Second Quarter Fiscal 2024 Earnings
May 1, 2024
Note Regarding Forward-Looking Statements
In addition to historical information, this document and the conference call that it accompanies contain forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to: statements regarding our growth and diversification opportunities, including those in Automotive, IoT and the artificial intelligence (AI) space; our business, product and technology strategies, including our diversification strategy; our technologies, technology leadership, technology differentiation and technology roadmap; our products, product performance, product leadership, product pipeline, product mix and product roadmap; new product releases, announcements and design wins; our automotive design win pipeline; the benefits of our technologies, products and research and development efforts; our business and share trends, as well as market and industry trends, such as on-device Generative AI, and their potential impact on our business and our positioning to take advantage thereof; acquisitions, collaborations or other strategic transactions, including the anticipated benefits thereof; anticipated demand for our products and technologies; our expectations regarding normalization of demand in IoT and the timing thereof; seasonal trends; our business outlook; our commitment to dividend growth; and our estimates, guidance and targets related to revenues (including without limitation our long-term automotive revenue targets), earnings per share (EPS), non-GAAP combined R&D and SG&A expenses (non-GAAP operating expenses), interest and investment and other expense (income) net, weighted average diluted share count, earnings before tax (EBT) margins, effective tax rates and global handset units. Forward-looking statements are generally identified by words such as "estimates," "guidance," "forecast," "target," "expects," "anticipates," "intends," "plans," "believes," "seeks" and similar expressions. Actual results may differ materially from those referred to in the forward- looking statements due to a number of important factors, including but not limited to: our dependence on a small number of customers and licensees, and particularly from their sale of premium-tier devices; our customers vertically integrating; a significant portion of our business being concentrated in China, which is exacerbated by U.S./China trade and national security tensions; our ability to extend our technologies and products into new and expanded product areas, and industries and applications beyond mobile handsets; our strategic acquisitions, transactions and investments, and our ability to consummate strategic acquisitions; our dependence on a limited number of third-party suppliers; risks associated with the operation and control of our manufacturing facilities; security breaches of our information technology systems, or other misappropriation of our technology, intellectual property or other proprietary or confidential information; our ability to attract and retain qualified employees; the
continued and future success of our licensing programs, which requires us to continue to evolve our patent portfolio and to renew or renegotiate license agreements that are expiring; efforts by some OEMs | |
to avoid paying fair and reasonable royalties for the use of our intellectual property, and other attacks on our licensing business model; potential changes in our patent licensing practices, whether due to | |
governmental investigations, legal challenges or otherwise; adverse rulings in governmental investigations or proceedings or other legal proceedings; our customers' and licensees' sales of products and | |
services based on CDMA, OFDMA and other communications technologies, including 5G, and our customers' demand for our products based on these technologies; competition in an environment of | |
rapid technological change, and our ability to adapt to such change and compete effectively; failures in our products or in the products of our customers or licensees, including those resulting from security | |
vulnerabilities, defects or errors; difficulties in enforcing and protecting our intellectual property rights; claims by third parties that we infringe their intellectual property; our use of open source software; the | |
cyclical nature of the semiconductor industry, declines in global, regional or local economic conditions, or our stock price and earnings volatility; geopolitical conflicts, natural disasters, pandemics and | |
other health crises, and other factors outside of our control; our ability to comply with laws, regulations, policies and standards; our indebtedness; and potential tax liabilities. These and other risks are set | |
forth in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 24, 2024 filed with the Securities and Exchange Commission (SEC). Our reports filed with the SEC are available on our | |
website at www.qualcomm.com. We undertake no obligation to update, or continue to provide information with respect to, any forward-looking statement or risk factor, whether as a result of new | |
information, future events or otherwise. | |
This presentation includes "Non-GAAP financial measures" as that term is defined in Regulation G. Further discussion regarding our use of Non-GAAP financial measures, as well as the most directly | |
comparable GAAP (accounting principles generally accepted in the United States) financial measures and information reconciling these Non-GAAP financial measures to our financial results prepared in | |
accordance with GAAP, are included in this presentation. | |
References to "Qualcomm" refer to Qualcomm Incorporated and/or its subsidiaries, as applicable. Qualcomm Incorporated includes QTL and the vast majority of our patent portfolio. Qualcomm | |
Technologies, Inc., a subsidiary of Qualcomm Incorporated, operates, along with its subsidiaries, substantially all of our engineering and research and development functions and substantially all of our | |
products and services businesses, including QCT. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority of our patent portfolio. Qualcomm Technologies, Inc., a subsidiary of | |
Qualcomm Incorporated, operates, along with its subsidiaries, substantially all of our engineering and research and development functions and substantially all of our products and services businesses, | |
including our QCT semiconductor business. Snapdragon and Qualcomm branded products are products of Qualcomm Technologies, Inc. and/or its subsidiaries. Qualcomm patented technologies are | |
licensed by Qualcomm Incorporated. | 2 |
Q2FY24 Highlights
3
Second Quarter Fiscal 2024 Results
Revenues
$9.4B
QCT
GAAP EPS(1)
$2.06
QTL
Non-GAAP(2) EPS
$2.44
Other
Revenues of
$8.0B
above guidance midpoint(3)
$1.8B
Combined Automotive & IoT revenues
EBT(4) of
$2.3B
with EBT margin of
29% ↑2pts YoY at high end of guidance range(3)
Revenues of
$1.3B
at midpoint of guidance range(3)
EBT margin of
71%
at midpoint of guidance range(3)
Returned
$1.6B
to stockholders including
$0.7B
of share repurchases &
$0.9B
in dividends
Increased annualized dividend payout to
$3.40 ↑$0.20 vs. prior
per share of common stock
1.) EPS = Diluted earnings per share; 2.) Non-GAAP information excludes our QSI (Qualcomm Strategic Initiatives) segment and certain share-based compensation, acquisition-related items, and other items. Further discussion regarding our use of Non-GAAP financial measures and reconciliations between GAAP and Non-GAAP results are included in this presentation; 3.) Prior guidance as of January 31, 2024; 4.) EBT = Earnings before taxes.
4
Q2FY24
QCT Highlights
Third
Consecutive
Quarter of
Record Auto
Revenues
Revenues
Handsets
$6.2B
Automotive
$603M
Internet of Things (IoT)
$1.2B
- In premium and high-tier smartphones, our Snapdragon® Mobile platforms continue to set the bar for performance and on-deviceGen AI capabilities.
- Recently launched flagship Android devices powered by Snapdragon® 8 Gen 3 are seeing strong demand globally, especially in China.
- Revenues from our Chinese OEMs increased by >40% year-over-year in the first half of fiscal '24, reflecting our strong competitive positioning and recovery of demand.
• The Snapdragon® Digital Chassis solution is the industry's leading technology solution, and we are pleased to announce that our design win pipeline is now ~$45B(1).
- We are growing faster than the addressable market and remain on track to achieve >$4B of revenues in fiscal '26.
- In Edge Networking IoT, our networking solutions continued to gain traction as the Wi-Fi 7 transition expands to the enterprise.
- In PCs, we recently expanded our compute portfolio with the Snapdragon® X Plus Platform, which is designed to address a broader range of design and price tiers, and we are excited about the upcoming launches of next-generation AI PCs powered by Snapdragon.
- The Meta Horizon OS, running on Snapdragon, is now open and available to third- party hardware makers - a significant milestone toward expanding the device ecosystem.
1.) As of May 1, 2024. The design-win pipeline reflects the current estimated future size of awarded automaker programs, based on forecasts provided directly by automakers and Tier-1 suppliers. | 5 |
Snapdragon and Qualcomm branded products are products of Qualcomm Technologies, Inc. and/or its subsidiaries. |
Financial Results and Guidance
As of May 1, 2024
Quarterly Results and Guidance | Q2FY24 Guidance(1) | Q2FY24 Results |
Revenues | $8.9B - $9.7B | $9.4B |
Non-GAAP diluted EPS | $2.20 - $2.40 | $2.44 |
Non-GAAP operating expenses(3) | ~$2.2B | $2.2B |
GAAP interest and investment and other expense (income), net | ~$25M | ($158M) |
Non-GAAP effective tax rate | ~14% | 13% |
Weighted average diluted share count | ~1.13B | 1.13B |
Segment Results and Guidance | ||
QCT revenues | $7.6B - $8.2B | $8.0B |
QCT EBT margin % | 27% - 29% | 29% |
QTL revenues | $1.2B - $1.4B | $1.3B |
QTL EBT margin % | 69% - 73% | 71% |
Annual Guidance | FY24 Prior Guidance(1) | |
Non-GAAP effective tax rate | ~14% | |
Q3FY24 Guidance(2)
$8.8B - $9.6B $2.15 - $2.35 ~$2.2B ~$10M ~13% ~1.13B
$7.5B - $8.1B 25% - 27% $1.2B - $1.4B 69% - 73%
FY24 Guidance(2)
~13%
1.) Prior guidance as of January 31, 2024; 2.) Our outlook does not include provisions for proposed tax law changes, future asset impairments or for pending legal matters, other than future legal amounts that are probable and estimable. Further, due to their nature, certain income and expense items, such as certain investments, derivative and foreign currency transaction gains or losses, cannot be accurately forecast. Accordingly, we only include such items in our financial outlook to the extent they are reasonably certain. Our outlook includes the impact of any pending business combinations to the extent they are expected to close in the upcoming quarter. Actual results may differ materially from outlook; 3.) Non-GAAP operating expenses = Non-GAAP combined R&D and SG&A expenses.
6
Q2FY24Revenues
Non-GAAP+1% Results
$9.3B | $9.4B |
Q2FY23 | Q2FY24 |
EBT
+11%
$2.9B | $3.2B |
Q2FY23 | Q2FY24 |
EPS
+13%
$2.15 | $2.44 |
Q2FY23 | Q2FY24 |
7
Q2FY24 | QCT | ||
Segment | Revenues | EBT | |
Results | +1% | +9% | |
$7.9B | $8.0B |
QTL
RevenuesEBT
+2% +7%
$2.1B | $2.3B | |||||||||
Q2FY23 | Q2FY24 | Q2FY23 | Q2FY24 |
$1.3B | $1.3B |
Q2FY23 | Q2FY24 |
$871M | $933M |
Q2FY23 | Q2FY24 |
8
Q2FY24 | |
QCT Revenue | Handsets |
Streams | +1% |
$6.1B | $6.2B |
Q2FY23 | Q2FY24 |
Automotive
+35%
$447M $603M
Q2FY23 Q2FY24
IoT
-11%
$1.4B | $1.2B |
Q2FY23 | Q2FY24 |
9
First generation of flagship Android smartphones
from leading OEMs featuring on-device AI
Samsung | OPPO | HONOR | Xiaomi |
Galaxy S24 series | Find X7 Ultra | Magic6 Pro | 14 | 14 Ultra |
OnePlus | vivo | ASUS |
12 | X Fold3 Pro | Zenfone 11 Ultra |
RedMi | ROG | iQOO | Nubia |
K70 Pro | Phone 8 | 12 | 12 Pro | Z60 Ultra |
Live translation
Live transcription
Photo portrait generation
Photo AI editing
Semantic search
Text summarization
Virtual assistants
Writing assistance
Image generation
New on-device AI use cases and experiences expected in future smartphone launches
Snapdragon is a product of Qualcomm Technologies, Inc. and/or its subsidiaries. | 10 |
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Qualcomm Inc. published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 May 2024 20:04:04 UTC.