michael.hicks@futurenet.com (Michael L Hicks)
2025-02-05 18:26:00
www.androidcentral.com
What you need to know
- Qualcomm announced a record $11.67 billion revenue in the first fiscal-year quarter of 2025.
- The largest YoY boost came from automotive (61%), though handsets (13%) was the largest revenue source at $7.57 billion.
- Qualcomm CEO Cristiano Amon focused on “growing edge AI opportunity” demonstrated by DeepSeek AI.
- Arm has withdrawn its decision to terminate the Qualcomm architecture license agreement, preserving the latter’s ability to sell custom Oryon CPUs.
Qualcomm opened the 2025 fiscal year with its strongest revenue quarter in the company’s history, hitting $11.67 billion primarily on the strength of the Snapdragon 8 Elite and its “long-standing strategic partnerships with Samsung and Google.”
But the company also warned that the next quarter might be “flat” at best, in part thanks to strong Apple iPhone sales.
CEO Cristiano Amon headlined Qualcomm’s Q1FY25 earnings call, saying that the company’s “quarterly revenue records” reflect “the strength of our technology, product roadmap, and end-customer demand.”
A 13% growth in handset revenue came from “stronger consumer demand for recently launched flagship smartphones and global share in Samsung Galaxy S25 devices,” said Qualcomm COO Akash Palkhiwala.
After touting the success of the Snapdragon 8 Elite, Amon focused on the new Snapdragon X for mini-desktop PCs, as well as Qualcomm’s dominance in the XR space as the primary partner for Meta Quest headsets, Ray-Ban smart glasses, and upcoming Android XR headsets like Samsung’s Project Moohan.
“We remain optimistic that we are at the beginning of an inflection point for smart glasses to gain scale,” Amon said, which lines up with Meta CEO Mark Zuckerberg’s comments during his recent earnings call that he hopes to see “hundreds of millions, and eventually billions of AI glasses.”
Just as Qualcomm saw a 68% automotive profit growth in the last quarterly earnings, they saw another 61% boost for this quarter, up to $961 million — while IoT grew 36% to $1.5 billion. Qualcomm announced an Amazon partnership at CES 2025 to create “LLM-powered experiences in the car,” and its Snapdragon Cockpit Elite has received a “strong industry reaction,” Amon claims.
Amon predicts the company will earn $22 billion on “non-handset revenue by 2029,” compared to about $8 billion total in 2024. This suggests that edge AI and XR business will grow on an exponential scale, making Qualcomm less dependent upon the smartphone business alone.
Amon explicitly referenced the recent, shocking DeepSeek AI demo as evidence that “AI models are developing faster, becoming smaller, more capable and efficient, and now able to run directly” on Snapdragon-powered tech, with Microsoft bringing “NPU-optimized versions of DeepSeek R1” to Snapdragon X-based Copilot+ PCs.
In the shorter term, Qualcomm’s executives warned that Q2FY2025 — or January through March 2025 — will see a “decline in QCT handset revenues” from $10 billion to as low as $8.9 billion. The main cause will be “seasonality and shipments to Apple,” which makes its own custom chips.
Apple recently reported a 4% YoY growth in its earnings call last week, and is evidently expected to see even stronger iPhone 16 series sales next quarter while Android phone flagship sales may decline.
At the very least, Qualcomm can continue to make profits despite Arm’s efforts to ban Qualcomm’s chips last year. Amon reported that “Arm recently notified us that it was withdrawing its October 22, 2024 notice of breach, and indicated that it has no current plan to terminate the Qualcomm architecture license agreement.” If Arm hadn’t lost its recent legal battle, future Qualcomm earnings would have been significantly deflated.
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