Q4 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Non-GAAP Revenue | $10.4 billion | At the high end of guidance |
| Non-GAAP EPS | $2.17 | Not stated |
| QCT Revenue | $9 billion | Up 6% sequentially |
| Licensing Revenue | $1.3 billion | Not stated |
| Automotive Revenue Growth | 89% | Year-over-year |
Guidance and outlook
- We are forecasting revenues of $10.4 billion to $11.2 billion and non-GAAP EPS of $2.15 to $2.35.
- In QTL, we estimate revenues of $1.3 billion to $1.5 billion and EBT margins of 72% to 76%.
- In QCT, we expect revenues of $9 billion to $9.6 billion and EBT margins of 20% to 22%.
- In QCT Data Center, we expect revenues of greater than $650 million.
How management sounded
Positive (+7 on our -10 to +10 scale). Management expressed strong confidence in their diversification strategy, citing an $8 billion annualized run rate in automotive and a clear path to $5 billion in data center revenue for fiscal 2027. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Data Center Ramp
Asked: Joseph Cardoso (JPMorgan) asked about the revenue ramp and the third customer.
Answer: Management stated the $5 billion target for fiscal 2027 is driven by two hyperscalers, with a third customer on accelerators and advanced discussions on custom silicon, positioning them for growth in 2028 and 2029.
Gross Margins
Asked: Joshua Buchalter (TD Cowen) asked about the gross margin step down due to the ASIC business.
Answer: Management explained that price increases will offset semiconductor costs, with full benefits in the second half of 2027, while data center remains accretive to operating margins but dilutive to gross margins.
Handset Market
Asked: Stacy Rasgon (Bernstein) asked about the flat handset market outlook given recent declines.
Answer: Management noted that channel inventory is thin and they expect QCT revenue to align with the overall market, with June marking the bottom for China Android.
Starlink/SpaceX
Asked: Chris Caso (Wolfe Research) asked about the Starlink announcement.
Answer: Management stated deployment begins in 2027, providing silicon for radio and massive MIMO, and expects revenue impact to appear as they exit fiscal 2027.
Arm Litigation
Asked: Liam Pharr (BofA) asked if the Arm litigation outcome impacts the CPU roadmap.
Answer: Management confirmed there are no implications for the CPU roadmap and they remain focused on developing and shipping Oryon products.
What to watch before the next call
- Execution of the $5 billion data center revenue target for fiscal 2027.
- The ramp of the fifth-generation Snapdragon digital chassis in the automotive segment.
- The transition of handset revenues to less than 50% of total company revenue.
