Qualcomm Inc. (NASDAQ:QCOM)

The analysis of the annual current and deferred income tax expense reveals several noteworthy trends and shifts in the financial profile over the six-year period examined.

Current Provision

The current provision, expressed in millions of US dollars, exhibits an overall upward trend from 737 million in 2020 to 2670 million in 2025. There is a substantial increase noted between 2020 and 2022, peaking at 2021 million in 2022. After a slight decline to 1730 million in 2023, the provision rises steadily again to reach the highest value in 2025. This pattern suggests increasing current tax obligations over the period, possibly due to growth in taxable income or changes in tax regulations affecting the company's current tax liabilities.

Deferred Provision (Benefit)

The deferred provision shows a more volatile pattern, characterized predominantly by negative values indicating deferred tax benefits in most years except the last. Starting with -216 million in 2020, the deferred benefit slightly increases in magnitude to -237 million in 2021, then sharply reduces to -9 million in 2022. A significant increase in the deferred benefit occurs in 2023 and 2024 with values of -1626 million and -1888 million, respectively, suggesting substantial deferred tax assets being recognized or changes in the timing differences affecting deferred tax calculations. However, this pattern reverses markedly in 2025, where the deferred provision becomes a substantial deferred tax expense of 4452 million, reflecting either the reversal of previous deferred benefits, changes in tax laws, or significant adjustments in deferred tax assets/liabilities.

Income Tax Provision from Continuing Operations

The overall income tax provision arising from continuing operations fluctuates throughout the period. It increases from 521 million in 2020 to a peak of 2012 million in 2022. However, in 2023, there is a dramatic decline to 104 million, indicating an unusually low tax expense that year. This low point is followed by a slight rebound to 226 million in 2024 before a steep surge to 7122 million in 2025, the highest value recorded. This surge likely correlates with the large deferred provision expense recognized in 2025, which significantly impacts total income tax provision. The fluctuations suggest that the company experienced variable tax expenses influenced by both current and deferred tax components, with 2025 being a year of significant tax cost recognition possibly due to one-time events or changes in tax positions.

In summary, the current tax provision generally increased over the period, indicating higher taxable income or tax rates. The deferred provision largely represented tax benefits until 2025 when this reversed to a significant expense, substantially influencing the total income tax provision from continuing operations. The year 2025 stands out with a pronounced rise in total income tax expense, highlighting a key area for further investigation regarding tax strategy, tax law changes, or accounting treatments affecting deferred taxes.

The analysis of the effective tax rate over the reviewed periods reveals notable fluctuations despite a stable federal statutory tax rate of 21% across all years.

Federal Statutory Tax Rate

The federal statutory tax rate remained constant at 21% throughout the entire period, indicating no changes in the underlying tax legislation or baseline tax obligations during these years.

Effective Tax Rate Trends

In contrast to the stable statutory rate, the effective tax rate exhibited significant variability. Starting at 9% in the year ending September 27, 2020, the effective tax rate increased moderately to 12% and then to 13% over the next two years.

Subsequently, there was a sharp decline to 1% in September 24, 2023, followed by a slight increase to 2% the following year. However, the most notable change occurred in September 28, 2025, when the effective tax rate surged dramatically to 56%.

Insights and Implications

The disparity between the constant statutory tax rate and the volatile effective tax rate suggests the influence of various factors such as changes in the company's taxable income composition, utilization of tax credits, deferred tax assets or liabilities, or one-time tax events impacting the effective tax expense.

The particularly low effective tax rates in 2023 and 2024 may indicate significant tax planning strategies, benefit from tax incentives, or recognition of tax benefits. Conversely, the dramatic increase to 56% in 2025 implies the recognition of substantial tax expenses, which could be attributed to non-deductible charges, reversal of deferred tax assets, or other extraordinary tax-related adjustments that warrant further examination.

The financial data reveals several notable trends and shifts in the deferred tax-related items and associated financial metrics over the analyzed periods.

Capitalized Research and Development Expenditures

This item shows a significant upward trend starting from the recorded value in the second-to-last period, increasing from 1,490 million to 4,194 million by the final period, indicating increased investment or capitalization of R&D costs.

Unused Tax Credits

There is a consistent and steady increase in unused tax credits throughout the whole span, growing from 1,311 million to 2,527 million, suggesting accumulating tax benefits yet to be utilized.

Customer Incentives

Customer incentives show some variability; increasing from 537 million to a peak of 807 million by 2022, then fluctuating slightly, with a modest recovery to 790 million by the last period.

Unused Net Operating Losses

Unused net operating losses increase initially from 576 million to 887 million but drop sharply in the subsequent period to 364 million, before recovering to around 700 million in recent periods, indicating fluctuations in offsetting losses.

Accrued Liabilities and Reserves

This category experiences some fluctuations, peaking at 483 million, dipping to 264 million, and then maintaining a narrower range around 400 million in the latest periods, reflecting changing estimates or obligations.

Other Deferred Tax Assets

The "Other" category here grows modestly over time, starting at 896 million, dipping around mid-period, then returning to over 1,000 million by the last periods, exhibiting relative stability with minor fluctuations.

Gross Deferred Tax Assets

A strong upward trajectory is evident, increasing from 3,595 million to 9,698 million, indicating an expanding base of deferred tax assets over the years.

Valuation Allowance

The valuation allowance presents considerable volatility, initially growing in magnitude from -1,728 million to a peak negative adjustment of -2,223 million, then decreasing in negative value before a substantial increase in negative adjustment to -8,016 million in the last period, suggesting reassessments or increased uncertainty regarding the realizability of deferred tax assets.

Net Deferred Tax Assets

Net deferred tax assets trend upward from 1,867 million to a peak of 6,050 million but then decline sharply to 1,682 million by the last period, reflecting the impact of changes in valuation allowance and other factors.

Intangible Assets

Intangible assets (noted as negatives) deepen slightly over time, from -181 million to around -367 million, indicating an increase in amortizable or depreciable intangible items.

Operating Lease Assets

Operating lease assets also show a gradual increase in negative values, moving from -100 million to -256 million, which may reflect growing lease obligations or asset recognition.

Unrealized Gains on Other Investments and Marketable Securities

These gains fluctuate negatively, generally increasing in magnitude from -97 million to -212 million, suggesting growing unrealized losses or reductions in fair value.

Other Deferred Tax Liabilities

Other items in this liability category remain relatively stable with some fluctuations, moving between -194 million and -235 million over time.

Deferred Tax Liabilities

Deferred tax liabilities steadily increase in magnitude from -572 million to -1,070 million, indicating higher obligations recognized on the balance sheet.

Net Deferred Tax Assets (Liabilities)

The net figure rises markedly from 1,295 million to a high point of 5,048 million, before declining significantly to 612 million at the last measurement, consistent with the fluctuations seen in valuation allowance and deferred tax assets and liabilities overall.

Overall, the data depicts a growing base of deferred tax assets, accompanied by marked fluctuations in valuation allowance, which heavily influences net deferred tax assets. Significant recent increases in capitalized R&D expenditures suggest intensified investment activity. Meanwhile, deferred tax liabilities have grown moderately, creating a complex interplay that impacts net deferred tax positioning. The pronounced volatility in valuation allowance and net assets indicates changing assessments of asset realizability and potential tax planning implications.

Non-current deferred tax assets

The non-current deferred tax assets exhibited a generally upward trajectory from 2020 to 2024, increasing significantly from 1,351 million USD in 2020 to a peak of 5,162 million USD in 2024. This represents a substantial increase over the five-year period, indicating growing deferred tax benefits recognized by the company. However, in 2025, there is a sharp and pronounced decline to 743 million USD, which suggests a major reduction in deferred tax assets.

Non-current deferred tax liabilities

The non-current deferred tax liabilities showed minor fluctuations over the observed period. Starting at 56 million USD in 2020, these liabilities increased gradually, peaking at 167 million USD in 2022. Subsequently, the liabilities decreased somewhat to 111 million USD in 2023, then rose slightly again to 114 million USD in 2024 and 131 million USD in 2025. Overall, the deferred tax liabilities remain relatively low and stable compared to the deferred tax assets.

Overall insights

The data reveals a significant increase in deferred tax assets over the period from 2020 to 2024, which may be associated with changes in the company's taxable temporary differences or recognition of tax benefits. This increasing trend suggests improvements in future tax deductions or credits. The sharp decrease in deferred tax assets in 2025 warrants attention, as it may indicate utilization, expiration, or re-evaluation of these assets. The relatively stable and minor fluctuations in deferred tax liabilities suggest less volatility on the liability side in comparison.

Assets

The reported total assets demonstrated consistent growth from 35,594 million USD in 2020 to a peak of 55,154 million USD in 2024, followed by a decline to 50,143 million USD in 2025. Adjusted total assets followed a similar pattern, increasing steadily from 34,243 million USD in 2020 to 49,992 million USD in 2024, then slightly decreasing to 49,400 million USD in 2025. This suggests an overall expansion in asset base until 2024, with a minor contraction thereafter.

Liabilities

Reported total liabilities remained relatively stable over the period, starting at 29,517 million USD in 2020 and slightly declining to 28,937 million USD in 2025. Adjusted total liabilities mirrored this stability, moving marginally from 29,461 million USD to 28,806 million USD over the same timeframe. The slight decreases indicate a modest reduction in obligations relative to the asset growth.

Stockholders’ Equity

Reported stockholders’ equity showed significant growth from 6,077 million USD in 2020 to a peak of 26,274 million USD in 2024, before decreasing to 21,206 million USD in 2025. Adjusted stockholders’ equity similarly increased, from 4,782 million USD in 2020 to 21,226 million USD in 2024, then declining slightly to 20,594 million USD in 2025. The equity growth indicates improved net asset value through 2024 with some retraction in the following year, reflecting possible changes in retained earnings or other equity components.

Net Income

Reported net income increased substantially from 5,198 million USD in 2020 to a high of 12,936 million USD in 2022. However, it then declined sharply to 7,232 million USD in 2023, rebounded to 10,142 million USD in 2024, and decreased again to 5,541 million USD in 2025. Adjusted net income exhibited a similar trend, rising from 4,982 million USD in 2020 to 12,927 million USD in 2022, then falling to 5,606 million USD in 2023 before increasing to 9,254 million USD in 2024 and climbing further to 9,993 million USD in 2025. These fluctuations highlight volatility in profitability, with a notable dip in 2023 followed by a partial recovery.

Summary

Overall, the financial data reflects a company that grew its asset base and equity significantly up to 2024, accompanied by stable liabilities. Profitability exhibited considerable variability, with peaks in 2022 and 2024 and a pronounced decline in 2023, potentially due to operational or market conditions impacting net income. The adjusted figures generally corroborate the trends in reported numbers but indicate some smoothing effects likely related to tax adjustments. The slight pullback in assets and equity in 2025 may warrant further investigation to determine underlying causes.

The financial performance over the periods indicates several notable trends in profitability, asset utilization, leverage, and returns. The reported net profit margin experienced an overall fluctuation, increasing from 22.09% in 2020 to a peak of 29.27% in 2022, before declining sharply to 12.51% in 2025. The adjusted net profit margin follows a similar trajectory but shows a more subdued dip and a better recovery in the last period, ending at 22.57% in 2025. This suggests that the core profitability, excluding certain adjustments, remained more resilient compared to the reported figures.

Total asset turnover ratios reveal an improving trend in asset efficiency. Both reported and adjusted ratios increased from 2020 through 2022, peaking around 0.9–0.94, followed by a decline in 2023 and 2024, and then a recovery in 2025 to nearly previous peak levels. This pattern indicates an initial strengthening in the ability to generate revenue from assets, a mid-period weakening, and a rebound in the most recent period.

Financial leverage has consistently decreased over the observed periods for both reported and adjusted ratios. The reported leverage dropped significantly from 5.86 in 2020 to around 2.1–2.4 in 2024 and 2025, while the adjusted ratios show a similar decline but remain slightly higher than the reported ones. The consistent reduction implies a shift towards a less leveraged capital structure, which could reduce financial risk but might also impact return magnitudes.

Return on equity (ROE) measurements show a pronounced decrease from exceptionally high levels in 2020 and 2021 (above 85% reported and over 100% adjusted) to markedly lower levels by 2023. Reported ROE dropped to 26.13% by 2025, whereas adjusted ROE rebounded somewhat to 48.52% in 2025 after earlier reductions. This indicates considerable volatility in equity returns, potentially influenced by changes in profit margins, asset turnover, and capital structure.

Return on assets (ROA) figures exhibit a peak around 2022, with reported and adjusted ROA reaching approximately 26.39% and 27.38%, respectively. Subsequent years show a decline, with reported ROA falling to 11.05% by 2025; however, adjusted ROA shows a different trend, declining initially but then rising to 20.23% in 2025. This divergence may reflect the impact of adjustments on asset-based profitability and underscores the importance of considering both reported and adjusted measures.

The financial data reveals several noteworthy trends related to reported and adjusted net income, as well as their corresponding profit margins over the six-year period analyzed.

Reported Net Income

Reported net income showed a general upward trajectory from 2020 to 2022, rising from $5,198 million in 2020 to a peak of $12,936 million in 2022. This was followed by a decline in 2023 to $7,232 million, a recovery to $10,142 million in 2024, and a sharp decrease again in 2025 to $5,541 million. This pattern indicates considerable volatility in earnings after the 2022 peak.

Adjusted Net Income

Adjusted net income closely follows the reported net income trend but with some differences in magnitude. It increased steadily from $4,982 million in 2020 to $12,927 million in 2022, slightly below the reported net income for the same period. Subsequently, it decreased more sharply to $5,606 million in 2023, then recovered to $8,254 million in 2024, and rose again to $9,993 million in 2025. Notably, adjusted net income remained more stable and did not fall as drastically in 2025 compared to reported net income.

Reported Net Profit Margin

The reported net profit margin exhibited a strong increase from 22.09% in 2020 to a peak of 29.27% in 2022, reflecting improved profitability during this period. Afterward, this margin fell significantly to 20.19% in 2023, recovered to 26.03% in 2024, and then dropped steeply to 12.51% in 2025, indicating substantial fluctuations in profitability.

Adjusted Net Profit Margin

The adjusted net profit margin trends are largely aligned with the reported ones but with less pronounced variation. It increased from 21.17% in 2020 to 29.25% in 2022, then declined sharply to 15.65% in 2023. In 2024, it recovered to 21.18% and further increased to 22.57% in 2025. This suggests that adjustments for deferred income tax and other factors moderate profitability fluctuations, leading to a more stable margin over the later years.

Overall, the data depicts a performance peak around 2022 for both reported and adjusted metrics, followed by volatility in subsequent years. The divergence between reported and adjusted figures, particularly in 2025, suggests accounting or tax-related adjustments have a noticeable impact on the financial outcomes. Adjusted data presents a less volatile and potentially more normalized view of profitability trends during this period.

The analysis of the annual reported and deferred income tax adjusted financial data reveals several noticeable trends in the company's asset base and efficiency ratios over the examined periods.

Reported and Adjusted Total Assets

The reported total assets have shown an overall increasing trend from 35,594 million USD in 2020 to a peak of 55,154 million USD in 2024 before decreasing to 50,143 million USD in 2025. This indicates a general expansion of the asset base followed by a contraction in the last period.

Adjusted total assets follow a similar pattern, increasing from 34,243 million USD in 2020 to 49,992 million USD in 2024, then slightly decreasing to 49,400 million USD in 2025. The adjusted figures are consistently lower than the reported figures, reflecting the impact of income tax adjustments.

Reported and Adjusted Total Asset Turnover

The reported total asset turnover ratio exhibited improvement from 0.66 in 2020 to 0.90 in 2022, indicating enhanced efficiency in generating revenue from assets. However, there was a decline to 0.70 in 2023, a stabilization around 0.71 in 2024, and a recovery to 0.88 in 2025.

The adjusted total asset turnover ratio mirrors this trend with slightly higher values, moving from 0.69 in 2020 to 0.94 in 2022. It then decreases to 0.75 in 2023, rises to 0.78 in 2024, and reaches 0.90 in 2025. This consistency suggests that adjustments for deferred income taxes do not materially alter the interpretation of asset efficiency.

Overall, the data suggest the company experienced growth in its asset base through the early years with improved efficiency in asset utilization until 2022. Following this period, asset turnover ratios declined, indicating reduced efficiency, possibly due to changes in business operations or market conditions. The partial recovery in 2025 suggests efforts to regain operational efficiency. The slight reduction in total assets in 2025 after reaching a peak might reflect strategic asset divestiture or revaluation adjustments.

Assets Trend

The reported total assets displayed consistent growth from 35,594 million US dollars in 2020 to a peak of 55,154 million in 2024, followed by a decline to 50,143 million in 2025. Adjusted total assets mirrored this pattern, growing steadily from 34,243 million in 2020 to 49,992 million in 2024 before slightly decreasing to 49,400 million in 2025. This suggests that the company experienced asset base expansion over most of the period with a slight contraction in the latest year.

Equity Trend

Reported stockholders’ equity exhibited a strong upward trajectory, increasing from 6,077 million US dollars in 2020 to a high of 26,274 million in 2024 before declining markedly to 21,206 million in 2025. Adjusted equity followed a similar trend, growing from 4,782 million to 21,226 million between 2020 and 2024, then decreasing modestly to 20,594 million in 2025. The consistent equity growth until 2024 indicates strengthening capital positioning, though the decline in 2025 suggests potential challenges affecting net worth or capital structure.

Financial Leverage Ratio

The reported financial leverage ratio significantly decreased from 5.86 in 2020 to 2.10 in 2024, indicating a notable reduction in leverage and an improvement in the equity base relative to assets. However, the ratio rose slightly to 2.36 in 2025, reflecting a modest increase in leverage. The adjusted financial leverage similarly declined from 7.16 in 2020 to 2.36 in 2024 and remained relatively stable at 2.40 in 2025. The downward trend in leverage over the first five years suggests a deliberate strategy to reduce financial risk, with stabilization in the final year.

Overall Insights

The data reveals a pattern of asset and equity growth accompanied by a consistent reduction in financial leverage through 2024, highlighting improved financial stability and potentially reduced reliance on debt financing. The declines in assets and equity, coupled with a slight uptick in leverage in 2025, could indicate emerging pressures or strategic shifts that warrant further investigation. The alignment between reported and adjusted figures suggests reliability in the adjustments made for income tax considerations.

The financial data over the six-year period reveals significant fluctuations in reported and adjusted net income, stockholders’ equity, and return on equity (ROE). There are discernible trends that highlight variability in profitability and equity positions, as well as differences between reported and adjusted measures.

Net Income

Reported net income showed a strong upward trend from 5,198 million US dollars in 2020 to a peak of 12,936 million in 2022. However, it then declined sharply to 7,232 million in 2023 before partially recovering to 10,142 million in 2024 and falling again to 5,541 million in 2025. Adjusted net income followed a somewhat similar pattern but was consistently lower than the reported figures for most years. It peaked in 2022 at 12,927 million, dropped more significantly to 5,606 million in 2023, then rose to 8,254 million in 2024 and further increased to 9,993 million in 2025. This pattern suggests considerable variability in earnings quality or impact of tax and other adjustments over time.

Stockholders’ Equity

The equity section exhibited steady growth until 2024. Reported equity rose from 6,077 million in 2020 to a high of 26,274 million in 2024, indicating substantial capital accumulation or retained earnings growth. However, in 2025, reported equity decreased to 21,206 million. Adjusted stockholders’ equity was consistently lower than reported equity but mirrored the overall upward trend, increasing from 4,782 million to 21,226 million by 2024 before slightly falling to 20,594 million in 2025. The decline in both equity measures in 2025 may indicate dividend payments, share buybacks, or other equity reductions.

Return on Equity (ROE)

The reported ROE started extremely high at 85.54% in 2020 and increased further to 90.88% in 2021, signaling exceptional profitability relative to equity during these years. ROE then decreased progressively over the following years, reaching 26.13% in 2025. Adjusted ROE was even higher initially, exceeding 100% in 2020 and 2021, before declining to 48.52% in 2025. The sharp initial ROE values suggest a relatively low equity base compared to income, which expanded over time leading to a normalization of ROE percentages. The differences between reported and adjusted ROE reaffirm the impact of adjustments on profitability metrics, with adjusted figures reflecting a lower but still substantial return trend.

Overall, the data indicate that the company experienced strong profitability and equity growth in the early years, followed by increased volatility in income and equity levels in the later years. The adjustments applied to net income and equity reflect a material effect on income metrics and shareholder equity, highlighting the importance of considering both reported and adjusted figures when assessing financial performance and health. The declining ROE trends in the latter years, despite fluctuations in net income, suggest expanding equity or changes in earnings composition affecting returns.

The financial data reveals noteworthy fluctuations in the company's reported and adjusted profitability and asset base over the examined periods. There are distinct variations in net income, total assets, and return on assets (ROA) that demonstrate several underlying trends.

Net Income Trends

The reported net income experienced significant growth from 5,198 million USD in the earliest period to a peak of 12,936 million USD by the third period. This was followed by a notable decline to 7,232 million USD in the fourth period before partially recovering to 10,142 million USD and then decreasing again to 5,541 million USD in the final period. The adjusted net income follows a similar pattern, peaking at 12,927 million USD in the third period, but shows a deeper trough in the fourth period at 5,606 million USD. Interestingly, the adjusted net income slightly recovered in the subsequent instances, reaching 9,993 million USD by the end.

Total Assets Evolution

Both reported and adjusted total assets exhibited a consistent growth trajectory from the first period through the fourth period, with reported assets increasing from 35,594 million USD to 51,040 million USD, and adjusted assets rising from 34,243 million USD to 47,730 million USD. The asset base continued to expand up to the fifth period, reaching 55,154 million USD (reported) and 49,992 million USD (adjusted). However, the last period shows a decline in total assets to 50,143 million USD (reported) and 49,400 million USD (adjusted), indicating a contraction in asset holdings.

Return on Assets (ROA) Behavior

The reported ROA improved significantly from 14.6% in the first period to 26.39% in the third period, reflecting enhanced profitability relative to asset size. This was followed by a sharp decrease to 14.17% and a moderate rise thereafter, ending at 11.05% in the final period. Adjusted ROA mirrored this pattern initially with a peak of 27.38% in the third period but then declined more steeply to 11.75% in the fourth period. Subsequently, adjusted ROA showed an upward trend, culminating in 20.23% in the last period, signaling a recovery in profitability efficiency on an adjusted basis.

Comparative Insights Between Reported and Adjusted Measures

Adjusted figures for net income and total assets are consistently lower than reported figures, suggesting the exclusion of certain tax-related or non-recurring items. The adjusted ROA generally tracks closely with reported ROA, though it displays more pronounced volatility especially in the later periods. This implies that the adjustments have a tangible impact on perceived profitability efficiency, providing a potentially more conservative or realistic view of financial performance.

Overall Interpretation

The company experienced marked growth in profitability and asset size up to the third period, with peak net incomes and ROAs indicative of strong operational performance. This was followed by a period of decline in net income and ROA, despite continued asset growth initially, suggesting pressures on profitability or increased costs. The final periods show signs of recovery in adjusted profitability metrics despite a reduction in the asset base, which could reflect improved operational efficiency or strategic asset management. The divergence between reported and adjusted metrics underscores the importance of considering tax and other adjustments for comprehensive financial assessment.