QUALCOMM Incorporated
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals.
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This information should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in “Part I, Item 1” of this Quarterly Report and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended September 28, 2025 contained in our 2025 Annual Report on Form 10-K.
This Quarterly Report (including but not limited to this section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “may,” “will,” “would” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Quarterly Report. Additionally, statements concerning future matters such as our future business, prospects, results of operations or financial condition; research and development or technology investments; new or enhanced products, services or technologies; emerging industries or business models; design wins or product launches; industry, market or technology trends, dynamics or transitions; our expectations regarding future demand or supply conditions; strategic investments or acquisitions, and the anticipated timing or benefits thereof; legal or regulatory matters, including the expected impacts of recently enacted or pending tax or other regulatory changes; U.S./China trade or national security tensions; vertical integration by our customers; competition; annual effective tax rates; and other statements regarding matters that are not historical are also forward-looking statements.
Although forward-looking statements in this Quarterly Report reflect our good faith judgment, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed under the heading “Risk Factors” below, as well as those discussed elsewhere in this Quarterly Report. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
Second Quarter Fiscal 2026 Overview
Revenues for the second quarter of fiscal 2026 were $10.6 billion, a decrease of 3% compared to the year ago quarter, with net income of $7.4 billion, an increase of 162% compared to the year ago quarter. Key items from the second quarter of fiscal 2026 included:
•QCT revenues decreased by 4% in the second quarter of fiscal 2026 compared to the year ago quarter due to lower handset revenues, partially offset by higher automotive and IoT revenues.
•QTL revenues increased by 5% in the second quarter of fiscal 2026 compared to the year ago quarter, primarily due to an increase in estimated revenues per unit, which was primarily driven by favorable mix.
•We recorded a $5.7 billion income tax benefit to release a valuation allowance in the second quarter of fiscal 2026 as we now expect to realize substantially all of our existing federal deferred tax assets as a result of additional guidance issued on corporate alternative minimum tax (CAMT) by the U.S. Department of Treasury and the Internal Revenue Service.
Our Business and Operating Segments
We develop and commercialize foundational technologies and products used across industries and applications from mobile devices to other areas including automotive and the internet of things (IoT). We derive revenues principally from sales of integrated circuit products and licensing our intellectual property, including patents and other rights.
We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT (Qualcomm CDMA Technologies) semiconductor business and our QTL (Qualcomm Technology Licensing) licensing business. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our Data Center business.
Our reportable segments are operated by QUALCOMM Incorporated and its direct and indirect subsidiaries. Substantially all of our products and services businesses, including QCT, and substantially all of our engineering and research
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and development functions are operated by Qualcomm Technologies, Inc. (QTI), a subsidiary of QUALCOMM Incorporated, and QTI’s subsidiaries. QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent portfolio. Neither QTI nor any of its subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated.
Seasonality. Many of our products and much of our intellectual property are incorporated into consumer wireless devices, which are subject to seasonality and other fluctuations in demand. Our revenues have historically fluctuated based on consumer demand for devices, as well as on the timing of customer/licensee device launches and/or innovation cycles (such as the transition to the next generation of wireless technologies). This has resulted in fluctuations in QCT revenues in advance of and during device launches incorporating our products and in QTL revenues when licensees’ sales occur. These trends may or may not continue in the future. Further, the trends for QTL have been, and may in the future be, impacted by disputes and/or resolutions with licensees and/or governmental investigations or proceedings.
Results of Operations
Revenues (in millions) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Equipment and services | $ | 9,060 | $ | 9,359 | $ | (299) | $ | 19,526 | $ | 19,301 | $ | 225 | ||||||||||||||||||||||
| Licensing | 1,539 | 1,620 | (81) | 3,325 | 3,348 | (23) | ||||||||||||||||||||||||||||
| $ | 10,599 | $ | 10,979 | $ | (380) | $ | 22,851 | $ | 22,649 | $ | 202 | |||||||||||||||||||||||
Second quarter 2026 vs. 2025
The decrease in revenues in the second quarter fiscal 2026 was primarily due to:
- $393 million in lower equipment and services revenues from our QCT segment
- $143 million in licensing revenues from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results
+ $97 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026
+ $63 million in higher licensing revenues from our QTL segment
First six months 2026 vs. 2025
The increase in revenues in the first six months of fiscal 2026 was primarily due to:
+ $135 million in higher equipment and services revenues from our QCT segment
+ $120 million in higher licensing revenues from our QTL segment
+ $94 million in higher equipment and services revenues from our Data Center segment, primarily driven by our acquisition of Alphawave in the first quarter of fiscal 2026
- $143 million in licensing revenues from a settlement of a licensing dispute in the second quarter of fiscal 2025, which was not allocated to our segment results
| Costs and Expenses (in millions, except percentages) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Cost of revenues | $ | 4,900 | $ | 4,937 | $ | (37) | $ | 10,468 | $ | 10,098 | $ | 370 | ||||||||||||||||||||||
| Gross margin | 54 | % | 55 | % | 54 | % | 55 | % | ||||||||||||||||||||||||||
Second quarter and first six months 2026 vs. 2025
Gross margin percentage decreased in the second quarter and first six months of fiscal 2026 primarily due to a decrease in QCT gross margin percentage.
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| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Research and development | $ | 2,463 | $ | 2,216 | $ | 247 | $ | 4,915 | $ | 4,446 | $ | 469 | ||||||||||||||||||||||
| % of revenues | 23 | % | 20 | % | 22 | % | 20 | % | ||||||||||||||||||||||||||
Second quarter 2026 vs. 2025
The increase in research and development expenses in the second quarter of fiscal 2026 was primarily due to:
+ $177 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), primarily driven by an increase in employee-related expenses and lower non-recurring engineering cost reimbursements for product-related development work
+ $83 million increase in share-based compensation expense
First six months 2026 vs. 2025
The increase in research and development expenses in the first six months of fiscal 2026 was primarily due to:
+ $298 million increase driven by higher costs related to the development of wireless and integrated circuit technologies (including investments in key growth and diversification opportunities), primarily driven by an increase in employee-related expenses
+ $168 million increase in share-based compensation expense
We expect to continue investing in key growth and diversification initiatives. The increase in our share-based compensation expense includes the replacement of our annual cash incentive awards for fiscal 2026 and 2027 with a two-year equity award for our broader non-executive leadership team. This approach is designed to motivate and retain our team to execute our long-term diversification strategy, while further aligning their compensation with the interests of our stockholders.
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Selling, general and administrative | $ | 898 | $ | 706 | $ | 192 | $ | 1,763 | $ | 1,430 | $ | 333 | ||||||||||||||||||||||
| % of revenues | 8 | % | 6 | % | 8 | % | 6 | % | ||||||||||||||||||||||||||
Second quarter 2026 vs. 2025
The increase in selling, general and administrative expenses in the second quarter of fiscal 2026 was primarily due to:
+ $72 million increase in share-based compensation expense
+ $44 million increase in acquisition-related expenses
First six months 2026 vs. 2025
The increase in selling, general and administrative expenses in the first six months of fiscal 2026 was primarily due to:
+ $123 million increase in share-based compensation expense
+ $84 million increase in acquisition-related expenses
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Interest Expense and Investment and Other Income, Net (in millions) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | ||||||||||||||||||||||||||||||
| Interest expense | $ | 171 | $ | 163 | $ | 8 | $ | 341 | $ | 326 | $ | 15 | |||||||||||||||||||||||
| Investment and other income, net | |||||||||||||||||||||||||||||||||||
| Interest and dividend income | $ | 113 | $ | 167 | $ | (54) | $ | 250 | $ | 336 | $ | (86) | |||||||||||||||||||||||
| Net (losses) gains on marketable securities | (64) | 18 | (82) | (120) | 37 | (157) | |||||||||||||||||||||||||||||
| Net gains (losses) on other investments | 7 | (5) | 12 | 217 | 26 | 191 | |||||||||||||||||||||||||||||
| Net losses on deferred compensation plan assets | (56) | (34) | (22) | (13) | (20) | 7 | |||||||||||||||||||||||||||||
| Impairment losses on other investments | (12) | (16) | 4 | (23) | (41) | 18 | |||||||||||||||||||||||||||||
Equity in net earnings of investees | 44 | 18 | 26 | 83 | 16 | 67 | |||||||||||||||||||||||||||||
| Other | 62 | — | 62 | 50 | 37 | 13 | |||||||||||||||||||||||||||||
| $ | 94 | $ | 148 | $ | (54) | $ | 444 | $ | 391 | $ | 53 | ||||||||||||||||||||||||
Net losses on marketable securities in the second quarter and first six months of fiscal 2026 was primarily driven by the change in fair value of certain of our QSI marketable equity investments.
Net gains on other investments in the first six months of fiscal 2026 was primarily driven by observable price changes on certain of our QSI non-marketable equity investments.
Income Tax Expense (in millions, except percentages)
The following table summarizes the primary factors that caused our income tax provision to differ from the expected income tax provision at the U.S. federal statutory rate:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | |||||||||||||||||||
| Expected income tax provision at federal statutory tax rate | $ | 469 | $ | 652 | $ | 1,214 | $ | 1,415 | ||||||||||||||
Benefit of releasing valuation allowance on federal deferred tax assets | (5,724) | — | (5,724) | — | ||||||||||||||||||
| Benefit from foreign-derived deduction eligible income (FDDEI) | (88) | (300) | (296) | (660) | ||||||||||||||||||
Foreign currency loss (gain) related to foreign withholding tax receivable | 63 | (1) | 121 | 165 | ||||||||||||||||||
| Benefit related to the federal research and development tax credit | (26) | (45) | (98) | (119) | ||||||||||||||||||
Excess tax deficiency (benefit) associated with share-based awards | 11 | (39) | (18) | (77) | ||||||||||||||||||
| Other | 157 | 26 | 205 | 24 | ||||||||||||||||||
| Income tax (benefit) expense | $ | (5,138) | $ | 293 | $ | (4,596) | $ | 748 | ||||||||||||||
| Effective tax rate | (230 | %) | 9 | % | (80 | %) | 11 | % | ||||||||||||||
We estimate our annual effective income tax rate to be 40% benefit for fiscal 2026, which is lower than the U.S. federal statutory rate. Additional information regarding our annual effective income tax rate and income tax expense is provided in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 3. Income Taxes.”
In the fourth quarter of fiscal 2025, tax reform legislation included in the One Big Beautiful Bill Act (OBBB) was enacted in the United States. The OBBB included significant corporate tax reforms, including changes to the foreign-derived deduction eligible income (FDDEI) regime and changes allowing domestic research and development (R&D) expenditures to be deducted as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). As a result, we expected to be perpetually subject to CAMT and established a $5.7 billion valuation allowance on our federal deferred tax assets in fiscal 2025.
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In the second quarter of fiscal 2026, the U.S. Department of Treasury and the Internal Revenue Service issued Notice 2026-07, which, among other items, allows us to reduce CAMT by certain previously capitalized domestic R&D expenditures. As a result, we no longer expect to be subject to CAMT in the foreseeable future, and therefore, we now expect to realize our existing federal deferred tax assets. Accordingly, we released our valuation allowance on our federal deferred tax assets resulting in a $5.7 billion income tax benefit in the second quarter of fiscal 2026. Changes in future taxable income, tax laws and other factors may change our determination regarding whether we will be able to realize our deferred tax assets.
Unrecognized tax benefits were $2.9 billion and $2.7 billion at March 29, 2026 and September 28, 2025, respectively. We believe that it is reasonably possible that our unrecognized tax benefits will change within the next twelve months.
Segment Results
The following should be read in conjunction with our financial results for the second quarter of fiscal 2026 for each reportable segment included in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 6. Segment Information.”
QCT Segment (in millions, except percentages)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||
Handsets | $ | 6,024 | $ | 6,929 | $ | (905) | $ | 13,848 | $ | 14,503 | $ | (655) | ||||||||||||||||||||||
Automotive | 1,326 | 959 | 367 | 2,427 | 1,920 | 507 | ||||||||||||||||||||||||||||
IoT (internet of things) | 1,726 | 1,581 | 145 | 3,414 | 3,130 | 284 | ||||||||||||||||||||||||||||
Total revenues (1) | $ | 9,076 | $ | 9,469 | $ | (393) | $ | 19,689 | $ | 19,553 | $ | 136 | ||||||||||||||||||||||
EBT (2) | $ | 2,465 | $ | 2,857 | $ | (392) | $ | 5,767 | $ | 6,103 | $ | (336) | ||||||||||||||||||||||
| EBT as a % of revenues | 27 | % | 30 | % | -3 points | 29 | % | 31 | % | -2 points | ||||||||||||||||||||||||
(1) Descriptions of our three QCT revenue streams can be found in this Quarterly Report in “Notes to Condensed Consolidated Financial Statements, Note 2. Composition of Certain Financial Statement Items.”
(2) Earnings before income taxes.
Substantially all of QCT’s revenues consist of equipment and services revenues, which were $8.9 billion and $9.3 billion in the second quarter of fiscal 2026 and 2025, respectively, and $19.3 billion and $19.2 billion in the first six months of fiscal 2026 and 2025, respectively. QCT revenues mostly relate to sales of our Snapdragon and Dragonwing platforms (which include processors and modems), stand-alone Mobile Data Modems, radio frequency transceiver, power management and wireless connectivity integrated chipsets as well as sales of 4G, 5G sub 6 and 5G millimeter wave RFFE products.
Second quarter 2026 vs. 2025
The decrease in QCT revenues in the second quarter of fiscal 2026 was primarily due to:
- lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases)
+ higher automotive revenues, due to $191 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and advanced driver assistance and automated driving (ADAS/AD) products and a $176 million increase in revenues per unit driven by favorable mix and higher average selling prices
+ higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix
QCT EBT as a percentage of revenues decreased in the second quarter of fiscal 2026 primarily due to:
- higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
- lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices
- lower revenues
First six months 2026 vs. 2025
The increase in QCT revenues in the first six months of fiscal 2026 was primarily due to:
+ higher automotive revenues, due to $328 million in higher shipments primarily from new vehicle launches with our Snapdragon digital cockpit and ADAS/AD products and a $179 million increase in revenues per unit driven by favorable mix and higher average selling prices
+ higher IoT revenues, primarily due to an increase in revenues per unit primarily driven by favorable mix
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- lower handsets revenues, primarily due to lower chipset shipments to certain major OEMs (primarily driven by customers adjusting build plans to reduce their inventory levels as a result of the negative effects of recent memory supply constraints and related price increases)
QCT EBT as a percentage of revenues decreased in the first six months of fiscal 2026 primarily due to:
- higher operating expenses, primarily driven by higher research and development and selling, general and administrative expenses
- lower gross margin, primarily driven by higher product cost, partially offset by higher average selling prices
QTL Segment (in millions, except percentages)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Licensing revenues | $ | 1,382 | $ | 1,319 | $ | 63 | $ | 2,974 | $ | 2,854 | $ | 120 | ||||||||||||||||||||||
| EBT | 994 | 929 | 65 | 2,224 | 2,086 | 138 | ||||||||||||||||||||||||||||
| EBT as a % of revenues | 72 | % | 70 | % | 2 points | 75 | % | 73 | % | 2 points | ||||||||||||||||||||||||
Second quarter 2026 vs. 2025
The increase in QTL licensing revenues in the second quarter of fiscal 2026 was primarily due to an increase in estimated revenues per unit, which was primarily driven by favorable mix.
QTL EBT as a percentage of revenues increased in the second quarter of fiscal 2026 primarily due to higher revenues.
First six months 2026 vs. 2025
The increase in QTL licensing revenues in the first six months of fiscal 2026 was primarily due to an increase in estimated sales of cellular products.
QTL EBT as a percentage of revenues increased in the first six months of fiscal 2026 primarily due to higher revenues.
QSI Segment (in millions)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | Change | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||||||||||||||
| Revenues | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-04-30 | Grech Patricia Y indirect | SVP, Chief Accounting Officer | Sell | -192 | $172.00 | -$33,024 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-29 10-Q expected by 2026-07-31 (in 89 days)
- ~2026-11-04 10-K expected by 2026-11-26 (in 187 days)
- ~2027-02-03 10-Q expected by 2027-02-05 (in 278 days)
- ~2027-04-28 10-Q expected by 2027-04-30 (in 362 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-04-29 10-Q Quarterly Report
- 2026-04-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-04 10-Q Quarterly Report
- 2026-02-04 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-16 8-K Officer/Director Change
- 2025-12-16 8-K Officer/Director Change
- 2025-11-05 10-K Annual Report
- 2025-11-05 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-02 8-K Officer/Director Change
- 2025-08-25 8-K Officer/Director Change
- 2025-07-30 10-Q Quarterly Report
- 2025-07-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-06-09 8-K Unregistered Equity Sale
- 2025-05-22 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits
- 2025-05-13 8-K Officer/Director Change