tapebrief
QCOM · Q2 2026

QCOM · Q3 2026 Earnings

Cautious

Qualcomm

Reported July 29, 2026

30-second summary

30-second take. Revenue of $9.95B (–4% YoY) beat consensus by 2.9% and cleared the high end of the prior guide, with non-GAAP EPS of $2.21 landing inside the guided $2.10–2.30 range but missing consensus by 0.9%. The Q3 handset trough that was the entire bull case last quarter printed at $5.09B versus a ~$4.9B guide — better than feared, and automotive +61% YoY (against a ~50% guide) is now compounding well above management's own framework. But the Q4 revenue guide of $9.7–10.5B implies –14% to –7% YoY off the $11.27B prior-year base, so the "sequential growth returning in Q4" claim from last quarter arrives as a much softer recovery than the language implied.

Headline numbers

EPS

Q3 FY2026

$2.21

-0.9% vs est.

Revenue

Q3 FY2026

$9.95B

-4.0% YoY

+2.9% vs est.

Gross margin

Q3 FY2026

53.0%

Operating margin

Q3 FY2026

16.4%

Key financials

Q3 FY2026
MetricQ3 FY2026Q3 FY2025YoYQ2 FY2026QoQ
Revenue$9.95B$10.37B-4.0%$10.60B-6.2%
EPS$2.21$2.77-20.2%$2.65-16.6%
Gross margin53.0%55.6%-260bps53.8%-80bps
Operating margin16.4%26.6%-1020bps21.8%-540bps

Guidance

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
RevenueQ3 FY2026$9.2B - $10.0B$9.947B+$0.347B above high end of guideBeat
Non-GAAP Diluted EPSQ3 FY2026$2.10 - $2.30$2.21in-line (within guidance range, near midpoint)Met
QCT RevenuesQ3 FY2026$7.9B - $8.5B$8.504B+$0.004B above high end of guideBeat
QTL RevenuesQ3 FY2026$1.15B - $1.35B$1.278B-$0.072B below high end but within range (mid-to-upper end)Beat
QCT Automotive YoY GrowthQ3 FY2026~50%61%+11 percentage points above guideBeat
QCT IoT YoY GrowthQ3 FY2026high single digits9%in-line (9% is upper-end of high single digits range)Beat

New guidance

MetricPeriodGuideYoY
Non-GAAP Diluted EPSQ4 FY2026$2.05 - $2.25—
GAAP Diluted EPSQ4 FY2026$1.22 - $1.42—
RevenueQ4 FY2026$9.7B - $10.5B-14% to -7% YoY
QCT RevenuesQ4 FY2026$8.4B - $9.0B—
QTL RevenuesQ4 FY2026$1.2B - $1.4B—
Non-handset Revenues Growth (FY2027 vs FY2026)FY 2027greater than 60%—

Segment performance

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
Handsets$5.086B$6.328B-19.6%
Automotive$1.588B$0.984B+61.4%
IoT$1.83B$1.681B+8.9%
QCT$8.504B$8.993B-5.4%
QTL (Licensing)$1.278B—-3.0%
QCT Automotive YoY Growth61%——
Combined QCT Automotive and IoT YoY Growth28%——
QCT Automotive Consecutive Quarters of Double-Digit YoY Growth23 quarters——

Profitability

Q3 FY2026
SegmentQ3 FY2026Q3 FY2025YoY
QCT EBT Margin26%——
QTL EBT Margin69%——
Non-GAAP Operating Margin27.9%——

Other KPIs

Q3 FY2026
SegmentQ3 FY2026
Return of Capital to Shareholders (Q3)$2.3 billion
Share Repurchases$1.4 billion (8M shares)

Management tone

No earnings call transcript was available for this quarter; the following observations are drawn from the press release, prepared-remarks quotes, and comparison to prior-quarter briefs.

Narrative arc: Diversification proof points (Q3 FY25) → Data centre pulled forward, Humane named (Q4 FY25) → Memory air pocket sized (Q1 FY26) → Handset bottom called, custom silicon ships in December (Q2 FY26) → FY29 non-handset target doubled (Q3 FY26).

The single most consequential disclosure this quarter is the doubling of the FY29 non-handset target to $40B from the November 2024 Investor Day framework. Two quarters ago management "reaffirmed on track to achieve fiscal 2029 revenue goals" without a revision; one quarter ago management signalled at Investor Day (June 24) that data centre and XR were understated. This quarter management formalised the revision — nearly doubling the target — and layered on a FY27 non-handset growth acceleration to >60% (from 24% in FY26). The sequence "reaffirm → hint at understatement → double the target" over three quarters is one of the more aggressive multi-year reframings in the sector this cycle. The credibility of the FY27 >60% acceleration is what the entire target now rests on — and the FY27 ramp is inseparable from the December-quarter data-centre shipment timeline.

The pricing-action language is new: "we are taking concrete actions to reflect the higher input costs in our product pricing and expect these actions to benefit our gross margins over time." One quarter ago management pre-conceded 100bps of QCT margin compression; this quarter margins landed exactly midpoint of the lowered band and the language shifts to future recovery via pricing. This is the first explicit acknowledgment that memory cost inflation is a persistent GM headwind, not a transient supply event — and that the response is price rather than absorbed cost. Whether OEMs accept the pricing is now a Q4/Q1 gating question.

The handset trough narrative resolved better than guided but the Q4 guide reframes what "recovery" means. Two quarters ago management called Q3 the explicit bottom and Q4 the return to sequential growth. Q3 handsets printed $0.2B above the trough guide (positive) and the Q4 revenue midpoint of $10.1B is +1.5% sequential — technically sequential growth, but against a Q4 FY25 comp of $11.27B this is –10% YoY. The "return to sequential growth" language survives; the "closing the air pocket" thesis does not. Investors modelling a V-shaped handset recovery need to reset to a U-shape extending into H1 FY27.

Automotive framing continues to compound rather than moderate. Three quarters ago automotive was "the largest generation-to-generation content increase in Qualcomm's history"; two quarters ago it was guided to exit FY26 above $6B annualized; this quarter Q3 alone delivered $1.59B — a $6.35B annualized run-rate cleared one quarter early. 23 consecutive quarters of double-digit growth is now the KPI management leads with. This is the one line where the multi-year story has consistently over-delivered against management's own framework.

Answers to last quarter's watch list

Does the Q3 handset trough actually print at ~$4.9B and resume sequential growth in Q4? Q3 handsets printed $5.09B — $0.19B above the ~$4.9B trough guide, so the trough was sized conservatively. The Q4 QCT guide of $8.4–9.0B implies handsets step up sequentially (roughly $5.5–6.0B). The air-pocket narrative resolves as management framed it, but the Q4 revenue guide of –14% to –7% YoY means "sequential growth" arrives against a much softer YoY comp than the language implied last quarter. Status: Resolved positively on the trough; the Q4 recovery is modest, not V-shaped.
The named hyperscaler customer behind December-quarter custom silicon shipments. The press release does not name a hyperscaler customer, and Qualcomm didn't disclose one at Investor Day either (based on the absence of any such reference in current materials). The December-quarter shipment commitment made last quarter remains on the calendar but the customer identity has now been withheld across three consecutive prints. Status: Continue monitoring — the December quarter is now the falsifiable gate.
Automotive exit FY26 run-rate above $6B annualized. Q3 automotive delivered $1.59B ($6.35B annualized), clearing the exit-FY26 anchor one quarter early. +61% YoY versus the ~50% guide is +11 percentage points of upside. This is the cleanest resolution in the print. Status: Resolved positively
QCT EBT margin holding the lowered 25–27% band with $7.9–8.5B of QCT revenue. QCT EBT printed at 26% — exactly midpoint. QCT revenue at $8.50B cleared the high end. Fixed-cost discipline held despite the lower revenue base. Status: Resolved positively
QTL EBT holding the 67–71% band. QTL EBT printed at 69% — mid-range. QTL revenue at $1.28B landed in the upper half of the $1.15–1.35B range. The low-tier deterioration flagged last quarter did not deepen. Status: Resolved positively
Investor Day positioning on data centre, 6G, robotics, and the FY29 target. The FY29 non-handset target was nearly doubled to $40B in this press release, and management set a FY27 non-handset growth acceleration to >60% (from 24% in FY26). This is the formal revision management telegraphed. Data-centre customer identity and unit economics remain undisclosed. Status: Resolved positively on the target revision; underlying data-centre disclosure remains open.

What to watch into next quarter

December-quarter data-centre revenue and named hyperscaler customer. This is the single most important disclosure into the Q4 print. Management committed to initial shipments and operating-margin accretion two quarters ago. If Q4 numbers do not show a data-centre revenue line — or a named customer is still withheld — the FY27 non-handset >60% growth target loses its mechanical bridge.

Q4 handset revenue and the shape of recovery. The Q4 QCT guide implies handsets step to roughly $5.5–6.0B. A print at the low end or below re-opens whether the memory constraint is worsening rather than normalising into FY27. A print near the top would validate the "sequential growth returning" language.

Gross margin trajectory and the pricing-action pass-through. Q3 GM of 53.0% is 170bps below Q2. Management's language on "taking concrete actions to reflect higher input costs in our product pricing" is a commitment; watch whether Q4 GM stabilises or steps down further. Anything below 53% would signal OEMs are not absorbing the price actions.

Automotive Q4 sequential growth off the $1.59B Q3 base. Automotive has beaten every quarterly framework for six consecutive quarters. A Q4 print below $1.6B would be the first sign the compounding is normalising. A print above $1.7B extends the trajectory into FY27 well ahead of the FY29 anchor.

FY27 non-handset >60% growth build. With FY26 non-handset at 24% and FY27 guided to >60%, the acceleration is dependent on both automotive sustaining and data centre becoming a material line. Investors should now be modelling FY27 non-handset revenue in the ~$28B range to reconcile to the $40B FY29 target — any commentary on the Q4 call that softens the FY27 framing directly threatens the FY29 number.

QTL Q4 trajectory and any Huawei licensing update. QTL has stabilised in the mid-$1.2B range for two quarters. The Q4 guide of $1.2–1.4B is a wide band. A print below $1.2B would confirm structural deterioration; Huawei licensing has now been "no update" for six consecutive quarters.

Sources

  1. Qualcomm Q3 FY2026 press release (SEC filing): https://www.sec.gov/Archives/edgar/data/804328/000080432826000085/qcom062826erex991.htm
  2. Tapebrief Q2 FY2026 brief (prior watch list, guide baselines, handset trough framing)
  3. Tapebrief Q1 FY2026 brief (memory air pocket sizing and FY26 handset trajectory)
  4. Tapebrief Q4 FY2025 brief (Q4 FY25 baseline for YoY guidance math; November 2024 Investor Day framework)
  5. Tapebrief Q3 FY2025 brief (original diversification and data-centre narrative anchors)

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