Qualcomm Reports Negative Numbers in Its Fiscal Q3

Qualcomm's Q3 results beat Wall Street’s revenue expectations but missed on profit. The chipmaker continued to grapple with the impact of a memory supply crunch weighing on the smartphone sector.

The company posted revenue of $9.9 billion for the quarter ended 28 June, down 4% from $10.4 billion a year earlier but ahead of the roughly $9.7 billion analysts had expected. Net income during the period was $2 billion, down 25% year-on-year. Handset chip sales fell 20% to $5.1 billion.

Automotive remained a bright spot, with revenue reaching $1.59 billion, which marked a 61% increase and the 23rd consecutive quarter of double-digit year-on-year growth for the segment. Qualcomm reiterated a target of $10 billion in annual automotive revenue by fiscal 2029.

IoT revenue was $1.83 billion, representing a 9% increase. Combined automotive and IoT revenue climbed 28%, underscoring the company’s push to diversify beyond its traditional handset business as it also builds out a data centre and custom silicon strategy with a leading hyperscaler.

Qualcomm CEO Cristiano Amon stated that the handset chips results reflected a bottoming out in the China market after OEMs pulled back on orders amid memory supply uncertainty. “We actually don’t expect fundamental changes in the premium tier and the higher tier volume,” Amon said on the company’s investor call.

Going forward, he expects Apple-related revenue to decline sharply and faster than previously anticipated, after Qualcomm’s share of components in the upcoming iPhone range came in well below an earlier estimate of around 20%. Amon said the company is offsetting the loss with growth elsewhere, including its emerging data centre business, which it expects to generate $5 billion in revenue by fiscal 2027.