Qualcomm Stock Falls as Record Earnings Beat The Street

Qualcomm's stock (NASDAQ: QCOM) is down 5.73% in early trading today, despite the firm announcing record-breaking revenues and a strong performance across key sectors. Accounting for today's decline, the stock remains green through the early part of 2025, with gains of 8% a significant outperformance on markets.

The company's total revenue for the quarter reached $11.7 billion, driven by strong growth in the automotive and Internet of Things (IoT) sectors.

In the latest earnings report, Qualcomm revealed a non-GAAP earnings per share (EPS) of $3.41, surpassing the high end of the guidance range, with the street expecting $2.99. The earnings call highlighted significant contributions from various business segments, including the Qualcomm CDMA Technologies (QCT) and Qualcomm Technology Licensing (QTL) divisions.

The QCT segment, which encompasses Qualcomm’s semiconductor business, reported revenues of $10.1 billion, setting a new record. Within QCT, handset revenues accounted for $7.6 billion. The QTL segment contributed $1.5 billion to the company's total revenue, with an earnings before tax (EBT) margin of 75%.

Qualcomm's automotive sector saw a remarkable 61% year-over-year growth, with revenues reaching $961 million. The IoT segment also demonstrated robust performance, with revenue growing by 36% year-over-year to $1.5 billion.

Looking ahead to the second quarter of 2025, Qualcomm has provided guidance indicating expected revenues ranging between $10.2 billion and $11 billion. The non-GAAP EPS for Q2 is projected to be between $2.70 and $2.90. The company anticipates QTL revenue to fall between $1.25 billion and $1.45 billion, with EBT margins ranging from 69% to 73%.

During Q1 2025, Qualcomm returned $2.7 billion to shareholders. This included $1.8 billion allocated for stock repurchases and $942 million distributed in dividends, reflecting the company's strong cash flows and commitment to shareholder value.

Qualcomm continues to face challenges, including a flat QTL revenue guidance for fiscal 2025 compared to 2024, indicative of hurdles in licensing segment growth. The company remains engaged in ongoing discussions with Huawei, yet has not factored potential revenue from a renewed agreement into current guidance. Additionally, Qualcomm aims to achieve over 100 PC design wins by 2026, expanding on 80 current designs in development.