“In QTL, we estimate revenues of $1.2 billion to $1.4 billion, and EBT margin of 68% to 72%, reflecting normal seasonal trends.”

In context

“Akash Palkhiwala (Chief Financial Officer): Thank you, Cristiano, and good afternoon, everyone. Let me begin with our results for the third fiscal quarter. We delivered revenues of $9.9 billion and non-GAAP EPS of $2.21, with revenue at the high end of our guidance. QTL revenues of $1.3 billion and EBT margin of 69% were in line with our expectations. QCT revenues of $8.5 billion were at the high end of our guidance, and EBT margin of 26% was in line with guidance. QCT handset revenues of $5.1 billion reflect the impact of industry-wide memory dynamics on the global smartphone market. QCT IoT revenues of $1.8 billion were up 9% versus the prior year driven by growth within the industrial networking and robotics category of products. In QCT Automotive, we delivered another record quarter with revenues of $1.6 billion, with 61% year-over-year growth driven by accelerating demand and increasing compute content per vehicle. Total non-handset revenues in QCT, including automotive and IoT, grew 28% year-over-year, underscoring the continued execution of our diversification strategy. Lastly, we returned $2.3 billion to stockholders, including $1.4 billion in share repurchases and $937 million in dividends. Before turning to guidance, I'd like to provide an update on a couple of factors reflected in our financial performance. First, consistent with our expectations, we estimate that QCT handset revenues from Chinese OEMs reached a bottom in the third fiscal quarter and will return to double-digit sequential growth in the fourth quarter. Second, the semiconductor industry is experiencing broad-based increase in input costs across wafer fabrication, assembly, test, advanced packaging, memory and other materials. We are taking concrete actions to reflect the higher input costs in our product pricing. These actions will benefit our gross margins over time as the pricing changes gradually come into effect. Finally, as a result of our supply constraints, we now expect an acceleration in the step-down of Apple product revenues starting in the fourth fiscal quarter as our share for upcoming iPhone launch is expected to be materially lower than our prior estimate of 20%. All these factors are contemplated both in our third quarter performance and fourth quarter outlook. Against this backdrop, I'll now provide our guidance for the fourth fiscal quarter. We are forecasting revenues of $9.7 billion to $10.5 billion and non-GAAP EPS of $2.05 to $2.25. In QTL, we estimate revenues of $1.2 billion to $1.4 billion, and EBT margin of 68% to 72%, reflecting normal seasonal trends. In QCT, we expect revenues of $8.4 billion to $9 billion and EBT margins of 23% to 25%. We forecast QCT handset revenues to be approximately $5.2 billion, driven by sequential growth in Android, offset by lower Apple product revenues. We expect QCT IoT revenues to remain approximately flat versus the year ago period, with double-digit growth across our industrial networking and robotics category of products, offset primarily by the impact of memory constraints on tablets and other consumer products. In QCT Automotive, we expect another record quarter with approximately 60% year-over-year revenue growth. Lastly, we anticipate non-GAAP operating expenses to be approximately $2.7 billion in the quarter, reflecting the acquisition of Modular and continued investment in our data center product roadmap ahead of revenue ramp. Before I conclude my prepared remarks, let me summarize the key drivers of QCT's growth trajectory going forward. We are well positioned to execute on the vision we outlined at our recent Investor Day with QCT non-handset revenues expected to grow to $40 billion by fiscal '29, nearly double the target we had previously provided. This forecast includes data center revenue growth to $5 billion in fiscal '27 and $15 billion in fiscal '29. As a result of our diversification execution, we now estimate non-handsets at more than 50% of QCT revenues in fiscal '27 and grow to approximately two-thirds in fiscal '29. In the short term, we anticipate growth in non-handset revenues relative to prior year to accelerate from 24% in fiscal '26 to greater than 60% in fiscal '27, a significant inflection point in the execution of our growth strategy. We expect this growth from non-handset revenues in fiscal '27 to replace total Apple product revenues in '26. In handsets, when memory industry dynamics stabilize, our Snapdragon product leadership and emergence of agentic AI experiences will position us well to reinstate QCT Android revenue scale and growth rates. Lastly, I'd like to welcome the Modular team to Qualcomm. We're excited to have completed this transaction, adding a world-class team whose AI software expertise will enhance our ability to execute on the significant opportunities ahead. This concludes our prepared remarks. Back to you, Brett.”