What you need to know
- Qualcomm announced its Q1 FY2024 financial earnings on Wednesday with a reported $9.9 billion in total revenue.
- Handsets sales rose by 16%, while automotive saw an uptick of 31% in sales this quarter.
- The firm is working on improving its XR experience with Google and Samsung.
Qualcomm announced its Q1 financial earnings for fiscal year 2024 on Wednesday, posting a 'strong' Q1 based on its handsets and automotive sales. The company reported $9.9 billion in total revenue, a 5% uptick compared to the $9.4 billion reported during the first quarter of 2023.
"We are extremely pleased to report strong quarterly results, with revenues and EPS exceeding the high end of our guidance," said Cristiano Amon, president and CEO of Qualcomm.
While Qualcomm designs and manufactures chipsets for smartphones, automotive, VR headsets, and other devices, the main contributors to the revenue in this quarter were the revenues streaming from the sales of handsets and automotive.
According to their report, the company gained $6.6 billion in sales of handset chips, a 16% bump from the same time last year ($5.7 billion).
With the launch of several flagship phones in the first quarter and the holiday season, Qualcomm saw a rise in its QTC sales compared to Q3 in 2023, attributing its handset revenue to premium phones launching during the quarter with its latest gen AI-focused Snapdragon 8 Gen 3.
Samsung recently launched the Galaxy S24 series, and the Galaxy S24 Ultra uses the chip globally. The Galaxy S24 and S24 Plus use the chip in select markets, including North America, while Exynos is used in international markets, a significant shift from the global share Qualcomm had with all three Galaxy S23 models. Although these phones launched in the current quarter, the company expects to see its revenue contributions in Q2, with estimates for handset sales growth in the high single digits or low double digits.
"I think you should look at the launch of the Galaxy S24 as a good proxy and how they should think about the agreement between us and Samsung," Amon said during the earnings call on Wednesday, teasing that the company is "aiming to have the leadership position and the mobile performance on CPU" with its upcoming custom CPU built using Oryon cores.
Regarding automotive revenues, Qualcomm saw a sharp rise in sales with $598 Million, a 31% rise on a year-on-year basis. This reflects the increased content in new vehicle launches, with 75 new models launched commercially in 2023 with Snapdragon Digital Chassis.
"We are pleased to work with Bosch to have our Snapdragon Ride Flex SoC enable their new central vehicle computer, further underscoring our shared commitment to technological innovation within automotive," said Nakul Duggal, group GM for Automotive, Industrial, and Cloud at Qualcomm.
Qualcomm also recently expanded its mixed reality solutions with the announcement of the Snapdragon XR2+ Gen 2. This could power Samsung's long-awaited mixed-reality headset, possibly called Samsung Glasses, and the Meta Quest 3.
The chip supports 4.3k per eye resolution at 90 frames per second in 12 or more concurrent cameras for immersive mixed reality and virtual reality experiences.
"We are proud to partner with Samsung and Google to provide leading XR experiences to Galaxy users by utilizing Snapdragon XR2+ Gen 2," Amon added on the earnings call.
While the company's QTC and QTL sales saw a reasonable gain, the IoT saw a 32% dip in sales, with $1.1 billion in earnings this quarter.
Qualcomm's CEO, Cristiano Amon, concluded the call by saying that Qualcomm is focused on what it can control and is busy at work with the growth and diversification of the company.
"We're tracking the launch of products with the Snapdragon X Elite chipset tied with the next version of Microsoft Windows. They have a lot of Windows AI capabilities," Amon added.
