Qualcomm has announced its financial results for the second quarter of fiscal year 2025, reporting revenue of $10.98bn, a 17% increase year-over-year, and adjusted earnings per share of $2.85. These figures exceeded analysts’ expectations for the period. However, the company’s revenue and earnings forecast for the third quarter came in below market projections, prompting a decline in its share price in after-hours trading.
The company provided revenue guidance for the third quarter in the range of $9.9bn to $10.7bn, setting the midpoint at $10.3bn. This was slightly below the average analyst estimate of $10.35bn. Qualcomm expects third-quarter adjusted earnings per share to range between $2.6 and $2.8, compared to consensus estimates of approximately $2.67.
Macroeconomic and geopolitical factors affecting outlook
Qualcomm attributed the softer outlook to continued macroeconomic pressures and uncertainties surrounding US-China trade dynamics. While the company’s chips are not currently subject to new tariffs, concerns remain regarding broader policy implications and their potential to affect global demand. The earnings announcement came as US officials consider expanding restrictions on certain technologies shipped to China.
During the second quarter, Qualcomm’s automotive and Internet of Things (IoT) business segments recorded notable year-on-year growth. Automotive revenue rose by 59%, while IoT sales advanced 27%. Together, these two units contributed approximately $2.54bn in revenue, underlining the company’s efforts to expand beyond smartphone components.
The Mobile Handset segment, Qualcomm’s core business, still delivered the majority of revenue, at $6.93bn. However, investor concerns have been rising due to Apple’s increasing shift towards internally developed modem chips. Apple contributed 27% of Qualcomm’s revenue in the recent quarter, and any reduction in orders could significantly impact future financial performance.
“As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control – our leading technology roadmap, best-in-class product portfolio, strong customer relationships and operational efficiencies,” said Qualcomm president and CEO Cristiano Amon. “Our top priorities remain executing our diversification strategy and continuing to invest in areas that drive long-term value.”
In line with its longer-term strategy, Qualcomm recently introduced the Snapdragon X85 5G Modem-RF System. The company expects this product to support its next-generation 5G platforms and capitalise on demand from enterprise, automotive, and industrial applications.
Despite the ongoing diversification and product developments, Qualcomm’s share price dropped by 6% following the third-quarter guidance, as per a report in Reuters. Over the past 12 months, the stock has fallen by approximately 17%, reflecting investor caution regarding both macroeconomic headwinds and client-specific risks.
Qualcomm continues to invest in AI and connectivity technologies, aiming to reinforce its market position across multiple sectors. In addition to chip development, the company remains focused on licensing revenue from its intellectual property portfolio, which accounted for approximately $1.32bn during the second quarter.
Read more: Trump set to announce new tariff rates on imported semiconductors
