filings.toolsItem 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||
| (In millions, except par value amounts) | ||||||||||||||
| (Unaudited) |
| June 29, 2025 | September 29, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 5,448 | $ | 7,849 | |||||||
| Restricted cash | 2,323 | — | |||||||||
| Marketable securities | 4,563 | 5,451 | |||||||||
| Accounts receivable, net | 3,410 | 3,929 | |||||||||
| Inventories | 6,338 | 6,423 | |||||||||
| Other current assets | 2,831 | 1,579 | |||||||||
| Total current assets | 24,913 | 25,231 | |||||||||
| Deferred tax assets | 6,114 | 5,162 | |||||||||
| Property, plant and equipment, net | 4,496 | 4,665 | |||||||||
| Goodwill | 11,366 | 10,799 | |||||||||
| Other intangible assets, net | 1,202 | 1,244 | |||||||||
| Other assets | 6,771 | 8,053 | |||||||||
| Total assets | $ | 54,862 | $ | 55,154 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Trade accounts payable | $ | 2,337 | $ | 2,584 | |||||||
| Payroll and other benefits related liabilities | 1,586 | 1,834 | |||||||||
| Unearned revenues | 285 | 297 | |||||||||
| Short-term debt | — | 1,364 | |||||||||
| Other current liabilities | 3,592 | 4,425 | |||||||||
| Total current liabilities | 7,800 | 10,504 | |||||||||
| Unearned revenues | 93 | 88 | |||||||||
| Long-term debt | 14,788 | 13,270 | |||||||||
| Other liabilities | 4,972 | 5,018 | |||||||||
| Total liabilities | 27,653 | 28,880 | |||||||||
| Commitments and contingencies (Note 5) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding | — | — | |||||||||
| Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,084 and 1,113 shares issued and outstanding, respectively | — | — | |||||||||
| Retained earnings | 26,552 | 25,687 | |||||||||
| Accumulated other comprehensive income | 657 | 587 | |||||||||
| Total stockholders’ equity | 27,209 | 26,274 | |||||||||
| Total liabilities and stockholders’ equity | $ | 54,862 | $ | 55,154 |
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
| (In millions, except per share data) | ||||||||||||||
| (Unaudited) |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Equipment and services | $ | 8,893 | $ | 7,993 | $ | 28,193 | $ | 24,259 | |||||||||||||||
| Licensing | 1,472 | 1,400 | 4,820 | 4,459 | |||||||||||||||||||
| Total revenues | 10,365 | 9,393 | 33,013 | 28,718 | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenues | 4,606 | 4,174 | 14,704 | 12,593 | |||||||||||||||||||
| Research and development | 2,226 | 2,259 | 6,672 | 6,591 | |||||||||||||||||||
| Selling, general and administrative | 771 | 664 | 2,200 | 1,998 | |||||||||||||||||||
| Other | — | 75 | — | 47 | |||||||||||||||||||
| Total costs and expenses | 7,603 | 7,172 | 23,576 | 21,229 | |||||||||||||||||||
| Operating income | 2,762 | 2,221 | 9,437 | 7,489 | |||||||||||||||||||
| Interest expense | (168) | (168) | (493) | (517) | |||||||||||||||||||
| Investment and other income, net | 358 | 226 | 748 | 768 | |||||||||||||||||||
| Income from continuing operations before income taxes | 2,952 | 2,279 | 9,692 | 7,740 | |||||||||||||||||||
| Income tax expense | (286) | (171) | (1,034) | (545) | |||||||||||||||||||
| Income from continuing operations | 2,666 | 2,108 | 8,658 | 7,195 | |||||||||||||||||||
| Discontinued operations, net of income taxes | — | 21 | — | 27 | |||||||||||||||||||
| Net income | $ | 2,666 | $ | 2,129 | $ | 8,658 | $ | 7,222 | |||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Continuing operations | $ | 2.44 | $ | 1.89 | $ | 7.85 | $ | 6.45 | |||||||||||||||
| Discontinued operations | — | 0.02 | — | 0.02 | |||||||||||||||||||
| Net income | $ | 2.44 | $ | 1.91 | $ | 7.85 | $ | 6.47 | |||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Continuing operations | $ | 2.43 | $ | 1.86 | $ | 7.79 | $ | 6.37 | |||||||||||||||
| Discontinued operations | — | 0.02 | — | 0.02 | |||||||||||||||||||
| Net income | $ | 2.43 | $ | 1.88 | $ | 7.79 | $ | 6.39 | |||||||||||||||
| Shares used in per share calculations: | |||||||||||||||||||||||
| Basic | 1,092 | 1,116 | 1,102 | 1,116 | |||||||||||||||||||
| Diluted | 1,099 | 1,134 | 1,112 | 1,130 | |||||||||||||||||||
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Net income | $ | 2,666 | $ | 2,129 | $ | 8,658 | $ | 7,222 | |||||||||||||||
| Other comprehensive income, net of income taxes: | |||||||||||||||||||||||
| Foreign currency translation gains (losses) | 231 | (34) | 97 | (13) | |||||||||||||||||||
| Net unrealized gains (losses) on available-for-sale debt securities | 1 | 2 | (21) | 40 | |||||||||||||||||||
| Net unrealized gains (losses) on derivative instruments | 52 | (4) | 16 | — | |||||||||||||||||||
| Other gains | 1 | 1 | — | 1 | |||||||||||||||||||
| Other reclassifications included in net income | (23) | (6) | (22) | 11 | |||||||||||||||||||
| Total other comprehensive income (loss) | 262 | (41) | 70 | 39 | |||||||||||||||||||
| Comprehensive income | $ | 2,928 | $ | 2,088 | $ | 8,728 | $ | 7,261 |
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) |
| Nine Months Ended | |||||||||||
| June 29, 2025 | June 23, 2024 | ||||||||||
| Operating Activities: | |||||||||||
| Net income from continuing operations | $ | 8,658 | $ | 7,195 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization expense | 1,231 | 1,267 | |||||||||
| Income tax provision less than income tax payments | (1,535) | (2,538) | |||||||||
| Share-based compensation expense | 2,120 | 1,951 | |||||||||
| Net gains on marketable securities and other investments | (297) | (314) | |||||||||
| Impairment losses on other investments | 93 | 66 | |||||||||
| Other items | (23) | (63) | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net | 535 | 221 | |||||||||
| Inventories | 33 | 397 | |||||||||
| Other assets | 361 | 120 | |||||||||
| Trade accounts payable | (220) | 691 | |||||||||
| Payroll, benefits and other liabilities | (943) | 654 | |||||||||
| Unearned revenues | 3 | (1) | |||||||||
| Net cash used by operating activities from discontinued operations | — | (91) | |||||||||
| Net cash provided by operating activities | 10,016 | 9,555 | |||||||||
| Investing Activities: | |||||||||||
| Capital expenditures | (785) | (785) | |||||||||
| Purchases of debt and equity marketable securities | (3,785) | (4,156) | |||||||||
| Proceeds from sales and maturities of debt and equity marketable securities | 4,892 | 1,895 | |||||||||
| Acquisitions and other investments, net of cash acquired | (711) | (234) | |||||||||
| Proceeds from other investments | 53 | 70 | |||||||||
| Other items | 7 | (28) | |||||||||
| Net cash used by investing activities | (329) | (3,238) | |||||||||
| Financing Activities: | |||||||||||
| Proceeds from short-term debt | 998 | 799 | |||||||||
| Repayment of short-term debt | (998) | (799) | |||||||||
| Proceeds from long-term debt | 1,487 | — | |||||||||
| Repayment of long-term debt | (1,365) | (914) | |||||||||
| Proceeds from issuance of common stock | 201 | 196 | |||||||||
| Repurchases and retirements of common stock | (6,347) | (2,818) | |||||||||
| Dividends paid | (2,848) | (2,739) | |||||||||
| Payments of tax withholdings related to vesting of share-based awards | (878) | (797) | |||||||||
| Other items | (10) | 2 | |||||||||
| Net cash used by financing activities | (9,760) | (7,070) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (5) | (4) | |||||||||
| Net decrease in total cash, cash equivalents and restricted cash | (78) | (757) | |||||||||
| Total cash and cash equivalents at beginning of period (including $77 classified as held for sale at September 24, 2023) | 7,849 | 8,527 | |||||||||
| Total cash and cash equivalents at end of period (including $2,323 classified as restricted cash at June 29, 2025) | $ | 7,771 | $ | 7,770 | |||||||
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | ||||||||||||||
| (In millions, except per share data) | ||||||||||||||
| (Unaudited) |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Total stockholders’ equity, beginning balance | $ | 27,728 | $ | 24,469 | $ | 26,274 | $ | 21,581 | |||||||||||||||
| Common stock and paid-in capital: | |||||||||||||||||||||||
| Balance at beginning of period | $ | — | $ | 66 | $ | — | $ | 490 | |||||||||||||||
| Common stock issued under employee benefit plans | — | 1 | 201 | 196 | |||||||||||||||||||
| Repurchases and retirements of common stock | (418) | (455) | (1,526) | (1,959) | |||||||||||||||||||
| Share-based compensation | 687 | 670 | 2,203 | 2,047 | |||||||||||||||||||
| Tax withholdings related to vesting of share-based payments | (269) | (282) | (878) | (797) | |||||||||||||||||||
| Common stock issued in acquisition | — | — | — | 23 | |||||||||||||||||||
| Balance at end of period | — | — | — | — | |||||||||||||||||||
| Retained earnings: | |||||||||||||||||||||||
| Balance at beginning of period | 27,333 | 23,965 | 25,687 | 20,733 | |||||||||||||||||||
| Net income | 2,666 | 2,129 | 8,658 | 7,222 | |||||||||||||||||||
| Repurchases and retirements of common stock | (2,454) | (848) | (4,860) | (859) | |||||||||||||||||||
| Dividends | (993) | (973) | (2,933) | (2,823) | |||||||||||||||||||
| Balance at end of period | 26,552 | 24,273 | 26,552 | 24,273 | |||||||||||||||||||
| Accumulated other comprehensive income: | |||||||||||||||||||||||
| Balance at beginning of period | 395 | 438 | 587 | 358 | |||||||||||||||||||
| Other comprehensive income (loss) | 262 | (41) | 70 | 39 | |||||||||||||||||||
| Balance at end of period | 657 | 397 | 657 | 397 | |||||||||||||||||||
| Total stockholders’ equity, ending balance | $ | 27,209 | $ | 24,670 | $ | 27,209 | $ | 24,670 | |||||||||||||||
| Dividends per share announced | $ | 0.89 | $ | 0.85 | $ | 2.59 | $ | 2.45 |
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
Note 1. Basis of Presentation and Significant Accounting Policies Update
Financial Statement Preparation. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all normal recurring adjustments necessary for a fair statement of the results for the interim periods. These condensed consolidated financial statements are unaudited and should be read in conjunction with our Annual Report on Form 10-K for our fiscal year ended September 29, 2024. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year.
We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three and nine months ended June 29, 2025 and June 23, 2024 included 13 weeks and 39 weeks, respectively. Our fiscal year for 2025 will include 52 weeks.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation.
Recent Accounting Pronouncements.
Segment Reporting Disclosures: In November 2023, the Financial Accounting Standards Board (FASB) issued new requirements to disclose certain incremental segment information on an annual and interim basis, including (among other items) additional disclosure about significant segment expenses. We will adopt the new requirements for our annual periods starting in fiscal 2025 (and interim periods thereafter) on a retrospective basis.
Income Tax Disclosures: In December 2023, the FASB issued new requirements to disclose annually certain additional detailed income tax information related to the effective tax rate reconciliation and income taxes paid, among other items. We will adopt the new requirements starting in fiscal 2026 on a retrospective basis.
Income Statement - Expense Disaggregation Disclosures: In November 2024, the FASB issued new requirements to disclose certain additional expense information on an annual and interim basis, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each income statement expense caption, as applicable. We will adopt the new requirements for our annual periods starting in fiscal 2028 (and interim periods thereafter) on a prospective basis.
Note 2. Composition of Certain Financial Statement Items
| Inventories (in millions) | |||||||||||
| June 29, 2025 | September 29, 2024 | ||||||||||
| Raw materials | $ | 301 | $ | 340 | |||||||
| Work-in-process | 3,944 | 3,497 | |||||||||
| Finished goods | 2,093 | 2,586 | |||||||||
| $ | 6,338 | $ | 6,423 |
We have multi-year capacity purchase commitments with certain suppliers of our integrated circuit products. Total advance payments related to multi-year capacity purchase commitments recorded on our condensed consolidated balance sheets at June 29, 2025 and September 29, 2024 were $2.4 billion and $3.0 billion, respectively, of which $1.9 billion and $765 million were recorded in other current assets, respectively, and $557 million and $2.2 billion were recorded in other assets, respectively.
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
| Other Current Liabilities (in millions) | |||||||||||
| June 29, 2025 | September 29, 2024 | ||||||||||
| Customer incentives and other customer-related liabilities | $ | 1,823 | $ | 2,480 | |||||||
| Income taxes payable | 938 | 1,080 | |||||||||
| Other | 831 | 865 | |||||||||
| $ | 3,592 | $ | 4,425 |
Long-term Debt. During the third quarter of fiscal 2025, we repaid $1.4 billion of unsecured fixed-rate notes that matured in May 2025. In May 2025, we also issued $1.5 billion of unsecured fixed-rate notes, consisting of $500 million of 4.50% notes, $400 million of 4.75% notes and $600 million of 5.00% notes (collectively, May 2025 Notes) that mature on May 20, 2030, May 20, 2032 and May 20, 2035, respectively. The net proceeds from the May 2025 Notes will be used for general corporate purposes.
At June 29, 2025, the aggregate fair value of our outstanding fixed-rate notes, based on Level 2 inputs, was approximately $13.9 billion.
Interest Rate Swaps. During the third quarter of fiscal 2025, in connection with the issuance of the May 2025 Notes, we entered into interest rate swaps with an aggregate notional amount of $1.5 billion, which are designated as fair value hedges and allow us to effectively convert all of our fixed-rate payments due under the May 2025 Notes into floating-rate payments. We entered into these agreements, in part, to manage interest rate risk associated with our cash equivalents and marketable securities, in addition to changes in the fair value of our outstanding debt.
Revenues. We disaggregate our revenues by segment (Note 6), by products and services (as presented on our condensed consolidated statements of operations), and for our QCT (Qualcomm CDMA Technologies) segment, by revenue stream, which is based on the industry and application in which our products are sold (as presented below). In certain cases, the determination of QCT revenues by industry and application requires the use of certain assumptions. Substantially all of QCT’s revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time and are principally from royalties generated through our licensees’ sales of mobile handsets.
QCT revenue streams were as follows (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
| Handsets (1) | $ | 6,328 | $ | 5,899 | $ | 20,831 | $ | 18,766 | |||||||||||||||||||||||||||||||||||||||
| Automotive (2) | 984 | 811 | 2,904 | 2,012 | |||||||||||||||||||||||||||||||||||||||||||
| IoT (internet of things) (3) | 1,681 | 1,359 | 4,811 | 3,740 | |||||||||||||||||||||||||||||||||||||||||||
| Total QCT revenues | $ | 8,993 | $ | 8,069 | $ | 28,546 | $ | 24,518 |
(1) Includes revenues from products sold for use in mobile handsets.
(2) Includes revenues from products sold for use in automobiles, including connectivity, digital cockpit and advanced driver assistance systems (ADAS) and automated driving (AD).
(3) Primarily includes products sold for use in the following industries and applications: consumer (including personal computers (PCs), tablets, voice and music and extended reality (XR)), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, tracking and logistics and utilities).
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods generally include certain sales-based royalty revenues related to system software, certain amounts related to customer incentives and licensing revenues recognized related to devices sold in prior periods (including revenues resulting from certain settlements and adjustments to prior period royalty estimates, which include the impact of the reporting by our licensees of actual royalties due) and were as follows (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Revenues recognized from previously satisfied performance obligations | $ | 189 | $ | 163 | $ | 691 | $ | 364 |
Remaining performance obligations, which are primarily included in unearned revenues (as presented on our condensed consolidated balance sheets), represent the aggregate amount of the transaction price of certain customer contracts yet to be recognized as revenues as of the end of the reporting period and exclude revenues related to (a) contracts that have an original expected duration of one year or less and (b) sales-based royalties (i.e., future royalty revenues) pursuant to our license agreements. Our patent license agreements with key OEMs are generally long-term, with remaining terms expiring between fiscal 2027 and 2031.
Concentrations. A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL segments. The comparability of customer/licensee concentrations for the periods presented are impacted by the timing of customer/licensee device launches and/or innovation cycles and other seasonal trends, among other fluctuations in demand. Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Customer/licensee (x) | 21 | % | 18 | % | 21 | % | 20 | % | |||||||||||||||
| Customer/licensee (y) | 18 | 17 | 20 | 20 | |||||||||||||||||||
| Customer/licensee (z) | 13 | 11 | 13 | 13 |
| Investment and Other Income, Net (in millions) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Interest and dividend income | $ | 160 | $ | 182 | $ | 495 | $ | 490 | |||||||||||||||
| Net gains on marketable securities | 204 | 8 | 241 | 16 | |||||||||||||||||||
| Net gains on other investments | 5 | 10 | 30 | 170 | |||||||||||||||||||
| Net gains on deferred compensation plan assets | 84 | 26 | 65 | 153 | |||||||||||||||||||
| Impairment losses on other investments | (52) | (5) | (93) | (66) | |||||||||||||||||||
| Other | (43) | 5 | 10 | 5 | |||||||||||||||||||
| $ | 358 | $ | 226 | $ | 748 | $ | 768 |
Discontinued Operations. On June 1, 2023, SSW Partners completed the sale of Veoneer’s Active Safety business to Magna International Inc. for net cash proceeds of $1.5 billion. On March 1, 2024, SSW Partners completed the sale of Veoneer’s Restraint Control Systems business (collectively with the Active Safety business, the Non-Arriver businesses) to American Industrial Partners Capital Fund VII. Through the date of disposition by SSW Partners, the results of operations and cash flows of Veoneer’s Non-Arriver businesses are presented as discontinued operations. Cash flows from investing and financing activities from discontinued operations reported for the periods presented were not material.
Note 3. Income Taxes
For the third quarter of fiscal 2025, we estimate our annual effective income tax rate to be 11% for fiscal 2025, which is lower than the U.S. federal statutory rate, primarily due to a significant portion of our income qualifying for preferential
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
treatment as foreign-derived intangible income (FDII) at a 13% effective tax rate, which includes certain additional benefits from the requirement to capitalize research and development expenditures for federal income tax purposes and a benefit from our federal research and development tax credit. Our effective tax rate of 10% for the third quarter of fiscal 2025 was lower than our estimated annual effective tax rate, primarily due to net discrete tax benefits realized in the third quarter of fiscal 2025.
On July 4, 2025, tax reform legislation included in the One Big Beautiful Bill Act (OBBB) was enacted in the United States. The impact of the OBBB is excluded from our estimated annual effective tax rate and provision for income taxes for the third quarter of fiscal 2025 as it is a nonrecognized subsequent event. The OBBB includes significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). We expect this change will have a favorable effect on our cash flows from operations due to significantly lower cash tax payments. However, we expect it will adversely affect our total provision for income taxes and results of operations, as these expenditures will no longer result in a deferred tax asset that is established at the statutory rate of 21% rather than the current effective tax rate of 13% after considering the FDII deduction. The legislation also modifies international tax provisions, including changes to the FDII regime. Specifically, it renames FDII as Foreign-Derived Deduction Eligible Income (FDDEI), maintains the current FDDEI effective tax rate of 13% through fiscal 2026 and adjusts the FDDEI effective tax rate to a permanent 14% rate in fiscal 2027 (compared to 16% under prior law).
While we continue to evaluate the impact of these tax law changes, we may be subject to the corporate alternative minimum tax of 15% beginning in fiscal 2026, and we are assessing our ability to realize our existing deferred tax assets. As such, our future provision for income taxes and results of operations may be adversely affected (potentially materially).
Note 4. Capital Stock
Stock Repurchase Program. During the first quarter of fiscal 2025, we utilized the remaining repurchase authority under the $10.0 billion stock repurchase program announced on October 12, 2021 and we began repurchases under the $15.0 billion stock repurchase program announced on November 6, 2024, which has no expiration date. At June 29, 2025, $9.7 billion remained authorized for repurchase under our stock repurchase program.
Shares Outstanding. Shares of common stock outstanding at June 29, 2025 were as follows (in millions):
| Balance at September 29, 2024 | 1,113 | ||||
| Issued | 12 | ||||
| Repurchased | (41) | ||||
| Balance at June 29, 2025 | 1,084 |
Earnings Per Common Share. Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed by dividing net income by the combination of the weighted-average number of common shares outstanding and the weighted-average number of dilutive common share equivalents, comprised of shares issuable under our share-based compensation plans, during the reporting period, using the treasury stock method. The following table provides information about the diluted earnings per share calculation (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Dilutive common share equivalents included in diluted shares | 7 | 18 | 10 | 14 | |||||||||||||||||||
| Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period | 2 | — | 1 | 5 |
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
Note 5. Commitments and Contingencies
Legal and Regulatory Proceedings.
ParkerVision, Inc. v. QUALCOMM Incorporated: On May 1, 2014, ParkerVision filed a complaint against us in the United States District Court for the Middle District of Florida alleging that certain of our products infringed seven ParkerVision patents. On August 21, 2014, ParkerVision amended the complaint, alleging that we infringed 11 ParkerVision patents and sought damages and injunctive and other relief. ParkerVision subsequently reduced the number of patents asserted to three. The asserted patents are now expired, and injunctive relief is no longer available. ParkerVision continues to seek damages related to the sale of many of our radio frequency (RF) products sold between 2008 and 2018. On March 23, 2022, the district court entered judgment in our favor on all claims and closed the case. On April 20, 2022, ParkerVision filed a notice of appeal to the United States Court of Appeals for the Federal Circuit (Federal Circuit). On September 6, 2024, the Federal Circuit reversed the judgment of the district court, citing certain substantive and procedural issues, and remanded the case to the district court for further proceedings. We intend to continue to vigorously defend ourselves in this matter.
Arm Ltd. v. QUALCOMM Incorporated: On August 31, 2022, Arm Ltd. (Arm) filed a complaint against us in the United States District Court for the District of Delaware. Our subsidiaries Qualcomm Technologies, Inc. and NuVia, Inc. (Nuvia) are also named in the complaint. The complaint alleges that following our acquisition of Nuvia, we and Nuvia breached Nuvia’s Architecture License Agreement with Arm (the Nuvia ALA) by failing to comply with the termination obligations under the Nuvia ALA. Arm is seeking specific performance, including that we cease all use of and destroy any technology that was developed under the Nuvia ALA, including processor core technology (which Arm alleges includes our custom Qualcomm Oryon CPU cores). Arm’s complaint also contended that we violated the Lanham Act through trademark infringement and false designation of origin through unauthorized use of Arm’s trademarks and sought associated injunctive and declaratory relief; however, Arm dismissed these claims prior to trial. On September 30, 2022, we filed our Answer and Counterclaim in response to Arm’s complaint denying Arm’s claims. Our counterclaim seeks a declaratory judgment that we did not breach the Nuvia ALA or the Technology License Agreement between Nuvia and Arm, and that, following the acquisition of Nuvia, our architected cores (including all further developments, iterations or instantiations of the technology we acquired from Nuvia) and System-on-Chip (SoC) products incorporating such cores are fully licensed under our existing Architecture License Agreement with Arm (the Qualcomm ALA) and Technology License Agreement with Arm (the Qualcomm TLA). A trial was held beginning on December 16, 2024, and on December 20, 2024, the jury found that (i) Qualcomm did not breach the Nuvia ALA and (ii) Qualcomm CPUs that include designs acquired in the Nuvia acquisition are licensed under the Qualcomm ALA. The jury was unable to reach a verdict with respect to Arm’s claim as to whether Nuvia breached the Nuvia ALA. The parties have filed various post-trial motions in this matter, including motions for judgment as a matter of law. We intend to continue to vigorously defend ourselves against Arm’s claims in this matter.
On April 18, 2024, we filed a separate complaint (captioned QUALCOMM Incorporated v. Arm Ltd.) against Arm in the United States District Court for the District of Delaware. The complaint alleges that Arm has breached the Qualcomm ALA by failing to provide certain deliverables that Arm is obligated to provide. The complaint seeks an order that Arm comply with its contractual obligations, damages, and additional relief. Arm moved to dismiss this complaint, and on October 30, 2024, the court denied Arm’s motion to dismiss. On December 16, 2024, we filed a First Amended Complaint alleging additional causes of action based on Arm improperly seeking to terminate the Qualcomm ALA and improperly publicizing that it was seeking to terminate the Qualcomm ALA. On June 3, 2025, we filed a Second Amended Complaint to add a claim that Arm has breached the Qualcomm TLA by failing to provide license offers at commercially reasonable prices and terms. Arm has moved to dismiss our amended complaint. Trial is scheduled to begin on March 9, 2026.
On October 22, 2024, Arm provided us with a notice alleging that we have breached the Qualcomm ALA by marketing products that contain CPUs that Arm alleges use designs, technology and code created by Nuvia employees prior to our acquisition of Nuvia; by seeking support and verification from Arm for additional products that use such alleged designs, technology and code; and by suing Arm for breach of the Qualcomm ALA. Arm’s notice asserts that it will have the right to terminate the Qualcomm ALA if such alleged breaches are not cured within 60 days of such notice. We disagree with Arm’s allegations, including that we are, or have been, in breach of the Qualcomm ALA. On January 8, 2025, Arm notified us that it was withdrawing its October 22, 2024 notice of breach and indicated that it has no current plan to terminate the Qualcomm ALA, while reserving its rights pending the outcome of the ongoing litigation.
Contingent Losses and Other Considerations: Litigation and investigations are inherently uncertain, and we face difficulties in evaluating or estimating likely outcomes or ranges of possible loss, particularly in antitrust and trade regulation investigations. We have not recorded any accrual at June 29, 2025 for contingent losses associated with the matters described
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
above based on our belief that losses, while reasonably possible, are not probable. Further, any possible amount or range of loss cannot be reasonably estimated at this time. The unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. We are engaged in numerous other legal actions not described above (for example, certain consumer class action lawsuits in jurisdictions outside the United States, and other matters arising in the ordinary course of our business, including those relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights) and, while there can be no assurance, we believe that the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Note 6. Segment Information
We are organized on the basis of products and services and have three reportable segments. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuits and system software with advanced connectivity and high-performance, low-power computing technologies for use in mobile devices; automotive systems for connectivity, digital cockpit and ADAS/AD; and IoT including consumer electronic devices, industrial devices and edge networking products. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. 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 (formerly referred to as our cloud computing processing initiative).
The table below presents revenues and earnings (loss) before income taxes (EBT) for reportable segments (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| QCT | $ | 8,993 | $ | 8,069 | $ | 28,546 | $ | 24,518 | |||||||||||||||
| QTL | 1,318 | 1,273 | 4,172 | 4,051 | |||||||||||||||||||
| QSI | — | 2 | — | 18 | |||||||||||||||||||
| Reconciling items | 54 | 49 | 295 | 131 | |||||||||||||||||||
| Total | $ | 10,365 | $ | 9,393 | $ | 33,013 | $ | 28,718 | |||||||||||||||
| EBT | |||||||||||||||||||||||
| QCT | $ | 2,671 | $ | 2,181 | $ | 8,774 | $ | 7,062 | |||||||||||||||
| QTL | 942 | 894 | 3,028 | 2,907 | |||||||||||||||||||
| QSI | 149 | 14 | 179 | 121 | |||||||||||||||||||
| Reconciling items | (810) | (810) | (2,289) | (2,350) | |||||||||||||||||||
| Total | $ | 2,952 | $ | 2,279 | $ | 9,692 | $ | 7,740 |
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 23, 2024 | June 29, 2025 | June 23, 2024 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Nonreportable segments | $ | 54 | $ | 49 | $ | 152 | $ | 131 | |||||||||||||||
| Unallocated revenues | — | — | 143 | — | |||||||||||||||||||
| $ | 54 | $ | 49 | $ | 295 | $ | 131 | ||||||||||||||||
| EBT | |||||||||||||||||||||||
| Unallocated revenues | $ | — | $ | — | $ | 143 | $ | — | |||||||||||||||
| Unallocated cost of revenues | (65) | (54) | (185) | (168) | |||||||||||||||||||
| Unallocated research and development expenses | (595) | (549) | (1,752) | (1,664) | |||||||||||||||||||
| Unallocated selling, general and administrative expenses | (182) | (175) | (554) | (588) | |||||||||||||||||||
| Unallocated other income | — | (75) | — | (47) | |||||||||||||||||||
| Unallocated interest expense | (168) | (168) | (493) | (518) | |||||||||||||||||||
| Unallocated investment and other income, net | 210 | 213 | 567 | 648 | |||||||||||||||||||
| Nonreportable segments | (10) | (2) | (15) | (13) | |||||||||||||||||||
| $ | (810) | $ | (810) | $ | (2,289) | $ | (2,350) |
Certain revenues were not allocated to our segments in our management reports because they were not considered in evaluating segment results. Unallocated revenues in the first nine months of fiscal 2025 were comprised of licensing revenues resulting from a settlement of a licensing dispute in the second quarter of fiscal 2025.
Note 7. Fair Value Measurements and Marketable Securities
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at June 29, 2025 (in millions):
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents | $ | 2,932 | $ | 257 | $ | — | $ | 3,189 | |||||||||||||||
| Marketable securities: | |||||||||||||||||||||||
| Corporate bonds and notes | — | 2,990 | — | 2,990 | |||||||||||||||||||
| Mortgage- and asset-backed securities | — | 813 | — | 813 | |||||||||||||||||||
| U.S. Treasury securities and government-related securities | 238 | 183 | — | 421 | |||||||||||||||||||
| Equity securities | 339 | — | — | 339 | |||||||||||||||||||
| Total marketable securities | 577 | 3,986 | — | 4,563 | |||||||||||||||||||
| Derivative instruments | — | 91 | — | 91 | |||||||||||||||||||
| Other investments (1) | 1,052 | — | 34 | 1,086 | |||||||||||||||||||
| Total assets measured at fair value | $ | 4,561 | $ | 4,334 | $ | 34 | $ | 8,929 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Derivative instruments | $ | — | $ | 139 | $ | — | $ | 139 | |||||||||||||||
| Other liabilities (1) | 1,049 | — | — | 1,049 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | 1,049 | $ | 139 | $ | — | $ | 1,188 |
(1) Other investments and other liabilities included in Level 1 are comprised of our deferred compensation plan assets and liabilities.
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
Marketable Securities. At June 29, 2025 and September 29, 2024, our marketable securities were all classified as current and were primarily comprised of available-for-sale debt securities (the vast majority of which were corporate bonds and notes).
The contractual maturities of available-for-sale debt securities were as follows (in millions):
| June 29, 2025 | |||||
| Years to Maturity | |||||
| Less than one year | $ | 1,066 | |||
| One to five years | 2,342 | ||||
| Five to ten years | 3 | ||||
| No single maturity date | 813 | ||||
| Total | $ | 4,224 |
Debt securities with no single maturity date included mortgage- and asset-backed securities.
Note 8. Acquisitions
Pending. On June 9, 2025, we announced that we reached an agreement with Alphawave IP Group plc (Alphawave) regarding the terms and conditions of a recommended acquisition by Aqua Acquisition Sub LLC, an indirect wholly-owned subsidiary of Qualcomm Incorporated, for the entire issued and to be issued ordinary share capital of Alphawave at an implied enterprise value of approximately $2.4 billion (as of the announcement date). The purchase price will be paid in cash or, if validly elected by eligible shareholders of Alphawave, in shares of our common stock or securities exchangeable for shares of our common stock. Alphawave is a developer of high-speed wired connectivity and compute technologies delivering IP, custom silicon, connectivity products and chiplets. The acquisition aims to further accelerate, and provide key assets for, our expansion into data centers. This acquisition is expected to complete during the first calendar quarter of 2026, subject to certain conditions, including receipt of regulatory approvals and approval from the requisite majority of Alphawave’s shareholders. In connection with the pending acquisition, we agreed to restrict the use of $2.3 billion in cash, which is presented as restricted cash on our condensed consolidated balance sheets, for the purpose of satisfying payment of the consideration to effect the acquisition.
Completed. During the first nine months of fiscal 2025, we acquired seven businesses for a total accounting purchase price of $668 million. These acquisitions were primarily for the purpose of executing on certain products and technology that support our diversification strategy in QCT industrial IoT and automotive. The acquired assets primarily consisted of $120 million of intangible assets and $532 million of goodwill, which was allocated to our QCT segment and which is primarily attributable to assembled workforce and certain synergies expected to arise after the acquisition.
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