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 28, 2026 | September 28, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 4,533 | $ | 5,520 | |||||||
| Restricted cash | — | 2,323 | |||||||||
| Marketable securities | 3,771 | 4,635 | |||||||||
| Accounts receivable, net | 4,668 | 4,315 | |||||||||
| Inventories | 8,379 | 6,526 | |||||||||
| Other current assets | 1,653 | 2,435 | |||||||||
| Total current assets | 23,004 | 25,754 | |||||||||
| Deferred tax assets | 5,679 | 743 | |||||||||
| Property, plant and equipment, net | 5,217 | 4,690 | |||||||||
| Goodwill | 14,274 | 11,358 | |||||||||
| Other intangible assets, net | 1,510 | 1,148 | |||||||||
| Other assets | 7,683 | 6,450 | |||||||||
| Total assets | $ | 57,367 | $ | 50,143 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Trade accounts payable | $ | 2,897 | $ | 2,791 | |||||||
| Payroll and other benefits related liabilities | 1,470 | 1,839 | |||||||||
| Unearned revenues | 280 | 358 | |||||||||
| Short-term debt | 2,489 | — | |||||||||
| Other current liabilities | 4,277 | 4,156 | |||||||||
| Total current liabilities | 11,413 | 9,144 | |||||||||
| Unearned revenues | 81 | 71 | |||||||||
| Long-term debt | 12,781 | 14,811 | |||||||||
| Other liabilities | 5,434 | 4,911 | |||||||||
| Total liabilities | 29,709 | 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; 1,057 and 1,074 shares issued and outstanding, respectively | — | — | |||||||||
| Retained earnings | 27,263 | 20,646 | |||||||||
| Accumulated other comprehensive income | 395 | 560 | |||||||||
| Total stockholders’ equity | 27,658 | 21,206 | |||||||||
| Total liabilities and stockholders’ equity | $ | 57,367 | $ | 50,143 |
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
| (In millions, except per share data) | ||||||||||||||
| (Unaudited) |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Equipment and services | $ | 8,475 | $ | 8,893 | $ | 28,002 | $ | 28,193 | |||||||||||||||
| Licensing | 1,472 | 1,472 | 4,796 | 4,820 | |||||||||||||||||||
| Total revenues | 9,947 | 10,365 | 32,798 | 33,013 | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenues | 4,670 | 4,606 | 15,138 | 14,704 | |||||||||||||||||||
| Research and development | 2,607 | 2,226 | 7,523 | 6,672 | |||||||||||||||||||
| Selling, general and administrative | 976 | 771 | 2,738 | 2,200 | |||||||||||||||||||
| Other | 68 | — | 97 | — | |||||||||||||||||||
| Total costs and expenses | 8,321 | 7,603 | 25,496 | 23,576 | |||||||||||||||||||
| Operating income | 1,626 | 2,762 | 7,302 | 9,437 | |||||||||||||||||||
| Interest expense | (178) | (168) | (519) | (493) | |||||||||||||||||||
| Investment and other income, net | 1,014 | 358 | 1,458 | 748 | |||||||||||||||||||
| Income before income taxes | 2,462 | 2,952 | 8,241 | 9,692 | |||||||||||||||||||
| Income tax (expense) benefit | (460) | (286) | 4,136 | (1,034) | |||||||||||||||||||
| Net income | $ | 2,002 | $ | 2,666 | $ | 12,377 | $ | 8,658 | |||||||||||||||
| Basic earnings per share | $ | 1.89 | $ | 2.44 | $ | 11.63 | $ | 7.85 | |||||||||||||||
| Diluted earnings per share | $ | 1.87 | $ | 2.43 | $ | 11.53 | $ | 7.79 | |||||||||||||||
| Shares used in per share calculations: | |||||||||||||||||||||||
| Basic | 1,057 | 1,092 | 1,064 | 1,102 | |||||||||||||||||||
| Diluted | 1,069 | 1,099 | 1,073 | 1,112 | |||||||||||||||||||
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) |
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Net income | $ | 2,002 | $ | 2,666 | $ | 12,377 | $ | 8,658 | |||||||||||||||
| Other comprehensive income (loss), net of income taxes: | |||||||||||||||||||||||
| Foreign currency translation (losses) gains | (27) | 231 | (106) | 97 | |||||||||||||||||||
| Net unrealized gains (losses) on available-for-sale debt securities | 1 | 1 | (3) | (21) | |||||||||||||||||||
| Net unrealized gains (losses) on derivative instruments | 40 | 52 | (48) | 16 | |||||||||||||||||||
| Other gains (losses) | — | 1 | (1) | — | |||||||||||||||||||
| Other reclassifications included in net income | 4 | (23) | (7) | (22) | |||||||||||||||||||
| Total other comprehensive income (loss) | 18 | 262 | (165) | 70 | |||||||||||||||||||
| Comprehensive income | $ | 2,020 | $ | 2,928 | $ | 12,212 | $ | 8,728 |
| See accompanying notes. | ||||||||||||||
| QUALCOMM Incorporated | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
| (In millions) | ||||||||||||||
| (Unaudited) |
| Nine Months Ended | |||||||||||
| June 28, 2026 | June 29, 2025 | ||||||||||
| Operating Activities: | |||||||||||
| Net income | $ | 12,377 | $ | 8,658 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization expense | 1,202 | 1,231 | |||||||||
| Income tax payments in excess of income tax provision | (5,550) | (1,535) | |||||||||
| Share-based compensation expense | 2,579 | 2,120 | |||||||||
| Net gains on marketable securities and other investments | (933) | (297) | |||||||||
| Impairment losses on other investments | 61 | 93 | |||||||||
| Equity in net earnings of investees | (149) | (13) | |||||||||
| Other items | (52) | (10) | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net | (264) | 535 | |||||||||
| Inventories | (1,798) | 33 | |||||||||
| Other assets | 777 | 361 | |||||||||
| Trade accounts payable | 149 | (220) | |||||||||
| Payroll, benefits and other liabilities | 231 | (943) | |||||||||
| Unearned revenues | (225) | 3 | |||||||||
| Net cash provided by operating activities | 8,405 | 10,016 | |||||||||
| Investing Activities: | |||||||||||
| Capital expenditures | (1,578) | (785) | |||||||||
| Purchases of debt and equity marketable securities | (2,449) | (3,785) | |||||||||
| Proceeds from sales and maturities of debt and equity marketable securities | 3,896 | 4,892 | |||||||||
| Acquisitions and other investments, net of cash acquired | (1,573) | (711) | |||||||||
| Proceeds from other investments | 26 | 53 | |||||||||
| Other items | 30 | 7 | |||||||||
| Net cash used by investing activities | (1,648) | (329) | |||||||||
| Financing Activities: | |||||||||||
| Proceeds from short-term debt | 3,238 | 998 | |||||||||
| Repayment of short-term debt | (2,743) | (998) | |||||||||
| Repayment of debt of acquired company | (174) | — | |||||||||
| Proceeds from long-term debt | — | 1,487 | |||||||||
| Repayment of long-term debt | — | (1,365) | |||||||||
| Proceeds from issuance of common stock | 223 | 201 | |||||||||
| Repurchases and retirements of common stock | (6,806) | (6,347) | |||||||||
| Dividends paid | (2,868) | (2,848) | |||||||||
| Payments of tax withholdings related to vesting of share-based awards | (888) | (878) | |||||||||
| Other items | (28) | (10) | |||||||||
| Net cash used by financing activities | (10,046) | (9,760) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (21) | (5) | |||||||||
| Net decrease in total cash, cash equivalents and restricted cash | (3,310) | (78) | |||||||||
| 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 | $ | 4,533 | $ | 7,771 | |||||||
| 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 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Total stockholders’ equity, beginning balance | $ | 27,278 | $ | 27,728 | $ | 21,206 | $ | 26,274 | |||||||||||||||
| Common stock and paid-in capital: | |||||||||||||||||||||||
| Balance at beginning of period | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Common stock issued under employee benefit plans | 223 | — | 223 | 201 | |||||||||||||||||||
| Repurchases and retirements of common stock | (728) | (418) | (3,971) | (1,526) | |||||||||||||||||||
| Share-based compensation | 857 | 687 | 2,666 | 2,203 | |||||||||||||||||||
| Tax withholdings related to vesting of share-based payments | (352) | (269) | (888) | (878) | |||||||||||||||||||
| Common stock issued in acquisition | — | — | 1,903 | — | |||||||||||||||||||
| Common stock issued to settle convertible debt | — | — | 67 | — | |||||||||||||||||||
| Balance at end of period | — | — | — | — | |||||||||||||||||||
| Retained earnings: | |||||||||||||||||||||||
| Balance at beginning of period | 26,901 | 27,333 | 20,646 | 25,687 | |||||||||||||||||||
| Net income | 2,002 | 2,666 | 12,377 | 8,658 | |||||||||||||||||||
| Repurchases and retirements of common stock | (640) | (2,454) | (2,801) | (4,860) | |||||||||||||||||||
| Dividends | (1,000) | (993) | (2,959) | (2,933) | |||||||||||||||||||
| Balance at end of period | 27,263 | 26,552 | 27,263 | 26,552 | |||||||||||||||||||
| Accumulated other comprehensive income: | |||||||||||||||||||||||
| Balance at beginning of period | 377 | 395 | 560 | 587 | |||||||||||||||||||
| Other comprehensive income (loss) | 18 | 262 | (165) | 70 | |||||||||||||||||||
| Balance at end of period | 395 | 657 | 395 | 657 | |||||||||||||||||||
| Total stockholders’ equity, ending balance | $ | 27,658 | $ | 27,209 | $ | 27,658 | $ | 27,209 | |||||||||||||||
| Dividends per share announced | $ | 0.92 | $ | 0.89 | $ | 2.70 | $ | 2.59 |
| 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 nine months ended June 28, 2026 and June 29, 2025 included 13 weeks and 39 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 on a 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) | |||||||||||
| June 28, 2026 | September 28, 2025 | ||||||||||
| Raw materials | $ | 682 | $ | 336 | |||||||
| Work-in-process | 5,005 | 3,985 | |||||||||
| Finished goods | 2,692 | 2,205 | |||||||||
| $ | 8,379 | $ | 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 June 28, 2026 and September 28, 2025 were $769 million and $1.9 billion, respectively, of which $195 million and $1.5 billion were recorded in other current assets, respectively, and $574 million and $357 million were recorded in other assets, respectively.
| Other Current Liabilities (in millions) | |||||||||||
| June 28, 2026 | September 28, 2025 | ||||||||||
| Customer incentives and other customer-related liabilities | $ | 2,762 | $ | 1,948 | |||||||
| Income taxes payable | 557 | 1,007 | |||||||||
| Other | 958 | 1,201 | |||||||||
| $ | 4,277 | $ | 4,156 |
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
| Short-term Debt (in millions) | |||||||||||
| June 28, 2026 | September 28, 2025 | ||||||||||
| Commercial paper | $ | 498 | $ | — | |||||||
| Current portion of long-term debt | 1,991 | — | |||||||||
| $ | 2,489 | $ | — |
Interest Rate Swaps. At June 28, 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.
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 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Handsets (1) | $ | 5,086 | $ | 6,328 | $ | 18,934 | $ | 20,831 | |||||||||||||||||||||||||||||||||||||||
| Automotive (2) | 1,588 | 984 | 4,015 | 2,904 | |||||||||||||||||||||||||||||||||||||||||||
| IoT (internet of things) (3) | 1,830 | 1,681 | 5,244 | 4,811 | |||||||||||||||||||||||||||||||||||||||||||
| Total QCT revenues | $ | 8,504 | $ | 8,993 | $ | 28,193 | $ | 28,546 |
(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: personal AI and compute (including personal computers (PCs), extended reality (XR) and other personal computing devices) and industrial, networking and robotics (including mobile broadband, wireless access points, handhelds, retail, tracking and logistics, and other commercial and home applications).
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 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Revenues recognized from previously satisfied performance obligations | $ | 165 | $ | 189 | $ | 417 | $ | 691 |
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. We generally seek to renew or renegotiate such license agreements prior to expiration.
| QUALCOMM Incorporated | ||||||||||||||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||||
| (Unaudited) |
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 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Customer/licensee (x) | 23 | % | 18 | % | 24 | % | 20 | % | |||||||||||||||
| Customer/licensee (y) | 20 | 21 | 20 | 21 | |||||||||||||||||||
| Customer/licensee (z) | * | 13 | * | 13 |
*Less than 10%
Other Income, Costs and Expenses. Other expenses in the three months and nine months ended June 28, 2026 consisted of $68 million and $97 million in restructuring and restructuring-related charges (substantially all of which related to severance costs), respectively.
| Investment and Other Income, Net (in millions) | |||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Interest and dividend income | $ | 97 | $ | 160 | $ | 347 | $ | 495 | |||||||||||||||
| Net gains on marketable securities (1) | 726 | 204 | 605 | 241 | |||||||||||||||||||
| Net gains on other investments | 19 | 5 | 237 | 30 | |||||||||||||||||||
| Net gains on deferred compensation plan assets | 149 | 84 | 135 | 65 | |||||||||||||||||||
| Impairment losses on other investments | (38) | (52) | (61) | (93) | |||||||||||||||||||
| Equity in net earnings (losses) of investees | 66 | (4) | 149 | 13 | |||||||||||||||||||
| Other | (5) | (39) | 46 | (3) | |||||||||||||||||||
| $ | 1,014 | $ | 358 | $ | 1,458 | $ | 748 |
(1) Primarily consist of net unrealized gains related to certain marketable equity securities.
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 $5.7 billion benefit in the second quarter of fiscal 2026 from releasing 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 third quarter of fiscal 2026 was 19%, which is higher than our estimated annual effective tax rate for fiscal 2026 primarily due to the $5.7 billion benefit in the second quarter from releasing our valuation allowance on our federal deferred tax assets. Our effective tax rate for the third quarter of fiscal 2025 was 10%, 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 June 28, 2026, $20.6 billion remained authorized for repurchase under our stock repurchase programs.
Shares Outstanding. Shares of common stock outstanding at June 28, 2026 were as follows (in millions):
| Balance at September 28, 2025 | 1,074 | ||||
| Issued | 25 | ||||
| Repurchased | (42) | ||||
| Balance at June 28, 2026 | 1,057 |
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 | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Dilutive common share equivalents included in diluted shares | 12 | 7 | 9 | 10 | |||||||||||||||||||
| 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 | 10 | 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, and a hearing on the appeal was held on June 1, 2026. 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 Architecture License Agreement with Arm (the Nuvia ALA) by failing to comply with the termination obligations under the
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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. On January 8, 2026, we filed a substantially identical complaint against Arm Ltd., which was subsequently consolidated with the Arm Holdings plc complaint. On March 30, 2026, our complaint against Arm Ltd. was amended to include an additional claim for breach of the Qualcomm ALA based on Arm’s failure to negotiate certain license terms in good faith. The court denied Arm’s motion to strike our amended complaint against Arm Ltd. on July 14, 2026. 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 June 28, 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
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our operating segments, such as the nature of products, the level of shared products, technology and other resources, 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 personal AI and compute devices and industrial, networking and robotics 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 | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| QCT: | |||||||||||||||||||||||
| Revenues | $ | 8,504 | $ | 8,993 | $ | 28,193 | $ | 28,546 | |||||||||||||||
| Cost of revenues | 4,452 | 4,497 | 14,598 | 14,395 | |||||||||||||||||||
| Operating expenses (R&D and SG&A) | 1,860 | 1,825 | 5,636 | 5,377 | |||||||||||||||||||
| EBT | $ | 2,192 | $ | 2,671 | $ | 7,959 | $ | 8,774 | |||||||||||||||
| QTL: | |||||||||||||||||||||||
| Revenues | $ | 1,278 | $ | 1,318 | $ | 4,252 | $ | 4,172 | |||||||||||||||
| Costs and expenses (1) | 397 | 376 | 1,147 | 1,144 | |||||||||||||||||||
| EBT | $ | 881 | $ | 942 | $ | 3,105 | $ | 3,028 | |||||||||||||||
| QSI: | |||||||||||||||||||||||
| Revenues | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Operating expenses | 3 | 3 | 8 | 9 | |||||||||||||||||||
| Investment and other income, net | 771 | 152 | 925 | 188 | |||||||||||||||||||
| EBT | $ | 768 | $ | 149 | $ | 917 | $ | 179 |
(1) Substantially all of QTL’s costs and expenses are comprised of operating expenses.
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Consolidated revenues and EBT include the following reconciling items (in millions):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Reportable segments | $ | 9,782 | $ | 10,311 | $ | 32,445 | $ | 32,718 | |||||||||||||||
| Nonreportable segments | 165 | 54 | 353 | 152 | |||||||||||||||||||
| Unallocated revenues | — | — | — | 143 | |||||||||||||||||||
| $ | 9,947 | $ | 10,365 | $ | 32,798 | $ | 33,013 | ||||||||||||||||
| EBT | |||||||||||||||||||||||
| Reportable segments | $ | 3,841 | $ | 3,762 | $ | 11,981 | $ | 11,981 | |||||||||||||||
| Nonreportable segments | (214) | (10) | (419) | (15) | |||||||||||||||||||
| Unallocated revenues | — | — | — | 143 | |||||||||||||||||||
| Unallocated cost of revenues | (97) | (65) | (272) | (185) | |||||||||||||||||||
| Unallocated R&D expenses | (755) | (595) | (2,069) | (1,752) | |||||||||||||||||||
| Unallocated SG&A expenses | (323) | (182) | (896) | (554) | |||||||||||||||||||
| Unallocated other expenses | (68) | — | (97) | — | |||||||||||||||||||
| Unallocated interest expense | (178) | (168) | (519) | (493) | |||||||||||||||||||
| Unallocated investment and other income, net | 256 | 210 | 532 | 567 | |||||||||||||||||||
| $ | 2,462 | $ | 2,952 | $ | 8,241 | $ | 9,692 |
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.
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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 28, 2026 (in millions):
| Level 1 | Level 2 | Total | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents | $ | 1,529 | $ | 299 | $ | 1,828 | |||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||
| Corporate bonds and notes | — | 2,249 | 2,249 | ||||||||||||||||||||
| Mortgage- and asset-backed securities | — | 557 | 557 | ||||||||||||||||||||
| U.S. Treasury securities and government-related securities | 32 | 7 | 39 | ||||||||||||||||||||
| Equity securities (1) | 926 | — | 926 | ||||||||||||||||||||
| Total marketable securities | 958 | 2,813 | 3,771 | ||||||||||||||||||||
| Derivative instruments | — | 54 | 54 | ||||||||||||||||||||
| Other investments (2) | 1,293 | — | 1,293 | ||||||||||||||||||||
| Total assets measured at fair value | $ | 3,780 | $ | 3,166 | $ | 6,946 | |||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Derivative instruments | $ | — | $ | 251 | $ | 251 | |||||||||||||||||
| Other liabilities (2) | 1,289 | — | 1,289 | ||||||||||||||||||||
| Total liabilities measured at fair value | $ | 1,289 | $ | 251 | $ | 1,540 |
(1) Primarily consists of equity securities in certain QSI investees that have completed initial public offerings, which remain subject to short-term lock-up restrictions on the ability to sell.
(2) Other investments and other liabilities included in Level 1 are comprised of our deferred compensation plan assets and liabilities.
Long-term Debt. At June 28, 2026, the aggregate fair value of our outstanding fixed-rate notes, based on Level 2 inputs, was approximately $14.0 billion.
Marketable Securities. At June 28, 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):
| June 28, 2026 | |||||
| Years to maturity | |||||
| Less than one year | $ | 616 | |||
| One to five years | 1,670 | ||||
| Five to ten years | 2 | ||||
| No single maturity date | 557 | ||||
| Total | $ | 2,845 |
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.
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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 June 28, 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 | 2,210 | ||||
| Other assets | 288 | ||||
| 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.
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.
Modular. On July 28, 2026, we completed the acquisition of Modular Inc (Modular). Modular provides an open, AI-native software platform that enables AI to run efficiently across hardware architectures. The acquisition of Modular is expected to strengthen the software foundation for generative and agentic AI across data center and edge environments. The transaction values Modular at approximately $3.1 billion based on the closing price of Qualcomm stock on the acquisition date, with consideration transferred consisting primarily of 18 million shares issued of our common stock. This included 4 million shares with an estimated fair value of approximately $700 million that were issued to certain executives and are subject to a four-year service requirement post-acquisition, of which a portion will be recognized as compensation expense and the remaining amount included as a component of the purchase price. Due to the timing of the acquisition, it is not practicable to disclose the preliminary allocation of the purchase price to the assets acquired and the liabilities assumed.
Other. During the first nine months of fiscal 2026, we acquired seven other businesses for a total accounting purchase price of $1.1 billion. 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 $295 million of intangible assets and $737 million of goodwill, with $661 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.
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