Qualcomm Fiscal Q3 2026 Revenue Falls 4% to $9.95 Billion; Gross Margin 53.1%
Qualcomm reported fiscal third-quarter 2026 revenue of $9.95 billion, down 4% year over year, with gross margin at 53.1%. Net profit was $2.0 billion, while core operating profit fell 41% to $1.63 billion. QCT chip sales, over 80% of revenue, saw handset revenue drop 19.6% to $5.09 billion, hurt by an 11% decline in non-Apple shipments and weaker high-end mix. Automotive revenue rose 61% to $1.59 billion, and IoT grew 9% to $1.83 billion. Global handset shipments fell 6%, with Apple up nearly 20% and Android down 11%.
Qualcomm released its fiscal 2026 third-quarter results after the U. S. market close on July 30, 2026, for the quarter ended June 2026. Revenue was $9.95 billion, down 4% year over year, and gross margin was 53.1%. Cost items across wafer manufacturing, packaging, testing, advanced packaging, memory and other materials all increased, putting notable pressure on gross margin.
Net profit for the quarter was $2.0 billion. In the previous quarter, the company released a valuation allowance of approximately $5.7 billion that had been booked against deferred tax assets. From an operating perspective, core operating profit was $1.63 billion, down 41% year over year.
By business, Qualcomm is mainly composed of its semiconductor chip business (QCT) and technology licensing business (QTL), with QCT accounting for more than 80% of total revenue. Within QCT, handset revenue was $5.09 billion, down 19.6% year over year. The handset decline reflected two factors: non-Apple handset shipments fell 11% in the quarter, and the mix of high-end models weakened as phone makers favored previous-generation platforms to reduce costs.
Automotive revenue was $1.59 billion, up 61% year over year, driven by growth in shipments of the fourth-generation Snapdragon Digital Cockpit. The company's fifth-generation Snapdragon Digital Chassis is expected to ramp in September, with significantly higher content per vehicle. IoT revenue was $1.83 billion, up 9% year over year, supported by demand for consumer and industrial-grade products.
Core operating expenses rose to about $3.6 billion, with research and development expenses increasing to $2.6 billion and quarterly sales expenses of $0.98 billion. In the handset market, global shipments remained at 290 million units in the quarter, down 6% year over year. Apple handset shipments rose nearly 20% year over year, while Android handset shipments declined 11%.
Qualcomm is advancing multiple initiatives in AI. The company regards on-device AI as a core element of its "Physical AI" strategy, spanning smartphones, PCs, automobiles, XR, robots and industrial IoT devices. It has also launched the Snapdragon C platform for Windows laptops, whose main advantages include the Oryon CPU, low-power AI inference and heterogeneous computing.