Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

QUALCOMM Incorporated
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value amounts)
(Unaudited)

			March 29, 2026						September 28, 2025
ASSETS
Current assets:
Cash and cash equivalents			$	5,435					$	5,520
Restricted cash			—						2,323
Marketable securities			4,364						4,635
Accounts receivable, net			4,347						4,315
Inventories			7,368						6,526
Other current assets			1,598						2,435
Total current assets			23,112						25,754
Deferred tax assets			5,968						743
Property, plant and equipment, net			5,071						4,690
Goodwill			14,251						11,358
Other intangible assets, net			1,575						1,148
Other assets			7,159						6,450
Total assets			$	57,136					$	50,143
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable			$	2,973					$	2,791
Payroll and other benefits related liabilities			1,370						1,839
Unearned revenues			323						358
Short-term debt			498						—
Other current liabilities			4,603						4,156
Total current liabilities			9,767						9,144
Unearned revenues			70						71
Long-term debt			14,772						14,811
Other liabilities			5,249						4,911
Total liabilities			29,858						28,937
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; 1,059 and 1,074 shares issued and outstanding, respectively			—						—
Retained earnings			26,901						20,646
Accumulated other comprehensive income			377						560
Total stockholders’ equity			27,278						21,206
Total liabilities and stockholders’ equity			$	57,136					$	50,143

See accompanying notes.

QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)

			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Revenues:
Equipment and services			$	9,060					$	9,359					$	19,526					$	19,301
Licensing			1,539						1,620						3,325						3,348
Total revenues			10,599						10,979						22,851						22,649
Costs and expenses:
Cost of revenues			4,900						4,937						10,468						10,098
Research and development			2,463						2,216						4,915						4,446
Selling, general and administrative			898						706						1,763						1,430
Other			29						—						29						—
Total costs and expenses			8,290						7,859						17,175						15,974
Operating income			2,309						3,120						5,676						6,675
Interest expense			(171)						(163)						(341)						(326)
Investment and other income, net			94						148						444						391
Income before income taxes			2,232						3,105						5,779						6,740
Income tax benefit (expense)			5,138						(293)						4,596						(748)
Net income			$	7,370					$	2,812					$	10,375					$	5,992
Basic earnings per share			$	6.92					$	2.55					$	9.71					$	5.41
Diluted earnings per share			$	6.88					$	2.52					$	9.65					$	5.36
Shares used in per share calculations:
Basic			1,066						1,104						1,068						1,107
Diluted			1,072						1,115						1,075						1,118

See accompanying notes.

QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)

			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Net income			$	7,370					$	2,812					$	10,375					$	5,992
Other comprehensive (loss) income, net of income taxes:
Foreign currency translation (losses) gains			(101)						82						(80)						(134)
Net unrealized (losses) gains on available-for-sale debt securities			(7)						16						(5)						(22)
Net unrealized (losses) gains on derivative instruments			(86)						23						(88)						(36)
Other reclassifications included in net income			(4)						1						(10)						—
Total other comprehensive (loss) income			(198)						122						(183)						(192)
Comprehensive income			$	7,172					$	2,934					$	10,192					$	5,800

See accompanying notes.

QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

			Six Months Ended
			March 29, 2026						March 30, 2025
Operating Activities:
Net income			$	10,375					$	5,992
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense			806						833
Income tax provision less than income tax payments			(5,857)						(899)
Share-based compensation expense			1,749						1,461
Net gains on marketable securities and other investments			(47)						(9)
Equity in net earnings of investees			(83)						(16)
Other items			(47)						(12)
Changes in assets and liabilities:
Accounts receivable, net			58						227
Inventories			(802)						202
Other assets			1,019						299
Trade accounts payable			229						(97)
Payroll, benefits and other liabilities			208						(773)
Unearned revenues			(194)						(67)
Net cash provided by operating activities			7,414						7,141
Investing Activities:
Capital expenditures			(1,082)						(491)
Purchases of debt and equity marketable securities			(1,925)						(3,326)
Proceeds from sales and maturities of debt and equity marketable securities			1,985						2,155
Acquisitions and other investments, net of cash acquired			(1,238)						(341)
Other items			38						43
Net cash used by investing activities			(2,222)						(1,960)
Financing Activities:
Proceeds from short-term debt			1,246						500
Repayment of short-term debt			(750)						(500)
Repayment of debt of acquired company			(174)						—
Proceeds from issuance of common stock			—						201
Repurchases and retirements of common stock			(5,442)						(3,498)
Dividends paid			(1,895)						(1,880)
Payments of tax withholdings related to vesting of share-based awards			(536)						(609)
Other items			(24)						(3)
Net cash used by financing activities			(7,575)						(5,789)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(25)						(38)
Net decrease in total cash, cash equivalents and restricted cash			(2,408)						(646)
Total cash and cash equivalents at beginning of period (including $2,323 classified as restricted cash at September 28, 2025)			7,843						7,849
Total cash and cash equivalents at end of period			$	5,435					$	7,203

See accompanying notes.

QUALCOMM Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per share data)
(Unaudited)

			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Total stockholders’ equity, beginning balance			$	23,073					$	26,880					$	21,206					$	26,274
Common stock and paid-in capital:
Balance at beginning of period			$	—					$	—					$	—					$	—
Common stock issued under employee benefit plans			—						200						—						201
Repurchases and retirements of common stock			(743)						(632)						(3,243)						(1,108)
Share-based compensation			889						726						1,809						1,516
Tax withholdings related to vesting of share-based payments			(256)						(294)						(536)						(609)
Common stock issued in acquisition			43						—						1,903						—
Common stock issued to settle convertible debt			67						—						67						—
Balance at end of period			—						—						—						—
Retained earnings:
Balance at beginning of period			22,498						26,607						20,646						25,687
Net income			7,370						2,812						10,375						5,992
Repurchases and retirements of common stock			(1,992)						(1,120)						(2,161)						(2,406)
Dividends			(975)						(966)						(1,959)						(1,940)
Balance at end of period			26,901						27,333						26,901						27,333
Accumulated other comprehensive income:
Balance at beginning of period			575						273						560						587
Other comprehensive (loss) income			(198)						122						(183)						(192)
Balance at end of period			377						395						377						395
Total stockholders’ equity, ending balance			$	27,278					$	27,728					$	27,278					$	27,728
Dividends per share announced			$	0.89					$	0.85					$	1.78					$	1.70

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 28, 2025. 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 six months ended March 29, 2026 and March 30, 2025 included 13 weeks and 26 weeks, respectively. Our fiscal year for 2026 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.

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 for our annual periods starting in fiscal 2026, which can be applied on a retrospective or prospective 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)
			March 29, 2026						September 28, 2025
Raw materials			$	580					$	336
Work-in-process			4,346						3,985
Finished goods			2,442						2,205
			$	7,368					$	6,526

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 March 29, 2026 and September 28, 2025 were $782 million and $1.9 billion, respectively, of which $469 million and $1.5 billion were recorded in other current assets, respectively, and $313 million and $357 million were recorded in other assets, respectively.

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Other Current Liabilities (in millions)
			March 29, 2026						September 28, 2025
Customer incentives and other customer-related liabilities			$	2,865					$	1,948
Income taxes payable			508						1,007
Other			1,230						1,201
			$	4,603					$	4,156

Interest Rate Swaps. At March 29, 2026 and September 28, 2025, we had outstanding interest rate swaps with an aggregate notional amount of $5.0 billion and $3.6 billion, respectively, that are designated as fair value hedges and allow us to effectively convert fixed-rate payments into floating-rate payments on a portion of our outstanding long-term debt.

Commercial Paper Program. We have an unsecured commercial paper program, which provides for the issuance of up to $4.5 billion of commercial paper. At March 29, 2026 and September 28, 2025, we had $498 million and no amounts, respectively, of outstanding commercial paper recorded as short-term 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												Six Months Ended
															March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Handsets (1)																											$	6,024					$	6,929					$	13,848					$	14,503
Automotive (2)																											1,326						959						2,427						1,920
IoT (internet of things) (3)																											1,726						1,581						3,414						3,130
Total QCT revenues																											$	9,076					$	9,469					$	19,689					$	19,553

(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), extended reality (XR) and other personal computing devices), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, tracking and logistics and utilities).

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												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Revenues recognized from previously satisfied performance obligations			$	132					$	285					$	313					$	526

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

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

agreements. Our patent license agreements with key OEMs are generally long-term, with remaining terms expiring between fiscal 2027 and 2031. We generally seek to renew or renegotiate such license agreements prior to expiration.

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												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Customer/licensee (x)			24		%				27		%				20		%				21		%
Customer/licensee (y)			22						18						24						21
Customer/licensee (z)			*						10						*						12

*Less than 10%

Other Income, Costs and Expenses. Other expenses in the three months and six months ended March 29, 2026 consisted of $29 million in restructuring and restructuring-related charges (substantially all of which related to severance costs).

Investment and Other Income, Net (in millions)
			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Interest and dividend income			$	113					$	167					$	250					$	336
Net (losses) gains on marketable securities			(64)						18						(120)						37
Net gains (losses) on other investments			7						(5)						217						26
Net losses on deferred compensation plan assets			(56)						(34)						(13)						(20)
Impairment losses on other investments			(12)						(16)						(23)						(41)
Equity in net earnings of investees			44						18						83						16
Other			62						—						50						37
			$	94					$	148					$	444					$	391

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 corporate alternative minimum tax (CAMT) and established a $5.7 billion valuation allowance on our federal deferred tax assets in fiscal 2025.

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.

We estimate our annual effective income tax rate to be 40% benefit for fiscal 2026, primarily due to the release of our valuation allowance on our federal deferred tax assets. Our annual effective income tax rate for fiscal 2026 also reflects a significant portion of our income qualifying as FDDEI taxable at a 13% effective tax rate and benefits from the federal research and development tax credit. Such benefits from FDDEI for fiscal 2026 will be reduced compared to fiscal 2025 as a result of the current deduction of domestic R&D expenditures under OBBB. However, it will have a favorable effect on our cash flows from operations due to significantly lower cash tax payments.

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Our effective tax rate for the second quarter of fiscal 2026 was 230% benefit, primarily due to the release of our valuation allowance on our federal deferred tax assets. Our effective tax rate for the second quarter of fiscal 2025 was 9%, primarily due to net discrete tax benefits.

Note 4. Capital Stock

Stock Repurchase Program. On March 17, 2026, we announced a new $20.0 billion stock repurchase program, which was in addition to the then-remaining repurchase authority of $2.1 billion under the previous program announced in November 2024. The stock repurchase programs have no expiration date. At March 29, 2026, $21.9 billion remained authorized for repurchase under our stock repurchase programs.

Shares Outstanding. Shares of common stock outstanding at March 29, 2026 were as follows (in millions):

Balance at September 28, 2025			1,074
Issued			19
Repurchased			(34)
Balance at March 29, 2026			1,059

Dividends. On March 17, 2026, we announced an increase in our quarterly dividend per share of common stock from $0.89 to $0.92, which is effective for dividends payable after March 26, 2026.

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, primarily 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												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Dilutive common share equivalents included in diluted shares			6						10						7						11
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			18						1						15						1

Note 5. Commitments and Contingencies

Legal and Regulatory Proceedings.

ParkerVision, Inc. v. QUALCOMM Incorporated: On May 1, 2014, ParkerVision, Inc. (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. 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. ParkerVision appealed to the United States Court of Appeals for the Federal Circuit (Federal Circuit), and 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. Following a claim construction ruling by the district court, the parties agreed to a stipulated judgment of non-infringement with respect to certain of ParkerVision’s claims (Receiver Claims). On October 2, 2025, the court entered a final judgment in our favor with respect to the Receiver Claims and severed and stayed ParkerVision’s remaining claims (Transmitter Claims), pending appeal of the court’s claim construction ruling and resulting determination of non-infringement of the Receiver Claims. ParkerVision has appealed to the Federal Circuit. We intend to continue to vigorously defend ourselves in this matter.

Arm Ltd. v. QUALCOMM Incorporated: On August 31, 2022, Arm Ltd. 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

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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). 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 filed various post-trial motions, including motions for judgment as a matter of law. On September 30, 2025, the court entered a final judgment upholding the jury’s verdict in favor of Qualcomm, granting judgment to Nuvia, and dismissing Arm’s remaining claims. On October 1, 2025, Arm filed a notice of appeal to the United States Court of Appeals for the Third Circuit. 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 Holdings plc f/k/a Arm Ltd., 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. 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. On January 8, 2026, we filed a substantially identical complaint against Arm Ltd., which was subsequently consolidated with the Arm Holdings plc complaint. Trial is scheduled to begin on October 5, 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 March 29, 2026 for contingent losses associated with the matters described 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 (including matters arising in the ordinary course of our business, such as those relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights, among others) 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. Our operating segments reflect the way our businesses and management/reporting structure are organized internally and the way our Chief Operating Decision Maker (CODM), who is our CEO, reviews financial information, makes operating decisions and assesses business performance. We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarities and the level of centralized resource planning within our operating segments, such as the nature of products, the level of shared products, technology and other resources,

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

production processes and customer base. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuit platforms 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.

Our CODM uses revenues and earnings (loss) before income taxes (EBT) to evaluate performance and allocate resources for our segments primarily through our budget and forecasting process. Our CODM primarily uses these metrics by comparing actual results to forecasted and prior period results. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense (as presented on the condensed consolidated statements of cash flows, the majority of which is allocated to QCT). Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense, certain net investment income, share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets, certain research and development (R&D) expenses, certain selling, general and administrative (SG&A) expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, asset impairment charges and awards, settlements and/or damages arising from legal or regulatory matters and recognition of the step-up of inventories and property, plant and equipment to fair value. Our CODM does not evaluate our operating segments using discrete asset information.

The table below presents revenues and EBT for reportable segments (in millions):

			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
QCT:
Revenues			$	9,076					$	9,469					$	19,689					$	19,553
Cost of revenues			4,700						4,834						10,145						9,898
Operating expenses (R&D and SG&A)			1,911						1,778						3,777						3,552
EBT			$	2,465					$	2,857					$	5,767					$	6,103
QTL:
Revenues			$	1,382					$	1,319					$	2,974					$	2,854
Costs and expenses (1)			388						390						750						768
EBT			$	994					$	929					$	2,224					$	2,086
QSI:
Revenues			$	—					$	—					$	—					$	—
Operating expenses			3						3						5						6
Investment and other (expense) income, net			(27)						13						154						35
EBT			$	(30)					$	10					$	149					$	29

(1) Substantially all of QTL’s costs and expenses are comprised of operating expenses.

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Consolidated revenues and EBT include the following reconciling items (in millions):

			Three Months Ended												Six Months Ended
			March 29, 2026						March 30, 2025						March 29, 2026						March 30, 2025
Revenues
Reportable segments			$	10,458					$	10,788					$	22,663					$	22,407
Nonreportable segments			141						48						188						99
Unallocated revenues			—						143						—						143
			$	10,599					$	10,979					$	22,851					$	22,649
EBT
Reportable segments			$	3,429					$	3,796					$	8,140					$	8,218
Nonreportable segments			(121)						(7)						(204)						(6)
Unallocated revenues			—						143						—						143
Unallocated cost of revenues			(95)						(60)						(178)						(119)
Unallocated R&D expenses			(616)						(558)						(1,314)						(1,156)
Unallocated SG&A expenses			(274)						(184)						(573)						(372)
Unallocated other expenses			(29)						—						(29)						—
Unallocated interest expense			(171)						(163)						(341)						(326)
Unallocated investment and other income, net			109						138						278						358
			$	2,232					$	3,105					$	5,779					$	6,740

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 second quarter and first six 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 March 29, 2026 (in millions):

			Level 1						Level 2												Total
Assets
Cash equivalents			$	1,014					$	515											$	1,529
Marketable securities:
Corporate bonds and notes			—						3,266												3,266
Mortgage- and asset-backed securities			—						863												863
U.S. Treasury securities and government-related securities			58						37												95
Equity securities			140						—												140
Total marketable securities			198						4,166												4,364
Derivative instruments			—						36												36
Other investments (1)			1,138						—												1,138
Total assets measured at fair value			$	2,350					$	4,717											$	7,067
Liabilities
Derivative instruments			$	—					$	295											$	295
Other liabilities (1)			1,134						—												1,134
Total liabilities measured at fair value			$	1,134					$	295											$	1,429

(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)

Long-term Debt. At March 29, 2026, the aggregate fair value of our outstanding fixed-rate notes, based on Level 2 inputs, was approximately $13.7 billion.

Marketable Securities. At March 29, 2026 and September 28, 2025, 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):

			March 29, 2026
Years to maturity
Less than one year			$	870
One to five years			2,489
Five to ten years			2
No single maturity date			863
Total			$	4,224

Debt securities with no single maturity date included mortgage- and asset-backed securities.

Note 8. Acquisitions

Alphawave. On December 18, 2025 (the Closing Date), we completed the acquisition of Alphawave IP Group plc (Alphawave) for $2.3 billion, which primarily consisted of $1.8 billion of equity consideration from the issuance of 11 million shares of our common stock, which includes certain securities exchangeable for shares of our common stock (Exchangeable Shares), and $301 million of cash consideration. Alphawave develops high-speed wired connectivity technologies delivering IP, custom silicon and connectivity products. The acquisition is intended to further accelerate, and provide key assets for, our expansion into data centers.

In connection with the acquisition, we issued Exchangeable Shares of Aqua ExchangeCo ULC, an indirect, wholly-owned subsidiary of QUALCOMM Incorporated, to certain Alphawave executives in exchange for their outstanding capital stock. The Exchangeable Shares (no par value; unlimited shares authorized; 4 million shares issued and outstanding as of March 29, 2026) are exchangeable for our common stock on a one-for-one basis and are substantially the economic equivalent of our common stock. The issued and outstanding Exchangeable Shares have been presented together with our common stock in our condensed consolidated financial statements. The Exchangeable Shares had an estimated fair value of $746 million, of which $453 million is included within the $2.3 billion purchase price and the remainder is subject to a four-year service requirement post-acquisition and will be recognized as compensation expense.

The preliminary purchase price allocation shown below could change as the fair values of the tangible and intangible assets acquired and liabilities assumed, and the related income tax effects, are finalized during the remainder of the measurement period (which will not exceed 12 months from the Closing Date). The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values was as follows (in millions):

Cash			$	51
Intangible assets subject to amortization			239
In-process research and development (IPR&D)			107
Goodwill			2,215
Other assets			283
Total assets			2,895
Convertible debt (1)			(278)
Other liabilities			(343)
Total liabilities			(621)
Net assets acquired			$	2,274

(1) Alphawave's outstanding unsecured convertible bonds were settled in the second quarter of fiscal 2026.

QUALCOMM Incorporated
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Goodwill related to this transaction was allocated to our Data Center operating segment and is not deductible for tax purposes. Goodwill is primarily attributable to assembled workforce which we expect will help accelerate our expansion into data centers, and certain revenue synergies expected to arise after the acquisition such as anticipated growth from new product sales. Acquired intangible assets subject to amortization primarily consists of completed technology that will be amortized on a straight-line basis over the weighted-average useful life of five years. We valued the completed technology and IPR&D using an income approach based on significant unobservable inputs.

Pro forma results of operations have not been presented because the effects of this acquisition were not material to our consolidated results of operations.

Other. During the first six months of fiscal 2026, we acquired six other businesses for a total accounting purchase price of $985 million. These acquisitions were primarily for the purpose of executing on certain products and technology that support our QCT business, including our diversification strategy. The acquired assets primarily consisted of $272 million of intangible assets and $698 million of goodwill, with $622 million allocated to our QCT segment and $76 million allocated to our Data Center operating segment, all of which is primarily attributable to assembled workforce and certain synergies expected to arise after the acquisitions.