Wireless chipmaker Qualcomm (NASDAQ:QCOM) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 10.3% year on year to $10.37 billion. The company expects next quarter’s revenue to be around $10.7 billion, coming in 0.8% above analysts’ estimates. Its non-GAAP profit of $2.77 per share was 2.1% above analysts’ consensus estimates.
Is now the time to buy Qualcomm? Find out in our full research report.
-
Revenue: $10.37 billion vs analyst estimates of $10.35 billion (10.3% year-on-year growth, in line)
-
Adjusted EPS: $2.77 vs analyst estimates of $2.71 (2.1% beat)
-
Adjusted Operating Income: $3.54 billion vs analyst estimates of $3.47 billion (34.2% margin, 2.1% beat)
-
Revenue Guidance for Q3 CY2025 is $10.7 billion at the midpoint, above analyst estimates of $10.61 billion
-
Adjusted EPS guidance for Q3 CY2025 is $2.85 at the midpoint, above analyst estimates of $2.82
-
Operating Margin: 26.6%, up from 23.6% in the same quarter last year
-
Free Cash Flow Margin: 24.9%, down from 28.4% in the same quarter last year
-
Inventory Days Outstanding: 125, down from 144 in the previous quarter
-
Market Capitalization: $174.8 billion
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Qualcomm’s 16.6% annualized revenue growth over the last five years was excellent. Its growth beat the average semiconductor company and shows its offerings resonate with customers, a helpful starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. Qualcomm’s annualized revenue growth of 5.7% over the last two years is below its five-year trend, but we still think the results were respectable.
This quarter, Qualcomm’s year-on-year revenue growth was 10.3%, and its $10.37 billion of revenue was in line with Wall Street’s estimates. Although the company met estimates, this was its third consecutive quarter of decelerating growth, potentially indicating a coming cyclical downturn. Company management is currently guiding for a 4.5% year-on-year increase in sales next quarter.
