Qualcomm Q3 Earnings: EPS Surges 29% as Automotive, IoT Drive Growth

Rhea-AI Summary

Qualcomm (NASDAQ: QCOM) reported strong Q3 fiscal 2025 results, with total revenues reaching $10.4 billion, up 10% year-over-year. The company's diversification strategy showed success with Automotive and IoT sectors growing 23% combined.

Key highlights include GAAP net income of $2.67 billion (up 25%) and non-GAAP EPS of $2.77 (up 19%). QCT segment revenue grew 11% to $8.99 billion, with notable increases in Automotive (21%) and IoT (24%). The company returned $3.8 billion to shareholders through dividends and share repurchases.

For Q4 2025, Qualcomm forecasts revenues between $10.3-11.1 billion and non-GAAP EPS of $2.75-2.95.

Positive

• Total revenue increased 10% YoY to $10.4 billion
• GAAP net income grew 25% to $2.67 billion
• Automotive revenue surged 21% to record $984 million
• IoT revenue grew 24% to $1.68 billion
• QCT segment profitability improved to 30% EBT margin
• Returned $3.8 billion to shareholders through dividends and buybacks

Negative

• Handset revenue growth slower at 7% compared to other segments
• QTL segment showed modest 4% revenue growth

Insights

Semiconductor Industry Analyst

Qualcomm's 10% revenue growth and 29% EPS increase showcase successful diversification beyond smartphones into automotive and IoT markets.

Qualcomm delivered an impressive quarter with $10.365 billion in revenue, up 10% year-over-year, significantly outpacing the broader semiconductor market. The standout metric is the 29% jump in GAAP EPS to $2.43, which substantially exceeds revenue growth and indicates expanding margins and operational efficiency.

The company's diversification strategy is clearly bearing fruit. While handsets still dominate at $6.328 billion (up 7%), the automotive segment surged 21% to $984 million and IoT grew an impressive 24% to $1.681 billion. These high-growth segments now represent approximately 26% of QCT revenue, reducing Qualcomm's historical dependency on smartphone cycles.

Profitability metrics tell an equally compelling story. QCT's EBT margin expanded 3 percentage points to 30%, suggesting the company is successfully leveraging its technology across diverse applications while maintaining pricing power. This margin expansion is particularly noteworthy given ongoing semiconductor industry pricing pressures.

The $3.8 billion capital return program, including $2.8 billion in share repurchases, demonstrates management's confidence in sustained cash generation. With Q4 guidance projecting continued growth (revenue of $10.3-11.1 billion), Qualcomm appears well-positioned to capitalize on expanding AI processing at the edge, leveraging its expertise in low-power, high-performance computing across multiple growth markets.

Qualcomm Incorporated (NASDAQ: QCOM) announced on July 30, 2025, robust financial results for its third fiscal quarter, showcasing significant year-over-year growth in revenue and profitability driven by the company's ongoing diversification strategy. The technology firm reported total revenues of $10.4 billion, marking a 10% increase from the corresponding period last year.

The company's performance was highlighted by substantial gains in its Automotive and Internet of Things (IoT) sectors, which together saw revenues climb by 23% compared to the prior year. This growth underscores the company's strategic push beyond its traditional handset market, a point emphasized by its leadership.

"Another quarter of strong growth in QCT Automotive and IoT revenues further validates our diversification strategy and confidence in achieving our long-term revenue targets,” stated Cristiano Amon, President and CEO of Qualcomm. “Our leadership in AI processing, high-performance and low-power computing and advanced connectivity positions us to become the industry platform of choice as AI gains scale at the edge."

Financial Performance Highlights

Qualcomm presented its results on both a GAAP (Generally Accepted Accounting Principles) and a non-GAAP basis. Non-GAAP figures are adjusted to exclude certain items, such as stock-based compensation, which the company believes provides investors with a clearer view of its core operational performance.

For the third fiscal quarter ended June 29, 2025, the key financial metrics were:

• Total Revenues: $10.365 billion, an increase of 10% year-over-year.
• GAAP Net Income: $2.666 billion, a 25% rise from $2.129 billion in the prior-year quarter.
• Non-GAAP Net Income: $3.040 billion, up 15% from $2.648 billion a year ago.
• GAAP Diluted EPS: $2.43, a 29% increase compared to $1.88 in the third quarter of fiscal 2024.
• Non-GAAP Diluted EPS: $2.77, a 19% increase from $2.33 in the prior-year quarter.

Segment Growth Underscores Diversification

The company's results were bolstered by solid performance across its primary business segments, QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology Licensing).

The QCT segment, which includes semiconductors and related technologies, generated revenues of $8.993 billion, an 11% increase year-over-year. A detailed breakdown of QCT revenue streams reveals the success of the company's diversification efforts:

• Automotive: Revenues surged 21% to a record $984 million.
• IoT (Internet of Things): Grew by 24% to reach $1.681 billion.
• Handsets: The largest stream saw a 7% increase to $6.328 billion.

The profitability of the QCT segment also improved, with Earnings Before Taxes (EBT) as a percentage of revenues rising to 30%, up three percentage points from 27% in the same quarter last year.

The QTL segment, Qualcomm's licensing arm, reported revenues of $1.318 billion, a 4% increase from the prior year. This segment also saw enhanced profitability, with its EBT margin climbing one point to 71%.

Capital Return and Business Outlook

Qualcomm continued its commitment to returning capital to its shareholders, distributing a total of $3.8 billion during the third quarter. This included $967 million in cash dividends, equating to $0.89 per share, and $2.8 billion through the repurchase of 19 million shares of common stock. The company noted it is on track to meet its accelerated buyback commitment for fiscal year 2025.

Looking ahead to the fourth fiscal quarter of 2025, the company provided the following guidance:

• Revenues: Projected to be between $10.3 billion and $11.1 billion.
• GAAP Diluted EPS: Expected in the range of $2.23 to $2.43.
• Non-GAAP Diluted EPS: Forecasted to be between $2.75 and $2.95.

This forward-looking guidance is based on the company's current outlook and is subject to various risks and uncertainties, as outlined in its public filings.

This article is based solely on information provided in Qualcomm Incorporated's press release dated July 30, 2025. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the information. Investors should conduct their own due diligence before making any investment decisions.

Source: Qualcomm Incorporated

FAQ

What were Qualcomm's (QCOM) Q3 2025 earnings results?

Qualcomm reported $10.4 billion in revenue (up 10% YoY), GAAP net income of $2.67 billion (up 25%), and non-GAAP EPS of $2.77 (up 19%).

How much did Qualcomm's Automotive and IoT segments grow in Q3 2025?

Qualcomm's Automotive revenue grew 21% to $984 million, while IoT revenue increased 24% to $1.68 billion.

What is Qualcomm's revenue guidance for Q4 2025?

Qualcomm expects Q4 2025 revenues between $10.3 billion and $11.1 billion, with non-GAAP EPS between $2.75 and $2.95.

How much capital did Qualcomm return to shareholders in Q3 2025?

Qualcomm returned $3.8 billion to shareholders, including $967 million in dividends ($0.89 per share) and $2.8 billion in stock buybacks.

What was Qualcomm's QCT segment performance in Q3 2025?

QCT segment revenue grew 11% to $8.99 billion, with improved profitability as EBT margin increased to 30% from 27% year-over-year.