Qualcomm Q3 2025: Diversification into Automotive & IoT Fuels Profit Growth

Qualcomm, the technology giant whose inventions are at the heart of most modern smartphones, has just released its financial results for the third quarter of fiscal 2025. Today, we're diving into the numbers from its latest 10-Q filing with the SEC to see how the company is performing and what its results signal for the broader tech landscape.

Overall, the report paints a picture of robust health, with impressive growth in both revenue and profit, largely driven by the company's successful expansion beyond its traditional mobile phone stronghold.

A Surge in Revenue and Profit

Qualcomm's total revenue for the quarter ending June 29, 2025, reached $10.4 billion, a solid 10% increase from the $9.4 billion reported in the same quarter last year. This top-line growth translated into even stronger bottom-line results. Net income jumped over 25% to $2.7 billion, up from $2.1 billion a year ago. This resulted in diluted earnings per share (EPS) of $2.43, a significant rise from $1.88.

To visualize how the company's revenue breaks down and flows through its various costs to arrive at its net income, the chart below provides a clear overview of the income statement.

Growth Beyond the Handset

The driving force behind these strong numbers is Qualcomm's core semiconductor business, known as QCT (Qualcomm CDMA Technologies). This segment, which includes the company's well-known Snapdragon processors, saw its revenue climb 11% to nearly $9.0 billion.

What's particularly interesting is where that growth is coming from:

• Handsets: While still the largest component, handset revenue grew a respectable 7% to $6.3 billion. The company attributes this to higher average selling prices and a favorable shift toward its premium-tier processors.
• Automotive: This segment is firing on all cylinders, with revenue surging 21% to $984 million. This growth is fueled by the increasing adoption of Qualcomm's "Snapdragon Digital Cockpit" products in new vehicle launches.
• Internet of Things (IoT): The IoT segment, which covers everything from consumer electronics to industrial equipment, also posted a remarkable 24% increase in revenue to nearly $1.7 billion.

This data clearly shows that Qualcomm's push to diversify its chip business into automotive and IoT is paying off, creating powerful new growth engines for the company. Meanwhile, its high-margin licensing business, QTL (Qualcomm Technology Licensing), continued its steady performance, contributing over $1.3 billion in revenue.

Shareholder Returns and Lingering Risks

Qualcomm remains committed to returning capital to its shareholders. Over the first nine months of its fiscal year, the company paid $2.8 billion in dividends and spent $6.3 billion repurchasing its own stock.

However, the report isn't without its cautionary notes. In its "Risk Factors" section, the company highlights ongoing concerns, including the potential for major customers to vertically integrate by developing their own chips—a trend seen across the tech industry. It also points to the risks associated with having a significant portion of its business concentrated in China, especially amid persistent trade tensions.

In conclusion, Qualcomm's latest quarterly report showcases a company in a strong financial position. Its strategic diversification is successfully mitigating reliance on the mature smartphone market, with automotive and IoT emerging as powerful growth drivers. While industry-wide challenges like rising manufacturing costs and geopolitical risks remain, Qualcomm's performance this quarter demonstrates solid execution and a clear path forward.