Executive Summary
QUALCOMM Incorporated (QCOM) delivered robust financial results for Q1 2024, reporting revenues of $9.9 billion, a 15.1% increase from the previous quarter, and a net income of $2.77 billion, reflecting a 23.8% year-over-year growth. The performance was primarily driven by strong demand in its chipset segment, notably supported by the latest Snapdragon 8 Gen 3 mobile platform and increased automotive revenues. Management highlighted the stabilization of the global handset market and a positive outlook on 5G transitions, showcasing growing partnerships and innovative products as key growth drivers. Major agreements, notably with Samsung and Apple, further solidified QUALCOMM’s market position, indicating resilience and strategic focus in diversifying its offerings across mobile and automotive sectors.
Key Performance Indicators
QoQ: 107.51% | YoY:18.78%
Key Insights
\n**Revenue Performance**: For Q1 2024, QUALCOMM reported total revenues of $9.9 billion, representing a 15.1% QoQ increase and 4.99% YoY growth. This growth was led by the QCT segment, which generated $8.4 billion in revenues (up from $6.7 billion from handsets), driven by increased Android demand and automotive chipset applications.
\n**Profitability**: Gross profit for the quarter was $5.62 billion, yielding a gross margin of 56.6%. Operating income reached $2.93 billion with an operating mar...
Financial Highlights
\nRevenue Performance: For Q1 2024, QUALCOMM reported total revenues of $9.9 billion, representing a 15.1% QoQ increase and 4.99% YoY growth. This growth was led by the QCT segment, which generated $8.4 billion in revenues (up from $6.7 billion from handsets), driven by increased Android demand and automotive chipset applications.
\nProfitability: Gross profit for the quarter was $5.62 billion, yielding a gross margin of 56.6%. Operating income reached $2.93 billion with an operating margin of 29.5%, signaling effective cost management amid increased revenues. Net income increased to $2.77 billion, translating to an EPS of $2.48, reflecting a solid 24.6% YoY increase.
\nBalance Sheet Health: The company maintained a balanced position with total assets of $52.1 billion and total liabilities of $29.1 billion, resulting in a significant equity of $23 billion. QUALCOMM's cash and short-term investments totaled $12.05 billion, providing a strong liquidity position, essential for ongoing investments in R&D and market expansions.
\nCash Flow: Q1 2024 saw net cash provided by operating activities of $2.95 billion, highlighting robust operational cash flow generation capabilities, despite net cash used in investing activities of $1.26 billion and financing activities of $2.04 billion. QUALCOMM returned $1.7 billion to shareholders through stock buybacks and dividends, underscoring commitment to shareholder value.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
9.94B |
4.99% |
15.11% |
| Gross Profit |
5.62B |
3.76% |
18.35% |
| Operating Income |
2.93B |
18.78% |
107.51% |
| Net Income |
2.77B |
23.80% |
85.70% |
| EPS |
2.48 |
24.62% |
86.47% |
Key Financial Ratios
operatingProfitMargin
29.5%
operatingCashFlowPerShare
$2.64
freeCashFlowPerShare
$2.45
dividendPayoutRatio
32.3%
Management Commentary
\nChipset Market Strength: "...Revenues from our chipset business of $8.4 billion reflect healthy Android demand and continued strong momentum in automotive."
\nAI Innovations: "The Snapdragon 8 Gen 3 mobile platform is setting a new standard for on-device gen AI experiences for premium smartphones..."
\nAutomotive Growth: "Notably, 75 new models launched commercially in 2023 were for technologies, highlighting Qualcomm's grown scale in automotive and execution of our design wins."
\nLicensing Strategy: "...we’re pleased to have extended several key license agreements. First, Apple exercised its unilateral option to extend..."
"The Snapdragon 8 Gen 3 mobile platform is setting a new standard for on-device gen AI experiences for premium smartphones..."
— Cristiano Amon, CEO
"We're very pleased to start our fiscal year with strong execution and financial performance..."
— Akash Palkhiwala, CFO
Forward Guidance
Management provided guidance for Q2 2024, forecasting revenues between $8.9 billion and $9.7 billion, with non-GAAP EPS expected to range from $2.20 to $2.40. This guidance reflects seasonality effects and the anticipation of moderate demand. However, the underlying growth drivers remain intact, as management notes that global handset units are expected to stabilize, with expectations of slight growth in 5G units. Additionally, automotive revenues are expected to remain strong due to ongoing design wins and product launches. Key focus areas include investment in AI solutions and strategic partnerships that bolster market presence and product offerings.