Qualcomm Reports Q3 FY2026 Earnings; EPS $2.21, Revenue $9.95 Billion

Qualcomm Chief Executive Cristiano Amon said in an interview that the company is taking concrete steps to expand profit margins, including an across-the-board increase in chip prices effective September 1. These chips currently supply mainly smartphone makers, and the company is also seeking other ways to optimize its supply chain. Amon noted that as costs rise, prices will follow.

For the quarter, Qualcomm reported adjusted earnings per share of $2.21 on revenue of $9.95 billion. In its earnings release, Qualcomm said the semiconductor industry is experiencing broad increases in input costs, covering wafer fabrication, packaging, testing, advanced packaging, memory, and other materials. Management, however, noted that revenue remains healthy.

The handset chip business remains the largest segment of Qualcomm's chip sales, with quarterly revenue of $5.1 billion, down 20% year over year. The company attributed the decline to a bottoming out in the Chinese market. Amon said dynamics in the smartphone market have made low-end and mid-tier phones less competitive due to affordability issues, and even in the high-end Android segment where Qualcomm dominates, customers are seeking lower prices. Consumer preferences within the premium category are shifting toward the lower end of the high tier and last year's models, driven by rising memory prices. Amon added that gross margins are also changing due to high supply costs, a short-term issue the company is addressing through price increases.

Qualcomm's automotive business performed strongly, with quarterly sales of $1.59 billion. In June, the company said it aims to reach $10 billion in automotive revenue by 2029. Qualcomm also announced a supply agreement with BMW for digital cockpit chips. Additionally, Qualcomm said it has completed its acquisition of AI software company Modular and plans to unveil its AI software platform at a conference in August.

Chips for low-power industrial uses and smart glasses are classified under the Internet of Things business, where sales rose 9% year over year to $1.83 billion. Net income for the quarter was $2 billion, down 25% year over year. Qualcomm generated significant profit through its QTL segment, which licenses intellectual property for cellular connectivity and other chip technologies to other companies; QTL revenue was $1.28 billion.