Handset segment revenue plunged 26% to $5.14 billion as consumer demand waned and business tied to Apple declined. However, diversification initiatives provided a crucial buffer, highlighted by an 89% surge in automotive revenue alongside a multi-year artificial intelligence partnership with Amazon. Escalating production costs will compress chip-design operating margins down to between 20% and 22% in the first quarter of fiscal 2027. Qualcomm has introduced price increases to protect profitability, though the financial benefits will not fully materialize until late fiscal 2027.
Key points
Non-handset revenue is projected to expand at an annual growth rate exceeding 60% as the…: Non-handset revenue is projected to expand at an annual growth rate exceeding 60% as the firm targets automotive and data centers.
Production and memory expenses are expected to compress chip-design operating margins fro…: Production and memory expenses are expected to compress chip-design operating margins from 24% down to between 20% and 22%.
Product price hikes implemented to counter rising expenses will not yield full financial…: Product price hikes implemented to counter rising expenses will not yield full financial benefits until the second half of fiscal 2027.
Sources checked by our analysis pipeline: 1
Qualcomm reported an 8% year-on-year decline in fourth-quarter revenue to $10.32 billion, as weakness in its smartphone chip business offset strong growth in automotive sales. Adjusted earnings stood at $2.17 per share, marginally above analysts' estimates of $2.16. (Sources: CNBC, WSJ, Reuters)
Reuters
2/5
Smartphone chip revenue plunges 26%
Qualcomm's handset business remained the biggest drag on its performance, with revenue falling 26% year-on-year to $5.14 billion. Higher memory costs and sluggish smartphone demand weighed on sales, while declining Apple-related revenue added to the pressure.
ETMarkets.com
3/5
Automotive business surges 89%
Qualcomm's automotive business emerged as a bright spot, with revenue jumping 89% year-on-year to a record $1.99 billion. Internet of Things revenue also increased 4% to $1.89 billion, highlighting the company's efforts to diversify beyond smartphones.
ETMarkets.com
4/5
Rising chip costs threaten margins
Qualcomm expects chip-design operating margins to decline to 20%-22% in the first quarter of fiscal 2027, compared with 24% in the September quarter. Rising costs across wafer fabrication, assembly, testing, advanced packaging and memory are squeezing profitability. The company is raising product prices, but expects the…
Soaring memory expenses forced the Japanese gaming company to raise console prices across major global markets, dampening consumer demand. These cost adjustments weighed heavily on quarterly momentum compared to previous periods. The downturn highlights how hardware manufacturing pressures are directly restricting the device's retail performance.
Strong momentum across core entertainment sectors has substantially lifted the conglomerate's recent financial performance. The surge underscores how critical gaming and film operations continue to be for driving the Japanese multinational's overall corporate earnings. Robust engagement across these flagship content segments provided the necessary catalyst to accelerate quarterly net income.
Financial figures released by the company for the third quarter have met prior market expectations. The outcome reflects steady operational execution across its core segments during the period. Observers are tracking how these performance numbers will influence the group's trajectory through the remainder of the fiscal year.