tapebrief
QCOM · Q4 2025

QCOM · Q3 2025 Earnings

Cautious

Qualcomm

Reported July 30, 2025

30-second summary

30-second take. Qualcomm delivered $10.37B in Q3 FY2025 revenue (+10.3% YoY) with non-GAAP EPS of $2.77, Automotive hit a record $984M (+21% YoY), and IoT grew 24% — diversification is no longer a slide, it's showing up in the print. But the call's centre of gravity has shifted to data centre: management is leaning on the AlphaWave acquisition and advanced negotiations with a leading hyperscaler to frame a future beyond Apple, while declining to disclose specifics. The September-quarter guide ($10.3–11.1B revenue, $2.75–2.95 non-GAAP EPS) implies sequential handset growth despite continued Apple share erosion.

Headline numbers

EPS

Q3 FY2025

$2.77

Revenue

Q3 FY2025

$10.37B

+10.3% YoY

Gross margin

Q3 FY2025

55.6%

Operating margin

Q3 FY2025

26.6%

Key financials

Q3 FY2025
MetricQ3 FY2025YoY
Revenue$10.37B+10.3%
EPS$2.77—
Gross margin55.6%—
Operating margin26.6%—

Guidance

Prior quarter data unavailable — comparison not possible.

Segment performance

Q3 FY2025
SegmentQ3 FY2025YoY
Handsets$6.328B+7.0%
Automotive$0.984B+21.0%
IoT$1.681B+24.0%
QCT$8.993B+11.0%
QTL$1.318B+4.0%
Automotive revenue (record quarterly)$984M—

Capacity & utilization

Q3 FY2025
SegmentQ3 FY2025
Combined Automotive and IoT YoY growth23%

Profitability

Q3 FY2025
SegmentQ3 FY2025
QCT EBT margin30%
QTL EBT margin71%

Management tone

Cristiano's prepared remarks were unusually forward-leaning on adjacencies. Three notes:

On data centre specifics, the posture is visibly guarded — Cristiano deflected repeated analyst probes on hyperscaler customer identity and deal size, saying the company will "wait until they become factual."

Q&A highlights

Joshua Buckhalter · TD Cowan

Asked about handset market drivers for 5% sequential growth in September quarter despite lower Apple share, and whether there's evidence of pull-in demand from China OEMs.

Akash Palkawala confirmed no evidence of pull-in and attributed the upside to new product launches at end of September, with OEMs preparing for new device launches based on strong interest in the new chip.

5% sequential handset revenue growth expected in September quarterNew flagship chip launch at end of SeptemberMultiple OEMs preparing for new device launches

Sameek Chatterjee · JPMorgan

Asked about AlphaWave integration strategy, customization vs. standardization approach, and deal size considerations for data center business expansion.

Cristiano described two product focuses: general purpose CPU for hyperscalers with first-party workloads and head unit for inferencing clusters; emphasized AlphaWave provides connectivity IP for scale-out; noted focus on customers with first-party workloads or inferencing clusters; planning to wait for factual developments before further disclosures.

Building accelerator cards and racks for inferencing clustersAlphaWave provides leading data center connectivityIn advanced negotiations with one significant customerExpecting halo effect from first customer win to validate platform

Ross Seymour · Deutsche Bank

Asked about Samsung's own processor competition, whether Qualcomm will maintain 100% Galaxy share, and whether premium tier ASP/content increases of double-digits will continue or accelerate with X85.

Akash stated Samsung multi-year agreement defines 75% baseline share with anything above as upside; noted historically relationships move to higher share levels; confirmed Android business grew ~10% in fiscal 25, exceeding Investor Day targets, driven by strength in premium tier where Qualcomm is positioned well.

Samsung baseline contractual share of 75%Upside potential above 75% baselineAndroid business grew approximately 10% in fiscal 25 vs. fiscal 24Growth exceeds Investor Day targets

Chris Caso · Wolf Research

Asked about granularity on December quarter dynamics including potential pull-forward from Chinese OEMs, extra week impact, and implications for March quarter; also asked about spending impact of data center business expansion and AlphaWave acquisition effects.

Akash stated business remains very strong across Android, automotive, and IoT with no significant unique factors outside of lower Apple share; December is seasonally the strongest quarter; regarding spending, Qualcomm has kept OPEX growth small over four years by reallocating existing spend and will focus new hiring on skills needed for data center execution.

December quarter is seasonally strongest for QualcommOPEX growth has been minimal over last four yearsNew hiring focused on skills required for data center diversificationExisting spend reallocation used to fund growth initiatives

Tal Liani · Bank of America

Asked about China market positioning as share increases, domestic vs. international trends, and competitive risks; also asked about margin implications of declining Apple revenues.

Akash highlighted Xiaomi multi-year agreement as evidence of strong China position with increasing volumes and expansion beyond phones into automotive, smart glasses, wearables, tablets; Cristiano added 30-year track record in China, learned to move at China's pace, and competitive position has only improved. On margins, Akash stated target of ~30% operating margin for the year maintained for long-term, with growth opportunity in auto/IoT exceeding Apple revenue scale.

Multi-year Xiaomi agreement with increasing volumes annuallyXiaomi expanding to automotive, smart glasses, wearables, tablets30-year history operating in China30% operating margin target maintained despite Apple share decline

What to watch into next quarter

Data centre customer disclosure. Management has now publicly framed advanced negotiations with a leading hyperscaler and a fiscal 28 revenue start. Watch for a named customer, a product SKU, or a revenue contribution timeline on the Q4 print — anything short of that keeps the data centre story in the "narrative" column rather than the "numbers" column.

Q4 handset revenue vs the implied 5% sequential step-up. The September flagship chip launch is the thesis; a miss on QCT handsets would reopen questions about whether non-Apple Android can sustain the +7% YoY pace seen this quarter.

Automotive sustainability above the $984M record. Auto has compounded for several quarters, and Akash guided to $1B in Q4. Watch whether Q4 sustains $1B+ quarterly run-rate or shows pricing/mix normalisation.

Samsung share trajectory above the 75% baseline. Now that the contractual floor has been disclosed, the read-through on each subsequent Galaxy generation becomes the share signal.

OPEX discipline as data centre hiring ramps. Akash committed to reallocation rather than absolute OPEX growth and guided Q4 non-GAAP OPEX to ~$2.35B. A Q4 OPEX line that breaks the four-year pattern would be the first concrete sign data centre is more expensive than framed.

Sources

  1. Qualcomm Q3 FY2025 press release (SEC filing): https://www.sec.gov/Archives/edgar/data/804328/000080432825000044/qcom062925erex991.htm
  2. Qualcomm Q3 FY2025 earnings call transcript (prepared remarks and Q&A)

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