Analyst(s): Olivier Blanchard
Publication Date: May 5, 2025
Qualcomm reported Strong Q2 FY 2025 revenue, marking a slight QoQ (quarter over quarter) decline from its Q1 FY 2025 across most metrics, including overall revenue, QCT revenue, QTL revenue, and EPS, but beating estimates. The QoQ decline is to be expected for Qualcomm based on seasonal trends. (The first fiscal quarter, uplifted by holiday sales and new flagship smartphones, tends to be historically stronger than the second.) As expected, Qualcomm posted solid YoY growth across most metrics, delivered QoQ growth in the IoT segment, and maintained its record-setting Q1 momentum in the automotive segment.
What is Covered in this Article:
- Qualcomm’s Q2 FY 2025 revenue and key growth drivers
- QCT segment strength: IoT and Automotive performance
- AI expansion across PCs and Automotive
- Notes on Qualcomm’s new X85 Modem-RF System and FWA solutions
- Edge-to-Cloud partnerships with IBM and Palantir
- Notes on possible tariff impacts
- FY 2025 guidance and Qualcomm’s diversification strategy
The News: Qualcomm Incorporated (NASDAQ: QCOM) announced results for its fiscal second quarter ended March 30, 2025. The company reported non-GAAP revenues reaching $10.8 billion for the quarter, and non-GAAP EPS hitting $2.85 (above the guidance midpoint) for a 17% YoY (Year over Year) revenue increase and a 21% EPS YoY bump. Zooming in, QCT posted revenues of $9.5B, in the high end of the guidance range, with $2.5B coming from the IOT and Automotive segments. QTL, meanwhile, posted $1.3B, which was more in line with the guidance range.
“We are pleased to report another quarter of strong results,” said Cristiano Amon, President and CEO of Qualcomm Incorporated. “As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control – our leading technology roadmap, best-in-class product portfolio, strong customer relationships, and operational efficiencies. Our top priorities remain executing our diversification strategy and investing in areas that drive long-term value.”
Qualcomm’s Q2 FY 2025 Earnings: YoY QCT Revenue Growth Momentum Continues
Analyst Take: The seasonality of some markets critical to Qualcomm’s revenues historically produces a stronger Q1 than Q2, particularly in the mobile handsets segment. This helps explain the slight QoQ numbers for the company, following a record-setting Q1 FY 2025. Taking a closer look at Qualcomm’s YoY performance gives us a better sense of Qualcomm’s progress and momentum. Non-GAAP Q2 revenue grew 15% YoY from $9.386B in 2024 to $10.836B in 2025. EBT and EPS also grew 16% and 17%, respectively, YoY.
QCT revenue growth paints a more encouraging picture for Qualcomm, with 18% YoY growth overall. While Handsets only garnered 12% YoY revenue growth, IOT grew by a respectable 27%, and Automotive grew by an impressive 59%. It is noteworthy that Qualcomm’s IOT business, which includes PCs, and its Automotive business, together contributed $2.5B to QCT revenue for the quarter, compared to only $1.8B just a year ago. (For reference, Qualcomm hopes to grow those segments to amount to roughly 50% of QCT revenues by 2030.)
Focus on the IOT: Steady Growth and Acceleration Expected Through 2025
Momentum in IOT is significant to Qualcomm for two key reasons: The first is that PCs fall under the company’s IOT business. Qualcomm’s Snapdragon X series chips, which power Windows-on-Arm AI PCs, are critical to Qualcomm’s growth and diversification strategy. The second is that with the expansion of AI into edge devices like smart cameras and drones, Qualcomm plans to help drive a new wave of growth across the industrial IOT segment (IIOT), a technology category particularly well suited to its high-performance, low-power chips. 27% YoY growth is a good sign that Qualcomm is finding its paces and making good progress in an IOT segment that is just now beginning its next growth cycle.
Case in point: Qualcomm’s announcement that it plans to acquire Edge Impulse Inc. could enhance its AI and IoT capabilities across the IoT and complement its strategic approach to the next wave of IoT transformation. This includes a comprehensive new chipset roadmap, unified software architecture, IoT blueprints to address diverse industry needs and challenges, services, ecosystem partners, and developer resources. Leveraging Edge Impulse’s community of 170,000 developers will facilitate creating, deploying, and monitoring AI models for a broad range of edge and IOT applications.
Automotive Continues to be Qualcomm’s Fastest-growing Segment
No major notes about Qualcomm’s automotive business this past quarter, except to point out that it grew 59% YoY, and held relatively steady QoQ. Adoption of the Snapdragon Digital Chassis continues to expand among global automakers, reinforcing Qualcomm’s position in the software-defined vehicle segment. The Snapdragon Ride Flex SoC continues to be integrated into next-gen ADAS and in-cabin systems, aligning with the industry’s move toward AI-powered vehicle intelligence.
Qualcomm’s new Snapdragon Digital Chassis Workbench, a cloud-based development platform designed to accelerate automotive software innovation, is helping accelerate adoption across the industry. With automakers increasingly investing in the cockpit, telematics, and ADAS platforms, Qualcomm’s full-stack strategy positions it well for continued growth in the automotive sector.
Qualcomm’s new X85 Modem’s Versatility Could also be a Market Share Booster
Qualcomm’s X85 5G Modem-RF system, with its integrated 5G AI Processor, enables Android smartphones to offer the fastest, most battery-efficient, and most reliable 5G Advanced connectivity on the market. Designed to deliver the high-performance 5G connectivity required for hybrid and agentic AI experiences, it promises 30% faster AI inference than previous generations. It also delivers up to 12.5 Gbps download speeds and supports 5G Advanced capabilities. Still, the system’s versatility also catches our eye: It is compatible with a range of devices beyond handsets, including PCs, FWA (fixed wireless access) points, automotive applications, and XR, with more on the way. Qualcomm’s ability to scale the X85 system isn’t negligible.
Speaking of FWAs, Qualcomm’s Dragonwing Fixed Wireless Access Gen 4 Elite could also inject some much-needed energy into the mobile broadband ecosystem. Powered by the X85 5G Modem-RF system, a quad-core processor, dedicated hardware acceleration, integrated 5G modem-RF, GNSS, Tri-Band Wi-Fi 7, and broad carrier middleware support, it is being marketed as the world’s first 5G Advanced FWA platform, and its iIntegrated AI capabilities promise to enhance network performance and make fuller use of generative AI at the network edge.
Other News About Qualcomm’s Diversification and Growth Trajectory
Qualcomm and IBM also recently announced an expansion of their edge-to-cloud collaboration, which aims to drive enterprise-ready generative AI solutions across cloud and edge devices. Qualcomm will be integrating IBM watsonx.governance (designed to help businesses manage their AI responsibly at enterprise scale) into Qualcomm’s AI Inference Suite, allowing it to run on devices powered by Snapdragon 8 Elite and Qualcomm’s Dragonwing AI on-prem appliance solution.
IBM’s Granite 3.1 models have reportedly been optimized and are available for download via the Qualcomm AI Hub. The models will work in tandem to provide end-to-end generative AI solutions running at the edge with guardrails “for controlling model deployments and operations, monitoring, and enhanced decision making,” per Qualcomm. The partnership will combine Qualcomm’s on-device inferencing, low power, and privacy features with the performance of IBM watsonx to help build secure, efficient, reliable, and governable edge-to-cloud AI solutions for businesses.
In a similar vein, Qualcomm also took the opportunity to highlight its partnership with Palantir, which will focus on bringing more ontology capabilities to the edge to improve data-driven decision-making. The collaboration aims to deliver scalable AI solutions for manufacturing, industrial, and automotive sectors, enhancing efficiency, product quality, and helping customers tackle complex challenges with real-time data processing, even in remote and offline environments. The ability for customers to access AI capabilities and data insights regardless of their location or connectivity status has obvious advantages for government use cases. It also works exceptionally well as a backup or failsafe option for critical infrastructure and mission-critical systems across a wide range of industries.
Potential Tariff Impacts
On tariffs, there are two main points to keep in mind: The first is that chips were excluded from tariffs at the time of Qualcomm’s earnings call. The second is that Qualcomm’s reliance on the Chinese market also falls mostly outside tariff threats. It should also be noted that Qualcomm’s diversified global supply chain should help it navigate any unforeseen challenges arising from tariffs with some agility.
Qualcomm’s most significant area of exposure is the overall macroeconomic climate’s impact on demand: If tariffs raise prices on mobile handsets, PCs and other electronics (including vehicles) beyond the point of their price elasticity, and/or if consumers and businesses decide to hold off on electronics and vehicle purchase until they feel more confident about the economy, Qualcomm’s demand pipeline could be negatively impacted.
What to Watch:
- Continued momentum for Qualcomm IP in the PC category as Windows-on-Arm AI PCs continue to gain traction in the commercial and consumer segments. Momentum should hold well through Q3 and Q4, driven by the Windows 10 to Windows 11 transition and overall PC refresh cycle.
- Strong growth in Automotive is expected to continue for the foreseeable future, although sequential growth could begin to slow as Qualcomm’s ecosystem integration enters a more mature phase.
- X85 could help Qualcomm gain more modem-RF market share in Android and drive stronger adoption of new FWA solutions. However, 5G modem adoption in PCs remains precarious as power and form factor constraints continue to impede cellular modem integration.
- The IIOT segment looks poised for a second wave of growth starting this year, thanks to new on-device AI capabilities, Qualcomm’s high-performance, low-power chip characteristics, and an improving edge-to-cloud solutions ecosystem. Qualcomm’s acquisition of Edge Impulse could significantly improve its ability to scale quickly in that market.
- New tariff regimes and macroeconomic uncertainty don’t appear to impact demand for Qualcomm solutions yet. Additionally, Qualcomm’s reliance on Chinese market revenue should be mostly shielded from tariffs and trade disputes, and its supply chain is diverse enough to adapt to any future disruptions. However, concerns about how future tariffs targeting electronics and automotive products could indirectly impact the demand pipeline for Qualcomm IP remain.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
Other insights from Futurum:
Qualcomm’s Q1 FY 2025 Earnings: Record QCT Revenue and Expanding AI Adoption
MWC 2025: Qualcomm and IBM Raise GenAI Competitive Stakes
Qualcomm’s X85 5G Modem Sets New AI-Powered Speed and Efficiency Benchmark
Author Information
Research Director Olivier Blanchard covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
