Qualcomm Posts Fiscal Third-Quarter 2026 Revenue of $9.95 Billion, Adjusted EPS $2.21

Qualcomm Chief Executive Cristiano Amon said the company is taking specific measures to expand profit margins, including a comprehensive price increase for its chips, which are primarily supplied to smartphone makers, effective September 1, while also seeking other ways to optimize its supply chain. Amon noted that costs are rising, and prices will rise accordingly.

For the quarter, Qualcomm reported adjusted earnings per share of $2.21 on revenue of $9.95 billion. The company said in its earnings release that the semiconductor industry is experiencing broad input cost increases across wafer fabrication, packaging, testing, advanced packaging, memory, and other materials, but management noted that revenue remained healthy.

The mobile chip business remained the largest segment of Qualcomm's chip sales, with revenue of $5.1 billion, down 20% year over year, which the company said reflected a bottoming out in the Chinese market. Amon said dynamics in the smartphone market are making low-end and mid-range 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 high-end category are shifting toward low-end premium 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 sales of $1.59 billion in the quarter. The company said in June that it aims to achieve $10 billion in automotive revenue by 2029. Qualcomm also announced a digital cockpit chip supply agreement with BMW. In addition, Qualcomm announced the completion of 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 use and smart glasses fall under the Internet of Things (IoT) business, which saw sales of $1.83 billion, up 9% year over year. Net profit for the quarter was $2 billion, down 25% year over year. Qualcomm's QTL unit, which licenses intellectual property for cellular connectivity and other chip technologies to other companies, generated significant profit, with QTL revenue of $1.28 billion.