QUALCOMM (NASDAQ:QCOM) reported record results for its fiscal first quarter of 2026, highlighted by $12.3 billion in revenue and non-GAAP earnings per share of $3.50, as management pointed to strength in flagship smartphones alongside continued growth in automotive and improving momentum across portions of its IoT portfolio.
At the same time, executives repeatedly emphasized that near-term handset results are expected to be constrained by industry-wide DRAM availability and pricing. Management said memory suppliers are redirecting manufacturing capacity toward high-bandwidth memory (HBM) for AI data centers, tightening DRAM supply for consumer electronics and prompting some handset OEMs—especially in China—to reduce build plans and work down chipset inventory. The company’s fiscal second-quarter guidance reflects those conditions.
Quarterly performance driven by flagship handsets, automotive, and licensing
Chief Financial Officer Akash Palkhiwala added that QTL licensing revenue was $1.6 billion with earnings before taxes (EBT) margin of 77%, coming in at the high end of guidance due to higher units and favorable mix. On the chip side, QCT handset revenue was a record $7.8 billion, which he attributed to recently launched flagship smartphones.
- Total revenue: $12.3 billion (record)
- Non-GAAP EPS: $3.50 (record; high end of guidance)
- QCT revenue: $10.6 billion (record)
- QCT handset revenue: $7.8 billion (record)
- QCT IoT revenue: $1.7 billion, up 9% year-over-year
- QCT automotive revenue: $1.1 billion, up 15% year-over-year (record)
- QTL revenue: $1.6 billion; EBT margin 77%
Palkhiwala said QCT EBT margin was 31%, “exceeding our long-term target of 30%.” He also noted Qualcomm returned $3.6 billion to stockholders, including $2.6 billion in stock repurchases and $949 million in dividends.
Memory constraints shape handset outlook and Q2 guidance
While management described consumer demand indicators as strong—especially in premium and high-tier devices—both Amon and Palkhiwala said the near-term issue is supply: DRAM availability and rising prices are expected to constrain handset builds across the industry.
Asked directly whether other factors were behind the Q2 handset weakness, Amon said it was “100%” related to memory, adding that sell-through data remained strong and that Qualcomm’s licensing business provides visibility into overall demand. He said the industry is being “sized by” memory availability as DRAM supply tightens due to HBM prioritization for data centers. Palkhiwala said Qualcomm has seen several OEMs, especially in China, reduce build plans and channel inventory, and Qualcomm’s Q2 guidance reflects “reduced chipset orders aligned with their scaled-back expectations.”
During Q&A, Palkhiwala said consumer-demand seasonality should remain consistent with prior years, but supply alignment will drive results. He also said March-quarter assumptions are “a reasonable way to model June as well,” given the uncertainty.
Second-quarter outlook: lower handset run rate, automotive acceleration
For fiscal Q2, Qualcomm guided to revenue of $10.2 billion to $11.0 billion and non-GAAP EPS of $2.45 to $2.65. Palkhiwala said QCT revenue is expected to be $8.8 billion to $9.4 billion with EBT margins of 26% to 28%, and he specifically forecast QCT handset revenue of approximately $6.0 billion due to memory constraints.
He guided QTL revenue to $1.2 billion to $1.4 billion with EBT margins of 68% to 72%, which he characterized as reflecting a normal sequential trend, while also noting that QTL is still subject to supply considerations in handset units.
On diversification businesses, Palkhiwala said QCT IoT revenue is expected to grow “by low teens%” year-over-year, and that QCT automotive growth is expected to accelerate to “greater than 35%” year-over-year in fiscal Q2 following the record Q1 quarter.
Qualcomm guided non-GAAP operating expenses to approximately $2.6 billion in Q2, citing typical calendar-year resets for certain employee-related costs and the completion of its Alphawave acquisition, which it said strengthens its platforms for next-generation AI data centers. Responding to a question about whether Qualcomm would adjust spending in light of handset uncertainty, Palkhiwala said the company’s operating plan framework is unchanged: reduce investment in mature businesses and fund diversification priorities, while remaining disciplined on OpEx growth.
Product and partnership updates across PCs, automotive, IoT, robotics, and data center
Amon highlighted several business updates during prepared remarks. In handsets, he said Qualcomm is seeing “continued expansion of the premium and high-tier smartphone segments” and “broad OEM adoption for dual flagship product strategy.” For Samsung’s upcoming family of premium-tier devices, Qualcomm expects “approximately 75% share,” consistent with prior expectations. He also noted ByteDance launched what he described as the “first agentic AI smartphone” powered by Snapdragon 8 Elite.
In PCs, Amon introduced Snapdragon X2 Plus, which he said is targeted at enterprise and commercial markets and is powered by the third-generation Qualcomm Oryon CPU. He said 18 Snapdragon-powered PCs debuted at CES from ASUS, HP, Lenovo, and Microsoft, and reiterated the company remains on track to commercialize 150 Snapdragon X-powered PCs this year.
In automotive, Amon described demand for Snapdragon Digital Chassis as “incredibly strong” and cited a letter of intent for a long-term supply agreement with Volkswagen Group spanning multiple brands, as well as work with its software-defined vehicle architecture initiative and collaboration with the group’s automated driving alliance formed by CARIAD and Bosch. He also pointed to Toyota’s newly launched RAV4 using Snapdragon Cockpit and additional collaborations with suppliers and automakers, bringing total design wins for Snapdragon Elite platforms to 10 programs.
In industrial IoT and robotics, Amon discussed Qualcomm’s acquisition of Augentix to augment its Dragonwing vision portfolio, the introduction of new Dragonwing processors and an IQX series for industrial PCs, and a formal expansion into advanced robotics featuring Dragonwing IQ10. He said Qualcomm has engaged with a range of companies—including Advantech, KUKA Robotics, and Figure—to help define compute architectures for robotics and humanoid platforms.
On data center, Amon said Qualcomm continues to develop solutions and engage with hyperscalers, cloud service providers, sovereign AI projects, and other partners. In Q&A, he said the only public customer announced to date is Humane, and that shipments have started. He added Qualcomm is executing on both CPU efforts—including adding a high-speed RISC-V CPU to the roadmap alongside Oryon—and its AI 250 platform with a new memory architecture. Amon said the company expects data center to “start showing in revenues” in 2027 and plans to provide more roadmap detail at its next investor event.
Separately, executive Alex Rogers said there was “no update” on Huawei license discussions, adding that negotiations are underway but confidential.
About QUALCOMM (NASDAQ:QCOM)
QUALCOMM Incorporated is a global semiconductor and telecommunications equipment company headquartered in San Diego, California. Founded in 1985, the company is known for its development of wireless technologies and for playing a central role in the evolution of digital cellular standards, including CDMA and subsequent generations of mobile standards. Qualcomm’s business combines the design and sale of semiconductor products with a patent licensing program for wireless technologies and related intellectual property.
The company’s product portfolio includes system-on-chip (SoC) platforms marketed under the Snapdragon brand, cellular modem and RF front-end components, connectivity solutions for Wi‑Fi and Bluetooth, and processors and platforms aimed at automotive, IoT, networking and edge-computing applications.
