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Qualcomm Q3 2022 Revenue Hits $10.9B, Beating Estimates
by Daniel Newman and Todd R. Weiss | July 28, 2022

The News: Qualcomm’s Q3 2022 revenue rose to $10.9 billion for the latest quarter, up 37 percent from $8 billion one year ago and highlighted by record revenue for its automotive and IoT chip segments, as the company reported its earnings on July 27. Qualcomm’s revenue beat analyst estimates of $10.87 billion and posted a 53 percent rise in non-GAAP net income of $3.36 billion, up from $2.2 billion one year ago. Read the full Qualcomm earnings Press Release.

Qualcomm Q3 2022 Revenue Hits $10.9B, Beating Estimates

Analyst Take: Qualcomm’s Q3 2022 performance was quite robust, built solidly and impressively on its successes with 5G, its diversification plays into IoT and Radio Frequency Front End (RFFE) module technologies, and its growing traction in the market’s thriving $19 billion automotive business pipeline.

This was a great quarter for Qualcomm during a tough time across the marketplace that has seen other companies miss analyst estimates and display more mixed results.

Here are the Qualcomm Q3 2022 fiscal earnings by the numbers:

  • Q3 2022 non-GAAP revenue of $10.9 billion, up 37 percent from $8.0 billion for the same quarter one year ago. The revenue figure beat analyst estimates of $10.87 billion by a consensus of analysts from Yahoo Finance.
  • Q3 2022 non-GAAP net income of $3.36 billion, up 53 percent from $2.2 billion one year ago.
  • Q3 2022 non-GAAP operating income of $4 billion, up 50.3 percent from $2.67 billion one year ago.
  • Q3 2022 non-GAAP diluted earnings per share (EPS) of $2.96, up from $1.92 per share one year ago.

What we see here is a great result based on a few factors. First, Qualcomm is executing well at the premium tier of the handset market. But perhaps even more notable is we are seeing Qualcomm’s diversification strategy continuing to pay off. In these latest earnings results, which outpaced expectations and provides clear evidence of Qualcomm’s ongoing pattern of sustainable growth. The continuing diversification efforts are transforming Qualcomm from a handset-focused company into a technology platform for building connectivity from the core in RFFE to the edge in IoT and automotive. As we’ve said before, Qualcomm CEO Cristiano Amon is driving an impressive diversification strategy and has embraced a commitment to driving innovation in every way possible, giving the company a wide range of new markets and opportunities in which to grow. That strategy is clearly paying off.

As part of its earnings news, Qualcomm also announced that it reached an agreement with Samsung to extend its patent licensing for the use of Qualcomm’s Snapdragon chips and platforms in Samsung’s Galaxy smartphone products for seven additional years. The extended patent licensing agreement covers 3G, 4G, 5G and upcoming 6G mobile technology through the end of 2030. Qualcomm’s Qualcomm Technologies subsidiary will also expand its collaboration with Snapdragon platforms for future premium Samsung Galaxy products, including smartphones, PCs, tablets, extended reality devices, and more.

This patent agreement extension is notable because it continues to provide Qualcomm with growth in the mobile market from a dependable mobile device maker which has huge markets and sales around the world. And Samsung’s tip of the hat to Qualcomm by extending the previous agreement by seven years shows Samsung’s faith and confidence in Qualcomm’s delivering the chips and platforms it needs to continue to its sales successes. We believe this is a huge boon for Qualcomm.

Qualcomm Segment Revenues See Increases

Qualcomm’s Q3 2022 segment categories also saw healthy revenue boosts. In the company’s Qualcomm CDMA Technologies (QCT) division, revenue for Qualcomm chips and platforms in the handset market soared 59 percent to $6.1 billion for the quarter, up from $3.9 billion one year ago.

FRRE revenue rose nine percent to $1 billion, up from $957 million one year ago, while revenue in the growing automotive category rose 38 percent to $350 million, up from $253 million in 2021. IoT revenue rose 31 percent to $1.8 billion, up from $1.4 billion one year ago.

Qualcomm Q3 2022 revenue for its Qualcomm Technology Licensing (QTL) unit had a more modest two percent increase to $1.5 billion, up from $1.49 billion one year ago.

These successes show that Qualcomm continues to take advantage of the tailwinds from 5G and that the company’s huge market share in the premium tier is an ongoing advantage as well. The continuing growth of the automotive segment and its ever-higher technology demands in gasoline-powered and electric vehicles is also a big plus for Qualcomm in the future as the company keeps its corporate foot on the accelerator pedal of innovation. In this quarter, Qualcomm saw the demand for its Automotive business swell to a $19 billion pipeline. On the heels of a bevy of key design wins, this pipeline is turning into revenue with the company delivering its best revenue result to date in this category—and there is little to indicate a slowdown in the future.

We believe Qualcomm is in a great place and is executing well in its markets and in its short-term and long-term business strategies, even as world markets remain in turmoil due to the lingering Covid-19 pandemic, supply chain issues, the war in Ukraine and other global situations.

Qualcomm’s Guidance for Q4 2022

As part of Qualcomm’s Q3 2022 results, the company also provided financial performance guidance for Q4 2022. The guidance numbers include:

  • Revenue between $11 billion to $11.8 billion. That includes QCT revenue between $9.5 billion to $10 billion and QTL revenue between $1.45 billion to $1.65 billion.
  • Non-GAAP diluted EPS between $3.00 to $3.30 per share.

The mid-point of Qualcomm’s Q4 2022 guidance includes an estimated impact of an approximate $0.20 reduction to EPS due to macroeconomic headwinds and a reduction in the global handset forecast, according to the company. We see these reductions as something to expect in the current macro. However, the guidance should be seen as largely positive as the company expects to continue executing despite headwinds.

Overall Impressions on Qualcomm’s Third Quarter

Qualcomm’s Q3 2022 results were just what the company ordered, with growing revenue that beat analyst expectations, promising progress in new and existing markets, and continuing success across its product lines. The extended licensing agreement with Samsung is a big positive for the company in both its premium tier ambitions and its growth into areas like wearables and connected PCs.

With clear strength and sustained demand for semiconductors and despite economic headwinds, Qualcomm’s results and guidance point to a robust future for the company under Amon’s leadership. It will be interesting to watch Qualcomm’s steady performance through the rest of 2022 and into 2023 as it continues to battle its competitors in uncertain times.

Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.

Other insights from Futurum Research:

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Image Credit: Wall Street Journal

About the Authors

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio

Todd is an experienced Analyst with over 21 years of experience as a technology journalist in a wide variety of tech focused areas.