asset was established at the statutory rate of 21% (rather than the current effective tax rate of 13% after considering the FDII deduction), capitalization favorably affected our total provision for income taxes and results of operations. With the enactment of OBBB, such impacts on our cash flows and tax provision are not expected to continue beginning in fiscal 2026. 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 handsets revenues, due to $2.5 billion in higher revenues per chipset primarily driven by higher average selling prices and favorable mix, and $423 million in higher chipset shipments by certain major OEMs, both of which benefited from an increase in demand for premium-tier Snapdragon platforms in Android devices
Previous report
+higher IoT revenues due to $1.5 billion in higher shipments across edge networking, consumer and industrial products, partially offset by unfavorable mix
Previous report
+higher revenues
Previous report
QTL licensing revenues and EBT remained approximately flat in fiscal 2025. 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) and 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. Beginning in the second quarter of fiscal 2025, QTL revenues did not include royalties from Huawei, whose license agreement has expired.
Previous report
We believe that on-device AI and high-performance, low-power computing combined with cellular technology (such as 5G) 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 such technology development, standardization, intellectual property creation and licensing, and a leading developer and supplier of integrated circuit products in order to sustain and grow our business long-term.
Previous report
•We expect leading process technology nodes to continue to drive product cost increases from certain of our key semiconductor wafer suppliers.
Previous report
In addition to the foregoing business and market-based matters, we continue to devote resources to working with and educating participants in the wireless industry and governments as to the benefits of our licensing programs and our extensive technology investments in promoting a highly competitive and innovative wireless industry. However, we expect that certain companies may be dissatisfied with the need to pay reasonable royalties for the use of our technologies and not welcome the success of our licensing programs in enabling new, highly cost-effective competitors to their products. Accordingly, such companies, and/or governments or regulators, may continue to challenge our business model in various forums throughout the world.
Previous report
(2) Includes our issued debt reported as long-term and short-term. At September 28, 2025, we had $15.1 billion of principal fixed-rate notes outstanding with maturity dates between 2027 and 2053.
Previous report
Debt. During the third quarter of fiscal 2025, we repaid $1.4 billion of unsecured fixed-rate notes that matured in May 2025. In May 2025, we also issued $1.5 billion of unsecured fixed-rate notes, consisting of $500 million of 4.50% notes, $400 million of 4.75% notes and $600 million of 5.00% notes (collectively, May 2025 Notes) that mature on May 20, 2030, May 20, 2032 and May 20, 2035, respectively. The net proceeds from the May 2025 Notes will be used for general corporate purposes. We also entered into interest rate swaps which are designated as fair value hedges and allow us to effectively convert all of our fixed-rate payments due under the May 2025 Notes into floating-rate payments.
Previous report
•On June 9, 2025, we announced that we reached an agreement to acquire Alphawave at an implied enterprise value of approximately $2.4 billion (as of the announcement date). The purchase price will be paid in cash or, if validly elected by eligible shareholders of Alphawave, in shares of our common stock or securities exchangeable for shares of our common stock. The acquisition is subject to certain closing conditions, including receipt of regulatory approvals. Subject to the satisfaction of these conditions, this acquisition is expected to complete during the first quarter of calendar 2026.
Previous report
Further, regulatory authorities in certain jurisdictions have investigated our business practices and instituted proceedings against us, and they or other regulatory authorities may do so in the future. Additionally, certain of our direct and indirect customers and licensees have pursued, and they or others may in the future pursue, litigation, arbitration or other strategies against us related to our business. Unfavorable resolutions of one or more of these matters have had and could in the future have a material adverse effect on our business, results of operations, financial condition and cash flows. See “Notes to Consolidated Financial Statements, Note 7. Commitments and Contingencies” and “Part I, Item 1A. Risk Factors” in this Annual Report.
Reworded paragraphs (44)
Previous wording
We develop and commercialize foundational technologies and products used across industries and applications from mobile devices to other areas including automotive and the internet of things (IoT). We derive revenues principally from sales of integrated circuit products and licensing our intellectual property, including patents and other rights.
Current wording
We develop and commercialize foundational technologies and products used across industries and applications from handsets to automotive, the internet of things (IoT) and data center. We derive revenues principally from sales of integrated circuit products and licensing our intellectual property, including patents and other rights.
Previous wording
We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT (Qualcomm CDMA Technologies) semiconductor business and our QTL (Qualcomm Technology Licensing) licensing business. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our Data Center business (formerly referred to as our cloud computing processing initiative).
Current wording
We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. Our QSI reportable segment makes strategic investments. We also have nonreportable segments, including our Data Center, QGOV and Modular businesses.
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 (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.
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 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.
Previous wording
Revenues were $44.3 billion, an increase of 14% compared to revenues of $39.0 billion in fiscal 2024, with net income of $5.5 billion, a decrease of 45% compared to net income of $10.1 billion in fiscal 2024. Key items from fiscal 2025 included:
Current wording
Revenues were $43.1 billion, a decrease of 3% compared to revenues of $44.3 billion in fiscal 2025, with net income of $13.6 billion, an increase of 146% compared to net income of $5.5 billion in fiscal 2025. Key items from fiscal 2026 included:
Previous wording
•QCT revenues increased by 16% in fiscal 2025 compared to the prior year, primarily due to higher handsets, IoT and automotive revenues.
Current wording
•QCT revenues decreased by 3% in fiscal 2026 compared to the prior year, due to lower handsets revenues, partially offset by higher automotive and IoT revenues.
Previous wording
•We recorded a charge of $5.7 billion to income tax expense to establish a valuation allowance in the fourth quarter of fiscal 2025 as we no longer expect to realize substantially all of our existing federal deferred tax assets as a result of the tax reform legislation included in the One Big Beautiful Bill Act (OBBB) enacted on July 4, 2025.
Current wording
•In the second quarter of fiscal 2026, we recorded a $5.7 billion income tax benefit from the release of a valuation allowance that was established in the fourth quarter of fiscal 2025, 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 wording
The increase in revenues in fiscal 2025 was primarily due to:
Current wording
The decrease in revenues in fiscal 2026 was primarily due to:
Previous wording
$5.1 billion in higher equipment and services revenue from our QCT segment
Current wording
$1.1 billion in lower equipment and services revenue from our QCT segment
Previous wording
Gross margin percentage decreased in fiscal 2025 primarily due to a decrease in the proportion of total revenues related to QTL licensing revenues (which have a higher margin percentage contribution).
Current wording
Gross margin percentage decreased in fiscal 2026 primarily due to a decrease in QCT gross margin percentage.
Previous wording
The increase in research and development expenses in fiscal 2025 was primarily due to a $118 million increase in share-based compensation expense. Our costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification initiatives) remained approximately flat, primarily driven by $314 million in higher non-recurring engineering cost reimbursements for product-related development work, partially offset by an increase in employee-related costs.
Current wording
$701 million increase driven by higher costs related to the development of connectivity and integrated circuit technologies (including investments in key growth and diversification opportunities such as our Data Center business), primarily driven by an increase in employee-related expenses and lower non-recurring engineering cost reimbursements for product-related development work
Previous wording
•We expect to continue investing in key growth and diversification initiatives. We also expect our share-based compensation expense to increase as we have replaced our annual cash incentive awards for fiscal 2026 and 2027 with a two-year equity award for our broader non-executive leadership team. This approach is designed to motivate and retain our team to execute our long-term diversification strategy, while further aligning their compensation with the interests of our stockholders.
Current wording
We expect to continue investing in key growth and diversification initiatives. The increase in our share-based compensation expense includes the replacement of our annual cash incentive awards for fiscal 2026 and 2027 with a two-year equity award for our broader non-executive leadership team. This approach is designed to motivate and retain our team to execute our long-term diversification strategy, while further aligning their compensation with the interests of our stockholders.
Previous wording
+$70 million increase in employee-related expenses
Current wording
+$55 million increase in employee-related expenses
Previous wording
Other expenses in fiscal 2025 consisted of restructuring and restructuring-related charges.
Current wording
Other expenses in fiscal 2026 consisted of restructuring and restructuring-related charges (substantially all of which related to severance costs).
Previous wording
Net gains on other investments in fiscal 2024 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments.
Current wording
Net gains on equity method investments in fiscal 2026 were primarily driven by higher earnings of certain QSI investments. Net gains on other investments in fiscal 2026 were primarily driven by observable price changes on certain of our QSI non-marketable equity investments. The decrease in interest and dividend income in fiscal 2026 was primarily due to lower balances of interest-bearing securities.
Previous wording
Income Tax Expense (in millions, except percentages)
Current wording
Income Tax (Benefit) Expense (in millions, except percentages)
Previous wording
The following table summarizes the primary factors that caused our annual tax provision from continuing operations to differ from the expected income tax provision at the U.S. federal statutory rate. Substantially all of our income is taxed in the U.S., of which a significant portion qualifies for preferential treatment as foreign-derived intangible income (FDII) at a 13% effective tax rate for the periods presented. Additional information regarding our annual effective tax rate (including discussion related to the impact of the requirement to capitalize research and development expenditures for federal income tax purposes, and the benefit related to the transfer of intellectual property between foreign subsidiaries in fiscal 2024) is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 3. Income Taxes.”
Current wording
The following table summarizes the primary factors that caused our annual tax provision from continuing operations to differ from the expected income tax provision at the U.S. federal statutory rate. Most of our income is taxed in the U.S., of which a significant portion qualifies for preferential treatment as foreign-derived deduction eligible income (FDDEI) at a 13% effective tax rate for the periods presented. Such benefits from FDDEI for fiscal 2026 were lower compared to fiscal 2025 as a result of changes to the current deduction of domestic research and development (R&D) expenditures under the One Big Beautiful Bill Act (OBBB). Additional information regarding our annual effective tax rate is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 3. Income Taxes.”
Previous wording
On July 4, 2025, tax reform legislation included in the OBBB was enacted in the United States. 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). The legislation also modifies international tax provisions, including changes to the FDII regime. Specifically, it renames FDII as Foreign-Derived Deduction Eligible Income (FDDEI), maintains the current FDDEI effective tax rate of 13% through fiscal 2026 and adjusts the FDDEI effective tax rate to a permanent 14% rate in fiscal 2027 (compared to 16% under prior law). As a result of these changes, we expect to be subject to the corporate alternative minimum tax (CAMT) beginning in fiscal 2026. CAMT 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 no longer expect to realize substantially all of our existing federal deferred tax assets and recognized a charge of $5.7 billion to income tax expense to establish a valuation allowance in the fourth quarter of fiscal 2025.
Current wording
In the fourth quarter of fiscal 2025, tax reform legislation included in the OBBB was enacted in the United States. The OBBB included significant corporate tax reforms, including changes to the FDDEI regime and changes allowing domestic 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
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $37.7 billion and $32.6 billion in fiscal 2025 and 2024, 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 $36.6 billion and $37.7 billion in fiscal 2026 and 2025, respectively. QCT revenues mostly relate to sales of our Snapdragon and Dragonwing platforms (which include processors and modems), standalone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of RFFE products.
Previous wording
The increase in QCT revenues in fiscal 2025 was primarily due to:
Current wording
The decrease in QCT revenues in 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 a $1.3 billion increase in revenues per unit driven by favorable mix and higher average selling prices and $712 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and ADAS/AD products
Previous wording
QCT EBT as a percentage of revenues increased in fiscal 2025 primarily due to:
Current wording
QCT EBT as a percentage of revenues decreased in fiscal 2026 primarily due to:
Previous wording
Gross margin percentage remained approximately flat in fiscal 2025, primarily driven by higher product costs, 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
-higher operating expenses, primarily driven by higher selling, general and administrative expenses
Current wording
-higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
Previous wording
QSI EBT increased in fiscal 2025 primarily due to higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments, partially offset by lower net gains from observable price changes on certain of our non-marketable equity investments.
Current wording
QSI EBT increased in fiscal 2026 primarily due to $246 million in higher net gains from certain QSI equity method investments, $208 million in higher net gains from observable price changes on certain of our non-marketable equity investments and $148 million in higher net gains on marketable securities resulting from the initial public offerings of certain of our equity investments.
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 “Part I, Item 1A. Risk Factors” in this Annual 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.
Previous wording
•We expect continued intense competition, including from vertical integration by certain of our customers (for example, Apple and Samsung). In particular, Apple began utilizing its own modem (rather than our products) in its recently released smartphones 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.
Current wording
•We expect continued intense competition, including from vertical integration by certain of our customers (for example, Apple and Samsung). In particular, Apple currently uses its own internally developed modem in certain of its smartphones and we expect that Apple will primarily use its own modem products, rather than our products, in its devices going forward, which will have a significant negative impact on our QCT revenues, results of operations and cash flows.
Previous wording
•U.S./China trade relations and/or national security protection policies may negatively impact our business, growth prospects and results of operations. See “Part I, Item 1A. Risk Factors” in this Annual Report, including 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.”
Current wording
•Because a significant portion of our business is concentrated in China, U.S./China trade relations and/or national security protection policies may negatively impact our business, growth prospects and results of operations.
Previous wording
Our principal sources of liquidity are our existing cash, cash equivalents and marketable securities (including restricted cash), cash generated from operations and cash provided by our debt programs, which we believe will satisfy our working and other capital requirements for at least the next 12 months based on our current business plans.
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, which we believe will satisfy our working and other capital requirements for at least the next 12 months based on our current business plans.
Previous wording
(1) In connection with our pending acquisition of Alphawave IP Group plc (Alphawave), 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 pending acquisition of Alphawave is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 9. 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 Annual Report in “Notes to Consolidated Financial Statements, Note 9. Acquisitions.”
Previous wording
Cash, cash equivalents and marketable securities (including restricted cash). The net decrease in cash, cash equivalents and marketable securities (including restricted cash) in fiscal 2025 was primarily due to $8.8 billion in payments to repurchase shares of our common stock, $3.8 billion in cash dividends paid, $1.4 billion repayment of unsecured fixed-rate notes that matured in May 2025, $1.2 billion in capital expenditures, $1.1 billion in payments of tax withholdings related to the vesting of share-based awards and $743 million in cash paid for acquisitions and other investments. This was partially offset by cash provided by operating activities, proceeds from the issuance of $1.5 billion of unsecured fixed-rate notes in May 2025 and $404 million in proceeds from the issuance of common stock (primarily under our Employee Stock Purchase Plan).
Current wording
Cash, cash equivalents and marketable securities (including restricted cash). The decrease in cash, cash equivalents and marketable securities (including restricted cash) in fiscal 2026 was primarily due to $7.8 billion in payments to repurchase shares of our common stock, $3.9 billion in cash dividends paid, $2.5 billion in capital expenditures (primarily to support our engineering infrastructure and the testing of our integrated circuits), $1.6 billion in cash paid for acquisitions and other investments and $1.1 billion in payments of tax withholdings related to the vesting of share-based awards. This was partially offset by cash provided by operating activities and $497 million in net proceeds from commercial paper issuance.
Previous wording
During fiscal 2025, income taxes paid were less than our provision. This was driven primarily by the $5.7 billion charge to income tax expense to establish a valuation allowance in fiscal 2025 as a result of the tax reform legislation included in the OBBB. This was partially offset 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. The enactment of the OBBB includes significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures as incurred beginning in fiscal 2026. We expect this change will have a favorable effect on our cash flows from operations due to lower cash tax payments compared to fiscal 2025 beginning in fiscal 2026.
Current wording
During 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. Tax reform legislation included in the OBBB was enacted in fiscal 2025 and contains certain provisions, including the deduction of domestic research and development expenditures as incurred, which reduced our cash tax payments and favorably impacted our cash flows from operations in fiscal 2026. We expect these provisions to continue to result in lower cash tax payments in future periods.
Previous wording
Net changes in our operating assets and liabilities positively impacted our operating cash flows in fiscal 2025 primarily from a decrease in other assets driven by the utilization of prior advanced supply agreement payments, partially offset by an increase in accounts receivables primarily driven by higher revenues.
Current wording
Net changes in our operating assets and liabilities decreased our operating cash flows primarily driven by an increase in inventory to secure supply and mitigate disruptions due to supply constraints, partially offset by a decrease in other assets which was primarily due to the utilization of prior advanced supply agreement payments.
Previous wording
We have an unsecured commercial paper program, which provides for the issuance of up to $4.5 billion of commercial paper. Net proceeds from this program are used for general corporate purposes. At September 28, 2025, we had no amounts of commercial paper outstanding. We also have a Revolving Credit Facility that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.0 billion, which expires on August 8, 2029. At September 28, 2025, no amounts were outstanding under the Revolving Credit Facility.
Current wording
We have an unsecured commercial paper program, which provides for the issuance of up to $4.5 billion of commercial paper. Net proceeds from this program are used for general corporate purposes. At September 27, 2026, we had $499 million of commercial paper outstanding. We also have a Revolving Credit Facility that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $4.0 billion, which expires on August 8, 2029. At September 27, 2026, no amounts were outstanding under the Revolving Credit Facility.
Previous wording
We expect to issue new debt in the future. The amount and timing of any such new debt will depend on a number of factors, including but not limited to maturities of our existing debt, acquisitions and strategic investments, favorable and/or acceptable interest rates and changes in corporate income tax law. Additional information regarding our debt is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 6. Debt.”
Current wording
We expect to issue new debt in the future. The amount and timing of any such new debt will depend on a number of factors, including but not limited to maturities of our existing debt, acquisitions and strategic investments, working capital and capital expenditure requirements, favorable and/or acceptable interest rates and changes in corporate income tax law. Additional information regarding our debt is provided in this Annual Report in “Notes to Consolidated Financial Statements, Note 6. Debt.”
Previous wording
At September 28, 2025, $7.2 billion remained authorized for repurchase under our stock repurchase program. Our stock repurchases were at an increased level in fiscal 2025 compared to fiscal 2024. The timing of future stock repurchases and the number of shares of common stock to be repurchased will depend upon prevailing market conditions and other factors. Repurchases may be made in the open market, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions or through the use of derivative instruments. Our stock repurchase programs are 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.
Current wording
At September 27, 2026, $19.6 billion remained authorized for repurchase under our stock repurchase program. The timing of future stock repurchases and the number of shares of common stock to be repurchased will depend upon prevailing market conditions and other factors. Repurchases may be made in the open market, through 10b5-1 programs, through accelerated share repurchase programs, in privately negotiated transactions or through the use of derivative instruments. Our stock repurchase programs are 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.
Previous wording
•Our purchase obligations at September 28, 2025, which primarily relate to purchase commitments with certain suppliers of our integrated circuit products, including those under multi-year capacity commitments, totaled $15.1 billion, of which, $10.5 billion is expected to be paid in the next 12 months.
Current wording
•Our purchase obligations at September 27, 2026, which primarily relate to purchase commitments with certain suppliers of our integrated circuit products, including those under multi-year capacity commitments, totaled $18.6 billion, of which, $13.8 billion is expected to be paid in the next 12 months.
Previous wording
•Our research and development expenditures were $9.0 billion in fiscal 2025 and $8.9 billion in fiscal 2024.
Current wording
•Our research and development expenditures were $10.2 billion in fiscal 2026 and $9.0 billion in fiscal 2025.
Previous wording
•Cash outflows for capital expenditures were $1.2 billion in fiscal 2025 and $1.0 billion in fiscal 2024. We expect capital expenditures to increase from fiscal 2025 in the near term primarily to support the testing of our integrated circuits.
Current wording
•Cash outflows for capital expenditures were $2.5 billion in fiscal 2026 and $1.2 billion in fiscal 2025. We expect capital expenditures to increase from fiscal 2026 levels in the near term, primarily to support our engineering infrastructure and the testing of our integrated circuits.
Previous wording
•Amounts related to future lease payments for operating lease obligations at September 28, 2025 totaled $1.1 billion, with $142 million expected to be paid within the next 12 months.
Current wording
•Amounts related to future lease payments for operating lease obligations at September 27, 2026, totaled $1.1 billion, with $162 million expected to be paid within the next 12 months.
Previous wording
•We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly.
Current wording
•We expect to continue making strategic investments and acquisitions, the amounts of which could vary significantly. For further information related to our most recent acquisitions, see “Notes to Consolidated Financial Statements, Note 9. Acquisitions” in this Annual Report.
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Current report — wording carried from elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
The increase in research and development expenses in fiscal 2026 was primarily due to:
Current report — wording carried from elsewhere
$428 million increase in share-based compensation expense
Current report — wording carried from elsewhere
+$229 million increase in share-based compensation expense
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net gains on marketable securities in fiscal 2025 was primarily driven by the initial public offerings of certain QSI equity investments.