Qualcomm Revenue Falls 4% as Handset Chips Weaken and Production Costs Rise
Key Facts
Qualcomm reported a 4% year-on-year decline in revenue for the third quarter of fiscal 2026, according to its earnings filing with the U.S. Securities and Exchange Commission. Revenue totaled $9,947 million, compared with $10,365 million in the third quarter of fiscal 2025. The sales decline was accompanied by a steeper drop in net profit under generally accepted accounting principles, which fell 25% year on year. The company reported net profit of $2,002 million, compared with $2,666 million a year earlier, according to the same filing. The results came amid weaker handset chip revenue and higher production input costs, offset by growth in the automotive business.
Qualcomm's handset chip business generated revenue of $5,086 million in the fiscal third quarter, according to the business results table in the company's filing. Revenue for the business totaled $6,328 million in the corresponding period of the previous fiscal year, marking a 20% year-on-year decline. Chief Executive Cristiano Amon had expressed confidence that the handset market would begin recovering after the fiscal third quarter, in remarks reported by Reuters in April. Amon said at the time: "We can now identify the bottom," referring to his assessment of the market's trajectory. His remarks linked the expected recovery to moving past that quarter, while the quarterly results showed handset chip revenue continuing to fall from its year-earlier level.
On costs, Qualcomm said in its earnings filing that higher manufacturing, assembly, testing, advanced packaging and memory costs were prompting it to adjust product prices. The company cited "higher input costs" when discussing these pressures in the financial filing. It expected profit margins to benefit gradually from its product price adjustments. Meanwhile, research and development expenses rose to $2,607 million in the third quarter of fiscal 2026. Those expenses totaled $2,226 million in the corresponding period of fiscal 2025, according to the expense line items published with the results.
Qualcomm's financial outlook extended to the fiscal fourth quarter, with its adjusted earnings per share forecast below the average analyst estimate. According to a Reuters report published in July, the company forecast adjusted earnings per share of between $2.05 and $2.25. The report compared that range with the average analyst estimate of $2.36, according to data compiled by the London Stock Exchange Group. The upper end of the company's guidance remained below that average, as it warned of rising memory costs and an accelerating decline in Apple-related revenue. Qualcomm had disclosed in its annual report a workforce of about 52,000 full-time, part-time and temporary workers as of September 28, 2025.
In trading, Reuters reported on July 30, 2026, that Qualcomm shares fell about 5% following the financial warning. The move followed the company's warning on memory costs and Apple revenue, alongside its adjusted earnings forecast. In a subsequent move, Investing documented another decline in the shares during morning trading on September 28. The stock fell 5.7% in that session, according to the report published that day. The share price reached $190.51 during morning trading.
By contrast, revenue from Qualcomm's automotive business rose to $1,588 million in the third quarter of fiscal 2026. The earnings filing compared that figure with revenue of $984 million in the corresponding period of the previous fiscal year. The business posted year-on-year growth of 61%, moving in the opposite direction to the decline in handset chip revenue over the same period. Over the longer term, the company's chief executive outlined a target in the earnings filing to expand revenue from businesses beyond handsets. Qualcomm aims for that revenue to total $40 billion by fiscal 2029.