“We are developing a differentiated set of product lines, including connectivity in fiscal '26, custom silicon and AI accelerators in fiscal '27 and server-class CPUs in fiscal '28.”

In context

“Cristiano Amon (President and Chief Executive Officer): Thank you, Brett, and good afternoon, everyone. Thanks for joining us today. In fiscal Q3, we delivered revenues of $9.9 billion, coming in at the high end of our guidance and non-GAAP earnings per share of $2.21. QCT revenues were $8.5 billion, with another quarter of record automotive revenues as well as growth in IoT. Licensing business revenues were $1.3 billion. At our recent Investor Day, we laid out the next chapter of Qualcomm built across three dimensions: one, expanding into the data center with four unique product lines; two, driving agentic and physical AI compute everywhere; and three, expanding beyond silicon to full stack software and platform solutions. We also updated our fiscal 2029 financial targets, which now include more than $24 billion in revenue across automotive and IoT plus more than $15 billion in data center, bringing our total non-handset revenue outlook to $40 billion by fiscal 2029, up from our previous target of $22 billion. This reflects our conviction in the opportunities throughout the end of the decade and the scale of our business diversification. In the short term, the entire industry continues to be impacted by unprecedented memory prices, higher manufacturing and input costs as well as supply chain shortages driven by overall data center demand. In addition to the resulting revenue decline in mobile and consumer electronics, this is creating short-term pressure on QCT gross margins which will be slightly below our historical range. We're implementing price increases and as they take effect, we expect to see gross margins realign to our operating model. Despite these headwinds, we expect top line growth for QUALCOMM in fiscal '27, driven by an inflection in non-handset revenues throughout the fiscal year. We're incredibly excited about the next chapter of Qualcomm, our relevance in the next phase of AI and distributed intelligence from edge to cloud, and we remain firmly focused on the execution phase of our strategy. I will now share some key highlights on the business. Let me start with data center. This is the ideal and logical time for Qualcomm to enter the market as agentic workloads are reshaping the economics of AI. Efficient token generation and total cost of ownership are fundamental to scaling AI. And as a result, inference is becoming disaggregated in the data center and will be increasingly distributed. This means hybrid inference will evolve across the entire compute continuum from data center to on-premise network edge and edge devices. Given Qualcomm's assets, it's a natural evolution of our growth story. We are developing a differentiated set of product lines, including connectivity in fiscal '26, custom silicon and AI accelerators in fiscal '27 and server-class CPUs in fiscal '28. Our portfolio is rolling out in phases over the next two years, leveraging decades of leadership in power-efficient compute and strong ecosystem presence and relationships. Our two near-term custom silicon wins will be revenue generating in the December quarter, and we have begun wafer production. Both projects are in the first phase of strategic multiyear customer relationships that we expect to expand over time. Our innovative high-bandwidth compute solution is designed to address one of the industry's most difficult bottlenecks by integrating compute directly with high-density memory, improving performance per watt, memory efficiency and total cost of ownership. I'm pleased to report that we have completed the tape-out of HBC Gen 1, an engineering milestone that moves us into the next phase of customer engagements. We expect to demonstrate HBC performance on silicon in the coming quarters ahead of the launch of our first HBC solution in mid-2027. Across our merchant platforms, including HBC based AI accelerators, SerDes connectivity and CPUs, we are in active conversations with nearly every leading data center player about building long-term partnerships. We're pleased with the activity and interest across these opportunities and expect to share more as they advance. As announced earlier today, we have closed our acquisition of Modular Inc., and integration is now underway. Modular strengthens our ability to deliver an end-to-end software stack for data center and Edge AI deployments. It will also be hardware-agnostic helping simplify AI software complexity across multiple platforms and giving developers a modern and open environment for heterogeneous compute. This is an important step in how we see AI infrastructure evolving with software and hardware coming together to deliver better performance, flexibility and efficiency. Our vision and objective with Modular goes far beyond augmenting our AI software capabilities. We have the ambition to change the current industry approach to AI software from closed to open systems to promote enhanced competition, innovation and resilience. Modular will host ModCon in August with some incredible announcements from industry partners, and we look forward to further engaging with developers and ecosystem partners at this event. In automotive, customer momentum continues to drive exceptional revenue growth. This quarter, we signed a landmark expanded agreement with BMW, winning a highly competitive selection process to become the lead compute silicon provider for their next-generation ADAS as well as digital cockpit. This agreement represents a material expansion of our automotive pipeline and establishes Qualcomm as the lead compute silicon partner for BMW extending across model programs well into the next decade. We look forward to building on our existing cooperation with BMW in the years ahead. Additionally, our recently announced collaboration with Stellantis supports our automotive pipeline well into the 2030s. These agreements reflect the broad interest we're seeing for digital cockpit and ADAS. Customers are shifting from socket-by-socket design awards to multi-generation strategic engagements as they increasingly recognize the value of our broad technology portfolio, platform approach and long-term commitment to partnerships, the automotive industry and open ecosystems. Further, with our fifth-generation Snapdragon digital chassis ramping in September, we're delivering a significant increase in content per vehicle, and we are on track to become the #1 automotive semiconductor player by revenue. Last quarter, we said we were targeting an annualized revenue run rate of $6 billion as we exit fiscal 2026. Today, we're raising that outlook and now expect annualized sales of approximately $7 billion exiting fiscal '26. Within Industrial, we're strengthening our position across many verticals as they embrace AI at the edge and open weight models. At our Investor Day, we introduced a fiscal '29 projection of $8 billion in revenue for industrial networking and robotics. We're happy to report that our industrial design win pipeline exceeds $7 billion with over $3.5 billion in design wins secured this fiscal year. This reflects strong customer demand and a meaningful increase in new businesses. We have a very broad portfolio of purpose-built silicon and full stack software solutions for this category. Our channel presence exceeds 38,000 customers supported by a deep partner ecosystem that is already yielding results. And with Arduino and Edge Impulse, our reach now extends to more than 30 million users. Moving on to handsets. Despite overall industry contraction caused by the current memory environment, we're seeing early signs of an agentic smartphone cycle that will grow over time. In China, major OEMs are preparing to bring new on-device agents and orchestrators to market, and we believe agentic experiences will play a larger role in premium tier demand as adoption grows. Our share position at Samsung remains strong, with Snapdragon powering approximately 70% of their flagship devices as announced at Samsung Unpacked. Our collaboration is now expanding across the wider Galaxy ecosystem from the latest foldable phones and Galaxy watches to intelligent eyewear developed with Google, bringing new agentic experiences to more devices. This reflects a broader potential to reimagine mobile for the age of agentic AI. Beyond smartphones, PCs, smart glasses and other new personal AI form factors are all becoming endpoints for agents that create a significant multiyear upgrade opportunity for Qualcomm as today's installed base needs to evolve to enable more personal, contextual and autonomous AI experiences. In PCs, we're growing our leading share of design wins in Google Books, bringing Snapdragon together with Gemini Intelligence for a new generation of AI-first laptops. With Microsoft, we're collaborating on Project Solara, a chip-to-cloud platform designed for agent-first enterprise devices. And through our Snapdragon Start program for smart glasses, we're delivering a complete reference platform that enables eyewear brands to develop their own devices. With roughly 600 million global eyewear units shipped every year, this program will help expand the ecosystem and accelerate the transition of this category to smart glasses. You will hear more about this at Snapdragon Summit in September. At Investor Day, we laid out our vision for Qualcomm's next chapter and our path toward our fiscal 2029 targets. We're already seeing an inflection in our non-handset businesses, which underscores the success of our diversification strategy, and there's a lot more to come. Our data center business is just at the beginning of its journey, and we recognize that investors want to see more proof points that we can successfully execute on our plans as a new entrant. We welcome the challenge ahead and are confident we will prove, as we have many times before, that Qualcomm can execute and win in new growth areas, including data center. With that, I will turn the call over to Akash.”