---
title: "Qualcomm: Has entered the $700 PC market (FY24Q4 interpretation meeting minutes)"
description: "Qualcomm (QCOM.O) released its fiscal year 2024 Q4 report (ending September 2024) after U.S. stock market hours on November 7, 2024, Beijing time. The key points are as follows: Below is the summary o"
type: "topic"
locale: "en"
url: "https://longbridge.com/en/topics/25170661.md"
published_at: "2024-11-07T07:15:27.000Z"
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# Qualcomm: Has entered the $700 PC market (FY24Q4 interpretation meeting minutes)

**Qualcomm (QCOM.O) released its Q4 fiscal year 2024 report (ending September 2024) after U.S. stock market hours on November 7, 2024, Beijing time. Key points are as follows:**

**Below is the summary of Qualcomm's Q4 fiscal year 2024 earnings call. For an interpretation of the earnings report, please visit** [**AI PC shows "signs," is Qualcomm's second spring coming soon?**](https://longportapp.com/zh-CN/topics/25164431)

**1.** $Qualcomm(QCOM.US) **Earnings report core information review:**

![IMG_256](https://pub.pbkrs.com/uploads/2024/3d594e44cf1afa297b71c72fac3dca73?x-oss-process=style/lg)

**2\. Detailed content of Qualcomm's earnings call**

**2.1 Core information presented by executives:**

Business progress

**Overall revenue:** Q4 non-GAAP revenue was **$10.2 billion**, non-GAAP earnings per share were **$2.69**, exceeding expectations. Advertising business revenue was $8.7 billion, and licensing business revenue was $1.5 billion.

**AI business:** Transitioning to support AI-driven edge computing with major industry leaders

Collaborated with Meta on **Llama 3.2**, including multimodal models with 11 billion, 3 billion, and 1 billion parameters on Snapdragon-powered devices.

Partnered with Amazon to create **cloud-to-edge solutions**, allowing developers to customize models on SageMaker and deploy them to Qualcomm's Snapdragon platform via AI Hub, with the number of models on AI Hub increasing by over 50% since last quarter.

**Mobile business:** Launched the world's fastest mobile processor **Snapdragon 8 Elite**

Utilizes the second-generation custom Oryon CPU, with a **30%** performance improvement and **57%** reduction in power consumption compared to the first generation CPU.

Introduced a new architecture Hexagon NPU, with performance and energy efficiency **both improved by 45%** compared to Snapdragon 8 Gen 3.

Can dynamically manage AI workloads and process multimodal GenAI in real-time.

Successfully launched with Xiaomi, Honor, Oppo, and Vivo, with related products also set to launch from Samsung, ASUS, and others.

**PC side:** Added the **Snapdragon X Plus 8** core computing platformMaintaining a leading position in performance and battery life, enabling OEMs to offer lighter, more affordable, and transformative device-side AI **Copilot+ PC**.

OEM manufacturers including Dell, HP, Lenovo, Samsung, Acer, and ASUS will adopt devices based on the X Plus 8-core platform.

The Snapdragon X series laptops will be the first to receive the new Copilot+ PC features.

**XR Business:**

Collaborating with Meta to drive the future of spatial computing, Quest 3S equipped with Snapdragon XR2 Gen 2 offers a more affordable mixed reality headset;

Ray-Ban Meta glasses powered by Snapdragon AR1 Gen 1 introduce new AI features;

Next-generation Spectacles powered by **dual Snapdragon processors** aimed at creators exploring advanced AR experiences.

**IoT:**

Launching Qualcomm IQ series industrial-grade solutions to meet the demands of next-generation industrial edge applications, featuring up to 100 tops of device-side AI performance and security features;

Introducing Qualcomm IoT solution framework to help enterprises build end-to-end applications, covering chip recommendations, software support, reference designs, and more.

**Edge Networking Business:**

Launching the first commercial platform **Networking Pro A7 Elite** that fundamentally transforms enterprise and home network connectivity through edge AI.

Revolutionizing enterprise and home network connectivity with edge AI, integrating multiple connectivity technologies and AI co-processors, providing opportunities for operators and enterprises to deploy innovative applications across various fields.

Enhancing privacy protection and personalized services through understanding the environment and real-time responses to achieve personalized services.

**Automotive Business:**

Releasing **Snapdragon Cockpit Elite** and **Snapdragon Ride Elite** platforms.

Both utilize optimized custom Oryon CPUs and high-performance Hexagon NPUs.

Supporting **advanced digital experiences** and **end-to-end ADAS systems** respectively.

Leading core manufacturers will adopt these platforms for future software-defined vehicles, including Auto and Mercedes-Benz.

Financial Performance

**Revenue Side**

**Total Revenue:** Non-GAAP revenue for the fourth quarter was **$10.2 billion**, with a non-GAAP earnings per share of **$2.69**, exceeding expectations. QCT business revenue was $8.7 billion, and **QTL** business revenue was $1.5 billion.

**QTL Revenue:** Due to a slight increase in mobile phone sales this quarter, QTL revenue was **$1.5 billion**, with an EBITDA profit margin of **74%**, at the high end of guidance

**QCT Revenue:** QCT revenue was **$8.7 billion**, with an EBITDA margin of **28%**, and revenue in the Internet of Things and automotive sectors was at the high end of guidance.

Mobile Business: QCT mobile revenue was **$6.1 billion**, in line with expectations.

Internet of Things: Thanks to the launch of new products and the continued normalization of channel inventory, QCT IoT revenue was **$1.7 billion**, a **24%** quarter-over-quarter increase.

Automotive Business: Due to the continued increase in new vehicle release content, QCT automotive revenue was **$899 million**, a **68%** year-over-year increase and an **11%** quarter-over-quarter increase.

**Returned Dividends:** Returned dividends totaled **$2.2 billion**, including **$1.3 billion in stock buybacks and $947 million in dividends**.

**Fiscal Year 2024**

**Revenue Side:** Achieved revenue of **$39 billion**, with a non-GAAP earnings per share of **$10.22**, a **21%** year-over-year increase.

**Expense Side:** Non-GAAP operating expenses were basically flat compared to fiscal year 2023.

**QCT:**

Mobile Business: Benefiting from the technological leadership of high-end Snapdragon products and the normalization of channel inventory, Android business revenue grew by **over 20%** year-over-year.

Internet of Things: In line with expectations at the beginning of the fiscal year, QCT IoT revenue achieved **continuous growth** in each quarter.

Automotive Business: QCT automotive business revenue grew **55%** year-over-year, expanding its leadership in automotive computing and connectivity platforms.

**Free Cash Flow:** Generated a record **$11.2 billion** in free cash flow for fiscal year 2024.

**Cash and Securities:** Cash and securities amounted to **$13.3 billion**, with a strong balance sheet performance.

**Guidance for Q1 Fiscal Year 2025**

**Mobile Sales:** Global sales of 3G, 4G, and 5G mobile phones are expected to grow at a low to mid-single-digit percentage year-over-year in **2024**.

**Revenue Side:** Forecast Q1 fiscal year 2025 revenue to be between **$10.5 billion and $11.3 billion**, with non-GAAP earnings per share of **$2.85 to $3.05**.

**QTL:** Expected revenue is between **$1.45 billion and $1.65 billion**, with an EBITDA margin of **73% to 77%**, reflecting the normal seasonal fluctuations adjusted for the mobile division in the fourth fiscal quarter.

**QCT:** Expected revenue is between **$9 billion and $9.6 billion**, with an EBITDA margin of **29% to 31%**.

Mobile Business: QCT mobile revenue is expected to grow at a mid-single-digit percentage year-over-year. This forecast is based on over **40% quarter-over-quarter revenue growth** from Chinese OEMs, as well as the accelerated launch of flagship Android phones supported by the recently launched Snapdragon 8 Elite platformInternet of Things: QCT's IoT revenue is expected to grow by **more than 20% year-on-year** with the growth of consumers, industry, and the network sector.

Automotive Business: QCT's automotive revenue is expected to **increase by 50% year-on-year**, remaining basically flat quarter-on-quarter.

**Expense Side: Non-GAAP operating expenses are expected to be approximately** $2.2 billion.

**2.2 Q&A Analyst**

**Q: Can you discuss the growth of the automotive business? How does the market environment affect it, and what is the visibility of this business trajectory?**

A: The revenue growth in the automotive business is more related to **the launch of new models adopting Qualcomm technology and changes in market share, with minimal impact from market fluctuations**. As we gain more share and launch new models, both quarter-on-quarter and year-on-year, **the financial data continues to show good growth momentum**.

**Q: Regarding the ARM dispute, can you provide some details? What impact does this have on the company?**

A: From our perspective, **the company has extensive and comprehensive custom design CPU licensing rights**, and we are confident that these rights will be confirmed. The relevant trial is scheduled for December, at which point we will respond to ARM's claims.

**Q: The company's IoT business declined year-on-year in the first three quarters, but accelerated growth is expected in the fourth quarter and the first quarter. Can you analyze the reasons for this growth in detail, including the recovery of traditional IoT business, contributions from the PC market, and comparisons between new and old products?**

A: The growth is mainly attributed to the consumer, industrial, and network sectors. The launch of **new products in the PC, XR, and other fields in the fourth quarter drove performance growth**, while **the normalization of channel inventory** also played a role, laying a good foundation for the overall business development throughout the year.

**Q: Considering the severe macroeconomic situation, the company's revenue is expected to grow by about 10% in the first quarter. How sustainable is this growth, especially considering the accelerated release of the Android system?**

A: We are satisfied with the current business development trajectory, including the fourth quarter performance and first quarter guidance. **Currently, we have not provided guidance beyond the first quarter**, but at the upcoming Investor Day, we will discuss our diversification strategy, growth situation, and provide a financial framework, addressing these issues.

**Q: The gross margin of the chipset is expected to decline by 100-150 basis points in the first quarter. What are the reasons for this? Is it due to increased wafer costs, PSM, or changes in product mix? Additionally, what is the reasonable expectation framework for future chip gross margins?**

A: In the fourth quarter, our **gross margin guidance was low, but the actual results were slightly better than expected** due to a **strong product mix**. The first quarter guidance is basically consistent with the fourth quarter, and we believe this is a reasonable way to model future business. From the perspective of product mix, we **are optimistic about the situation in various businesses and the mobile phone sector**, and the product mix will continue to impact future gross margins.

**Q: What is the scale of the PC business in the fourth quarter? Given the seasonal decline in IoT business in the first quarter, how do the PC business and other related businesses contribute in the early stages of new product launches?**\*\*

A: We are excited about the PC business roadmap, and we **have become the performance leader in Windows devices**. In the fourth quarter, we **launched the Snapdragon X Plus 8-core chip, enabling us to enter the $700 price range PC market**, achieving cross-tier performance leadership without sacrificing NPU performance, with initial positive feedback. We will discuss its appeal in OEMs and long-term goals in detail on Investor Day.

Since the product launch in May, the **number of platforms in our design has increased from about 20 to 58, nearly tripling**, indicating that our platforms resonate with the market and have gained OEM attention.

**Q: The growth of the automotive business is mainly driven by the Chinese market. What is the company's exposure in the Chinese market? How are the relevant metrics for infotainment and ADAS? What is the market participation of Snapdragon Ride Elite in infotainment and ADAS integration? What are the expected growth prospects for the next few years?**

A: Our product portfolio is widely designed globally and is diverse, **not relying on specific regions**. We will provide relevant disclosures in the future.

We have designs with almost every OEM in every region. The **AI performance improvements of Snapdragon Ride Elite and Cockpit Elite are significant, and the design appeal is high**. Currently, the ADAS business has made some progress, and **it will accelerate growth in the coming years, becoming a driver of revenue growth**.

**Q: Excluding the top two customers, the mobile business has grown by about 50% year-on-year. Can you provide relevant metrics on unit numbers and average selling price (ASP)? Considering last year's inventory dynamics and the sustainability of growth in 2025, especially what are the incremental metrics for the Chinese market excluding the top two customers?**

A: From the perspective of total mobile market sales, growth is expected to be in the low to mid-single digits in 2024. For us, the main growth factors are enhanced chipset capabilities and increased products, such as the release of the X Elite - 8 Elite chip, **which benefits ASP after the solutions are adopted**. Additionally, the share of high-end products in the mobile market has increased from 21% to 30%, improving the product tier structure. Meanwhile, Huawei product revenue is not included in this quarter's guidance, while it was included in the same period last year, indicating that we have overcome related impacts and achieved growth.

**Q: After the rebound or normalization of the high-end market in the first half of the year, is the current growth in the mobile business a follow-up from the mid-range market or a continuation of the trend from the first half of the year? Additionally, what is the reason for the accelerated product launches in the Chinese market, is it market improvement or timing issues?**

A: We have a clear advantage in the high-end market, and after the release of the new flagship chipset, **OEMs are actively leveraging it and accelerating product launches, driving business growth, with little relation to other tiers.**

**Q: The company's authorized business has seen a slight quarter-on-quarter increase. Is this due to the lack of an additional week?**

A: Yes, this is normal, mainly due to the **lack of an additional week** and the usual quarter-on-quarter growth.

**Q: Other companies report the opposite situation from Qualcomm, such as a weak migration to the low-end in the Chinese market and Apple's performance falling short of expectations. How do you explain these differences? Is the company's growth due to customer inventory buildup or new product launches, and what is the demand and composition of the global terminal market?**

A: We are satisfied with the company's performance. Here are some data points to help understand: First, **it is expected that the revenue from Chinese OEM smartphones will grow over 40% quarter-on-quarter in the first quarter of fiscal year 2025**; second, the Android revenue for fiscal year 2024 is expected to **grow 20% year-on-year (including the loss of Huawei revenue)**; third, compared to the closest competitors in the Android space, our **high-end revenue exceeds theirs by more than 5 times**. These indicate that our product roadmap is strong, the high-end market is expanding, inventory dynamics are improving, product launches are driving customer growth, and market structure is optimizing.

**Q: According to the guidance, the growth of the Chinese Android business exceeding 40% implies a double-digit decline for the other two major customers. What is the reason for this? Is it due to tariffs or election results causing customers to pull demand forward?**

A: Not at all, **this is not due to tariffs or election-related reasons causing a pull-forward in demand**. This is **based on the timing of chipset procurement related to customer release rhythms and demand**, which is not entirely related to sales performance, and our **market share among OEMs remains stable, not a share issue.**

**Q: The company's IoT business has seen good year-on-year growth, while other companies face challenges in this area, especially in the consumer and industrial sectors. Are we seeing demand growth in the Chinese market for consumers? Is there inventory adjustment in the industrial sector? What is the timing for recovery, and what are the related thoughts?**

A: In the consumer sector, **new product launches (such as XR and NPC) have driven performance**. In the industrial sector, we have **launched a new product portfolio in embedded systems**, including chipsets and software, to meet the demand for AI application cases in the industrial sector. The market is at a turning point, and demand for related solutions is beginning to emerge; we will discuss this in detail during the investor day.

**Q: The company's 10-K filing mentions that a major customer may move towards internalization in the coming quarters. What is the impact of this on the overall QCT profit margin?**

A: **The situation has not changed**; we have a **three-year agreement with this customer (2024 - 2026 smartphone releases)**, and the framework remains consistent with before, planning for a share reduction to 20% upon the agreement's conclusion in 2026. If the situation improves, it would be beneficial.

**Risk disclosure and statement of this article:** [**Dolphin Investment Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

### Related Stocks

- [QCOM.US - Qualcomm](https://longbridge.com/en/quote/QCOM.US.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
