Qualcomm Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 29 April 2026: press release. Guidance figures: 1 raised, 5 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue down 3% year over year: Total revenues were $10,599 million, down 3% from $10,979 million. Non-GAAP revenues fell 2% from $10,836 million, which excluded a prior-year licensing settlement item of $143 million. Source
• Non-GAAP EPS down 7%: Non-GAAP diluted EPS was $2.65 against $2.85. Non-GAAP earnings before taxes fell 12% to $3,246 million, and the non-GAAP margin on revenues was 31% against 34%. Source
• QCT revenue down, margin lower: QCT revenues were $9,076 million, down 4%. QCT earnings before taxes fell 14% to $2,465 million, a 27% margin against 30% a year earlier. Source
• Automotive and IoT grew 20%: Automotive revenues rose 38% to $1,326 million and IoT rose 9% to $1,726 million. Combined, the two grew 20%, which the company presented as diversification. Source
• Memory supply hits handset demand: The company said its third quarter guidance reflects memory supply constraints and related pricing, which it expects to affect demand from several handset OEMs. Source
• Third quarter revenue range: Third quarter revenue guidance is $9.2 billion to $10.0 billion, with QCT at $7.9 billion to $8.5 billion and QTL at $1.15 billion to $1.35 billion. Source
• Third quarter non-GAAP EPS range: Non-GAAP diluted EPS guidance is $2.10 to $2.30, against GAAP diluted EPS guidance of $1.26 to $1.46; the difference is share-based compensation and other items. Source

“We are pleased to deliver results in line with our guidance, reflecting solid execution as we navigate a challenging memory environment,”

Cristiano Amon, President and CEO of Qualcomm Incorporated

Guidance

What changed from last quarter

• New: Company announced a new $20 billion share repurchase authorization after completing $5.4 billion of repurchases in the first half of fiscal 2026. Source
• New guidance: Third quarter guidance issued, replacing the second quarter guidance and including estimated memory supply effects. Source
• Ended: Valuation allowance established in the fourth quarter of fiscal 2025 was released, producing a $5.7 billion income tax benefit in the quarter. Source
• New: Fixed estimated non-GAAP tax rate for the second quarter is 12.5%, against the 13.5% fixed rate stated for fiscal 2026 in the prior release. Source
• New: Company describes its entry into the data center, with a custom silicon engagement with a leading hyperscaler. Source
• New: Investor relations contact changed to Brett Simpson, Senior Vice President, from Mauricio Lopez-Hodoyan, Vice President, in the prior release. Source

Second quarter results and drivers

• Revenue down 3% year over year: Total revenues were $10,599 million, down 3% from $10,979 million. Non-GAAP revenues fell 2% from $10,836 million, which excluded a prior-year licensing settlement item of $143 million. Source
• Non-GAAP EPS down 7%: Non-GAAP diluted EPS was $2.65 against $2.85. Non-GAAP earnings before taxes fell 12% to $3,246 million, and the non-GAAP margin on revenues was 31% against 34%. Source
• GAAP EPS rose on tax benefit: GAAP diluted EPS was $6.88 against $2.52, lifted by a $5.33 per share income tax benefit. GAAP earnings before taxes fell 28% to $2,232 million, while GAAP net income rose to $7,370 million. Source
• First-half net income up 73%: First-half revenues were $22,851 million, up 1% from $22,649 million. First-half GAAP net income was $10,375 million against $5,992 million, and diluted EPS was $9.65 against $5.36. Source

Segments and revenue streams

• QCT revenue down, margin lower: QCT revenues were $9,076 million, down 4%. QCT earnings before taxes fell 14% to $2,465 million, a 27% margin against 30% a year earlier. Source
• Handset revenue fell 13%: Handset revenues were $6,024 million against $6,929 million, down 13%. Handsets made up 66% of QCT revenues against 73% a year earlier. Source
• Automotive and IoT grew 20%: Automotive revenues rose 38% to $1,326 million and IoT rose 9% to $1,726 million. Combined, the two grew 20%, which the company presented as diversification. Source
• QTL licensing earnings up 7%: QTL revenues were $1,382 million, up 5%, and QTL earnings before taxes were $994 million, up 7%. The QTL margin was 72% against 70%. Source

“We are in a period of profound industry transformation - the rise of AI agents is reshaping our roadmap across every platform we develop.”

Cristiano Amon, President and CEO of Qualcomm Incorporated

Handset demand and memory constraints

• Memory supply hits handset demand: The company said its third quarter guidance reflects memory supply constraints and related pricing, which it expects to affect demand from several handset OEMs. Source
• Second quarter tracked prior guidance: Second quarter revenue of $10,599 million compared with prior guidance of $10.2 billion to $11.0 billion, and non-GAAP EPS of $2.65 compared with $2.45 to $2.65. The company said results were in line with guidance.
• Inventory balance rose: Inventories were $7,368 million at March 29, 2026 against $6,526 million at September 28, 2025. The documents do not state the cause of the change. Source

Costs, operating income and margins

• Operating income down 26%: Operating income was $2,309 million against $3,120 million, down 26%. Non-GAAP operating income was $3,280 million against $3,687 million. Source
• R&D and SG&A spending increased: Research and development rose to $2,463 million from $2,216 million, up 11%. Selling, general and administrative expense rose to $898 million from $706 million, up 27%. Source
• Cost of revenues nearly flat: Cost of revenues was $4,900 million against $4,937 million. Non-GAAP cost of revenues was $4,805 million after excluding share-based compensation and other items. Source
• Share-based compensation excluded from non-GAAP: Share-based compensation of $860 million and other items of $108 million were excluded from non-GAAP operating income, which was $3,280 million. Source
• New Other expense line: Other costs of $29 million appeared as a separate line, against none in the prior-year quarter. Source

Cash flow and capital spending

• Operating cash flow up 4%: First-half net cash from operating activities was $7,414 million against $7,141 million. The cash flow statement includes a $5,857 million adjustment for income tax provision less than payments. Source
• Capital spending more than doubled: First-half capital expenditures were $1,082 million against $491 million a year earlier. Source
• Acquisitions and goodwill rose: Acquisitions and other investments used $1,238 million in the first half against $341 million. Goodwill rose to $14,251 million from $11,358 million at September 28, 2025. Source
• Deferred tax assets rose sharply: Deferred tax assets were $5,968 million at March 29, 2026 against $743 million at September 28, 2025. Source
• Cash and debt balances: Cash and equivalents were $5,435 million and marketable securities $4,364 million. Short-term debt was $498 million and long-term debt $14,772 million. Source

Returns to shareholders

• Quarterly returns totaled $3.7 billion: Returned $3.7 billion in the quarter: $945 million of dividends at $0.89 per share and $2.8 billion of repurchases of 19 million shares. Source
• First-half buybacks reached $5.4 billion: Repurchases and retirements of common stock totalled $5,442 million in the first half against $3,498 million a year earlier. Dividends paid were $1,895 million. Source
• Diluted share count down 4%: Diluted shares used in per share calculations were 1,072 million in the quarter against 1,115 million a year earlier. Source

Strategy and data center entry

• Entry into data center: Company describes a custom silicon engagement with a leading hyperscaler as part of its data center entry, with initial shipments expected later this calendar year. Source
• AI agents reshape product roadmap: The CEO said AI agents are reshaping the roadmap across every platform the company develops, in what he described as a period of profound industry transformation. Source
• Strategic investments being exited: QSI is excluded from non-GAAP results because the company generally expects to exit its strategic investments in the foreseeable future. Source

Third quarter guidance

• Third quarter revenue range: Third quarter revenue guidance is $9.2 billion to $10.0 billion, with QCT at $7.9 billion to $8.5 billion and QTL at $1.15 billion to $1.35 billion. Source
• Third quarter non-GAAP EPS range: Non-GAAP diluted EPS guidance is $2.10 to $2.30, against GAAP diluted EPS guidance of $1.26 to $1.46; the difference is share-based compensation and other items. Source
• Guidance includes pending acquisitions: Guidance includes pending business combinations expected to close in the upcoming quarter. Source

Coming up, as management said on 29 April 2026

• Investor Day on June 24: Company plans to update its growth initiatives, including Data Center and Physical AI, at its Investor Day on June 24. Source

Earlier plans management reported on

• Met: Management said second quarter results were in line with the guidance it gave in the prior release. Source
• On track: Management said the custom silicon engagement with a leading hyperscaler is on track for initial shipments later this calendar year. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.