tapebrief
QCOM · Q1 2026

QCOM · Q2 2026 Earnings

Neutral

Qualcomm

Reported April 29, 2026

30-second summary

SENTIMENT: Mixed 30-second take. Q2 revenue of $10.60B beat consensus by 0.2% and landed at the midpoint of the prior guide ($10.2–11.0B), with non-GAAP EPS of $2.65 hitting the top of the $2.45–2.65 range — clean execution against a guide management cut sharply three months ago. The Q3 guide ($9.2–10.0B revenue, –11% to –4% YoY; non-GAAP EPS $2.10–2.30) confirms the handset trough is in Q3, not Q2, with management explicitly committing to sequential Chinese handset recovery in Q4. Offsetting the near-term reset, Cristiano confirmed the December-quarter custom silicon engagement is with a large hyperscaler and characterised it as a multi-generation engagement; when pressed for product specifics he described Qualcomm's general data-center IP portfolio (CPU, accelerator, custom ASIC capabilities from AlphaWave, connectivity IP) but declined to specify what this engagement contains, calling it only "a custom product." Even with that limited disclosure, the named-hyperscaler gating event the watch list flagged for the data-centre thesis has effectively arrived.

Headline numbers

EPS

Q2 FY2026

$2.65

+3.5% vs est.

Revenue

Q2 FY2026

$10.60B

-3.5% YoY

+0.2% vs est.

Gross margin

Q2 FY2026

53.8%

Operating margin

Q2 FY2026

21.8%

Key financials

Q2 FY2026
MetricQ2 FY2026YoYQ1 FY2026QoQ
Revenue$10.60B-3.5%$12.25B-13.5%
EPS$2.65—$3.50-24.3%
Gross margin53.8%—54.6%-80bps
Operating margin21.8%—27.5%-570bps

Guidance

Strong Q2 beat across revenue and EPS; Q3 guidance points to handset segment bottoming with sequential recovery expected in Q4, though near-term memory supply constraints and Chinese customer weakness continue to weigh.

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
RevenueQ2 FY2026$10.2B - $11.0B$10.599B+0.6B above high end of guideBeat
Non-GAAP Diluted EPSQ2 FY2026$2.45 - $2.65$2.65+$0.00 at high end of guideBeat
QCT RevenuesQ2 FY2026$8.8B - $9.4B$9.076B-$0.324B below high end of guideBeat
QTL RevenuesQ2 FY2026$1.2B - $1.4B$1.382Bin-lineMet
GAAP Diluted EPSQ2 FY2026$1.69 - $1.89$6.88+$4.99 above high end of guideBeat

New guidance

MetricPeriodGuideYoY
QCT RevenuesQ3 FY2026$7.9B - $8.5B-18 to -12% YoY
QTL RevenuesQ3 FY2026$1.15B - $1.35B—
RevenueQ3 FY2026$9.2B - $10.0B-11 to -4% YoY
Non-GAAP Diluted EPSQ3 FY2026$2.10 - $2.30—
GAAP Diluted EPSQ3 FY2026$1.26 - $1.46—

Segment performance

Q2 FY2026
SegmentQ2 FY2026YoY
QCT Handsets$6.024B-13.0%
QCT Automotive$1.326B+38.0%
QCT IoT$1.726B+9.0%
QTL Licensing$1.382B+5.0%
QCT Total Revenue$9.076B—
Handsets YoY Growth-13%—
Automotive YoY Growth+38%—
IoT YoY Growth+9%—

Profitability

Q2 FY2026
SegmentQ2 FY2026
QCT EBT Margin27%
QTL EBT Margin72%

Other KPIs

Q2 FY2026
SegmentQ2 FY2026
Share Repurchases (H1 FY2026)$5.4B
Dividend per Share$0.89

Management tone

Narrative arc: Automotive proof points (Q3 FY25) → Data centre customer named/Humane (Q4 FY25) → Memory shortage takes the wheel (Q1 FY26) → Hyperscaler confirmed and Apple sunset quantified (Q2 FY26).

Three quarters ago the data-centre story was an unnamed "advanced hyperscaler negotiation" with a fiscal-28 revenue start. Two quarters ago it became Humane at 200MW with material revenue pulled into fiscal 27. Last quarter it stayed at Humane with a concrete $27M starting point. This quarter Cristiano confirmed to Buckhalter that the December custom silicon engagement is "with a large hyperscaler" and "a multi-generation engagement." When Caso pressed for whether the engagement is CPU or accelerator, Cristiano described Qualcomm's general data-center asset base — CPU, accelerator, memory solutions, ASIC capabilities from AlphaWave, and connectivity IP — but declined to specify which of those elements this particular engagement contains, calling it only "a custom product." The named hyperscaler the prior watch list flagged as the next gating event has effectively arrived — though both the identity and product scope are held for the June 24 Investor Day. This is the most material narrative-to-numbers conversion since Humane was named, even with the product-content question left open.

The framing of the memory disruption has shifted from "1–2 quarter shape issue" to a longer trough. Last quarter Akash framed Q2 as the cut and implied Q3 would be the recovery. This quarter the bottom call has moved to Q3, with explicit commitment that Q4 sees sequential growth from there — a one-quarter slip in the recovery arc. The QCT –13% YoY in Q2, deepening to –18% to –12% YoY in the Q3 QCT guide, demonstrates the cut is harder and longer than the Q1 framing implied. Management is no longer calling it a "supply ceiling" — they are now distinguishing premium tier holding (where Qualcomm is over-indexed) from mid-low tier weakness, a more honest read on demand-mix dynamics.

Apple revenue contribution to fiscal 27 was quantified for the first time. Cristiano confirmed to Akuri the 20% share assumption for fall 2026 launch phones with no product relationship beyond that, and Akash followed up by acknowledging sell-side models suggesting "a little over $2 billion" of QCT Apple product revenue in fiscal 27, calling that "a reasonable place to model the business." Three quarters ago Apple was the variable management was actively de-emphasising via non-Apple growth disclosures; this quarter the Apple sunset is being explicitly sized so investors can model it cleanly. That posture change is itself a confidence signal — management is comfortable letting the number be in the model because non-handset and hyperscaler revenue is now visible enough to absorb it.

Samsung share framing escalated from contractual floor to upward-biased expected case. Two quarters ago the 75% baseline was disclosed with Galaxy S25 hitting 100% as upside. This quarter Cristiano told Chatterjee the relationship reset is to ">70% Qualcomm share (vs. historical ~50%)" with the framework holding for "current and next fiscal year" and explicitly suggested agentic AI creates "positive bias for further share gains." That is the firmest forward-looking framing on Samsung in four quarters.

Two areas remain guarded: detailed custom silicon technical specifications and pricing (deferred to Investor Day), and Huawei licensing (no substantive update for a fourth consecutive call).

Q&A highlights

Joshua Buckhalter · TD Cowan

Requested details on the custom silicon engagement with a leading hyperscaler announced for December quarter shipments, including scope and magnitude (CPU vs accelerator vs networking chip), and confidence level that fiscal Q3 represents the bottom for Android QCT sales into China given seasonal patterns and low visibility.

Cristiano Amon declined to provide specifics on the custom silicon engagement pending Investor Day on June 24, but confirmed it is with a large hyperscaler and represents a multi-generation engagement incorporating Qualcomm's CPU, accelerator, memory solutions, ASIC capabilities, and connectivity IP from AlphaWave. Akash Palkawala explained the Q3 bottom confidence is based on two factors: OEM decisions to slow bills and draw down channel inventory (both reflected in Q2 and Q3 guidance) plus visibility into sell-through data via QTL licensing business showing end consumer demand remains stable despite memory constraints.

Custom silicon engagement is with a large hyperscalerMulti-generation engagement expectedDecember quarter initial shipments plannedQ3 expected to be bottom for China Android QCT revenue

Sameek Chatterjee · JPMorgan

Asked about competitive dynamics in data center compared to three/six months ago, specifically regarding Broadcom's vertical integration and NVIDIA's focus on inference acceleration. Also inquired about the Samsung multi-year agreement framework, specifically regarding recent share changes and use of in-house SoCs.

Cristiano Amon provided detailed competitive positioning, arguing that the AI market is transitioning from training/inference GPU-centric to agentic orchestration phases where CPU performance becomes critical. Qualcomm differentiates via: (1) proven CPU leadership across smartphones, PCs, autos; (2) dedicated agentic data center CPU in development; (3) custom silicon capabilities via AlphaWave; (4) unique accelerator focus on decode inference; (5) edge device position. On Samsung, Amon reaffirmed the relationship reset to >70% Qualcomm share (vs historical ~50%), expects this framework for current and next year, and suggests agentic AI creates positive bias for further share gains.

Samsung share reset to >70% (from ~50% historically)Framework remains >70% for current and next fiscal yearAgentic AI expected to provide positive bias on Samsung shareQualcomm developing dedicated CPU for agentic data center experiences

Timothy Akuri · UBS

Questioned the speed of the custom silicon engagement reaching production by December quarter given typical cycle times, and whether this represents recycled AlphaWave chiplet/DSP capabilities or new Qualcomm IP. Also confirmed Apple share assumptions for fiscal 27.

Cristiano Amon clarified that Qualcomm had been engaging data center customers for several quarters before the AlphaWave acquisition, which enhanced execution capabilities and IP portfolio. The custom engagement is expected to be a multi-generation agreement incorporating Qualcomm capabilities, with full details deferred to Investor Day. Confirmed Apple share assumption remains 20% of new launch phones in fall 2026 with no product relationship beyond that, and noted sell-side models suggest ~$2B+ QCT product revenue for Apple in fiscal 27.

Apple share assumption: 20% of fall 2026 launch phonesNo product relationship with Apple beyond fall 2026 launchFiscal 27 Apple product revenue estimate: $2 billion+Multi-generation custom engagement with hyperscaler

Chris Caso · Wolf Research

Sought clarification on whether the December quarter custom silicon engagement is for an accelerator or CPU. Also asked how to model the QTL business trajectory into the second half of the year given projected handset weakness.

Cristiano Amon confirmed the December engagement is a custom product but declined further specificity. Akash Palkawala described the QTL business as facing weakness in mid-low tier handsets with premium/high tier remaining stable, and that this dynamic should be used to project forward, though QTL typically follows handset unit trends with adjustments for royalty mix.

December quarter engagement is custom product (not pre-defined CPU/accelerator)Premium handset tier holding strengthMid-low tier handset weakness persistingQTL royalty mix favorable in Q2

Stacy Raskin · Bernstein Research

Asked how handset seasonality into September quarter (when Apple typically ramps but Qualcomm now has reduced share) offsets the expected China Android recovery, and whether agentic smartphones requiring increased memory will exacerbate memory supply issues into 2027.

Akash Palkawala identified September quarter dynamics as China OEM sequential growth (from Q3 bottom) offset by Apple's reduced 20% share (no change in share assumption), noting Qualcomm is not specifically guiding Q3 revenue direction and investors should model both factors. Cristiano Amon declined to forecast 2027 memory dynamics, noting the pace of AI change is accelerating design requirements for higher CPU capability devices, and that both data center and edge device memory demand is increasing with new memory player capacity coming online.

China QCT Q3 bottom, Q4 expected sequential growthApple share 20% (no change to prior assumption)Premium tier demand holding; mid-low tier weakeningAgentic smartphones require higher CPU capability

Answers to last quarter's watch list

Does QCT trough at the Q2 guide midpoint or push lower? QCT printed $9.08B vs. the $8.8–9.4B range — near the midpoint, holding within range but not in the upper half. Critically, the trough is not Q2 — the Q3 QCT guide of $7.9–8.5B is ~$0.9B lower. The Q2 print itself is acceptable, but the trough has moved out one quarter. Status: Resolved negatively
Does the memory constraint loosen by Q3, or is this a multi-quarter overhang? Q3 guidance explicitly includes ongoing memory supply constraint impact on handset OEMs. Management committed Chinese handset revenue bottoms in Q3 with sequential Q4 recovery, but did not say the underlying memory situation resolves — only that OEM build behaviour normalises. The thesis-level fiscal-29 goals were not re-addressed, but the cyclical shape is now 3 quarters not 1–2. Status: Continue monitoring
Data centre revenue ramp beyond the expected $27M Humane starting point. Substantially advanced — the December-quarter custom silicon engagement is confirmed with a large hyperscaler, multi-generation in scope, with full details deferred to June 24 Investor Day. The named-hyperscaler gating event has effectively arrived even if the name is withheld. Status: Resolved positively
Automotive deceleration trend. Reversed decisively. Auto delivered $1.33B at +38% YoY, accelerating from Q1's +15% and Q4 FY25's +17%. The Q1 deceleration concern is invalidated. Status: Resolved positively
Handset YoY trajectory in Q2. Handsets printed –13% YoY, the first negative print in over a year and a deep one. The Q1 watch flagged this as plausible; it landed at the more severe end. Status: Resolved negatively
Huawei licensing status. No substantive update for a fourth consecutive call; the topic was not pressed in the Q&A exchanges captured. The stasis continues. Status: Continue monitoring

What to watch into next quarter

Does QCT land in the upper half of the $7.9–8.5B Q3 guide, confirming Q3 as the true trough? A print below $8.2B would push the trough out another quarter and invalidate the Q4 sequential recovery commitment management staked the call on.

Investor Day (June 24) hyperscaler disclosure. Watch for the customer name, deployment size, revenue contribution timeline, and whether the engagement is a single SKU or multi-product platform — the product-content question Cristiano declined this call. Anything less than a named customer with sized revenue keeps the data-centre story narrative-led despite this quarter's progress.

Q4 FY26 guide must show Chinese handset sequential recovery. Management explicitly committed to this on the call. If the Q3 print is accompanied by a Q4 guide that does not show sequential QCT growth, the credibility hit will be substantial.

Automotive sustainability above $1.3B and the +38% YoY pace. The reversal from a decelerating trend is sharp — watch whether Q3 holds the new run-rate or shows quarterly volatility that recalibrates the fiscal-29 trajectory.

GAAP/non-GAAP reconciliation hygiene. With the $5.7B valuation-allowance release now reversing the Q4 FY25 charge, two consecutive multi-billion-dollar GAAP swings have cleared. The Q3 guide implies a GAAP/non-GAAP gap of ~$0.84 — back in normal range — but ongoing tax-policy sensitivity (corporate AMT guidance was the trigger here) remains a disclosure-quality watch item.

Samsung share confirmation for the Galaxy S26 cycle. Management framed >70% for "current and next fiscal year" — the next concrete data point is the S26 win rate disclosed on the Q4 print or early FY27.

Sources

  1. Qualcomm Q2 FY2026 press release (SEC filing): https://www.sec.gov/Archives/edgar/data/804328/000080432826000060/qcom032926erex991.htm
  2. Qualcomm Q2 FY2026 earnings call (prepared remarks and analyst Q&A)
  3. Tapebrief Q1 FY2026, Q4 FY2025, and Q3 FY2025 briefs (prior-quarter watch list, guide baselines, and narrative arc)

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