Qualcomm FY24Q3 corresponds to the actual period of April/May/June 2024.
Qualcomm FY24Q3 Earnings:
Revenue was $9.393B, up 11% year over year and flat sequentially (revenue peak was $11.4B in FY22Q4).
GAAP gross margin was 56%, up 0.5 percentage points year over year and down 0.7 percentage points sequentially.
GAAP net income was $2.129B, up 18% year over year, marking the third consecutive quarter of double-digit growth, and down 9% sequentially (net income peak was $3.7B in FY22Q3).
FY24 Q4 revenue is guided at $9.5B-$10.3B, up 10%-19% year over year; midpoint net income is guided at $2.812B, up 89% year over year.
FY25Q1 (holiday quarter: iPhone 16 series + Snapdragon 8 Gen 4) revenue growth is expected to be similar to the year-ago period, i.e., around 5% ($10.4B).
Business Segments:
Handset revenue was $5.899B, up 12% year over year, accounting for 63% of revenue; 2024 global handset volumes are expected to be flat or up slightly year over year (unchanged), with the share of premium devices above $400 rising from 21% last year to 31% this year; domestic Android OEM revenue grew 50% year over year this quarter, driven primarily by premium model demand.
Snapdragon 8 Gen 4 uses a non-Arm reference custom CPU, and the modem-RF suite is largely sold as a bundle, both of which will lift ASP; Huawei's export license expired on May 7, with a modest impact on this quarter and next quarter's revenue.
The company signed a long-term licensing agreement with Chinese OEM Honor this quarter, as well as with Transsion and two other major domestic players.
Automotive revenue was $811M, up 87% year over year, marking the 15th consecutive quarter of double-digit year-over-year growth and the fourth consecutive quarterly record, accounting for 9% of revenue; the FY24 full-year 50% growth target and the FY26 $4B revenue target remain on track.
IoT revenue was $1.359B, down 8% year over year, the sixth consecutive quarter of year-over-year decline, accounting for 14% of revenue; IoT consumer, networking, and industrial demand is recovering; 20 Copilot+ PCs powered by X Elite/Plus launched on June 18, with a roadmap for lower-tier models; near-term PC revenue impact is hard to estimate; by 2027, 50% of PCs are expected to be AI PCs; Qualcomm XR platforms are benefiting from LLM-driven endpoint device demand.
Q4 handset revenue is expected to grow low single digits sequentially, with Apple modem procurement increasing and Android seasonally declining ahead of flagship chip launches; IoT is expected to grow low double digits sequentially, driven by consumer, networking, and industrial; automotive is expected to be flat sequentially.
Overall, Qualcomm benefited from strong domestic Android performance this quarter, returning its core handset business to double-digit growth; in non-handset businesses, automotive delivered an above-expectation result, while the much-anticipated Arm PC remains difficult to predict in the near term.
Qualcomm's previous net income peak was $12.9B (FY22); based on current guidance, FY24 net income would be ~$10B; applying a long-term valuation anchor of 20x PE yields a rough valuation range of $200B-$258B. Qualcomm's valuation has long been constrained by uncertainties such as Apple exposure and China exposure (FY23 China revenue share was 62% by customer sales location, ~40% by customer headquarters).