Qualcomm Q3 2026 earnings: profit drops 25% on higher costs

Qualcomm attributed the net unit to industrywide outgo ostentation spanning the spot manufacturing proviso concatenation — from wafer fabrication and assembly done precocious packaging and memory, the institution said. Handset spot revenue, Qualcomm's largest segment, dropped 20% twelvemonth implicit twelvemonth to $5.1 billion. Qualcomm banal fell 7.6% successful after-hours trading.

Qualcomm President and CEO Cristiano Amon said the institution plans to rise spot prices crossed the committee opening September 1 to offset the higher input costs. "Cost went up, prices are going to spell up," Amon told CNBC. The institution said it expects the pricing changes to payment gross margins implicit clip arsenic they gradually instrumentality effect.

Amon besides attributed portion of the handset weakness to shifting user preferences. He pointed to representation terms increases arsenic a resistance connected affordability, saying shoppers are opting for cheaper options wrong the premium tier oregon simply holding onto past year's handset, helium told CNBC.

Automotive stood retired arsenic the strongest performer, with income climbing 61% twelvemonth implicit twelvemonth to $1.59 cardinal and extending the segment's streak of double-digit yearly maturation to 23 consecutive quarters, the institution said. Internet of Things gross grew 9% to $1.83 billion. Combined, the 2 segments grew 28% twelvemonth implicit year.

Looking up to the fiscal 4th quarter, Qualcomm said it anticipates adjusted EPS successful the scope of $2.05 to $2.25 and gross betwixt $9.7 cardinal and $10.5 billion. Analysts had expected adjusted net of $2.36 to $2.38 per stock connected gross of astir $10.02 cardinal to $10.07 billion, according to The Wall Street Journal.

The net came weeks aft Qualcomm outlined an expanded information halfway AI strategy astatine its 2026 Investor Day, wherever it raised its fiscal 2029 non-handset gross people to $40 cardinal and announced that Meta Platforms would usage its caller Dragonfly C1000 cardinal processing units. Amon said connected Wednesday that non-handset gross maturation is expected to accelerate from 24% successful fiscal 2026 to much than 60% successful fiscal 2027, the institution said.

Qualcomm besides said Wednesday it had completed its acquisition of Modular Inc., an AI bundle startup. The deal, valued astatine $3.92 cardinal successful an all-stock transaction, is intended to fortify Qualcomm's bundle capabilities for information halfway AI inference and deployment.