tapebrief
QCOM · Q4 2025
QCOM · Q2 2026

QCOM · Q1 2026 Earnings

Cautious

Qualcomm

Reported February 4, 2026

30-second summary

30-second take. Qualcomm delivered $12.25B in Q1 FY2026 revenue (+5% YoY), landing near the midpoint of the prior $11.8–12.6B guide range (slightly above the $12.2B midpoint), with non-GAAP EPS of $3.50 at the top of the $3.30–3.50 range. The story is the Q2 guide: revenue $10.2–11.0B and non-GAAP EPS $2.45–2.65 — a ~$1.65B and ~$0.95 sequential cut at the midpoint that management attributes entirely to industry-wide DRAM shortages flowing through to OEM handset builds. Data centre got a concrete framing — management expects $27M to start showing in revenues with Humane shipping — but the near-term print is a handset supply story, not a demand story.

Headline numbers

EPS

Q1 FY2026

$3.50

Revenue

Q1 FY2026

$12.25B

+5.0% YoY

Gross margin

Q1 FY2026

54.6%

Free cash flow

Q1 FY2026

$4.42B

Operating margin

Q1 FY2026

27.5%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$12.25B+5.0%$11.27B+8.7%
EPS$3.50—$3.00+16.7%
Gross margin54.6%—55.4%-80bps
Operating margin27.5%—25.9%+160bps
Free cash flow$4.42B———

Guidance

Q1 FY2026 beat revenue and non-GAAP EPS guidance while segment revenues mostly missed; Q2 FY2026 guidance significantly lowered sequentially due to memory supply constraints impacting handsets.

Guidance is issued one quarter forward. The Prior-guide column references the guide issued last quarter for the period just reported; the New-guide column is for next quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$11.8B - $12.6B$12.252B+0.65B above guide high endBeat
Non-GAAP Diluted EPSQ1 FY2026$3.30 - $3.50$3.50at high end of guideBeat
GAAP Diluted EPSQ1 FY2026$2.55 - $2.75$2.78+0.03B above guide high endBeat
QCT RevenuesQ1 FY2026$10.3B - $10.9B$10.613B-0.287B below guide high endMissed
QTL RevenuesQ1 FY2026$1.4B - $1.6B$1.592B-0.008B below guide high endMissed

New guidance

MetricPeriodGuideYoY
RevenueQ2 FY2026$10.2B - $11.0B—
Non-GAAP Diluted EPSQ2 FY2026$2.45 - $2.65—
GAAP Diluted EPSQ2 FY2026$1.69 - $1.89—
QCT RevenuesQ2 FY2026$8.8B - $9.4B—
QTL RevenuesQ2 FY2026$1.2B - $1.4B—

Segment performance

Q1 FY2026
SegmentQ1 FY2026YoY
Handsets$7.824B+3.0%
Automotive$1.101B+15.0%
IoT$1.688B+9.0%
QCT$10.613B+5.0%
QTL$1.592B+4.0%

Profitability

Q1 FY2026
SegmentQ1 FY2026
QCT Operating Margin31%
QTL Operating Margin77%
Non-GAAP Operating Margin36%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Capital Returned to Stockholders$3.6B
Share Repurchases$2.6B (15M shares)
Dividend per Share$0.89

Management tone

Narrative arc: Automotive proof points (Q3) → Data centre customer named (Q4) → Memory shortage takes the wheel (Q1).

The dominant tone shift this quarter is the abrupt re-centring of the call around an exogenous supply constraint. Last quarter Cristiano spent the call expanding the data-centre and XR narrative, with handset Android share framed as a structural multi-year tailwind. This quarter the spine of the Q&A was memory: five of the five most material exchanges touched DRAM availability, OEM build behaviour, or how the constraint flows through margins. Management's response to Joshua Buckhalter that "weakness is 100% memory-related, not macroeconomic" — and that DRAM availability for consumer electronics is down year-over-year because HBM has been prioritised for data centres — is the cleanest articulation. The implication: the company sees the Q2 guide as a supply-side ceiling, not a demand-side floor.

The premium-tier resilience thesis got recast as a volume argument rather than a price argument. Last quarter Akash framed Galaxy S25 100% share as evidence the 75% contractual baseline was a floor. This quarter the framing is that premium and high-tier consumers are historically more resilient to price increases (pandemic precedent), but the binding constraint is availability, not price — meaning the segment-mix tailwind that drove Q4's +14% handset growth cannot fully offset the build-rate constraint in Q2. That is a meaningful softening of the implicit confidence in handset trajectory.

Data centre got its first concrete revenue framing. To Samik Chatterjee, Cristiano confirmed an expected $27M starting revenue with Humane shipping and ISV workload progression on plan, plus broader hyperscaler/CSP engagement still in flight. This converts the narrative-to-numbers transition the prior-quarter watch list flagged, but at a scale far below where it materially moves the model — and management still declined to update AI200/AI250 unit economics, deferring those again.

Two posture changes worth flagging. First, management held the fiscal 2029 revenue goals as on track despite the Q2 reset — meaning the company is treating the memory disruption as a 1–2 quarter shape issue, not a thesis issue. Second, on Huawei licensing, the topic was tagged by the tone extraction as the most evasive of the call, with no substantive update for the third consecutive quarter.

Q&A highlights

Joshua Buckhalter · TD Canwin

Are there factors beyond memory pricing driving handset weakness? How should we think about the TAM for the year? Is the inventory correction the last shoe to drop in March quarter?

Management confirmed weakness is 100% memory-related, not macroeconomic. Strong consumer demand and sell-through observed. Memory availability for consumer electronics is down year-over-year due to HBM prioritization for data centers. OEMs adjusting build production to available memory. Market sizing will be determined by memory availability.

Memory shortage is 100% driver of guidance reductionStrong consumer demand and sell-through in Q1DRAM availability for consumer electronics down year-over-yearOEMs adjusting production to available memory supply

Samik Chatterjee · J.P. Morgan

Data center progress update with customers? Is memory volatility disruptive or augmenting progress pace? Follow-up on memory impact durability and premium tier resilience.

Data center progressing on plan with Humane as public customer shipping. Broad hyperscaler/CSP engagement ongoing. Unique specialized hardware approach for disaggregated data center workloads validated by industry trends. Expect $27M revenue starting point. Premium and high-tier more resilient to price increases historically (pandemic precedent). Issue is availability, not just price.

Humane customer shipping and progressing well on ISV workloadsSpecialized platform approach validates disaggregated data center strategyExpected $27M starting revenue for data centerPremium/high-tier historically more resilient to price increases

Ross Seymour · Deutsche Bank

What percentage of handset business is in China given heavy impact cited? Will normal seasonality occur after March quarter decline?

Management does not break down by region but notes Chinese OEM exposure is less than unit volume percentage would suggest due to their lower-tier focus. Seasonality on demand side expected consistent with past; consumers wait for premium tier launches. Supply alignment with demand is the uncertainty, not demand fundamentals.

Chinese OEM exposure less than unit volume percentage due to lower-tier positioningExpected seasonality in consumer demand consistent with historical patternsPremium tier launches drive significant consumer purchases seasonally

Timothy Akuri · UBS

Why is QCT margin drop-through more than 100% sequentially? Is there additional cost pressure beyond normal seasonality and memory constraints?

Management indicated gross profit margin expected largely in line with December quarter; margin decline driven by revenue scale and OPEX guidance provided, not additional cost pressure. Consistent with other industry participants' reports. Normal seasonal premium tier Chinese launches in Chinese New Year also impact sequential comparison.

Gross margin expected largely in line with December quarterMargin decline driven by revenue scale and OPEX guidanceSeasonal impact from Chinese New Year premium launches on Chinese OEM buildsConsistent margin pressure observed across industry

CJ Muse · Cantor Fitzgerald

Given DRAM makers signaling only 50-70% demand satisfaction and shortages into 2028, how are you planning for sustained shortage? Can Chinese customers design in CXMT? How does Samsung internal DRAM advantage factor? Managing wafer commits to TSMC?

Qualcomm does not purchase memory directly for handsets; customers do. Already qualified with all memory suppliers including CXMT. Multi-generation memory controller flexibility allows working with new and older memory versions. Great TSMC relationships ensure sufficient wafers for demand. Fair to assume fiscal year handset market sized by DRAM availability.

Qualcomm does not directly purchase memory for handsetsAlready qualified with all major and emerging memory suppliers including CXMTMulti-generation memory controller flexibility across platformGreat supplier relationships ensure adequate wafer allocation

Answers to last quarter's watch list

What was the GAAP charge? Q1 GAAP EPS of $2.78 came in $0.03 above the prior guide's high end, with the GAAP/non-GAAP gap closing to ~$0.72 — within the normal range. No recurrence of a Q4-style charge surfaced in the print, and management was not pressed on it in the available Q&A. The Q4 episode appears non-recurring on this read, though the underlying line item remains undisclosed in materials reviewed for this brief. Status: Resolved positively
AI200/AI250 unit economics at the H1 2026 roadmap update. Management did not address cost-per-gigawatt, pricing strategy, or competitive performance metrics on this call. Cristiano confirmed Humane is shipping and the disaggregated architecture is on plan, but kept all unit-economic disclosures deferred. Status: Continue monitoring
Hyperscaler announcement beyond Humane. No new named customer this quarter. Management referenced "broad hyperscaler/CSP engagement" but disclosed only the expected $27M Humane starting revenue. Status: Not resolved
QTL trajectory and Huawei. QTL came in at $1.59B, at the high end of the $1.4–1.6B guide range (and +4% YoY), a clean beat on the segment. However, the Q2 guide drops QTL to $1.2–1.4B midpoint $1.3B — a sequential step-down of ~18%. Huawei licensing was flagged by the tone analysis as the most evasive topic, with no substantive update. Status: Continue monitoring
Q1 FY2026 GAAP vs. non-GAAP gap. Gap closed to $0.72 in Q1, in line with the ~$0.75 implied by last quarter's guide. The Q2 guide implies a wider gap of ~$0.76 at the midpoint ($2.55 non-GAAP vs. $1.79 GAAP) — at the upper end of normal but not signalling a charge recurrence. Status: Resolved positively
Analyst day revision on long-term targets. Management reaffirmed fiscal 2029 revenue goals as on track but did not revise the $22B Auto+IoT framing upward or formally raise the data-centre TAM band. The memory disruption may have postponed the upward revision Cristiano hinted at last quarter. Status: Not resolved

What to watch into next quarter

Does QCT trough at the Q2 guide midpoint or push lower? $9.1B QCT midpoint is the implied trough; watch whether the Q2 print lands in the upper half of $8.8–9.4B (memory situation contained) or breaks the low end (situation deteriorating).

Does the memory constraint loosen by Q3, or is this a multi-quarter overhang? Management framed fiscal-29 goals as on track, implying a 1–2 quarter shape issue. The H1 calendar-2026 DRAM allocation read from memory suppliers will be the gating signal.

Data centre revenue ramp beyond the expected $27M Humane starting point. A named hyperscaler conversion or a second customer disclosure on the Q2 print is the next gating event for the data-centre thesis. Without it, the line stays a narrative through fiscal 27.

Automotive deceleration trend. Auto +15% YoY decelerated from Q4's +17%. Watch whether Q2 Auto holds above $1B and whether the YoY rate stabilises or continues drifting toward the low teens.

Handset YoY trajectory in Q2. Q1 handsets at +3% YoY is already a sharp deceleration from Q4's +14%. A negative YoY print in Q2 — plausible given the memory-driven cuts — would mark the first handset decline in over a year.

Huawei licensing status. Three consecutive calls of no substantive update. A binary resolution either way is material to QTL run-rate; continued stasis is itself an answer that should compress QTL valuation framing.

Sources

  1. Qualcomm Q1 FY2026 press release (SEC filing): https://www.sec.gov/Archives/edgar/data/804328/000080432826000016/qcom122825erex991.htm
  2. Qualcomm Q1 FY2026 earnings call Q&A (analyst exchanges)
  3. Tapebrief Q4 FY2025 and Q3 FY2025 briefs (prior-quarter watch list and guide baselines)

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