QCOM · QUALCOMM Incorporated

QUALCOMM's second quarter fiscal 2026 results reflect a mixed performance. GAAP net income surged 162% year-over-year to $7.37 billion, but this was almost entirely due to a $5.7 billion income tax benefit from the release of a valuation allowance on deferred tax assets. On an operating basis, Non-GAAP net income fell 10% to $2.84 billion, and Non-GAAP EPS declined 7% to $2.65, as revenues slipped 3% to $10.6 billion. The revenue decline was driven by a 13% drop in QCT handset revenues to $6.02 billion, partially offset by strong growth in automotive (up 38% to a record $1.33 billion) and IoT (up 9% to $1.73 billion). Combined QCT automotive and IoT revenues grew 20% year-over-year, underscoring the company's diversification progress. QTL licensing revenues rose 5% to $1.38 billion. Management highlighted solid execution amid a challenging memory environment and expressed optimism about AI-driven opportunities and a new data center custom silicon engagement with a leading hyperscaler, on track for initial shipments later this calendar year. The company returned $3.7 billion to stockholders in the quarter, including $2.8 billion in share repurchases, and announced a new $20 billion buyback authorization. For the third quarter of fiscal 2026, QUALCOMM guided revenues of $9.2 billion to $10.0 billion and Non-GAAP EPS of $2.10 to $2.30, below the consensus estimate of $2.81, reflecting the impact of memory supply constraints and related pricing on handset OEM demand. The company expects QCT handset revenues from Chinese customers to bottom in Q3 and return to sequential growth in the following quarter.