Analysis of Reportable Segments
Qualcomm Inc. operates in 3 segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI).
Segment Profit Margin
Qualcomm Inc., profit margin by reportable segment
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Qualcomm CDMA Technologies (QCT) | 28.70% | 26.08% | 34.07% | 28.73% | 16.75% | 14.64% |
| Qualcomm Technology Licensing (QTL) | 72.27% | 68.38% | 72.79% | 73.21% | 68.46% | 64.34% |
| Qualcomm Strategic Initiatives (QSI) | 577.78% | -42.86% | -900.00% | 2,035.56% | -30.56% | 226.32% |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
- Qualcomm CDMA Technologies (QCT) Profit Margin
- The profit margin for this segment showed a consistent upward trend from 14.64% in 2019 to 34.07% in 2022, indicating strong improvement in profitability over these years. However, this was followed by a decline to 26.08% in 2023, before rising again to 28.7% in 2024. Overall, while there was growth over the long term, the recent fluctuations suggest some volatility in profit margins for this segment.
- Qualcomm Technology Licensing (QTL) Profit Margin
- This segment exhibited a relatively stable and high profit margin over the entire period. Starting at 64.34% in 2019, the margin increased to a peak of 73.21% in 2021, before slightly declining to 68.38% in 2023. By 2024, it rose again to 72.27%. The data reflect a strong and sustained profitability with minor variations, maintaining the segment as a highly profitable part of the business.
- Qualcomm Strategic Initiatives (QSI) Profit Margin
- The profit margin for this segment showed extreme volatility throughout the period. It began with an unusually high margin of 226.32% in 2019, dropped drastically to -30.56% in 2020, then surged to an exceptionally high 2035.56% in 2021. This was followed by a severe decline to -900% in 2022 and continued negative margins in 2023 at -42.86%, before recovering to a positive 577.78% in 2024. These swings indicate highly irregular performance, with significant gains and losses possibly reflecting the experimental or high-risk nature of the segment's activities.
Segment Profit Margin: Qualcomm CDMA Technologies (QCT)
Qualcomm Inc.; Qualcomm CDMA Technologies (QCT); segment profit margin calculation
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) before income taxes (EBT) | 9,527) | 7,924) | 12,837) | 7,763) | 2,763) | 2,143) |
| Revenues | 33,196) | 30,382) | 37,677) | 27,019) | 16,493) | 14,639) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 28.70% | 26.08% | 34.07% | 28.73% | 16.75% | 14.64% |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
1 2024 Calculation
Segment profit margin = 100 × Earnings (loss) before income taxes (EBT) ÷ Revenues
= 100 × 9,527 ÷ 33,196 = 28.70%
The segment exhibited notable fluctuations in key financial metrics over the six-year period under review. Revenues showed a consistent upward trajectory from 2019 to 2022, increasing substantially from $14,639 million to $37,677 million, which indicates robust sales growth. However, in 2023, revenues declined to $30,382 million before experiencing a partial recovery to $33,196 million in 2024.
Earnings before income taxes (EBT) mirrored a generally positive trend, rising from $2,143 million in 2019 to a peak of $12,837 million in 2022. Subsequently, EBT decreased to $7,924 million in 2023 but rebounded somewhat to $9,527 million in 2024. This movement suggests some volatility in profitability, potentially due to changes in operational efficiency or external market factors impacting cost structures or pricing power.
The segment profit margin percentage further corroborates this pattern. Initially, the margin improved steadily from 14.64% in 2019 to a high of 34.07% in 2022, indicating enhanced profitability relative to revenue. Yet, margin compression occurred in 2023, dropping to 26.08%, despite the partial revenue rebound in 2024, where the margin improved to 28.7%. This indicates a possible pressure on costs or pricing that affected profitability after 2022 but shows signs of stabilization.
Overall, the segment experienced strong growth and margin expansion up to 2022, followed by a period of contraction in both revenue and earnings metrics in 2023. The partial recovery in 2024 suggests adaptive responses to prior challenges; however, profitability remains below the peak levels attained in 2022. Close monitoring of factors influencing these fluctuations would be prudent to sustain growth and profitability trends going forward.
Segment Profit Margin: Qualcomm Technology Licensing (QTL)
Qualcomm Inc.; Qualcomm Technology Licensing (QTL); segment profit margin calculation
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) before income taxes (EBT) | 4,027) | 3,628) | 4,628) | 4,627) | 3,442) | 2,954) |
| Revenues | 5,572) | 5,306) | 6,358) | 6,320) | 5,028) | 4,591) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 72.27% | 68.38% | 72.79% | 73.21% | 68.46% | 64.34% |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
1 2024 Calculation
Segment profit margin = 100 × Earnings (loss) before income taxes (EBT) ÷ Revenues
= 100 × 4,027 ÷ 5,572 = 72.27%
The Qualcomm Technology Licensing (QTL) segment exhibited notable fluctuations in its financial performance over the six-year period from 2019 to 2024.
- Earnings Before Income Taxes (EBT)
- EBT increased steadily from $2,954 million in 2019 to a peak of $4,628 million in 2022, indicating a strong growth phase. This was followed by a decline to $3,628 million in 2023 before recovering to $4,027 million in 2024. The pattern suggests some volatility but overall growth compared to the initial year.
- Revenues
- Revenues showed an upward trend from $4,591 million in 2019 to $6,358 million in 2022, aligning with the increase in EBT. However, there was a significant drop to $5,306 million in 2023, followed by a modest recovery to $5,572 million in 2024. This decline and partial rebound indicate market or segment-specific challenges impacting sales during these years.
- Segment Profit Margin
- The segment profit margin demonstrated improvement from 64.34% in 2019 to a high of 73.21% in 2021, maintaining a similar level of 72.79% in 2022. After a dip to 68.38% in 2023, it increased again to 72.27% in 2024. This margin trend reflects efficient cost management and profitability despite revenue and EBT fluctuations, with a slight softness corresponding to the revenue challenges noted in 2023.
In summary, the segment experienced growth in profitability and earnings up to 2022, followed by a period of contraction in 2023 with partial recovery in 2024. Profit margins remained relatively strong throughout, indicating resilience in operational efficiency despite revenue pressures.
Segment Profit Margin: Qualcomm Strategic Initiatives (QSI)
Qualcomm Inc.; Qualcomm Strategic Initiatives (QSI); segment profit margin calculation
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Earnings (loss) before income taxes (EBT) | 104) | (12) | (279) | 916) | (11) | 344) |
| Revenues | 18) | 28) | 31) | 45) | 36) | 152) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 577.78% | -42.86% | -900.00% | 2,035.56% | -30.56% | 226.32% |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
1 2024 Calculation
Segment profit margin = 100 × Earnings (loss) before income taxes (EBT) ÷ Revenues
= 100 × 104 ÷ 18 = 577.78%
The analysis of the annual financial data for the Qualcomm Strategic Initiatives (QSI) segment reveals significant volatility and fluctuating performance over the six-year period under review.
- Earnings (loss) before income taxes (EBT)
- The EBT figures show extreme variability, with positive earnings recorded in 2019, 2021, and 2024, and losses reported in 2020, 2022, and 2023. Specifically, the segment reported an EBT of $344 million in 2019, which turned into a loss of $11 million in 2020, then surged to a high of $916 million in 2021. This was followed by a loss of $279 million in 2022 and a further loss of $12 million in 2023, before rebounding strongly to $104 million in 2024. The pattern indicates irregular profitability, with gains not consistently sustained.
- Revenues
- Revenues exhibit a consistent downward trend throughout the period. Starting at $152 million in 2019, revenues declined sharply to $36 million in 2020 and fluctuated at relatively low levels thereafter—$45 million in 2021, then decreasing progressively to $31 million in 2022, $28 million in 2023, and reaching the lowest value of $18 million in 2024. This persistent decrease suggests diminishing sales or contract values within the segment.
- Segment Profit Margin
- The segment profit margin depicts extreme fluctuations, including both extraordinarily high and negative values. The margin was exceptionally high at 226.32% in 2019, dropped sharply to negative 30.56% in 2020, surged impressively to 2035.56% in 2021, then plummeted to -900% in 2022, worsened to -42.86% in 2023, and surged again to 577.78% in 2024. Such volatility indicates inconsistent cost management or profitability factors affecting the segment, possibly due to irregular or one-time income and expense items.
Overall, the segment’s financial performance is characterized by considerable instability in profitability and a clear decline in revenue generation. The highly volatile profit margins corroborate the unpredictable earnings performance, suggesting that while some years show strong profitability, others experience significant losses. The consistent decline in revenue alongside irregular earnings suggests challenges in sustaining growth and profitability within this segment over the reported years.
Revenues
Qualcomm Inc., revenues by reportable segment
US$ in millions
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Qualcomm CDMA Technologies (QCT) | 33,196) | 30,382) | 37,677) | 27,019) | 16,493) | 14,639) |
| Qualcomm Technology Licensing (QTL) | 5,572) | 5,306) | 6,358) | 6,320) | 5,028) | 4,591) |
| Qualcomm Strategic Initiatives (QSI) | 18) | 28) | 31) | 45) | 36) | 152) |
| Reconciling items | 176) | 104) | 134) | 182) | 1,974) | 4,891) |
| Total | 38,962) | 35,820) | 44,200) | 33,566) | 23,531) | 24,273) |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
The segment revenue data reveals distinct trends across Qualcomm's primary business units over a six-year period from 2019 to 2024. Each segment exhibits fluctuating performance patterns reflecting varied business dynamics and market conditions.
- Qualcomm CDMA Technologies (QCT)
- This segment demonstrated substantial growth from 2019 through 2022, increasing from $14,639 million to $37,677 million, more than doubling in three years. However, a noticeable decline occurred in 2023 where revenues fell to $30,382 million, followed by a moderate rebound to $33,196 million in 2024. Overall, QCT remains the largest revenue contributor among all segments, showing strong cyclical growth with some volatility in recent periods.
- Qualcomm Technology Licensing (QTL)
- The QTL segment exhibited steady growth from 2019 to 2021, rising from $4,591 million to $6,320 million. This upward trend plateaued through 2022 at $6,358 million but then saw a decline in 2023 to $5,306 million. A partial recovery to $5,572 million took place in 2024. The licensing revenue stream appears relatively stable but subject to some contraction in recent years.
- Qualcomm Strategic Initiatives (QSI)
- Revenues in the QSI segment declined considerably over the period, dropping from $152 million in 2019 to just $18 million in 2024. This consistent decrease indicates a shrinking contribution from strategic initiatives, potentially reflecting shifts in corporate focus or investment priorities.
- Reconciling Items
- Reconciling items show a progressive decline from $4,891 million in 2019 to a low of $104 million in 2023, followed by a minor increase to $176 million in 2024. This trend suggests a reduction in adjustments or eliminations required within consolidated segment reporting, likely due to changes in accounting treatments or segment boundary definitions.
- Total Revenue
- Total consolidated revenue followed an overall growth trajectory, rising from $24,273 million in 2019 to a peak of $44,200 million in 2022. This was succeeded by a decline to $35,820 million in 2023, then an increase to $38,962 million in 2024. The variation in total revenue primarily reflects the trends observed in the QCT segment, the largest contributor, while other segments influence the overall variability to a lesser extent.
Earnings (loss) before income taxes (EBT)
Qualcomm Inc., earnings (loss) before income taxes (ebt) by reportable segment
US$ in millions
| Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | Sep 29, 2019 | |
|---|---|---|---|---|---|---|
| Qualcomm CDMA Technologies (QCT) | 9,527) | 7,924) | 12,837) | 7,763) | 2,763) | 2,143) |
| Qualcomm Technology Licensing (QTL) | 4,027) | 3,628) | 4,628) | 4,627) | 3,442) | 2,954) |
| Qualcomm Strategic Initiatives (QSI) | 104) | (12) | (279) | 916) | (11) | 344) |
| Reconciling items | (3,322) | (4,097) | (2,188) | (3,032) | (475) | 2,040) |
| Total | 10,336) | 7,443) | 14,998) | 10,274) | 5,719) | 7,481) |
Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).
- Qualcomm CDMA Technologies (QCT)
- The segment exhibited a strong upward trend from 2019 through 2022, increasing from $2,143 million to a peak of $12,837 million. However, in 2023, earnings before income taxes (EBT) declined sharply to $7,924 million, before recovering moderately to $9,527 million in 2024. Despite the recent volatility, the overall trend shows growth over the six-year period.
- Qualcomm Technology Licensing (QTL)
- This segment showed steady growth from 2019 ($2,954 million) to 2021 ($4,627 million). Earnings plateaued in 2022 at $4,628 million, then declined to $3,628 million in 2023. A moderate recovery to $4,027 million is observed in 2024. The data indicates some cyclicality or external pressures affecting licensing revenues in the last two years.
- Qualcomm Strategic Initiatives (QSI)
- Segment earnings displayed high volatility, with positive values in 2019 ($344 million) and 2021 ($916 million) contrasted by losses in 2020 (-$11 million), 2022 (-$279 million), and 2023 (-$12 million). A recovery to $104 million is noted in 2024, though the amounts remain small relative to other segments. This suggests fluctuating performance and possibly ongoing investment or restructuring activities.
- Reconciling items
- These items showed a negative trend overall, starting with a positive $2,040 million in 2019, followed by successive negative values reaching -$4,097 million in 2023, before a slight improvement to -$3,322 million in 2024. This pattern may indicate adjustments, eliminations, or costs negatively impacting overall profitability, contributing to fluctuations in aggregate earnings.
- Total Segment EBT
- The total segment earnings before income taxes displayed variability across the periods. After an initial value of $7,481 million in 2019, there was a dip to $5,719 million in 2020. The total then increased substantially to a high of $14,998 million in 2022 before falling again to $7,443 million in 2023. In 2024, total segment EBT rebounded to $10,336 million. This pattern suggests a cycle of growth peaking in 2022, followed by periods of decline and partial recovery, reflecting the combined effects of individual segment performance and reconciling adjustments.