Qualcomm shatters records with explosive Q4 growth, automotive revenue soars

Qualcomm has ended its fiscal year 2024 on a high note, posting record earnings and revenue growth across key sectors, with a particular surge in its automotive and IoT divisions. The San Diego-based technology company, widely known for its Snapdragon-branded products, reported a significant jump in profitability for its fourth quarter, marked by a nearly 100% surge in net income compared to the same period last year.

Record-Breaking Year Despite Market Challenges

Qualcomm announced a total revenue of $10.24 billion for Q4 fiscal 2024, an impressive 19% rise from $8.63 billion in the same quarter last year. The company also reported earnings per share (EPS) of $2.59, nearly doubling the $1.32 recorded in Q4 of fiscal 2023. The fiscal 2024 GAAP earnings per share stood at $8.97, with a non-GAAP EPS of $10.22. Qualcomm President and CEO Cristiano Amon attributed the solid performance to a mix of robust demand for Snapdragon products and successful diversification across key growth sectors.

Amon stated that the company has successfully concluded the fiscal year with a 30% year-over-year growth in EPS, driven by strategic expansion efforts and recent product launches at key industry events, including Snapdragon Summit and Embedded World. He noted that Qualcomm’s leadership in the technology sector is further solidified by its wide-ranging innovations in handsets, PCs, automotive, and industrial IoT applications.

Automotive Division Sees Explosive Growth

Among the most promising segments of Qualcomm’s operations is its automotive business, which delivered its fifth consecutive record quarterly revenue. In Q4 fiscal 2024, the automotive revenue soared by 68% to reach $899 million, compared to $535 million during the same period last year. This growth reflects increased demand for Qualcomm’s chips and integrated platforms as car manufacturers increasingly pivot towards advanced driver-assistance systems (ADAS) and the integration of cutting-edge connectivity solutions.

Additionally, the QCT (Qualcomm CDMA Technologies) segment, which includes revenues from handsets, automotive, and IoT sectors, experienced robust performance. Handset revenue grew by 12% in the quarter to $6.1 billion, benefiting from Qualcomm’s sustained push into the high-end smartphone market. Meanwhile, the IoT division saw a 22% increase in revenue year-over-year, contributing $1.68 billion for Q4.

Fiscal Year 2024 Overview

For the full fiscal year, Qualcomm’s revenues stood at $39.0 billion, a 9% increase from fiscal 2023. Operating income for the year was $10.07 billion, and net income surged by 40% to reach $10.14 billion. The company’s significant earnings were partly driven by its licensing business, Qualcomm Technology Licensing (QTL), which generated $5.57 billion in revenue, an increase of 5% year-over-year.

Earnings before taxes (EBT) for the fiscal year also painted a positive picture, jumping to $10.34 billion, marking a 39% growth compared to the previous year. Qualcomm’s strategy of aggressive share repurchases continued in 2024, with the company returning $7.81 billion to shareholders through stock buybacks and dividends. The Board of Directors has further approved a new $15 billion stock repurchase authorization, highlighting Qualcomm’s commitment to shareholder returns.

Mixed Signals from IoT Segment

Despite overall positive results, Qualcomm’s Internet of Things (IoT) segment saw mixed performance. While Q4 revenues from IoT grew by 22%, the fiscal year results indicated a decline of 9% compared to the previous year. Qualcomm’s management suggested that challenges in some key markets and reduced discretionary spending were the primary factors for this slowdown.

Looking Forward: Positive Guidance for Q1 Fiscal 2025

Looking ahead, Qualcomm has provided optimistic guidance for the first quarter of fiscal 2025. The company expects revenues between $10.5 billion and $11.3 billion, with QCT revenues projected to be in the range of $9.0 billion to $9.6 billion. The expected GAAP EPS is forecast to be between $2.39 and $2.59, while non-GAAP EPS is projected to reach between $2.85 and $3.05.

The company’s strategic expansion and growth initiatives, including further development in the automotive and IoT sectors, are expected to drive continued success. Qualcomm’s leadership believes that its investment in next-generation digital technologies and its Snapdragon product line will continue to set the company apart in the highly competitive semiconductor market.

Expert View: Qualcomm’s Strategic Position

Financial analysts have noted Qualcomm’s strong positioning in the semiconductor sector, particularly pointing out the company’s diversification efforts as a major strength. Qualcomm’s focus on automotive and IoT markets has started to yield results, providing a cushion against potential fluctuations in the smartphone market.

According to market analysts, the new $15 billion share repurchase program is an indication of Qualcomm’s financial health and its confidence in continued cash flow growth. “Qualcomm’s strong revenue from automotive, coupled with a proactive return-to-shareholder strategy, makes it a stable long-term pick,” said an analyst.