Executive Summary
In the fiscal second quarter of 2024, QUALCOMM Incorporated (QCOM) reported total revenues of $9.4 billion, demonstrating year-over-year growth of 1.23% despite quarterly decline of 5.5%. The company achieved non-GAAP earnings per share (EPS) of $2.44, exceeding the upper guidance range. Significant performance came from the chipset segment, primarily driven by premium-tier smartphone demand and robust automotive revenues, reflecting a strategic push into new technology sectors including artificial intelligence and automotive.
Management emphasized strong momentum in the automotive sector, with a design win pipeline growing to approximately $45 billion, setting the company on track for over $4 billion in automotive revenues by fiscal 2026. This diversification strategy, alongside leadership in on-device AI technology, illustrates QUALCOMM's potential to capitalize on emerging markets. The company remains optimistic about sustaining growth driven by both its chipset and licensing businesses.
Key Performance Indicators
QoQ: -20.08% | YoY:11.96%
QoQ: -15.94% | YoY:36.50%
QoQ: -16.13% | YoY:35.95%
Key Insights
1. Revenue: $9.4 billion, YoY growth of 1.23%, QoQ decline of 5.5%
2. Net Income: $2.33 billion, YoY growth of 36.5%, QoQ decline of 15.94%
3. EPS: $2.44, YoY growth of 35.95%, QoQ decline of 16.13%
4. Cash at End of Period: $9.22 billion
5. Automotive Revenues: Targeting $4 billion by fiscal 2026, driven by $8 billion in QCT revenues and significant design wins.
6. Gross Profit Margin: 56.3%, with strong operational efficiencies maintained.
7. Current Ratio: 2.65, indicating healthy liquidity.
...
Financial Highlights
1. Revenue: $9.4 billion, YoY growth of 1.23%, QoQ decline of 5.5%
2. Net Income: $2.33 billion, YoY growth of 36.5%, QoQ decline of 15.94%
3. EPS: $2.44, YoY growth of 35.95%, QoQ decline of 16.13%
4. Cash at End of Period: $9.22 billion
5. Automotive Revenues: Targeting $4 billion by fiscal 2026, driven by $8 billion in QCT revenues and significant design wins.
6. Gross Profit Margin: 56.3%, with strong operational efficiencies maintained.
7. Current Ratio: 2.65, indicating healthy liquidity.
8. Operating Cash Flow: $3.55 billion, reflecting strong cash generation from operations.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
9.39B |
1.23% |
-5.50% |
| Gross Profit |
5.28B |
3.14% |
-6.05% |
| Operating Income |
2.34B |
11.96% |
-20.08% |
| Net Income |
2.33B |
36.50% |
-15.94% |
| EPS |
2.08 |
35.95% |
-16.13% |
Key Financial Ratios
operatingProfitMargin
24.9%
operatingCashFlowPerShare
$3.18
freeCashFlowPerShare
$3.02
dividendPayoutRatio
38.5%
Management Commentary
1. AI Strategic Initiatives: Management highlighted the launch of the Qualcomm AI Hub aimed at commercializing on-device AI applications, asserting, "We're extremely well positioned to capitalize on this growth opportunity... delivering 4x faster inferencing."
2. Automotive Sector Growth: Cristiano Amon noted that, "We're on track to achieve more than $4 billion of automotive revenues in fiscal '26" underscoring the substantial growth potential in this market.
3. Market Trends: Management indicated stronger demand in the premium smartphone segment, stating "The mix is improving... and the premium and high-tier as a percentage continue to increase."
4. Future Outlook: The guidance suggests third-quarter revenues between $8.8-$9.6 billion, reflecting seasonality concerns but indicating confidence in a rebound post-flagship launches.
"In fiscal Q2, we delivered non-GAAP revenues of $9.4 billion. Non-GAAP earnings per share of $2.44, was above the high end of our guidance."
â Cristiano Amon
"We're optimistic about the opportunities ahead for the company and will continue to execute on our plan to deliver long-term growth and value for shareholders."
â Cristiano Amon
Forward Guidance
Management provided a guidance range for Q3 revenues of $8.8â$9.6 billion and an EPS between $2.15 and $2.35, indicating a slight contraction due to anticipated seasonal declines in handset revenues. However, the forecast remains positive for year-end returns, supported by new smartphone launches and increasing automotive revenue from a growing design win pipeline. Investors should monitor the developments within the automotive sector and the market acceptance of on-device AI applications as key drivers for future growth.