Qualcomm (Minutes): Its share in this year's new iPhone models will drop to 70%
Qualcomm (QCOM.O) released its fiscal year 2025 Q2 earnings report (as of March 2025) during the U.S. after-hours trading session on May 1, 2025, Beijing time:
Below are the Minutes of Qualcomm's fiscal year 2025 Q2 earnings call. For a Quick Interpretation of the report, please visit《Qualcomm: Samsung’s ‘Blood Transfusion’ Fails to Sustain Momentum, Apple’s ‘Sabotage’ Hides Landmines》
I. $Qualcomm(QCOM.US) Key Earnings Highlights:
II. Detailed Earnings Call Content
2.1. Executive Summary:
1. Fiscal Year 2025 Q2 Financial Performance
Total Revenue: $10.98 billion.
Non-GAAP EPS: $2.85.
Semiconductor Business (QCT): Revenue reached $9.5 billion.
Licensing Business (QTL): Revenue was $1.3 billion.
Growth Highlights:
Automotive and IoT revenues grew 59% and 27% YoY, respectively.
Dividends & Buybacks: Returned $2.7 billion to shareholders, including $938 million in dividends and $1.7 billion in buybacks.
2. Technology & Product Updates
Mobile:
At MWC, we launched the x85 5G platform—the world’s most advanced AI-powered modem-to-antenna system. It will debut in smartphones, cars, and IoT devices in H2 2025. For smartphones, it will be Android-exclusive.
To date, global Android OEMs have released 90 flagship models with Snapdragon 8 Elite.
AI PC:
Since mid-2024, over 85 Snapdragon X designs are in production/development, targeting 100+ by 2026. Third-party data shows Snapdragon PCs captured ~9% of Windows laptops priced above $600 in the U.S. and Europe’s top 5 markets in Q1 2025.
XR:
Long-term partnerships with Meta and Google drove XR growth; 15+ smart glasses designs globally.
Industrial IoT:
Collaborating with Palantir to integrate AI into edge industrial systems.
Automotive:
Won 30 new projects, including 5 ADAS deals and orders from Nio, ZEEKR, Great Wall, and Dongfeng. 14 commercial vehicles launched globally (29 YTD).
New partnerships with Visteon and Patel for next-gen AI cockpit solutions; pre-integrated ADAS with ASV for L1/L2+ features.
Edge Networking:
Launched the x85-based 4th-gen FWA platform—the world’s first 5G Advanced-ready FWA solution.
3. Financial Outlook
FY2025 Q3 Guidance:
Non-GAAP Revenue: $9.9–10.7B.
Non-GAAP EPS: $2.60–2.80.
QTL: Revenue of $1.15–1.35B (EBT margin: 67–71%).
QCT: Revenue of $8.7–9.3B (EBT margin: 28–30%).
Mobile: +10% YoY; IoT & Auto: +15% and +20% YoY.
4. M&A
Announced acquisition of Edge Impulse Inc. (undisclosed terms) on March 11, 2025. Its edge-AI platform serves 170K+ developers for predictive maintenance, asset tracking, etc.
5. FY2029 Targets
Non-mobile revenue: $22B; PC: $4B; XR: $2B; Auto: $8B; Industrial IoT: $4B.
2.2. Q&A:
Q: How do tariffs factor into mobile guidance? Any pre-stocking impacts?
A: Tariff assumptions are baked into guidance—no material direct impact observed. No abnormal customer pre-orders.
Q: Any updates on Huawei royalty negotiations?
A: No progress to share; talks ongoing.
Q: What drove IoT’s outperformance? Demand pull-forward?
A: Industrial IoT led growth amid market shift from MCUs to MPUs/AI.
Q: M&A strategy—expanding existing vs. entering new markets?
A: Focused on industrial edge-AI; acquisitions like Edge Impulse build scalable software platforms.
Q: FY Q4 seasonal factors beyond macro?
A: Normal seasonality for Android/auto/IoT; Apple share to drop to ~70% in fall 2025.
Q: China risks? Shift from Qualcomm to MediaTek?
A: Strong position intact—design wins span domestic/export markets (smartphones, PCs, autos, XR).
Q: Chip gross margin dip (90bps QoQ)? Product mix?
A: Minor low-end mix shift; overall trends remain healthy.
Q: Tariff indirect impacts?
A: Minimal direct/demand effects baked in; indirect risks monitored.
Q: Auto growth drivers? ADAS inflection timing?
A: 1/3 of pipeline is ADAS; Snapdragon Digital Chassis integrates cockpit/ADAS on one chipset.
Q: Mobile’s 10% YoY growth—China vs. global splits? Subsidy impacts?
A: China premium (>$400) share rose from 21% (2019) to 30% (2024), fueling growth.
Q: PC margin outlook as pricing expands downward?
A: 4 platforms now cover sub-$600 PCs; 85+ designs secured (target: 100 by 2026).
Q: Competition—pressure from Arm’s CSS?
A: Stable Samsung share (75% vs. 50% historically); MediaTek remains key rival in China.
Q: AI’s ASP boost in mobile vs. PC?
A: Mobile AI resembles feature-to-smartphone transition; NPU content/ASP rises. PC AI early-stage.
Q: OpEx trajectory post-Apple share loss?
A: Shifting investments from mobile to auto/IoT (PC/XR/industrial).
Q: Rationale for 100% FCF return?
A: Strong cash reserves; opportunistic buybacks amid low valuation.
Disclosures & Disclaimers: Dolphin Research Disclosures
