A：In the recent fiscal quarter, Qualcomm reported revenues of $7 billion, coming in at the high end of their guidance, and non-GAAP earnings per share of 1.25 dollars per share.

A：The entire industry, including Qualcomm, is being impacted by unprecedented memory prices, higher manufacturing and input costs, and supply chain shortages driven by overall data center demand. These factors are resulting in a revenue decline in mobile and consumer electronics and short-term pressure on QCT growth margins which are expected to slightly below historical range. However, the company is implementing price increases, and as they take effect, gross margins are expected to realign with their operating model.

A：Qualcomm is entering the data center market with a focus on developing a differentiated set of product lines including connectivity, custom silicon, AI accelerators, and server-class CPUs. Their portfolio rollout is in phases over the next few years, leveraging decades of power-efficient compute leadership and strong ecosystem presence. The company has already secured near-term custom silicon wins, completed the tape out of HBC Gen, an engineering milestone, and is working on demonstrating HBC performance on silicon ahead of the launch of their first HPC solution in mid-2027. Qualcomm is in active conversations with nearly every leading data center player about building long-term partnerships.

A：The acquisition of Modular Incorporated strengthens Qualcomm's ability to deliver an end-to-end software stack for data center and Edge AI deployments. It provides a hardware-agnostic approach to simplify AI software complexity across multiple platforms and offers a modern and open environment for AI computing. This acquisition is seen as an important step in the evolution of AI infrastructure and is expected to enhance performance, flexibility, and efficiency. Qualcomm aims to change the industry approach to AI software from closed to open systems to promote enhanced competition, innovation, and resilience.

A：The expanded agreement with BMW is significant for Qualcomm as it establishes the company as the lead compute silicon partner for BMW's next generation of ADAS and digital cockpit, extending well into the next decade. This agreement represents a material expansion of their automotive pipeline and reflects a broader interest in the digital cockpit and ADAS sectors as customers recognize the value of Qualcomm's broad technology portfolio, platform approach, and long-term commitment to partnerships within the automotive industry and open ecosystems. With the ramping of their fifth-generation Snapdragon Digital cockpit in September, Qualcomm is on track to become the number one automotive semiconductor player by revenue.

A：The revised annualized sales outlook for Qualcomm as it exits fiscal 2023 is approximately $8 billion, an increase from the previous target of $7 billion.

A：Despite industry contraction due to the current memory environment, there are early signs of an emerging agentic smartphone cycle. The company is collaborating with major Oems like Samsung, Google, and Microsoft on developing new device agents and orchestrators to enhance premium tier demand and reimagine mobile for the age of AI.

A：This fiscal year, the company has secured over script billion dollars in design wins in the industrial design wing.

A：The significance of the collaboration with Samsung lies in the strong share position, with Snapdragon powering approximately script of their flagship devices.

A：At the upcoming Snapdragon Summit in September, the company will lay out its vision for the next chapter of Qualcomm and its path toward its fiscal 29 targets, including further details on the diversification strategy and growth areas like the data center business.

A：The revenue for the third fiscal quarter was $9.9 billion with non-GAAP EPS of $2.21, and QTL revenues were at the high end of guidance at $1.3 billion with an EBT margin of 69%.

A：The company anticipates an acceleration in the step-down of Apple product revenues starting in the fourth fiscal quarter due to lower shares for upcoming iPhone launches, which are expected to materially lower revenues compared to prior estimates.

A：The company's guidance for the fourth fiscal quarter is revenues of $9.7 to $10.5 billion and non-GAAP EPS of $2.50 to $2.25. In QTL, estimated revenues are $1.2 to $1.4 billion with an EBITDA margin of 68% to 72%, while QCT is expected to have revenues of $8.4 to $9.0 billion with EBITDA margins of 23% to 25%.

A：Key drivers of QCT's growth trajectory include non-handset revenues growing to nearly $8 billion by fiscal 27 and nearly double the previously provided target. This growth is expected to reach two-thirds of QCT revenues by fiscal 29, with non-handset revenues growing at a significant rate, especially in fiscal 27. QCT also anticipates growth in non-handset revenues relative to the prior year, with inflection points in the execution of the growth strategy.

A：To address the challenges in gross margins, the company is taking action to increase prices and adjust customer product pricing. These changes are expected to show up in gross margins over the next couple of quarters as contracts are honored and gradually as the product cycles progress.

A：Revenue from data center engagements is expected to start in the December quarter and is anticipated to ramp as the year progresses.

A：The market is expected to react to the double-digit price increase as a pass-through of input cost increases and wafer price increases. Even with this increase, it is small relative to the magnitude of the memory bill of materials and is not expected to fundamentally change the premium tier's volume or the company's position in the industry.

A：Apple's lower share in new device launches is expected to result in a significant sequential decline in revenue from September to December. This decline will accelerate the exit of Apple revenue from the model. However, the company anticipates that revenue from Android will grow and offset the reduction in Apple revenue, along with data center revenue starting to ramp.

A：The anticipated revenue profile from December to March is for revenues to grow. This change is due to Apple having a very strong December quarter which is not included in the model anymore. Therefore, the company expects revenue growth when transitioning from the December to the March quarter.

A：The reduced sales to Apple were a result of supply constraints, leading to materially less share than previously estimated and consequently lower revenue from Apple products. The reduction in Apple revenue is offset by the year-over-year growth in non-handset areas, which is targeted to be greater than Apple's growth and is expected to replace the entire product revenue within the year.

A：The data center ramp is expected to be dilutive to gross margins. However, the gross margin impact from data center revenue, which is mostly from custom chip engagements, is anticipated to be significantly lower than the ongoing baseline gross margin percentage. This will result in a drag of about 100 basis points on the weighted average gross margin for the quarter.