Qualcomm (QCOM) delivered a strong performance in the third quarter of fiscal 2025, showcasing solid growth, effective diversification, and disciplined execution across its core and emerging businesses. Total revenues reached $10.4 billion, representing a 10% year-over-year increase, driven by broad-based strength across its semiconductor and licensing segments. GAAP net income climbed 25% to $2.67 billion, while non-GAAP net income rose 15% to $3.04 billion. Diluted earnings per share saw robust growth on both a GAAP (up 29% to $2.43) and non-GAAP (up 19% to $2.77) basis. Gross margin held steady at 56%, reflecting favorable product mix and pricing dynamics.

The QCT (semiconductor) segment continued to outperform, generating $8.99 billion in revenue, a 11% increase year-over-year, with EBT rising 22% to $2.67 billion and margin expanding to 30%. Notably, Automotive revenue hit a record $984 million, up 21%, bolstered by new vehicle launches featuring Snapdragon digital cockpit platforms. IoT revenues surged 24% to $1.68 billion, reflecting strong momentum across industrial, edge networking, and consumer applications. Handset revenue also grew 7% to $6.33 billion, supported by a favorable mix of premium-tier Snapdragon devices. Collectively, the Automotive and IoT segments grew 23% year-over-year, underscoring Qualcomm’s progress in diversifying beyond mobile.

QTL (licensing) revenue improved 4% to $1.32 billion, with EBT up 5% to $942 million and margins slightly higher at 71%. While the expiration of the Huawei license weighed on results, Qualcomm offset this with new long-term agreements with other key Chinese OEMs and a resolution with Transsion, eliminating related litigation.

Strategic investments under QSI also contributed, with EBT of $149 million, up from $14 million a year ago, aided by gains in portfolio holdings. On the capital allocation front, Qualcomm returned $3.8 billion to shareholders, including $967 million in dividends and $2.8 billion in share repurchases, and raised its full-year capital return target to 100% of free cash flow.

CEO Cristiano Amon highlighted Qualcomm’s strength in edge AI, low-power computing, and connectivity as foundational to its leadership across automotive, IoT, and premium Android markets. The company reported 30 new automotive design wins, continued traction in AI-enabled IoT through acquisitions like Edge Impulse and FocusAI, and strong PC momentum with 85+ Snapdragon X designs and 750+ native applications in development.

Looking ahead to Q4 FY25, Qualcomm expects revenue between $10.3 billion and $11.1 billion, with non-GAAP EPS forecasted between $2.75 and $2.95. The guidance reflects stable end-market demand, though management acknowledged ongoing uncertainties, including potential impacts from Apple’s modem insourcing, U.S.-China trade tensions, and regulatory and legal proceedings. The flat gross margin and a modest decline over the first nine months reflect a shift in revenue mix, particularly the relative reduction in higher-margin licensing income.

Despite external headwinds, Qualcomm’s consistent performance, record-setting non-handset revenues, and strategic focus on AI, edge computing, and next-gen connectivity position it well for sustained growth. With $5.45 billion in cash, $54.86 billion in assets, and proactive balance sheet management—including $1.5 billion in new debt issuance and $1.4 billion in repayments—the company remains financially strong and growth-oriented heading into the final quarter of fiscal 2025.