Qualcomm Inc (QCOM) Q2 2025 Earnings Call Highlights: Strong Growth in Automotive and IoT Segments

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

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Q & A Highlights

Q : Could you discuss the assumptions in your guidance for the handset market, especially concerning tariff-related impacts and order patterns from your largest customer? A : Akash Palkhiwala, CFO and COO, stated that their guidance reflects the current assessment of the financial impact of tariffs, with no material direct impact observed. The supply chain's global diversification helps navigate potential challenges. There have been no significant pull-ins from customers, indicating consistent ordering patterns.

Q : Any updates on Huawei royalty revenue negotiations, given the challenging backdrop? A : Alexander Rogers, President of QTL and Global Affairs, mentioned that discussions are ongoing, but there are no updates to share at this time.

Q : What drove the upside in the IoT segment, and is there evidence of demand pull-forward? A : Akash Palkhiwala highlighted significant growth across consumer, networking, and industrial IoT, with industrial being the largest contributor. The transition from microcontrollers to microprocessors and AI is benefiting Qualcomm's technology portfolio, and no material demand pull-forward was observed.

Q : Can you elaborate on your M&A strategy, particularly regarding recent acquisitions like Focus AI and Edge Impulse? A : Cristiano Amon, CEO, explained that these acquisitions aim to enhance Qualcomm's IoT space, especially in industrial applications. The focus is on building a scalable software platform to leverage advanced computing and AI at the edge.

Q : How do you view the competitive landscape in smartphones, particularly concerning high-end competition and potential threats from CSS designs? A : Cristiano Amon stated that the competitive landscape remains unchanged, with stable relationships with key customers like Samsung. The competition in China is primarily between Qualcomm and MediaTek, with the premium tier expanding, allowing room for both players.

Q : What are the growth drivers for the automotive segment, and when will ADAS become a more significant contributor? A : Cristiano Amon noted that growth is driven by increased digital cockpit and compute content, with ADAS designs gaining traction. Akash Palkhiwala added that Qualcomm is well-positioned in the transforming auto market, benefiting from increased silicon content in new vehicle types.

Q : How does the decline in market share at your US customer affect OpEx and Qualcomm's margin structure? A : Akash Palkhiwala explained that Qualcomm's strategy is to maintain OpEx investment levels while transitioning focus from handsets to growth areas like automotive, PC, XR, and industrial IoT. The targets set at Investor Day aim to replace revenue from declining Apple business.

Q : What prompted the decision to return 100% of free cash flow to shareholders? A : Akash Palkhiwala mentioned that strong cash flow and a growing cash balance allowed Qualcomm to increase buybacks while maintaining strategic flexibility for M&A. The decision aligns with the framework outlined at Investor Day.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

This article first appeared on GuruFocus .