QUALCOMM (QCOM) 31 Jul 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, July 31, 2024. The playback number for today's call is (877) 660-6853, International callers, please dial (201) 612-7415. The playback reservation number is 13747430.

to of call please Investor like Lopez-Hodoyan, to go now President Vice Relations. would turn over the Mauricio ahead. I Mr. Lopez-Hodoyan,

include Amon and remarks you, good everyone. call Thank afternoon, by Akash and will Cristiano Palkhiwala. Today's prepared

the In session. question-and-answer addition, will Rogers Alex join

on our call Investor can accompany access slide that release earnings You Relations a website. and presentation this our

website on will be replay addition, In later and today. qualcomm.com, this call is a on being our webcast available

in non-GAAP the on and Regulation call defined today, measures During related our GAAP G, use can to financial the will find you as we reconciliations website.

will forward-looking projections which events our to contain SEC materially Please cause refer events, business future We XX-K, from results forward-looking filings, make trends actual could results financial forward-looking statements. including or also materially statements, in or and statements. estimates or projected our industry recent or including the important to could of most Actual differ that our results. factors differ business those from

comments to now Chief Cristiano from Officer, and And Amon. Qualcomm's President Executive

Thanks range. of $X.XX, and reflect fiscal midpoint non-GAAP delivered of Thank automotive Revenues chipset our you, $X.X mobile our platforms billion Snapdragon our non-GAAP guidance of IoT and we of smartphones. QX, a business the in growth afternoon, traction revenues today. In us for billion above sequential was from and per good share joining continued which across earnings and leading of $X.X Mauricio, everyone.

of the were revenues result IoT of revenues $X.X and automotive Our business execution strategy. our were ongoing diversification billion. Licensing

global digital autonomy. and/or These XX new and In connectivity key automakers from with business. than we share ADAS automotive, secured some to like wins quarter. cockpit more include during the would highlights I Now next-generation design the

virtually to now Digital scale and for asset all Snapdragon is Our the automotive industry. continue OEMs Chassis key a across

in to our be simultaneously with important extending and all we're capabilities note on that domains autonomy is AI Future automotive-centric Snapdragon to to AI Snapdragon solutions for experiences the combines SoC. to industry-leading forward, architecture and enable Gen a Digital to look cases central services. utilized applications. to expansion include ADAS Ride we software-defined on Gen computing for As single It's data AI uniquely enable car positioned on-device which transition, microcontrollers, cloud and Chassis experiences growth A Gen ADAS automotive user-centric the our digital focused great into and use is across sensor drivers digital workloads cockpit the Flex our AI example solution, X-wheelers vehicle replacing cockpit.

mobile to and on are In AI continue with Snapdragon Together handsets, the to end, help with of become in pleased working features and to expansion cases well industry trajectory precursor drive will with own To our premium we FoldX FlipX continued AI the believe are efficiency for we're is the Galaxy, next-generation extraordinary coming push Gen partners, the of positioned AI other of AI powered very transformation and Samsung across delivering X and Z is Gen by X level Qualcomm device pleased the which growth devices. Galaxy for we boundaries foldable that use capabilities, that all smartphones on-device years. performance, power cloud. This the we applications on pervasive AI devices. across smartphones. in this AI-centric a

our platform, our our performance This already the our powered October, and Snapdragon by next-generation custom At of CPU. Oryon combined first our with and new both NPU AI will details be in flagship exceeding upcoming customers' Snapdragon expectations. to Summit reveal capabilities platform, X unparalleled we is mobile

leadership highlight for XX of In This on computing launch back the transitions purchase very Windows most restoring in marks compute, Buy, PCs platforms XX the ecosystem. Copilot+ Costco, Series became across Best retailers. start PCs Norman of Copilot+ XX. personal XX retail spaces many pleased performance Currys, the Lenovo, important Harvey from Copilot+ and X Elite of powered countries now in we're and more. that significant Snapdragon since to dedicated Snapdragon are and unique by XX Dell, It's to available one available Microsoft, June and exclusively is Windows ASUS the the Acer, Samsung and HP, X

the We and with are initial out very online. pleased several with models sold response at retailers

customers more to across We're with presence than countries Snapdragon working in their readiness respective retail global closely environments. to than also the in is Our expected coming XX expand retailers XX months. to commercial more drive XX

of responsive to the Additionally, applications developers AI added and Series AI Copilot+ create take for models on-device X advantage optimized to Snapdragon AI PCs. compelling to easily power-efficient platforms hub, allowing we the Qualcomm generative

next look we the forward working with on PCs. Copilot+ wave OEMs already to As XXXX, of are we

new In expand addition our $XXX X performance. will wins, retail low product Series road design PCs address with prices to without NPU to map as compromising as

begun we transition the of believe Series ARM-compatible benefits PC Longer the the that make an term, to Snapdragon it X platforms has architecture. ecosystem clear

forecasting will forward, at look least be that we of AI we're XX% XXXX. by capable PCs As

leadership Given silicon to of be technology suppliers as top our clear one positioned these expect for road map we and the competitive devices.

the reality about gain excited scale. the foresee cases success We enabled new an for demand continued particularly of positive the in momentum of XR, Gen Meta's devices acceleration exceeding Llama Sales expectations Ray-Ban use mixed into in and part glasses. as the due in remain also our integration by are experience. extended to smart We AI

XR we glasses Snapdragon Most including reality head-mounted others. major engaged upcoming augmented Meta, choice, X XR mixed Microsoft, Augmented and showcase Google, Sony's the of NTT's ecosystem World remains and device. the Expo with will at and players, the recently, reality platform are industry latest devices, of

to This we're for IoT. connectivity, of including computing on network industrial in XG we're and area report non-terrestrial enterprise networks IoT, industrial Saudi with ecosystem, significant pleased AI wide Aramco the now advanced the solutions cases cellular industrial also that development collaborating accelerating In use includes and and first XG, for private Arabia.

trend our core by increase PC. transformed the computing more on-device especially we for is expect AI and sector built have aligns AI, we processing. with for demand industrial in the road map Auto well As capabilities, an This and complex

next at edge we critical space. becomes enterprise phase unique intelligence to next the few for transformation, platform. high-performance announce processing build IoT road map In opportunity this digital support for for models our in the product ability dedicated in the and position see months, a new As multiple leadership a industrial we will multibillion development systems, including AI parameter run a to comprehensive operating of

we that Finally, signed pleased Chinese agreement share Honor, licensing OEM. a very a smartphone we're to with long-term key leading recently

and date we're beyond We continue to diversification company's particularly of have in what PC. the automotive pleased and be we mobile, proud accomplished with to

diversification provide our Investor Day updates in additional strategy XX. at on November our York New will on We

now to call I turn like to over would the Akash.

our third quarter Thank afternoon, you, earnings. I'll start everyone. and Cristiano, fiscal with good

XX% revenues continue in to revenues of above EBT which non-GAAP the We QTL our of with the our upside our sequentially to $X.X as guidance. in revenue in of in the Chinese of increased both margin $X.X XX% greater recovery are growth high end announce and with billion pleased in line our revenues both to $X.X by which a results were EBITDA were $X.X premium driven of expectations, $X.X scale IoT and handset and revenues than range, with QCT X% billion midpoint billion at reflecting of from was we OEMs. see year-over-year expectations. and automotive. billion QCT billion strong EPS environment. delivered of QCT industry handsets IoT of $X.XX, guidance gradual in XX%, margin Android line of were and of revenues

of our XX%. delivered record We automotive fourth $XXX quarter sequential of consecutive revenues with of growth QCT million,

acceleration the in industry. connectivity Our and reflects leading of new vehicle revenue content solutions launches as advanced we growth supplier computing the automotive to become

including billion million stockholders in in stock $X.X during the Lastly, billion repurchases dividends. $XXX $X.X we quarter, returned to and

forecast. Before outline turning would to included our in I like factors guidance, X to

of to global year-over-year largely financial First, 'XX XG, handset units to a XG, to consistent on flat flat our with slightly we units, long-term up calendar basis. continue estimate planning in XG be assumption

change Second, in to to will which revoked first license Huawei, to the on late in revenues quarter This our 'XX. impact calendar products and 'XX both the quarter fiscal was export May was of set current our X. expire

we with every to period X quarter Lastly, week our as fiscal fourth our fiscal includes calendar end reporting quarter align years. X the additional an

fourth guidance. to quarter turning fiscal Now

to We units. $X.X XX%. non-GAAP revenues billion billion billion of revenues of and estimate $X.X $X.XX EPS we of to we EBT billion margins QTL, reflecting revenues In are handset to EBT of XX%, $X.X expect and $X.XX XX% billion $XX.X billion seasonality $X.XX. to of forecasting In QCT, for XX% of $X.XX to and to margins normal

new our 'XX. an lower the premium offset modem-only revenues expect low We This first handset Android in percentage forecast single-digit by of partially increase grow reflects fiscal sequentially. seasonally QCT launch chipset by ahead purchases quarter from revenue of a handset customer in to Snapdragon

expect consumer, networking double-digit IoT across by increase percentage and driven revenues growth industrial. QCT We will low by sequentially,

outperformance our the Following QCT the remain quarter. automotive expect revenues quarter, in we flat in fiscal fourth to third

track ability to We our to targets. confidence to long-term execute revenue on growth 'XX, deliver XX% providing in in approximately fiscal are year-over-year our

non-GAAP be billion. to expenses expect we operating Lastly, $X.X approximately

the we performance our are are to financial of Based XX% EPS non-GAAP guidance, midpoint In on to relative closing, we fiscal with pleased in track growth 'XX. of strong and fiscal approximately deliver 'XX. our on execution

key been quarter, validated accelerated for industry support and our vision on-device Over the for last AI several has by players.

in we industrial, PCs, and automotive to drive expect AI us networking, handsets and XR. differentiation for competitive Beyond on-device

Our end to we all has industry-leading us our diversification look positioned the leading And technology products months product our strategy. in to continue introducing new ahead, on execute and portfolio to markets. across forward

Day Finally, our concludes update as our automotive where Investor we'll IoT and be we'll prepared XX, This an strategy. diversification remarks. Cristiano on November our outlined, hosting provide on

you, to Mauricio. Back

Thank questions. you, now ready . we for are Operator, Akash.

come will Cowen. Matt First from Instructions] with line TD [Operator the of question Ramsay

couple automotive through a that the questions, company the to or And doubt some starting OEM X in bit come really upside talk ago. little highlighting in of pretty I some there. seeing on big diversification you like I of this the is you revenue programs could is in years one revenue. about won business, have maybe deliver no first the guys, X now some the of now you're a guess

see Do AI time units mean momentum keep people could start roll asking that on next roll these the from, of several back? you of as continues the about long won PCs. out we Cristiano then through I a lots some one, guess, the second to you as kind what I And questions think we programs quarters? of

ramp you to really when here know, period units. to getting holiday for you close start would As in the you're sell

maybe current of fiscal next the your company year. take units of could what expectations the as for terms you forward revenue could or on PC into in us your market So bring look give your we

Matt. Very questions. Thanks Thank the good. you, for asking

start to you want it. with we're performance. Look, of There pleased signs pipeline see into the things me Let we to automotive. I saying of start really this translating couple with by is very like a automotive And revenue. are continue

industry. with we our technology, became the The have for being digital, the would the add revenue a first industry new because pipeline. which really about one continue is only key automotive quarter, XX XX the about is Digital our it's just with automotive our or the launch launched content, but independent to of the new combustion also we have not all models all whether And cars also share internal Chassis of is actually EV design asset about be Snapdragon wins, to within new is,

So that. about we're very excited

use developed. use AI see in of the especially model, where models of audio. And Gen That to pipeline, be An content to interesting the user side on cars provided billion in the see as script, the metric digital Akash cockpits interface having. lot is It from a upside was We're $X continue said being Gen large doing cases, on we a starting our upside what AI in automotive. as are using with from get the question. in it track comment for could wheel. your actually we our grow. to new will We great revenue the upgrade for language behind is One an to to case launched we're XXXX. technology that

is with about very saying We will new compatible. we're which architecture comment is Windows, it's a exceeding Copilot+ pleased, by version the of expectations. second is -- new PCs. Arm an The start I our a

launched have a We that with right ramp will internal our the models we expect XX of market get in time. that now targets. what that, over But exceeding the seen is period

And as out. will Some prepared that, models, should my I be mentioned continue sold I transitions. a as we expect to had in the slow market crescendo, remarks, and think that steady

Microsoft, to biggest same continue did going have expect EFA, thing company, for auto, every PC driver of coming announcements will diversification we're up quarter. as be Copilot+ We to the from continue product features to new very the to we'll happy at next the see that we and with track we coming and more you're about

is Chatterjee the next Our with from question line Samik JPMorgan. of

have terms look to the that you outside next you the mid-tier with I smartphones. One, AI AI guess, as year, follow-up. for a I appreciable if I in on you're work consumers Congrats off AI more are the or of already. pipeline thinking can wins related share with your into of any print features start with about difference And here. if from in to smartphone smartphones seeing you features with, questions to flagship those in design the of Cristiano, them your those strong phones how proliferation you And demand for here and you capabilities customers? hefty

question, Thank you for your Samik.

start saying by that his reflected of the China would one thing growth remarks, some I I really XX% think in smartphones, he talks Chinese was we metrics provided OEMs. on by it within And by So about like. Akash with

AI tier. expanded So the premium the has of size

in growth, and the We're growing seen tier tier in even seeing premium low larger actually a AI. we've by kind single premium which of a that. market it's enabled flattish digits So to faster, is

And to of the features. have We a AI to few. we are happy your question, with used specific trajectory

assumptions to have AI model, have AI see going going direction in that when we eventually, get Now a to we could don't start any is tens feature become features. will our smartphone change a an AI heroic the actually And are We I to that the like create and but they we're cases. with smartphone. this XXX, of to AI-driven a has pointed more use in China the if of in an an have FlipX the flagship. cases They're interesting becoming the use early process, Galaxy we to still It's launched upside of upgrade be cycle. cases going the number interesting. increase in next but FoldX. use

asked the mass which going see doing about restoring is to have on we PC custom same doing CPU. the We're in has And actually shift And we're phones. that. I we intend the you Windows of upcoming premium the you're us map, performance PC launch We to do our to be know And you're very see our AI ecosystem on that big a the back road going story. we're going going ecosystem, given mobile that compromising But to tier. the capabilities. in thing next part Snapdragon the our that of the to AI doing not the performance see tier, bringing done road to The I'm same within similar as is in excited AI with to expand us something the map.

think us what although guide quick one looks Got Akash. soft for of it. sort Akash, a sort the export that September the days to guiding to license with the you similar upside headwind? And pretty you're where is to for Huawei. revenues, ago, now that about XX you offsets? to were to you of back finding How of incremental offset the incremental Where headwinds sort have help should we

Samik. happy Samik, with the growing. right? the look our Thanks, handset played pretty way business, you quarter Yes. has out, we at If are we're

edge industrial We strength and quarter-over-quarter guiding are low quarter an September we're in growth, revenue will the quarter. of and then we're we're seeing flat percentage basis. off consumer strong double-digit networking across single-digit we IoT, coming grow low in June, auto a guiding guiding on extremely that and

expectations, incremental IoT of and And so our seeing show are benefit our previous and up you're both guidance. these, that all to in automotive

line with of the from Wolfe Research. is Chris question next Caso Our

obviously in strong the about Can which question week cost? extra just go the the you as quarter, to. following extra that speak quarter impact on And to is and the you implications any referred first revenue clarification a expect that, on it of what the might both is you seasonally you there's have guess I week, into on absence quarter. a if

Sure, Yes. Chris.

the reduction is other each revenue the reduction, guidance, week outlined by If largely and factors about the offset on Huawei on X other. then for I Those the X one side. you which offset the think hand extra

net And both guidance of pretty the limited on impact our consider factors. so overall impact is the you when

Specifically the equal are you about as weeks business. all extra on of not created as the know, different week, think our you parts

in revenue factored OpEx we've incremental side. is revenue And -- what So the sorry, side, the on QTL side. incremental QCT the OpEx then on within incremental on

flagship we from revenue really that QCT, weeks. that And benefit doesn't a and launch forecast change number have on then within based the phone of the

these look are big other. key that against factors you each the and I So much step pretty message and But when largely factors the of already is, kind cancel included X they're in. outlined, remains consistent at out back

then about And moving Understood. of -- have is to Okay. the outside before. range the it's The that guidance fourth quarter for you over QTL. talking been

You haven't units. handset global changed your expectation for

guidance speak quarter you the that first quarter for the can because So segment. is for stronger to and reason a that's forward the sustainable typically going if QTL

Yes, sure.

QTL the So relatively guidance is straightforward.

look to If basis. very a at June you small quarter-over-quarter we growth typically September, on see

So And factored then which we our also factored have we as well, the on of is in. extra that it week numbers. into top

guiding got for So number that's we QTL. how the to we're

Our Bernstein Research. line Rasgon is the Stacy next of question with from

thinking that coming extra for December again ask week, second of half I bit? want you get help didn't shape us the question should that a quite the If could think how quarter for about guys are Chris' What to. of that. December? to you I off The little seasonality implication you

Sure, Stacy.

going year of factors forward. are we know, quarter grow about that the December of strongest there first consider. expecting quarter, a we're and into we typically So And a well, the it's we into the think quarter, couple as the quarter you seasonally as

premium for quarter. go tailwind last product tier to a XX is year. Huawei new back which going We weeks then -- relative XX be we revenue weeks have is the to us. have the Android we'll last weeks did year, launch which the First to back from chip, of going our And forward, within do XX not

a look in we of net last So consistent to to year-over-year quarter you basis, of growth revenue at year-over-year with be largely year. -- expect saw all when the growth this, we largely revenue December be

Got it. helpful. That's

point PC the could guide that's how also much it's sort guide the us -- like it in of you PCs? quarter? consumer give color. at revenue next any is this sounds you of How I actually much but it know is said just piece of actually growing includes If how incremental is, where the for much of IoT,

I mean Yes. into Stacy all launch. we're in a our candor weeks few

is and have our so will, our of more we of longer-term it's we've PC. said, customers is the specific we as to we're from our growth lot kind a But as specific we do to factor And it kind term being the to we tried plans specific in bullish in early not opportunity have too on a get revenue have us, a really assumption best this disclosure assumption indications into. or on give about short sell-through as usually either on Investor to insight ramp. We But very going that to Cristiano do. Day, something and on

line comes question of next Stanley. with Morgan the Joe from Moore Our

-- And you in to your of back give sense in share is the your us sounds expanding? Can come And because competitor. seem that market numbers the there. maybe is I tier is talked And XX% market that like than to kind versus then units? about how of better growth price commentary of much China you a handset. the wanted growth premium it

Yes.

is handset assumption from to 'XX at So if that you flat look 'XX, total slightly our up. to general the it's market,

has representing that, very is within of from the XX% the than market trend growing. the premium greater XX% the So to positive. But market. gone We've market $XXX representing the of not been tier, now

premium benefiting market that, as And we And are but from. content just strong so know, revenue well. as that participate tier. get a in not to that's perspective, very we expands, are at significant you increase perspective growth we very as the from that And

Christopher of line the from Rolland is question Susquehanna. next with Our

a bunch of guess latest Q, coming licenses your I talked new in you up. about

expire the as of that else expect Huawei fiscal $XXX would I they a including everyone early to 'XX, first do in number Is Huawei stuff think sign lastly, is guess, those XG fair million negotiations? I these well? Do negotiations Huawei. about XG you roughly we And at a affect on this Huawei? then from that think the quarter. all, impact might

this Alex. Chris, the question. Thanks is for

was basically if really or a you good out number over So execute done job year a And of so, and we Apple OEM that. recent look also progress have at most a renewals or we've signed doing as up But last to set extensions. we actually extended on getting And X licensing then, the recently the The major on know, that 'XX. you term. to signed agreement. through Chinese long long-term noted we

they we're haven't signed still we but them then terms Well, named through are we in negotiations with working significant of handset getting up. them, manufacturers. have expectations optimistic And others that

still We but up important and announced company tranching also think ongoing focus ongoing, the XG we is a that the we're recently license, XG some that litigation with license the negotiations. to signed them. and There's I with on negotiating thing to

others forward. of we've So to Huawei negotiations move with, company is just a trying the engaged been in that terms like

on to that news any really just expect don't have continue. We that We yet.

number perspective, QTL units, of by it and And to look any to but OEM, the thinking down of apply scale a is know, a contributes of breakdown don't stream. about specific as that the you then revenue from break market way our we of the the our OEM revenue reasonable scale revenue the overall at market

of Our the is from Bank. line next Seymore Ross with question Deutsche

One follow-up. question, one

your position both modem customer, only feel share year-to-year, apps Same There's with what of relative customers? with about penetration for in First modem perpetual see in your lead you Korean at handset you'll that debate your and the the given customer. How market one, gen-to-gen. about leadership the have you're thing you processor doing side kind on your with business. the probably wanted do just more how to feel I Cristiano.

feeling look the forward you how major next you about the Qualcomm can X, have are over as year customers? that the penetration at or So

for loaded Ross, your question, Thanks right. All question.

So one to I'm one. unpack going by to have

of question, part about first we We pretty feel modem how about the modem our the think do think technology. I good technology.

core of the is this one think of I competencies the company.

of to patents essential and in the be We the pushing continue extended #X road continue to and country patents be wireless number the company a for in the company map.

it we business to with we with you framework all. relates provided Apple, As still our the operate that to

expect chipset I think extended we when agreement, within to be operating that. and the we

We have no new update, provided an said upside. everything before above we is what

So assumptions we what don't have that disclosure. in our had above we financial planning

we leadership applications conversation processor, GPU. think the other of a in AI about because When with flagship I have Adreno always bit launching in sustained will will in sustained while, the performance, we're little our think at the the in leadership had going the be and mobile the performance, we of application a the interesting and custom is peak for Summit in the our always in gaming, beginning now Snapdragon we had devices own And to year, XXXX. towards be time end have first CPU, which the announced more

company, And processor argue perceived own launch said will application think a isn't I our communications handset as PC have I a as this I a well going be to computing that benchmark others the the in we So now the to it to Copilot+ that earnings, was used the And reflected graduation the the that custom of in as I be CPU. is as company, for point Qualcomm industry. for our advantage think accelerating. really is PC we as follow really become within to

As GSXX, going have to relationship. AI with consistent you that them. largely what it relates Samsung, lot launch have have with relationship opportunity of we is with the both the coming the We're the with of continue. happy premium into think It's agreements to smartphones. seen a I with to executed pretty how we And

it last Akash. I December year-over-year in the same follow-up about was to said that you in answer the would December. be question, guess for as growth your One, prior as my your

just a Just think margins I How a going And happens, like quarter, gross should income them the how in QCT in think Was your Has automotive, forward? picture PCs, clarification. cetera? September then et still bigger that down the guess diversification line for but QCT. we we Looks implying statement? my should question, about process that you're in about flat year-over-year. bit

Ross. Sure,

QCT, comment provided company, was margin fourth quarter. slightly line on for we're better the doing From in expected. had And with overall that perspective, quarter. guiding really a not but So than the guidance had we're focused the we gross we quarter Qualcomm in what just metrics. overall third so did we is third We guided

it. as fourth fiscal way you about I a think the way look is model going-forward beyond a fourth of forward quarter to thinking as quarter into 'XX reasonable using path

next America. Our Liani line from is question the Tal of with Bank of

Can you hear me?

Yes, we can.

Okay. Perfect.

Sorry.

enterprise? segment? addressable How in the compute, mostly it laptops, your envision market about do compute So I addressable you meaning, need help to consumer market is your define in

the far a deployment? yet. thing When sense to going from about talked second can't drive What handsets? in you seem of timing handsets. to AI, the kind And we AI away lot talk is what's inclusion be carriers, the in in they that they will of do the that find the applications you applications and drive applications to think deployment is AI it of What the

is your question. Thank this Cristiano. you Tal, for

the Let take first me one.

about You market following the way. should addressable think

very on in enterprise, the map ranging I from especially for market. we talked it's We're it's price right of think, laptops remarks, $XXX road We're laptops. prepared laptops, above. extending now points, focused as XX, the addressable consumer and Windows First commercial whether all,

but and I to That's upgrades has will AI to one what as in to XX% OEMs as an basically a views, XX Windows defined way we sold solution. -- can PC, the us and happening be of of there differentiated Copilot+ about indicating And AI PCs, their been respective continue it. for That's see think are you. a computers -- is think with to transition a forecast opportunity provide about PCs. to participate highly number And XXXX metric I that our of we

I think your second question...

It AI applications. was on

for applications AI about It devices. was

on talk, going the how you be it. interface. on is you're to to human whether part start user of whether apps. lot going you're the very And going of here's a do to AI text, change So going think whether going to experience computer should you're going to to about important phones, it's to this a is touch,

to a see relevant. of those really you're conversation. become the conversation. to apps use the are of of as start lot existing see And to or more agents carrier less a that going going we application case of start It's an more new It's to development change of

are of you like Llama for for search you WhatsApp WhatsApp going things see a different do with , me, their with the to you model. to if you're example, within For user ability to

eventually, multiple to have the trajectory. we're across said The the of before, the with I'd And smartphone. lot number with use models we're functionality I going of way happy is as the -- like to And cases. to apps. measure a what compare happened this actually multiple are very

was and the of became apps With very smartphone, apps hundreds thousands were like and it first became apps, and of there happening. XX clear then became then X,XXX what apps XXX became

hopefully lot and that's the in same think at going the AI the look we to way. in AI like to I cases a we more and little the NPU of premium expand use beginning, drive performance increasing, silicon number and tier. We're but bit the high continue

is O'Malley Tom Barclays. last from with question Our

more your step-up very a for think in good a describing and kind But a one I there's did what auto the of PC I of your deck in obviously, being that. huge just the you kind also, in you've driver. portfolio, have quarter, commentary for one job of guys about Akash. talking drove here, Cristiano in AI and recently and

late of XXXXs. to XX revenue of kind you kind look being of if about and terms Auto you the in look is the think the at end what But IoT opportunity back-end side you growth? I loaded, next Analyst the the hosted the talked XX next Day at months, Cristiano, if opportunity the or you more an kind date exciting you months, and was automotive of do you, think

walk you OpEx Akash sizes, side, up have bit an growth step but just if out those week? then extra seeing be breaking And you are Could to buckets you obviously drive given moving are into the some that look extra different parts the but little QX, what week just the the to you down. there. expected as just through can on a there, Obviously, X are

Tom. the Actually, appreciate the to you, I this. opportunity really an question explain give question. like me Thank I to

think focused of differentiation. should business Actually, -- we're just We're of You diversification. I'm of big Qualcomm, a trying we're of build business to number on really building one sorry, this. not

not of Qualcomm with Day, is that That's continue. see outlined about turning now, we that's September a will when especially Investor hopefully, and kind that you then this And actually going Auto the building in into how that how quarter, platform we away. XXXX, big for going financials. be can talk materializing. to was into And And

given the size in the we billion of talk about $X We the We're towards to We expect, $X about end billion track that. of our on do decade. pipeline, talk 'XX.

early. get we as And PCs. it's is one second -- the But

our exceeding It's happy. very we're said, expectations. I As

Some models We sold launched. out. just

get excited. we to grow one how over to very what to we I Investor stop will there a don't that's comfortable when That's going represent that's out the to probably think and they're we going time there. Qualcomm. putting feel But of metric think we about Day, contribution when total the

going I driving road and think what it's the all do Qualcomm. The and computing, encourage map industrial I AI next to you towards next one, see we're to quarter,

that So we and completely months. road map, we're to our industrial the road coming we're in map redesigning going unveil

from can markets are that it's just about super one think focused and number many bets, not We're bet. of we a diversification and there growth So this technology. about on as, benefit

OpEx, your into spend is quarter higher goes on on spend and why Tom, OpEx extra third was we material-related second the it in quarter, And week. which non-labor third related down the some despite and had quarter tape-out question fourth the

And very change But on the so kind specific no and focused it new of OpEx. we timing when spend for managing nonlabor committed are operating is drove it's skills way are We're it. in very that diversification. just to do of fundamentally, that even required hiring, it, discipline we

way for company. the we OpEx in So are a the difference won't you see the managing

That Mr. anything session. adjourning add concludes call? further to do today's the question-and-answer Amon have you before

our on execution. our all PC great job to employees quickly our for want No, I just of just the a suppliers, thank partners,

I think proud accomplished. we're of we very what

forward AI very of you the traction, next in products one in we much. edge. to actually in we're of launching IoT. the generation across of vector run feel industrial to very each automotive said, the We future the hopefully very Thank in will growth looking creating drive position our coming AI I as the We months, a to the unique for company ability new happy continue at . We're businesses. a with have and

today's gentlemen, this conference concludes and call. Ladies

now disconnect. You may