Qualcomm’s fourth quarter results were met with a negative market reaction, despite the company meeting Wall Street’s revenue expectations and exceeding consensus for non-GAAP profit. Management attributed the quarter’s performance to robust demand in premium handsets, continued expansion in automotive and industrial IoT, and strong adoption of Snapdragon platforms across devices. CEO Cristiano Amon explained that flagship smartphone launches and broadening market traction for Snapdragon, particularly in automotive and PC segments, were central to the quarter’s revenue growth. However, management also acknowledged that industry-wide memory shortages, especially for DRAM, began impacting customer inventory decisions late in the quarter.
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Qualcomm (QCOM) Q4 CY2025 Highlights:
- Revenue: $12.25 billion vs analyst estimates of $12.21 billion (5% year-on-year growth, in line)
- Adjusted EPS: $3.50 vs analyst estimates of $3.40 (2.9% beat)
- Adjusted EBITDA: $4.81 billion vs analyst estimates of $4.78 billion (39.2% margin, 0.5% beat)
- Revenue Guidance for Q1 CY2026 is $10.6 billion at the midpoint, below analyst estimates of $11.15 billion
- Adjusted EPS guidance for Q1 CY2026 is $2.55 at the midpoint, below analyst estimates of $2.86
- Operating Margin: 27.5%, down from 30.5% in the same quarter last year
- Inventory Days Outstanding: 123, down from 145 in the previous quarter
- Market Capitalization: $149.5 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Qualcomm’s Q4 Earnings Call
- Joshua Buchalter (TD Cowen) asked whether any factors beyond memory pricing were driving handset guidance. CEO Cristiano Amon reiterated that "it's 100% related to memory," with no demand issue observed.
- Samik Chatterjee (JPMorgan) inquired about data center progress and whether memory volatility affected customer engagement. Amon stated that "everything is on track" and emphasized the multibillion-dollar opportunity, while CFO Akash Palkhiwala said, "the fundamentals are strong."
- Ross Seymore (Deutsche Bank) pressed on the regional impact of memory constraints and seasonality. Palkhiwala explained that Chinese OEMs are more affected but that overall demand remains robust, with seasonality expected to be consistent with prior years.
- Timothy Arcuri (UBS) asked about the pace of operating margin decline in the QCT segment. Palkhiwala responded that margin compression is due to lower revenue scale and typical seasonal factors, not competitive or structural issues.
- C. J. Muse (Cantor Fitzgerald) questioned how Qualcomm manages prolonged DRAM shortages and wafer supply. Amon highlighted platform flexibility and readiness to work with multiple memory suppliers, while also pointing to strong relationships with wafer foundries.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch (1) signs of normalization in DRAM supply and its impact on handset production, (2) the pace of revenue growth and design wins in automotive and industrial IoT, and (3) the commercial adoption of Snapdragon-powered PCs and AI-focused devices. Execution in new markets such as robotics and updates on data center product roadmaps will also be important indicators for Qualcomm’s broader diversification strategy.
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