Qualcomm(US:QCOM)2025-04-30 20:05Financial Performance - Revenues for Q2 fiscal 2025 were $11.0 billion, a 17% increase year-over-year, with net income of $2.8 billion, up 21% from the previous year[69] - The first six months of fiscal 2025 saw total revenues of $22.6 billion, an increase of $3.3 billion compared to the same period last year[74] - Total revenues for Q2 2025 reached $9.469 billion, up 18% from $8.026 billion in Q2 2024, driven by higher revenues across handsets, automotive, and IoT segments[88] Segment Performance - QCT segment revenues increased by 18% in Q2 fiscal 2025, driven by higher sales in handsets, automotive, and IoT[72] - QTL segment revenues remained approximately flat in Q2 fiscal 2025 compared to the same quarter last year[72] - Handset revenues increased by $749 million in Q2 2025, totaling $6.929 billion, compared to $6.180 billion in Q2 2024, marking a 12% growth[88] - Automotive revenues rose by $356 million to $959 million in Q2 2025, up from $603 million in Q2 2024, representing a 59% increase[88] - IoT revenues grew by $338 million to $1.581 billion in Q2 2025, compared to $1.243 billion in Q2 2024, an increase of 27%[88] - QCT segment revenues for the first six months of fiscal 2025 were $19.2 billion, up from $16.2 billion in the same period of 2024, reflecting a 18% increase[91] - QTL licensing revenues for Q2 2025 were approximately flat at $1.319 billion, with EBT at $929 million, a slight decrease from $933 million in Q2 2024[95] Expenses and Margins - Gross margin for Q2 fiscal 2025 was 55%, down from 56% in the same quarter last year, primarily due to a decrease in QCT gross margin[76] - Research and development expenses for Q2 fiscal 2025 were $2.2 billion, representing 20% of revenues, down from 24% in Q2 fiscal 2024[79] - Selling, general and administrative expenses were approximately flat at $706 million in Q2 fiscal 2025, accounting for 6% of revenues[81] Cash Flow and Financing - For the first six months of fiscal 2025, net cash provided by operating activities was $7.141 billion, an increase of $638 million compared to the previous year[110] - Net cash used by financing activities increased to $5.789 billion, up $2.168 billion from the prior year, primarily due to share repurchases and cash dividends[110] - The company repurchased 22 million shares for $3.5 billion and paid $1.9 billion in cash dividends during the first half of fiscal 2025[110] - Income taxes paid exceeded the provision by $530 million, negatively impacting net cash provided by operating activities[111] - A decrease in payroll and other benefit-related liabilities negatively impacted operating cash flows, partially offset by a decrease in other assets[112] Tax and Interest - The expected income tax provision at the federal statutory rate for Q2 2025 was $652 million, compared to $525 million in Q2 2024, reflecting an increase of 24%[86] - The company estimates an annual effective income tax rate of 11% for fiscal 2025, lower than the U.S. federal statutory rate[86] - Interest expense for Q2 fiscal 2025 was $163 million, a decrease of $9 million from the previous year[83] Market and Competition - The company experienced a $143 million increase in licensing revenues due to a recent settlement of a licensing dispute[78] - The company expects transitions to new generations of leading process technology nodes to continue driving product cost increases from key semiconductor wafer suppliers[109] - Intense competition is anticipated, particularly from vertical integration by customers like Apple, which has begun using its own modem, negatively impacting QCT revenues[109] Dividends and Cash Position - The quarterly dividend per share was increased from $0.85 to $0.89, effective for dividends payable after March 27, 2025[114] - Cash and cash equivalents as of March 30, 2025, were $7.203 billion, down from $7.849 billion as of September 29, 2024, a decrease of 8%[108] - Marketable securities increased to $6.643 billion as of March 30, 2025, up from $5.451 billion as of September 29, 2024, an increase of 22%[108] - The company believes its cash, cash equivalents, and marketable securities will satisfy working and other capital requirements for at least the next 12 months[116] Financial Risks - Financial market risks related to interest rates, foreign currency exchange rates, and equity prices remain unchanged, despite increased volatility in capital markets[118]