QUALCOMM Incorporated

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm third quarter fiscal 2024 earnings conference call. At this time, all participants are in listen-only mode. Later, we conduct a question and answer session. If you'd like to ask a question during that time, please press star, then the number one on your telephone keypad. To throw your question, press star, then the number two. If you're using a speakerphone, please pick up your handset before pressing the numbers. Please limit your questions to one question and one follow-up. As a reminder, this conference is being recorded July 31st, 2024. The playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. The playback reservation number is 137-47430. I would now like to turn the call over to Mauricio Lopez-Adoin. Vice President of Investor Relations. Mr. Lopez-Odoin, please go ahead.

Thank you, and good afternoon, everyone. Today's call will include prepared remarks by Cristiano Mon and Akash Palkawala. In addition, Alex Rogers will join the question and answer session. You can access our earnings release and a slide presentation that accompanied this call on our Investor Relations website. In addition, this call has been webcast on Qualcomm.com and our replay will be available on our website later today. During the call today, we will use non-GAAP financial measures as defined in Regulation G, and you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements, including projections and estimates of future events, business or industry trends, or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. please refer to our SEC filings, including our most recent 10-K, which contain important factors that could cause actual results to differ materially from the forward-looking statements. And now the comments from Qualcomm's President and Chief Executive Officer, Christian Almon.

Thank you, Mauricio, and good afternoon, everyone. Thanks for joining us today. In Fiscal Q3... We delivered non-GAAP revenues of $9.4 billion and non-GAAP earnings per share of $2.33, which was above the midpoint of our guidance range. Revenues from our chipset business of $8.1 billion reflect the sequential growth in automotive and IoT and continued traction of our Snapdragon mobile platforms across leading smartphones. Our automotive and IoT revenues were the result of ongoing execution of our diversification strategy. Licensing business revenues were $1.3 billion. Now, I would like to share some key highlights from the business. In automotive, we secured more than 10 new design wins with global automakers during the quarter. These include next-generation digital cockpit, connectivity, and or ADAS and autonomy. Our Snapdragon digital chassis continue to scale across virtually all OEMs and is now a key asset for the automotive industry. As we look forward, we're focused on extending our industry-leading on-device AI solutions to the Snapdragon digital chassis to enable automotive-centric GenAI use cases and applications. It's important to note that our architecture, with capabilities across all domains, is uniquely positioned to enable sensor data to be utilized simultaneously for ADAS autonomy workloads and user-centric GenAI experiences in the digital cockpit. A great example is our Snapdragon Ride Flex solution, which combines digital cockpit and ADAS on a single SoC. Future drivers for automotive growth include Gen AI experiences, the software-defined vehicle transition, central computing replacing microcontrollers, expansion into two-wheelers, and car-to-cloud services. Enhanced Sets. we are pleased that all Galaxy Z Fold 6 and Flip 6 are powered by the Snapdragon 8 Gen 3 for Galaxy, delivering extraordinary AI capabilities, premium level performance, and power efficiency for foldable devices. Together with Samsung and our other partners, we continue to push the boundaries of on-device Gen AI on mobile devices. To that end, we're pleased with the growth and trajectory of AI use cases on smartphones. This continued expansion of AI features is a precursor to next-generation smartphones, which we believe will become AI-centric, with pervasive on-device AI working across applications in the cloud. Qualcomm is very well positioned to help drive this transformation across the industry in the coming years. At our upcoming Snapdragon Summit in October, we will reveal details of our next-generation Snapdragon 8 flagship mobile platform, the first to be powered by our custom Orion CPU. This platform, combined with new and unparalleled NPU AI capabilities, is already exceeding both our and our customers' performance expectations. In Compute, We're very pleased that Co-Pilot Plus PCs, powered exclusively by Snapdragon X-Series platforms, became available for purchase on June 18. This marks the start of one of the most significant transitions in personal computing since the launch of Windows 95 and is restoring performance leadership back to the Windows ecosystem. 20 Copilot Plus PCs from Microsoft, Dell, HP, Lenovo, Acer, Asus, and Samsung are now available across 20 countries and 47 retailers. It's important to highlight the unique Copilot Plus and Snapdragon X Elite dedicated retail spaces in Best Buy, Costco, Curry's, Harvey Norman, and many more. We are very pleased with the initial response with several models sold out at retailers and online. Our retail presence is expected to expand to more than 60 retailers across 25 countries in the coming months. We're also working closely with more than 50 global commercial customers to drive Snapdragon readiness in their respective environments. Additionally, We added the Snapdragon X-Series platforms to the Qualcomm AI Hub, allowing developers to easily take advantage of optimized AI models to create responsive, power-efficient, and compelling on-device generative AI applications for Copilot Plus PCs. As we look forward to 2025, we are already working with OEMs on the next wave of Copilot Plus PCs. In addition to new design wins, our X-Series product roadmap will expand to address PCs with retail prices as low as $700 without compromising NPU performance. Longer term, we believe the benefits of Snapdragon X-Series platforms make it clear that the PC ecosystem has begun the transition to an ARM compatible architecture. As we look forward, we're forecasting that at least 50% of PCs will be AI-capable by 2027. Given our clear technology leadership and competitive roadmap, we expect to be positioned as one of the top silicon suppliers for these devices. We also remain excited about the continued positive momentum in XR, particularly the success of Meta's Ray-Ban smart glasses. Sales are exceeding our expectations due in part to the integration of LAMA into the experience. We foresee an acceleration in demand for extended and mixed reality devices as new use cases enabled by GenAI gain scale. Snapdragon XR remains the industry platform of choice and we are engaged with major ecosystem players including Meta, Google, Microsoft, and others. Most recently, at the Augmented World Expo, we showcased two of the latest XR devices, NTT's augmented reality glasses and Sony's upcoming head-mounted mixed reality device. In industrial IoT, we're pleased to report that we're now collaborating with Aramco on connectivity, AI, and advanced computing solutions for industrial and enterprise use cases in Saudi Arabia. This also includes accelerating development of the industrial 4G, 5G, and non-terrestrial networks ecosystem, including the first significant wide area private cellular network for IoT. As the industrial sector is transformed by AI, we expect an increase in demand for more complex on-device processing. This trend aligns well with our core capabilities, especially the computing and AI roadmap we have built for auto and PC. As high-performance processing and intelligence at the edge becomes critical for the next phase of enterprise digital transformation, we see a unique opportunity to build a leadership position in this space. In the next few months, we will announce our new dedicated product roadmap for industrial IoT, including support for multiple operating systems, ability to run multi-billion parameter AI models, and a comprehensive development platform. Finally, we're very pleased to share that we recently signed a key long-term licensing agreement with Honor, a leading Chinese smartphone OEM. We continue to be pleased with the company's diversification beyond mobile, and we're particularly proud of what we have accomplished to date in automotive and PC. We will provide additional updates on our diversification strategy at our Investor Day in New York on November 19. I would now like to turn the call over to Akash.