Qualcomm Revenue Falls as Handset Slump Deepens
Adjusted earnings declined 20% to $2.21 a share as handset demand weakened.
Qualcomm Incorporated (QCOM), the wireless-chip maker, reported a 4% decline in fiscal third-quarter revenue as a deepening handset contraction outweighed faster growth in automotive chips. Revenue totaled $9.947 billion, near the top of the company’s $9.2 billion-to-$10.0 billion forecast range.
The quarter extended a shift in Qualcomm’s business mix. Automotive and internet-of-things revenue together rose 28% from a year earlier, accelerating from 20% growth in the second quarter, while handset revenue recorded a steeper decline.
GAAP net income fell 25% to $2.002 billion, and earnings declined 23% to $1.87 a share. On an adjusted basis, net income dropped 23% to $2.356 billion and earnings fell 20% to $2.21 a share. Adjusted earnings were down 17% sequentially from $2.65.
Handset revenue fell 20% to $5.086 billion after declining 13% in the previous quarter. The business was down 16% sequentially and had contracted 35% from $7.824 billion in the fiscal first quarter. Automotive revenue, meanwhile, rose 61% to $1.588 billion, accelerating from 38% growth in the second quarter, while IoT revenue increased 9% to $1.830 billion.
The weaker handset business weighed on Qualcomm’s chip-segment profitability. QCT revenue declined 5% to $8.504 billion, while earnings before taxes fell 18% to $2.192 billion. The segment’s EBT margin narrowed to 26% from 30% a year earlier, continuing a slide from 31% in the first quarter and 27% in the second.
Qualcomm said broad-based cost increases across fabrication, assembly, testing, advanced packaging and memory affected the third-quarter results and its outlook. The company said product-price increases should gradually benefit gross margins.
For the fiscal fourth quarter, Qualcomm expects revenue of $9.7 billion to $10.5 billion, putting the midpoint above the third-quarter result. It forecasts adjusted earnings of $2.05 to $2.25 a share, compared with $2.21 in the latest quarter. Qualcomm also set a target of $40 billion in non-handset revenue for fiscal 2029 and expects non-handset growth, including data centers, to accelerate from 24% in fiscal 2026 to more than 60% in fiscal 2027.
The company completed its acquisition of Modular Inc. during the quarter, adding software for generative and agentic artificial intelligence after its first-quarter purchase of Alphawave Semi expanded its data-center operations. Qualcomm returned $2.3 billion to shareholders, down from $3.7 billion in the second quarter, as repurchases declined and the quarterly dividend increased to $0.92 a share.