Qualcomm Inc. (NASDAQ:QCOM)

The profitability ratios demonstrate varied performance over the analyzed period. Generally, a decline in profitability metrics is observed from 2020 through 2025, although with some fluctuations. Initial values are notably high, particularly for Return on Equity, and subsequently moderate over time.

Gross Profit Margin

The gross profit margin exhibited relative stability in the initial period, fluctuating between approximately 57.5% and 60.2% from December 2020 to September 2022. A gradual downward trend then emerges, decreasing from 57.84% in September 2022 to 55.10% in December 2025. The decline, while consistent, is relatively modest.

Operating Profit Margin

The operating profit margin shows more pronounced fluctuations. It increased from 29.04% in December 2020 to a peak of 35.88% in September 2022, before declining significantly. By December 2025, the operating profit margin reached 27.12%, representing a substantial decrease from its highest point. The period from March 2022 to December 2025 demonstrates a clear downward trajectory.

Net Profit Margin

Similar to the operating profit margin, the net profit margin experienced an initial increase, peaking at 30.52% in June 2022. However, this was followed by a more dramatic decline. The most significant drop occurs between June 2025 (26.76%) and December 2025 (12.51%), indicating a substantial reduction in net profitability. The margin concludes the period at 11.96% in March 2025.

Return on Equity (ROE)

Return on Equity begins at a very high level of 91.17% in December 2020, and peaks at 112.56% in June 2021. A consistent decline is then observed, falling to 23.25% by March 2025. This represents a significant contraction in the company’s ability to generate profit from shareholder investments. The rate of decline appears to accelerate in the later periods.

Return on Assets (ROA)

Return on Assets follows a similar pattern to ROE, starting at 17.95% in December 2020 and reaching a high of 27.35% in June 2022. A subsequent decline is evident, with ROA decreasing to 10.12% by March 2025. This suggests a diminishing efficiency in utilizing assets to generate earnings. The decline mirrors the trend observed in other profitability metrics.

In summary, while initial profitability levels were strong, a consistent downward trend is apparent across all analyzed ratios from 2022 onwards. The declines in net profit margin, ROE, and ROA are particularly noteworthy, suggesting increasing challenges in maintaining profitability and efficiently utilizing resources.

The gross profit margin exhibited a generally decreasing trend over the observed period, spanning from December 2020 to December 2025. While fluctuations occurred, the overall movement suggests a compression of profitability at the gross level.

Initial Period (Dec 2020 - Jun 2021)

The gross profit margin began around 60.17% in December 2020 and experienced a slight decline to 59.82% by June 2021. This initial period demonstrated relative stability, with margins fluctuating within a narrow range.

Downward Trend (Sep 2021 - Mar 2023)

A more pronounced downward trend commenced in September 2021, with the margin decreasing from 57.51% to 56.46% by March 2023. This period saw consistent, albeit moderate, erosion of the gross profit margin. The lowest point in the observed period was reached in March 2023 at 56.46%.

Stabilization and Slight Recovery (Jun 2023 - Sep 2024)

From June 2023 to September 2024, the gross profit margin showed signs of stabilization, fluctuating between 55.70% and 56.21%. A slight recovery was observed during this timeframe, though it did not return to levels seen earlier in the period.

Recent Period (Dec 2024 - Dec 2025)

The final period demonstrated continued fluctuation, with the margin decreasing to 55.68% in December 2024 before increasing to 55.10% in December 2025. This suggests ongoing pressure on gross profitability, but with some potential for stabilization.

Overall, the gross profit margin experienced a net decrease over the entire period. While short-term fluctuations were present, the dominant pattern indicates a gradual reduction in the percentage of revenue remaining after accounting for the cost of goods sold. This trend warrants further investigation to determine the underlying drivers, such as changes in pricing, cost of materials, or production efficiency.

The operating profit margin exhibited a generally positive trajectory over the observed period, though with notable fluctuations. Initial values ranged from 29.04% to 31.74% in the first four quarters, demonstrating a relatively stable and healthy profitability. A subsequent increase was observed, peaking at 35.82% and 35.88% in the quarters ending June 2022 and September 2022, respectively. Following this peak, the margin experienced a decline, reaching a low of 21.74% in the quarter ending March 2023. A recovery was then evident, with the margin gradually increasing to 27.12% by the end of the observation period.

Initial Period (Dec 2020 - Sep 2021)

The operating profit margin demonstrated consistent strength, fluctuating within a narrow range of approximately 29% to 32%. This suggests a stable operating environment and effective cost management during this timeframe.

Peak and Subsequent Decline (Jun 2022 - Mar 2023)

A significant increase in the operating profit margin occurred in mid-2022, indicating improved operational efficiency or favorable pricing dynamics. However, this was followed by a substantial decline throughout the subsequent quarters, potentially attributable to increased costs, pricing pressures, or a shift in revenue mix. The decline warrants further investigation to identify the underlying causes.

Recovery Phase (Mar 2023 - Dec 2025)

From the low point in March 2023, the operating profit margin showed a consistent, albeit moderate, recovery. The margin stabilized in the 27% to 28% range towards the end of the period, suggesting a stabilization of operational performance. The recovery, while positive, did not fully restore the margin to the levels observed in the first half of 2022.

Long-Term Trend

Despite the intermediate fluctuations, the operating profit margin generally trended upwards over the entire observation period, from 29.04% in December 2020 to 27.12% in December 2025. This indicates a long-term improvement in the company’s ability to generate profit from its core operations, although the recent period shows a plateauing of this improvement.

The net profit margin exhibited a generally strong performance throughout the observed period, though with notable fluctuations. Initial values demonstrated a robust margin, followed by periods of both expansion and contraction. A significant decline is evident in the most recent reporting periods.

Initial Period (Dec 2020 - Jun 2022)

The net profit margin began at 25.21% in December 2020 and generally increased, peaking at 30.52% in June 2022. This indicates a period of improving profitability, where the company effectively managed costs relative to revenue growth. The margin remained above 28% for the majority of this timeframe, suggesting consistent operational efficiency.

Mid-Period Fluctuation (Sep 2022 - Jun 2023)

Following the peak, the net profit margin experienced a downward trend, decreasing from 29.27% in September 2022 to 22.33% in June 2023. While remaining positive, this period reflects a weakening in profitability, potentially due to increased costs or slowing revenue growth. The decline was not linear, with some quarterly variations.

Recent Performance (Sep 2023 - Dec 2025)

A recovery was observed in September 2023, with the margin reaching 26.03%. However, this was followed by a dramatic decrease in December 2025, resulting in a negative net profit margin of -12.51%. This represents a substantial shift in financial performance and warrants further investigation. The subsequent quarters show a slight recovery to 11.96% in December 2025.

Overall Trend

The overall trend demonstrates a cyclical pattern. A period of growth and high profitability was followed by a period of decline, and then a sharp negative turn in the most recent quarter. The volatility observed in the later periods suggests increased sensitivity to external factors or internal operational challenges. The recent negative margin is a significant outlier compared to the historical performance.

The observed fluctuations in net profit margin suggest a dynamic business environment. Further analysis, incorporating factors beyond the scope of this review, is recommended to understand the drivers behind these changes, particularly the substantial decline in the most recent reporting period.

The Return on Equity (ROE) exhibited considerable fluctuation over the observed period. Initially, the ROE demonstrated a strong upward trajectory, peaking in the March 2021 quarter. Subsequently, the ROE experienced a decline, stabilizing within a narrower range before undergoing another period of volatility.

Initial Growth & Subsequent Decline (Dec 2020 – Dec 2021)

The ROE began at 91.17% in December 2020 and increased significantly, reaching a high of 108.05% in March 2021 and 112.56% in June 2021. Following this peak, the ROE decreased to 88.12% by December 2021, indicating a potential shift in the company’s profitability relative to equity.

Continued Downward Trend & Stabilization (Mar 2022 – Sep 2022)

The downward trend continued into the first half of 2022, with the ROE falling to 80.15% in June 2022 and further to 71.81% in September 2022. While still declining, the rate of decrease appeared to moderate during this period.

Further Decline & Low Point (Dec 2022 – Sep 2023)

The ROE continued its decline, reaching 53.52% in December 2022 and a low of 33.51% in September 2023. This represents a substantial decrease from the initial values observed in 2020 and 2021. The decline suggests a weakening in the company’s ability to generate profits from shareholder investments.

Recovery & Recent Performance (Dec 2023 – Sep 2025)

A partial recovery was observed starting in December 2023, with the ROE increasing to 33.67%. This upward momentum continued through September 2025, reaching 26.13%. However, a significant negative value of -3,117% was recorded in December 2025, representing a substantial loss relative to equity. The ROE then rebounded to 23.25% in the final measurement period.

The fluctuations in ROE correlate with changes in both net income and stockholders’ equity. While stockholders’ equity consistently increased over the period, net income experienced more variability, contributing to the observed ROE trends. The negative ROE in December 2025 is particularly noteworthy and warrants further investigation into the underlying causes of the substantial net loss.

The Return on Assets (ROA) exhibited a generally increasing trend over the observed period, punctuated by fluctuations. Initial values demonstrated strong profitability, followed by a period of stabilization and then a significant downturn before a partial recovery.

Initial Growth Phase (Dec 2020 – Jun 2022)

From December 2020 to June 2022, ROA increased from 17.95% to a peak of 27.35%. This indicates a growing ability to generate profit from its asset base. The increase suggests improved operational efficiency, effective asset utilization, or a combination of both. The rate of increase was particularly notable between March 2021 and June 2022.

Stabilization and Decline (Jun 2022 – Sep 2023)

Following the peak in June 2022, ROA experienced a period of stabilization followed by a decline. While remaining positive, the ratio decreased from 27.35% to 14.17% by September 2023. This suggests a weakening in the company’s ability to generate earnings relative to its asset base, potentially due to increased costs, decreased sales, or less efficient asset management.

Recovery and Subsequent Fluctuations (Sep 2023 – Jun 2025)

A partial recovery was observed from September 2023 to December 2023, with ROA reaching 27.67%. However, this was followed by further fluctuations. The ratio decreased significantly to -3.117% in December 2025, indicating a loss relative to assets. This substantial decline warrants further investigation to determine the underlying causes, such as significant asset write-downs or substantial losses. Prior to this, ROA had been trending upwards again, reaching 21.10% in June 2025.

Overall Trend

Despite the fluctuations, the latter half of the period demonstrates increased volatility in ROA. The negative value in December 2025 is a significant outlier and represents a considerable deviation from the preceding trend. The overall trend suggests a company that was initially improving its asset utilization and profitability, but has recently experienced challenges impacting its ability to generate returns from its assets.

The observed changes in ROA should be considered in conjunction with other financial metrics and industry benchmarks to gain a more comprehensive understanding of the company’s performance.