QUALCOMM Incorporated

And gentlemen, thank you for standing by. Welcome to the Qualcomm second quarter fiscal 2026 earnings conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session. If you'd like to ask a question during this time, press star, then a number one on your telephone keypad. To withdraw your question, press star, then a number two. If you're using a speakerphone, please pick up your handset before pressing the numbers. Please number your questions to one question and one follow-up. As a reminder, this conference is being recorded April 29, 2026. The playback number for today's call is 877-660-6853. International callers, please dial 201-612-7415. The playback reservation number is 137-59-551. I would now like to turn the call over to Brett Simpson, Senior Vice President of Investor Relations.

Mr. Simpson, please go ahead. Thank you and good afternoon, everyone. Today's call will include prepared remarks by Cristiano Amon 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 accompany this call on our investor relations website. In addition, this call is being webcast on Qualcomm.com and a 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 10Q, which contain important factors that could cause actual results to differ materially from the forward-looking statements. And now to comments from Qualcomm's President and Chief Executive Officer, Cristiano Amon.

Thank you, Brett, and good afternoon, everyone. Thanks for joining us today. In Fiscal Q2, we delivered revenues of $10.6 billion and non-GAAP earnings per share of $2.65, with EPS coming in at the high end of our guidance. QCT revenues were $9.1 billion, with another quarter of record automotive revenues, as well as growth in IoT. Licensing business revenues were $1.4 billion. Before I share key highlights from the business, I would like to provide some perspective on Qualcomm's current customer design cycles and the opportunities ahead. We are in a period of profound change, and it may not yet seem obvious to the financial community. The emergence of agentic AI workloads with OpenClaw as an early example are fundamentally changing user experiences across connected edge devices and reshaping our roadmap in every platform we develop. For agents to work efficiently, They must run continuously in the background, fuel sensor data into context, orchestrate multi-step tasks reliably, and deliver strong security. Today's install-based devices were not built for these new capabilities, and it represents a significant upgrade opportunity and expansion of our addressable market in the coming years. Agent orchestration is predominantly CPU-bound. and Qualcomm has the world's best-performing CPU across smartphones, PCs, auto, and soon the data center. Qualcomm's unparalleled connectivity solutions and power-efficient NPU for local models will also be key assets to delivering a GenTech AI experience. No other semiconductor company matches the breadth and scale of our technology and product portfolio, which powers devices spanning milliwatts to kilowatts. from smart wearables to data centers. As a result, we're seeing a step function increase in strategic customer engagement and is changing how we think about the broad AI opportunity as well as the speed of our diversification efforts. Beginning with automotive, in Q2, we exceeded $5 billion in annualized revenues for the first time, and we expect to exit fiscal 26 at a run rate above $6 billion. This growth is driven by our fourth-generation Snapdragon digital chassis platform, which comprises connectivity, telematics, infotainment, as well as advanced driver assistance and automated driving. Notably, we have now enabled more than 1 million cars operating ADAS and autonomy on our Snapdragon ride processors. By the end of the fiscal year, we will begin commercial shipments of our fifth-generation Snapdragon digital chassis platform. This represents the largest generation-to-generation content increase in Qualcomm's history, delivering three times higher CPU throughput, a three-fold increase in GPU capability, and 12 times higher NPU performance while supporting in-vehicle agents and processing for level 3 and level 4 autonomous driving. Looking ahead to fiscal 27, we expect continued share gains and increased content particularly in ADATs. We're pleased with the performance of our automated driving stack with BMW, and we're seeing broad customer engagement from other leading automakers. Our recent announcements with Bosch and Wave are good examples of what's to come as we build on our proven platforms and self-driving stack in-scale ADATs. In IoT, agentic workloads and edge AI are driving major product renewal design cycles. Overall, our pipeline is healthy and there is clear momentum for Qualcomm solutions. In personal AI, we expect a significant increase in the choice of new smart glasses starting in the second half of the year. We believe this launches, combined with a rapid progress in agentic AI, will catalyze an inflection point in customer demand across this category. Our 2026 Snapdragon X2 PC platforms are currently in production, and our world-class Orion CPU unlocks powerful, always-on agentic experiences, making it a true competitive differentiator. Agentic orchestrators such as OpenClaw, Clawed Desktop, Clawed Code, OpenAI Codex Desktop, Perplexity Computer, CrewAI, Hermes Agent, LandGraph, and Humane 1 running on Snapdragon X2 are early proof points. A recent PCMag review of the ASUS ZenBook A16 notes that Qualcomm is now a serious challenger in the PC space and states, quote, the generational leap from the original Snapdragon X Elite to the X2 series is particularly striking. Qualcomm hasn't just caught up to the industry. in some cases, is now helping to set the pace, unquote. In addition, our Hexagon NPU is the world's fastest for laptops delivering up to 85 tops. Together with our industry-leading CPU, which has the best on-device token generation rate, Snapdragon X2 delivers the full agent experience end-to-end and outperforms Intel's Pinter Lake by nearly 30%. In physical and industrial AI, our new Dragon Wing IQ10 platform has generated substantial customer interest since our launch at CES. This is a significant upgrade compared to IQ9, featuring an NPU with up to 700 tops of own-device AI performance, an 18-core Orion CPU, over 20 camera sensors, and an integrated safety island. Building on our design win with Figure AI, we announced an exciting multi-year agreement with Nura, reinforcing our confidence that we can become a significant player in the broad robotics market. Also during the quarter, we introduced Ventuno Q at Embedded World. This is the second Arduino platform built on Qualcomm Silicon, and we view it as a world-class prototyping engine for both robotics and industrial AI developers as we expand our ecosystem across key verticals. VentunoQ is purpose-built to bring AI into the physical world, enabling fully autonomous AI agents in a wide range of edge AI applications, including voice assistants and vision systems. Several new industrial AI products are also moving from design win to deployment across retail, utilities, oil and gas, agriculture, and other verticals. In data center, the AlphaWave integration is off to a great start, and we're pursuing multiple opportunities with large hyperscalers, cloud service providers, sovereign AI projects, and other global partners. Building on that momentum, we're also entering the custom silicon space, beginning our ramp with a leading hyperscaler, and we expect initial shipments in the December quarter. In addition, development of our leading data center CPU and high-performance AI inference accelerators is progressing well. We look forward to sharing more details and customer wins at Investor Day in June. Regarding handsets, I would like to underscore two key points. First, the quarter played out as we expected. Sell-through held up and our chip business materially undershipped consumer demand. We believe our China Android revenue is bottoming out in fiscal Q3 and Akash will provide more specifics in his financial update. Second, We think agentic smartphones will soon begin to influence the premium tier, and we expect this team will only get stronger into fiscal 27. With examples like the bi-dense Daobao-powered agentic AI phone from ZTE Nubia, Xiaomi's recent announcement of a Mi Claw agent framework and other agentic systems now in development across the Android ecosystem, We have a clear line of sight into how the AI upgrade cycle will unfold, and this is going to be an important tailwind for premium demand over time. Next, I want to highlight a major strategic initiative and long-term growth driver for Qualcomm, 6G, the next generation of wireless. Designed for the age of AI, we believe 6G will present one of the most significant transitions for the wireless industry. From a connectivity perspective, 6G will enable new classes of mobile and personal devices, such as smart glasses, with enhanced uplink capabilities to support agentic use cases like see what I see. Beyond connectivity, 6G will be an AI native network where AI reasoning, learning, and autonomous action are core functions. It is intended to act as distributed intelligent infrastructure that integrates communication, and wide-area real-time sensing. With these new capabilities, the network becomes critical infrastructure and provides the telecom industry an opportunity to develop completely new business and economic models. It will make possible new AI-enabled services ranging from context-relevant data, data insights and analytics, low-altitude aerial, terrestrial, and autonomous traffic management drone detection and tracking, and 3D mapping with telemetry to build dynamic digital twins at scale. Qualcomm's leadership in connectivity, AI processing, and high-performance low-power computing position us to be one of the key architects and beneficiaries of the 6G transition. In addition to the development of foundational technologies and standards, we're building end-to-end solutions for devices and the network, from agentic modems and compute platforms that power phones, PC, intelligent wearables, and cars, all the way to the network, including power-efficient, next-generation radio units, wide-area network sensing platforms, and high-performance compute and AI accelerators for the RAN, network edge, core, and data center. To help shape and accelerate the 6G roadmap, at MWC, we launched a 60-company coalition spanning carriers, cloud infrastructure, AI native partners, and auto OEMs. The engagement and feedback on our 6G vision and plans from our partners, customers, and governments across the globe has been very positive, and we look forward to working across the industry to deliver on this generational opportunity. Before I turn the call over to Akash, I want to note that we will provide a broader update at our Investor Day to include our data center plans and our progress in other areas, including advanced robotics, next generation ADAS, industrial edge AI, personal AI devices, and 6G. We hope you can join us as we will be highlighting meaningful new avenues of growth to support our long-term diversification story. I will now turn the call to Akash.