Qualcomm Handset Chip Revenue Falls 26% In Fourth Quarter As Automotive Sales Jump 89%
Fiscal 2026 revenue slipped 3% to $43.12 billion, and the CEO reiterated a $5 billion data center target for fiscal 2027.
Qualcomm, which designs the chips and software behind smartphones, cars and data center gear, said its handset chip revenue fell 26% to $5.137 billion in the fiscal fourth quarter, while automotive revenue rose 89% to $1.99 billion. CEO Cristiano Amon said fiscal 2027 starts a "non-handset revenue inflection" that includes the ramp of its data center business.
Cars grow as phones shrink
Total revenue for the quarter ended September 27 fell 8% to $10.322 billion on a standard-accounting basis, from $11.270 billion a year earlier. Adjusted earnings were $2.17 per share, down 28% from $3.00. Reported earnings were $1.17 per share, against a loss of $2.89 a year earlier.
The company called its automotive result a record, its first $2 billion quarter. Internet-of-things chip revenue rose 4% to $1.888 billion. Over the full fiscal year, handset revenue fell 13% to $24.072 billion and automotive rose 52% to $6.004 billion.
Qualcomm's licensing unit, QTL, brought in $1.304 billion in the quarter, down 7%. The company said it renewed long-term license agreements with Apple, Huawei and Transsion, and announced a multi-generational product collaboration with Amazon for AI data centers.
A year helped by a tax benefit
Fiscal 2026 revenue was $43.12 billion, down 3%. Adjusted earnings per share fell 12% to $10.54. Reported earnings per share rose to $12.70 from $5.01, helped by a $5.7 billion income tax benefit, or $5.32 per share, from releasing a valuation allowance.
Qualcomm spent $7.817 billion on stock repurchases in the year, plus $3.854 billion in dividends.
Costs and a $5 billion target
Amon said non-handset revenue is projected to grow by more than 60% year over year in fiscal 2027, and he reiterated the $5 billion data center revenue target for that year.
For the first quarter of fiscal 2027, Qualcomm guided to revenue of $10.4 billion to $11.2 billion and adjusted earnings of $2.15 to $2.35 per share. The company said chip input costs are rising across fabrication, packaging, memory and other materials. It is raising prices in response and expects the full benefit in chip-unit gross margins in the second half of fiscal 2027.
Qualcomm's first-quarter outlook includes data center revenue in its chip-unit guidance of $9.0 billion to $9.6 billion.
Sources
- 8-K Filing — QUALCOMM INC/DE (QCOM) — SEC EDGAR
- Exhibit qcom092726erex991.htm — QUALCOMM INC/DE 8-K exhibit — SEC EDGAR
- Qualcomm is betting big on data centers as smartphone sales sink | The Verge — The Verge
- Qualcomm Q4 earnings: new markets lift sales forecast above estimates — qz.com
