Qualcomm delivered a fiscal fourth-quarter beat but failed to satisfy investors, as a 26% year-over-year drop in handset revenue highlighted the widening gap between its shrinking smartphone core and its fast-growing automotive and data-center ambitions. The company reported GAAP revenue of $10.32 billion and adjusted earnings per share of $2.17, narrowly ahead of Wall Street forecasts of $10.12 billion and $2.16. That compares with $11.27 billion in revenue and $3.00 in adjusted EPS a year earlier. Despite the beat, shares fell 5.75% after hours after first-quarter EPS guidance came in below consensus.
Qualcomm's QCT chip segment produced $9.02 billion in revenue, down 8% year over year but above the roughly $8.8 billion analysts expected. Within QCT, handset revenue was $5.14 billion, a 26% decline from $6.96 billion a year earlier and below the approximately $5.3 billion estimate. For the full fiscal year, handset revenue fell 13% to $24.07 billion, while total QCT revenue declined 3% to $37.21 billion and earnings before tax margin narrowed from 30% to 27%. Management said higher wafer fabrication, assembly, testing, advanced packaging and memory costs are squeezing profitability, with the full benefit of product price increases expected only in the second half of fiscal 2027.
The quarter also showed why Qualcomm is pushing beyond phones. Automotive revenue reached a record $1.99 billion, up 89% year over year, and full-year automotive revenue rose 52% to $6.00 billion. IoT revenue grew 4% to $1.89 billion. Licensing revenue fell 7% to $1.30 billion. CEO Cristiano Amon called fiscal 2027 the beginning of a non-handset revenue inflection and reiterated a target of more than 60% growth in non-handset businesses. Qualcomm is working with Amazon on custom silicon for AWS AI infrastructure, with SpaceX on Starlink Mobile's planned U.S. terrestrial 5G network using Dragonwing infrastructure, and with Anduril on the BlueChip U.S.-built laptop powered by Snapdragon X processors. Data-center revenue is projected to reach about $5 billion in fiscal 2027 and $15 billion by fiscal 2029, with total non-handset QCT revenue expected to hit roughly $40 billion.
First-quarter guidance was mixed: Qualcomm expects revenue of $10.4 billion to $11.2 billion, above the roughly $10.6 billion consensus midpoint, but adjusted EPS of $2.15 to $2.35, with a midpoint of $2.25 below the roughly $2.32 analysts expected. The company expects QCT revenue of $9.0 billion to $9.6 billion and QTL revenue of $1.3 billion to $1.5 billion. The central investor question is whether data-center, automotive, Starlink and PC programs can scale fast enough to replace declining handset revenue while cost inflation pressures margins.
