Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Qualcomm Inc (QCOM, Financial) reported strong non-GAAP revenues of $10.2 billion and earnings per share of $2.69, exceeding the high end of their guidance.
- The company is making significant progress in its growth and diversification strategy, particularly in edge AI and connected computing.
- Qualcomm Inc (QCOM) has seen a 24% increase in IoT revenues from the prior quarter, driven by new product launches and channel inventory normalization.
- The Snapdragon 8 Elite platform has restored performance leadership to the Android ecosystem, with successful launches by major OEMs like Xiaomi, Honor, Oppo, and Vivo.
- Qualcomm Inc (QCOM) achieved its fifth consecutive quarter of record automotive revenues, with a year-over-year growth of 68%.
Negative Points
- The company faces potential risks from the ARM dispute, although they are confident in their license rights.
- There is a seasonal sequential decline expected in QCT IoT revenues, consistent with previous fiscal years.
- Qualcomm Inc (QCOM) is not providing guidance beyond the first quarter, leaving uncertainty about future performance.
- The company has no Huawei product revenue in its current quarter guidance, which could impact overall revenue growth.
- Concerns exist about the sustainability of double-digit growth into the March quarter, particularly in the smartphone market.
Q & A Highlights
Q: Can you discuss the strength in the automotive sector and how the current environment is affecting Qualcomm?
A: Cristiano Renno Amon, President and CEO, explained that Qualcomm's automotive revenue is less sensitive to market fluctuations and more related to new models launching with Qualcomm technology. This reflects a shift in market share, leading to growth both sequentially and year-over-year.
Q: What is Qualcomm's stance on the ARM dispute, and what are the implications?
A: Akash Palkhiwala, CFO and COO, stated that Qualcomm has broad, well-established license rights covering their custom-designed CPUs and is confident these rights will be affirmed. The trial is scheduled for December, and Qualcomm looks forward to addressing ARM's claims.
Q: Can you elaborate on the acceleration in IoT and its components?
A: Akash Palkhiwala noted that the IoT growth is driven by new product launches across consumer, industrial, and networking sectors, along with some channel inventory normalization. The launches in PC and XR contributed significantly to the fourth and first-quarter performance.
Q: How sustainable is the double-digit growth in the handset market, particularly in China?
A: Akash Palkhiwala mentioned that the growth is driven by content increase and improved mix across tiers, with devices over $400 increasing from 21% to 30% of the market. Qualcomm's premium-tier revenue is significantly higher than competitors, indicating strong product roadmap and market traction.
Q: What is the impact of new product launches on Qualcomm's PC business?
A: Akash Palkhiwala highlighted that Qualcomm has established performance leadership in Windows devices with the Snapdragon X Plus 8-core chip, allowing access to the $700 price tier. Cristiano Renno Amon added that the number of platforms designed in has increased nearly threefold, indicating strong market traction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
