Key Highlights

  • Fiscal 2026 Revenue fell 3% to USD 43.1 billion from USD 44.3 billion, while Net Income rose 146% to USD 13.6 billion and diluted EPS reached USD 12.70 against USD 5.01.
  • A USD 5.7 billion income tax benefit from releasing a valuation allowance in the second quarter lifted net income, while Operating Income fell to USD 8.66 billion from USD 12.36 billion.
  • Automotive revenue climbed to USD 6.0 billion from USD 4.0 billion, but handset revenue dropped to USD 24.1 billion from USD 27.8 billion.
  • Qualcomm returned USD 11.7 billion to shareholders through USD 7.8 billion of Buybacks and USD 3.9 billion of dividends, and USD 19.6 billion remains authorized.

A Tax Benefit Explains the Gap Between Profit and Sales

Qualcomm (NASDAQ:QCOM) filed its Annual Report on November 4, 2026 for the fiscal year ended September 27, 2026, a 52-week year. Revenue was USD 43,120 million versus USD 44,284 million, with equipment and services at USD 36,895 million and licensing at USD 6,225 million. Net income was USD 13,628 million against USD 5,541 million. The jump came from an income tax benefit of USD 4,214 million versus an expense of USD 7,122 million a year earlier, after a USD 5.7 billion valuation allowance release in the second quarter. Operating income of USD 8,658 million was about 30% lower (calculated), and gross Margin slipped to 53% from 55%.

Handset Decline Offsets Automotive and IoT Growth

The chip segment, QCT, fell 3% to USD 37,208 million. Handsets dropped USD 3.7 billion to USD 24,072 million, while automotive rose 52% (calculated) to USD 6,004 million and IoT grew to USD 7,132 million from USD 6,617 million. QCT pretax Earnings were USD 10,101 million, a 27% margin versus 30%. Research and Development rose to USD 10,207 million from USD 9,042 million, including a USD 428 million rise in share-based compensation and Data Center investment. The Alphawave acquisition, closed in the first quarter, added USD 235 million of higher data center revenue. Qualcomm (NASDAQ:QCOM) says Apple is expected to primarily use its own modems going forward, with a significant negative impact on QCT revenue.

Buybacks, Dividends and a Thinner Cash Pile

Operating cash flow was USD 11,145 million versus USD 14,012 million. Cash, cash equivalents and marketable securities, including restricted cash, fell to USD 7,681 million from USD 12,478 million, while debt, including commercial paper, was USD 15,112 million. The company repurchased 48 million shares at an average USD 161.96 and paid dividends of USD 3.62 per share. Cash taxes exceeded the tax provision in the year, and inventory was built to secure Supply amid constraints. The next markers are how quickly automotive, IoT and data center revenue can offset the handset decline, and the segment reporting change that moves Data Center into QCT from the first quarter of fiscal 2027.

Where Things Stand

The profit jump came mainly from a one-time tax benefit rather than from the operating business. Qualcomm (NASDAQ:QCOM) grew net income 146% even though revenue fell 3%, operating income fell about 30% and gross margin narrowed. Automotive and IoT growth is real but has not yet covered the handset shortfall, and the company flags Apple modem insourcing as a significant risk to chip revenue.