Qualcomm's Q2 2025 10-Q: Inside the $11B Revenue Engine

QUALCOMM (QCOM) recently released its financial results for the second quarter of fiscal 2025, and it's a great opportunity to look under the hood of this tech giant. By digging into the income statement from their latest 10-Q filing, we can see not just how much money the company made, but how it made it.

For the three months ending March 30, 2025, QUALCOMM reported a strong total revenue of nearly $11.0 billion, culminating in a healthy net income of $2.8 billion. This represents a net margin of about 25.6%, meaning the company kept over a quarter of every dollar in revenue as profit.

To better understand how QUALCOMM's revenue translates into profit, this flow diagram illustrates the journey from sales to the bottom line, breaking down the major costs and expenses along the way.

As the chart shows, the cost of generating this revenue was approximately $4.9 billion, leaving the company with a gross profit of $6.0 billion—a gross margin of 55%. After accounting for operating expenses, primarily a hefty $2.2 billion investment in Research and Development (R&D), the company's operating income stood at $3.1 billion.

The Two Engines of Growth

QUALCOMM’s business is primarily split into two powerful segments:

• QCT (Qualcomm CDMA Technologies): This is the semiconductor division, responsible for designing and selling the Snapdragon chips that power countless devices. In Q2, QCT was the main revenue driver, bringing in $9.5 billion. This segment saw impressive growth across the board, particularly in its Automotive and Internet of Things (IoT) businesses, which complemented the nearly $7 billion from its core Handsets business.

• QTL (Qualcomm Technology Licensing): This segment manages the company's vast portfolio of foundational patents for mobile technology. While it generated a smaller $1.3 billion in revenue, it is incredibly profitable. With an earnings before tax (EBT) of $929 million, the QTL division boasts a remarkable EBT margin of over 70%.

This dual strategy is key to QUALCOMM's success: the QCT segment drives massive scale and product sales, while the high-margin QTL segment provides a stable and highly profitable revenue stream from its intellectual property.

In Conclusion

QUALCOMM's latest filing paints a picture of a company executing well, with its core semiconductor business firing on all cylinders and expanding into new growth areas. The substantial and consistent investment in R&D underscores its commitment to staying at the forefront of technology. While the company acknowledges risks in its filing, such as its significant business concentration in China and the trend of customers developing their own chips, its Q2 performance demonstrates strong operational and financial health.