QCOM — QUALCOMM Incorporated

Qualcomm Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Total Revenues: $10.6 billion
• Non-GAAP EPS: $2.65, at the high end of guidance
• QCT Revenues: $9.1 billion, with automotive revenues reaching a record $1.3 billion (38% YoY growth)
• Licensing Revenues (QTL): $1.4 billion, with an EBT margin of 72%
• Shareholder Returns: $3.7 billion returned, including $2.8 billion in share repurchases and $945 million in dividends
• Tax Benefit: $5.7 million noncash GAAP tax benefit due to a reversal of a tax valuation allowance

2. Strategic Updates and Business Highlights:

• Automotive Growth: Exceeded $5 billion in annualized revenues for the first time; expected to exceed $6 billion by fiscal year-end, driven by the fourth-generation Snapdragon Digital Chassis.
• IoT and Edge AI: QCT IoT revenues grew 9% YoY to $1.7 billion, with strong demand for consumer and industrial products.
• Agentic AI Focus: Qualcomm is pivoting towards agentic AI workloads, enhancing user experiences across devices, and sees significant upgrade opportunities in existing devices.
• Data Center Developments: Progressing with custom silicon engagements with hyperscalers, with initial shipments expected in December 2026.
• 6G Initiatives: Qualcomm is actively developing 6G technologies, forming a coalition to shape the future of wireless connectivity.

3. Forward Guidance and Outlook:

• Q3 2026 Revenue Forecast: $9.2 billion to $10 billion, with non-GAAP EPS of $2.10 to $2.30.
• QTL Revenue Guidance: $1.15 billion to $1.35 billion, with EBT margins of 67% to 71%.
• QCT Handset Revenue Forecast: Approximately $4.9 billion, impacted by memory industry dynamics.
• Automotive Revenue Growth: Expected to accelerate to approximately 50% YoY growth in Q3.

4. Bad News, Challenges, or Points of Concern:

• Handset Market Weakness: Declining demand in the mid and low-tier segments, particularly affecting Chinese OEMs, leading to under-shipping relative to consumer demand.
• Memory Supply Issues: Ongoing challenges in the memory market are impacting pricing and supply for handset OEMs, contributing to cautious build plans.
• Competitive Pressures: Increased competition in the data center space from companies like NVIDIA and others moving towards custom silicon solutions.

5. Notable Q&A Insights:

• China Handset Market: Qualcomm anticipates Q3 to be the bottom for QCT handset revenues from Chinese customers, with expectations for recovery in Q4.
• Data Center Strategy: Qualcomm is pursuing both custom ASIC and merchant solutions in the data center, with a focus on differentiating through high-performance CPUs and connectivity IP.
• Samsung Relationship: Qualcomm maintains a stable relationship with Samsung, expecting to keep a share of over 70% in the premium smartphone segment.
• 6G Timeline: Prototypes expected in 2028, with early launches anticipated in 2029, indicating a long-term strategic focus on next-generation connectivity.

Overall, Qualcomm's Q2 2026 results reflect strong performance in automotive and IoT sectors, while facing challenges in the handset market due to memory supply issues and competitive dynamics in the data center space. The company remains optimistic about future growth driven by advancements in AI and 6G technologies.