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Wireless chipmaker Qualcomm (NASDAQ:QCOM) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 16.9% year on year to $10.98 billion. The company expects next quarter’s revenue to be around $10.3 billion, close to analysts’ estimates. Its non-GAAP profit of $2.85 per share was 1% above analysts’ consensus estimates.

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Qualcomm (QCOM) Q1 CY2025 Highlights:

• Revenue: $10.98 billion vs analyst estimates of $10.65 billion (16.9% year-on-year growth, 3.1% beat)

• Adjusted EPS: $2.85 vs analyst estimates of $2.82 (1% beat)

• Adjusted EBITDA: $4.08 billion vs analyst estimates of $4.08 billion (37.2% margin, in line)

• Revenue Guidance for Q2 CY2025 is $10.3 billion at the midpoint, roughly in line with what analysts were expecting

• Adjusted EPS guidance for Q2 CY2025 is $2.70 at the midpoint, above analyst estimates of $2.68

• Operating Margin: 28.4%, up from 24.9% in the same quarter last year

• Free Cash Flow Margin: 21.3%, down from 35.9% in the same quarter last year

• Inventory Days Outstanding: 144, up from 111 in the previous quarter

• Market Capitalization: $166 billion

StockStory’s Take

Qualcomm’s first quarter results were shaped by ongoing expansion in its handset, automotive, and IoT (Internet of Things) segments, with management emphasizing the growing adoption of AI (artificial intelligence) across these areas. CEO Cristiano Amon noted that the company’s technology leadership and product breadth, particularly in premium Android smartphones and automotive digital platforms, contributed to revenue gains, while new partnerships and product launches in edge AI and smart devices added to momentum.

Looking ahead, management’s guidance reflects both optimism and caution, citing potential headwinds from macroeconomic uncertainty and evolving global trade policies, including tariffs. CFO Akash Palkhiwala explained that guidance incorporates current expectations around tariffs, stating, “There is uncertainty around the impact of the global trade landscape on demand across our businesses.” The company aims to offset these risks by advancing its AI-enabled platforms and expanding in non-handset markets such as automotive, PCs, and industrial IoT.

Key Insights from Management’s Remarks

Qualcomm’s management attributed the quarter’s outperformance to strong product demand and successful execution in multiple end markets, while also highlighting key strategic investments and partnerships.

• AI Platform Expansion: Management emphasized the rapid adoption of smaller, on-device generative AI models, with Snapdragon platforms running several new AI models from industry leaders. This trend is expected to enable new applications and drive demand for Qualcomm’s edge computing solutions.

• Automotive Pipeline Growth: The automotive segment saw 59% year-over-year growth, underpinned by new design wins—including advanced driver-assistance systems (ADAS)—and expanded collaborations with automakers such as Nio and Zeekr. Leadership cited digital cockpit and ADAS content as primary growth drivers.

• IoT Industrial Upswing: Management highlighted notable performance in industrial IoT, attributed to a shift from microcontrollers to more advanced microprocessors with AI capabilities. Strategic acquisitions of Edge Impulse and FocusAI are intended to further strengthen Qualcomm’s AI and analytics offerings at the edge.

• Premium Android Handset Momentum: The Snapdragon 8 Elite platform continued to gain traction, with 90 flagship Android smartphone designs and growing demand in the premium tier—especially in China where subsidies boosted higher-end device sales. Management described this as an ongoing multi-year trend.

• PC and XR Expansion: Snapdragon-based PCs and smart glasses (XR) are expanding, with more than 85 PC designs in development and over 750 native applications now running on Snapdragon X. Management believes these categories are moving toward broader adoption as AI use cases mature.