What you need to know
- Qualcomm reports its fiscal year Q4 earnings on Wednesday.
- The company managed nearly $11.4 billion in revenue, roughly in line with the company's expectations.
- Handset revenue grew 40% to more than $6.5 billion.
- Qualcomm's outlook for FY Q1 suggests that economic pressures are finally taking hold.
Qualcomm's fiscal year ended on September 25, and the company reported some pretty strong gains across the board. Unlike much of the tech industry, Qualcomm has a pretty positive quarter overall, with a record $11.39 billion in revenue. However, like the rest of the tech industry, Qualcomm's outlook isn't all that sunny.
Revenue for the quarter was spearheaded by solid headset sales in Qualcomm's QCT business. Headset revenue came in at $6.57 billion, representing most of the division's $9.9 billion revenue for the quarter. That's no doubt that's to flagship sales from devices like the Galaxy Z Flip 4 and the new iPhone 14 Pro, as well as sales of affordable Android phones.
"We are pleased to report another strong year, despite the macroeconomic challenges, as we continue to execute our strategy of transforming Qualcomm from a wireless communications company for the mobile industry to a connected processor company for the intelligent edge," said Cristiano Amon, President and CEO of Qualcomm, in a statement.
Qualcomm has largely managed to outpace the economic challenges other big tech companies have struggled with throughout the year. However, the company's outlook for the current quarter suggests that even Qualcomm isn't immune. As a result, the company's revenue guidance has been lowered to somewhere between $9.2 billion and $10.0 billion, much lower than analysts' expectations of more than $12 billion (via CNBC).
Qualcomm attributes this lower outlook to "rapid deterioration in demand" and the negative impact caused by the easing of supply constraints.
"Given the uncertainty caused by the macroeconomic environment, we are updating our guidance for calendar year 2022 3G/4G/5G handset volumes from a year-over-year mid-single-digit percentage decline, to a low double-digit percentage decline," Qualcomm said in the report.
During the earnings call, Amon highlighted the ways that Qualcomm is challenging the economic pressures, which mirror much of the moves made by other Big Tech companies. That includes a hiring freeze and "planned spending reductions across our mature product areas."
Amon also remains confident in the company's growth beyond the short term. Part of this is due to the expected growth of Windows PCs powered by Qualcomm chips by 2024. The company recently partnered with Microsoft on the new Surface Pro 9 5G, which is powered by the SQ3 chip, a custom version of the Snapdragon 8cx Gen 3.
Qualcomm also touts its latest partnerships, such as one with Samsung that will see its phones powered by more Snapdragon chips globally until 2030. As a result, Amon is positive about the March quarter, particularly given the expected launch of the Galaxy S23 at the beginning of 2023, which will increase Qualcomm's share with Snapdragon from 75% on the Galaxy S22 to global share with the S23.
