Qualcomm (QCOM) posted a strong Q2 2025, delivering solid top- and bottom-line growth while reinforcing its leadership across handsets, automotive, and IoT. Total revenues rose 17% year-over-year to $11.0 billion, with net income climbing 21% to $2.8 billion, driven by broad-based demand and consistent execution. Earnings before taxes (EBT) improved to $3.1 billion, reflecting strength across Qualcomm’s core business lines. On a non-GAAP basis, revenue reached $10.8 billion, with EPS of $2.85, both surpassing the midpoint of prior guidance. The company returned $2.7 billion to shareholders through dividends and share buybacks, underscoring its commitment to capital discipline.

The QCT segment was a standout, generating $9.5 billion in revenue, an 18% increase from the prior year. Handsets grew 12% to $6.9 billion, propelled by increased premium-tier Android shipments and stronger ASPs. Automotive revenue surged 59% to $959 million, benefiting from new design wins and richer content per vehicle. Meanwhile, IoT revenue expanded 27% to $1.6 billion, led by rising demand for industrial, edge, and AI-driven connectivity. QCT delivered EBT of $2.86 billion with a 30% margin, up one percentage point year-over-year, reflecting efficient execution and high-value design traction.

In QTL, revenue held steady at $1.3 billion, with EBT of $929 million and a 70% margin, slightly down from the prior year. The unit signed new licensing agreements, including long-term deals with major Chinese OEMs and a 4G/5G license with Transsion, though Huawei revenue dropped out as its license expired. The QSI segment reported EBT of $10 million, down sharply from last year due to lower gains from equity investments.

Operationally, SG&A remained flat, while interest expense declined modestly to $163 million. However, investment income dropped to $148 million, reflecting reduced market gains.

Qualcomm’s leadership in on-device AI was a focal point in the quarter. The company rolled out its X85 5G platform, powering next-gen AI applications across handsets, automotive, and IoT. Management noted that 90 flagship Snapdragon 8 Elite phones had shipped or been announced, and that premium-tier smartphone demand in China was expanding, aided by government support. In PCs, Snapdragon systems captured a 9% share of Windows laptops over $600, with more than 85 active designs and a robust app ecosystem taking shape. Automotive momentum continued with 30 new design wins, as Qualcomm reiterated its $8 billion revenue target for 2029. IoT also gained strategic traction with industrial AI partnerships (e.g., Palantir) and acquisitions like Edge Impulse and FocusAI, reinforcing its edge computing ambitions.

Looking ahead, Qualcomm expects Q3 revenues between $9.9 billion and $10.7 billion, with non-GAAP EPS of $2.60 to $2.80. QCT is forecast to grow across all verticals, with handsets up ~10%, IoT ~15%, and automotive ~20%. Normal seasonal trends are expected across product lines. While Apple-related share is set to decline to ~70% in upcoming launches, Qualcomm remains well positioned globally. Management also reiterated its plan to return 100% of free cash flow to shareholders in fiscal 2025, signaling strong confidence in cash generation and strategic progress.

Risks remain in the form of evolving tariffs, regulatory scrutiny, and licensing uncertainties, particularly around Huawei. However, Qualcomm continues to see strength in premium-tier Chinese demand and maintains stable relationships with major partners like Samsung. Internal controls showed no material changes in the quarter.

In summary, Qualcomm’s Q2 2025 results highlight its successful diversification beyond handsets, growing traction in automotive and IoT, and leadership in on-device AI and premium connectivity. With a clear long-term strategy and strong execution, the company remains well-positioned for sustained performance despite macroeconomic and competitive challenges.