Qualcomm Reports 17% Revenue Growth to $10.98 Billion in Q2 Fiscal 2025

QUALCOMM Incorporated reported a strong financial performance for the second quarter of fiscal 2025, with total revenues reaching $10.98 billion, a 17% increase from $9.39 billion in the same quarter of the previous year. The company's net income also rose by 21% to $2.81 billion, compared to $2.33 billion in the prior year. This growth was primarily driven by a significant increase in the Qualcomm CDMA Technologies (QCT) segment, which saw revenues rise by 18% to $9.47 billion, fueled by higher sales in handsets, automotive, and Internet of Things (IoT) products.

In terms of profitability, the operating income for the quarter was $3.12 billion, up from $2.34 billion a year earlier. The gross margin slightly decreased to 55% from 56%, attributed to a decline in the QCT gross margin. The company reported basic earnings per share of $2.55, an increase from $2.03 in the same quarter last year. For the first six months of fiscal 2025, total revenues were $22.65 billion, up from $19.33 billion, with net income increasing to $5.99 billion from $5.09 billion.

Strategically, Qualcomm has been active in expanding its licensing agreements, recently finalizing long-term licenses with two key Chinese original equipment manufacturers (OEMs) and entering into comprehensive agreements with Transsion, a growing OEM in developing regions. These agreements have helped stabilize licensing revenues, which remained flat at $1.62 billion for the quarter. The company also continued its stock repurchase program, utilizing $3.5 billion to repurchase shares during the first half of the fiscal year, with $12.5 billion remaining authorized for future repurchases.

Operationally, Qualcomm's QCT segment reported strong performance metrics, with handsets generating $6.93 billion in revenue, up from $6.18 billion, and automotive revenues increasing to $959 million from $603 million. The company’s employee headcount remained stable, supporting its ongoing research and development efforts, which totaled $2.22 billion for the quarter. The company continues to face challenges, including competition from customers developing their own integrated circuit products and geopolitical tensions affecting its operations in China.

Looking ahead, Qualcomm anticipates continued growth driven by the adoption of 5G technology and its applications in automotive and IoT sectors. However, the company remains cautious about potential impacts from global trade policies, competition, and the cyclical nature of the semiconductor industry. The management has indicated that while they expect to maintain their leadership in 5G technology, they are closely monitoring market conditions and customer demand to navigate potential challenges effectively.