Qualcomm Incorporated · NASDAQ:QCOM
Qualcomm — Investor Day (November 2024)
34 slides from Qualcomm's investor day presentation, Nov 19, 2024
Slide 1: Akash Palkhiwala, CFO and COO
Akash Palkhiwala Chief Financial Officer and Chief Operating Officer Qualcomm Incorporated Snapdragon and Qualcomm branded products are products of Qualcomm Technologies, Inc. and/or its subsidiaries. References in this presentation to “Qualcomm” may mean Qualcomm Incorporated, Qualcomm Technologies
Slide 2: Note Regarding Forward-Looking Statements
Note Regarding Forward-Looking Statements In addition to historical information, this presentation contains forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to statements regarding: our growth and diversification opportunities, including th
Slide 3: Agenda
Historical perspective Revenue growth and diversification Agenda Operating discipline Capital allocation 3
Slide 4: Strong financial performance and execution in FY24
Strong financial performance and execution in FY24 Reflects the benefit of operating leverage +9% +20% $38.9B +21% $35.8B $13.3B $10.22 $11.1B $8.43 FY23 FY24 FY23 FY24 FY23 FY24 Non-GAAP revenues Non-GAAP EBT Non-GAAP EPS Non-GAAP information excludes our QSI (Qualcomm Strategic Initiatives) segmen
Slide 5: Historical performance validates strategy
Historical performance validates strategy Strong revenue and earnings growth 2X GROWTH $38.9B 3X GROWTH $13.3B ~3X GROWTH $10.22 $19.4B $4.3B $3.54 FY19 FY24 FY19 FY24 FY19 FY24 Non-GAAP revenues Non-GAAP EBT Non-GAAP EPS 5
Slide 6: QCT revenue growth and margin expansion
QCT revenue growth and margin expansion Acceleration across all revenue streams $33.2B >2X GROWTH ~2X Handsets 18% GROWTH 29% $14.6B 31% Automotive 15% IoT 14% FY19 FY24 FY19 FY24 Revenues EBT margin Five-year revenue CAGRs Beginning in the first quarter of fiscal 2023, QCT RFFE (radio frequency fro
Slide 7: Current business priorities
Current business priorities Android QTL Automotive Internet of Things handsets PC Virtual and Industrial Networking Other personal augmented reality computing devices 1 EDGE AI 1. Includes tablets, headphones and smartwatches. 7
Slide 8: Scale of Android handsets
ANDROID HANDSETS Scale of Android The leader in QCT FY24 handsets Android revenues ~2X Android revenues 82% >5X Premium-tier (Snapdragon 8) of CY24e global handset shipments 1 revenues 1. Counterpoint Research, August 2024. 2. A combination of third-party and internal estimates. 8
Slide 9: Revenue growth drivers: Content (processor and AI) and product mix
ANDROID HANDSETS Revenue growth drivers: Content (processor and AI) and product mix >10% CAGR QCT Android revenues Snapdragon 8 die size Normalized to 4nm1 8% CAGR Expect Android revenue SAM CAGR to be a mid- single digit percentage over next five years 2 Snapdragon 8 Gen 1 Snapdragon 8 Gen 2 Snapdr
Slide 10: Transition to software defined vehicle drives 2X TAM expansion
AUTOMOTIVE Transition to software defined vehicle drives 2X TAM expansion 2024e TAM $50B 2029 TAM $100B Connectivity Digital cockpit ADAS/AD TAM drives upside opportunity TAM: Total addressable opportunity. A combination of third-party and internal estimates. Includes high-power compute, which is al
Slide 11: Expanding design-win pipeline provides revenue visibility
AUTOMOTIVE Expanding design-win pipeline provides revenue visibility ~$45B Diversified global customer base ADAS/AD $30B $13B Digital cockpit ~$45B $6.5B Design-win pipeline Connectivity Nov 2019 Nov 2021 Sep 2022 May 2024 Analyst Day Investor Day Auto Investor Day Q2FY24 Earnings The design-win pip
Slide 12: Strong revenue growth forecast
AUTOMOTIVE Strong revenue growth forecast REVENUE MILESTONES R AMP A S AD >$9B KPI T R A M P ~$8B ~$8B >80% C O C AL >$4B FY29 revenue of cumulative D IGIT target revenue forecast $2.9B over next 5 years $1.1B covered under existing design wins $0.8B FY19 FY21 FY24 FY26e FY29e FY31e Beginning in the
Slide 13: Increasing relevance of our technology creates multiple growth vectors
IOT Increasing relevance of our technology creates multiple growth vectors Digital transformation drives demand for processing and AI at the edge FY24 REVENUES PC Virtual and Industrial Networking Other personal 1 $5.4B augmented reality computing devices 1. Includes tablets, headphones and smartwat
Slide 14: Snapdragon X Series is the performance leader in AI PCs
IOT – PC PREMIUM 12 CPU cores 70% Snapdragon X Series $1,000+ Notebook volume addressable by HIGHEST PERFORMANCE expected 2026 design wins is the performance LONGEST BATTERY LIFE HIGH 10 CPU cores leader in AI PCs Broad product roadmap MID 8 CPU cores 100+ drives design traction Devices targeted to
Slide 15: PC 2029 TAM, SAM and revenue target
PC 2029 TAM 2029 SAM REVENUE TARGET 220Mu 90% Windows notebooks and desktops AI PC penetration $4B FY29 revenue target $35B 30%-50% Silicon revenues Non-x86 AI notebooks A combination of third-party and internal estimates, as of Nov. 19, 2024. 15
Slide 16: Purpose-built technology for a new computing platform
is the partner of choice for XR IOT – XR Purpose-built technology for a new AR growth driven by GenAI computing platform Strategic long-term collaborations with key partners Immersive MR/VR 16
Slide 17: Revenue growth with potential
Augmented reality Virtual and mixed reality IOT – XR 15Mu FY29 Snapdragon forecast 15Mu FY29 Snapdragon forecast Revenue growth with potential Comparable device ecosystem – 2024e units PERSONAL AND PORTABLE Comparable device ecosystem – 2024e units STATIONARY >$2B FY29 revenue upside opportunity tar
Slide 18: Scaling industrial across verticals: products, solution and channel
IOT – INDUSTRIAL Scaling industrial across verticals: products, solution and channel Products and solutions Channel and go-to-market strategy System Module makers ODM OEM Distributors End verticals integrators ENERGY RETAIL INDUSTRIAL Chipset Hardware and Edge AI Services and Solutions Location and
Slide 19: AI and digital transformation drives market transition
PROCESSING FIVE-YEAR METRICS AI + iQ Series $50B AI and digital IOT - INDUSTRIAL transformation drives market transition Digital transformation 2029 TAM PROCESSING drives revenue growth $4B FY29 revenue target MCU WIRED CONNECTIVITY ALL CONNECTIVITY TECHNOLOGY A combination of third-party and intern
Slide 20: Revenue growth >2.5X over the next five years
IOT Revenue growth >2.5X over the next five years Multiple vectors of growth – accelerated by AI FY29 REVENUE TARGET PC Virtual and Industrial Networking Other personal $14B FY24 REVENUES $5.4B mixed reality computing devices1 1. Includes tablets, headphones and smartwatches. 20
Slide 21: QCT IoT and Automotive revenue growth projections
QCT IoT and Automotive revenue growth projections Diversification revenues FY29 revenue targets $22B Automotive $8B Automotive and IoT growth of >2.5X 22% IoT $14B Diversification growth far exceeds CAGR IoT revenue scale of modem-only $8.3B PC $4B handset customer IoT XR $2B Automotive Diversified
Slide 22: Optimizing investments to deliver growth and diversification
NON-GAAP OPEX Optimizing investments to deliver growth and diversification $8.7B $8.8B 15% CAGR Investment in diversification 8% CAGR 2% CAGR Revenues R&D SG&A FY19 to FY24 Non-GAAP CAGRs FY22 FY24 Focused on operating expense discipline Maintain long-term Opex target as a % of revenue at 21-23% Non
Slide 23: Acquisition priorities
Acquisition CUMULATIVE FIVE YEARS priorities 12 7 2 8 8 5 Focus on diversification < $50M $50M-$500M >$500M in core in IoT in Automotive technology and technology leadership KEY ACQUISITIONS CUSTOM CPU TEAM ADAS/ AD COMPUTER VISION IOT SOFTWARE GESTURE AI SOFTWARE COMPILER RECOGNITION 23
Slide 24: Capital structure and capital allocation
Capital structure Capital allocation CUMULATIVE FIVE YEARS Strong balance sheet and Capital return $6B $31B $16B $16B M&A Non-GAAP R&D Stock repurchases Dividends paid investment grade rating policy A2/A Stable rating1 Grow dividends low to mid-single digits annually 79% of free cash flow2 returned
Slide 25: QCT IoT and Automotive organic revenue growth drives long-term diversification target
QCT IoT and Automotive organic revenue growth drives long-term diversification Handsets FY24 Automotive 2030 Automotive Handsets revenues and IoT target and IoT 25
Slide 26: Key takeaways
Key takeaways Executing on Positioned to benefit Strong cash Transformation redefines diversification strategy from increasing on- generation and Qualcomm, diversifies while maintaining device AI adoption consistent capital customer base and operating discipline across devices return policy accelera
Slide 27: Thank you
Thank you References in this presentation to “Qualcomm” may mean Qualcomm Incorporated, Qualcomm Technologies, Inc., and/or other subsidiaries or business units within the Qualcomm corporate structure, as applicable. Qualcomm Incorporated includes our licensing business, QTL, and the vast majority o
Slide 28: Note regarding use of Non-GAAP financial measures
Note regarding use of Non-GAAP financial measures This presentation includes “Non-GAAP financial measures” as that term is defined in Regulation G. The Non-GAAP financial measures presented herein should be considered in addition to, not as a substitute for or superior to, financial measures calcula
Slide 29: Reconciliations of GAAP to Non-GAAP financial measures
Reconciliations of GAAP to Non-GAAP financial measures Fiscal 2024 results Fiscal 2023 results GAAP Less Share-Based Non-GAAP GAAP Less Share-Based Non-GAAP (in millions, except per share data) Results Less QSI Compensation Less Other Items1 Results (in millions, except per share data) Results Less
Slide 30: Fiscal 2019 Results
Fiscal 2019 Results GAAP Less Share-Based Non-GAAP (in millions, except per share data) Results Less QSI Compensation Less Other Items1 Results Revenues $24,273 $152 $— $4,723 $19,398 EBT $7,481 $344 ($1,037) $3,889 $4,285 Net income (loss) $4,386 $271 ($853) $645 $4,323 Diluted EPS $3.59 $0.22 ($0.
Slide 31: CAGR
CAGR FY19 FY24 FY19 to FY24 FY19 FY24 FY19 to FY24 FY19 FY24 FY19 to FY24 (in millions, except percentages) Revenue Revenue Revenue CAGR R&D R&D R&D CAGR SG&A SG&A SG&A CAGR GAAP $24,273 $38,962 10% $5,398 $8,893 11% $2,195 $2,759 5% Less QSI 152 18 — — — — 13 12 — Less share-based compensation — —
Slide 32: Operating expenses and revenues
Operating expenses and revenues FY22 FY24 Long-term Opex target as a % (in millions, except percentages) Opex Opex Revenues2 GAAP $10,764 $11,652 27-29% Less QSI 14 12 — Less share-based compensation 2,000 2,559 — Less other items1 12 287 — Non-GAAP $8,738 $8,794 21-23% 1. Other items excluded from
Slide 33: Free cash flow and return of our free cash flow to stockholders
Free cash flow and return of our free cash flow to stockholders Cumulative R&D (in millions, except percentages) Sum of FY20 – FY24 (in millions) Sum of FY20 – FY24 Net cash provided by operating activities $48,947 GAAP $39,056 Less capital expenditures 8,048 Less QSI — Free cash flow (Non-GAAP) $40
Slide 34: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA (in millions) FY24 FY19 (in millions) FY24 FY19 Net income $10,142 $4,386 *Other items includes: Plus income tax expense 226 3,095 Revaluation of deferred compensation plan liabilities2 ($197) $- Plus depreciation and amortization 1,706 1,401 Restructuring and restructurin