Slide 1: Third quarter fiscal 2018 earnings
July 25, 2018 Third quarter fiscal 2018 earnings
Slide 2: Safe harbor
Safe harbor In addition to the historical information contained herein, this presentation and the conference call that accompanies it contain forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to statements regarding our intent to terminate t
Slide 3: Qualcomm reports third quarter fiscal 2018 earnings
Qualcomm reports third quarter fiscal 2018 earnings Quarter ended June 24, 2018 • We reported results significantly above our prior expectations for our fiscal third quarter, driven by solid execution across the company, including very strong results in our licensing business. • We intend to termina
Slide 4: Third quarter fiscal 2018 results vs. guidance
Third quarter fiscal 2018 results vs. guidance Q3 ‘18 Guidance* Q3 ‘18 Results(4) Revenues $4.8B - $5.6B $5.6B Non-GAAP(1) combined R&D and SG&A expenses Flat to increase 2% sequentially Increased 1% sequentially Non-GAAP(1) diluted EPS(2) $0.65 - $0.75 $1.01 MSM chip shipments 185M – 205M 199M QCT
Slide 5: Fourth quarter fiscal 2018 guidance
Fourth quarter fiscal 2018 guidance As of July 25, 2018 Q4 ‘18 Guidance* Revenues $5.1B - $5.9B Non-GAAP(1) combined R&D and SG&A expenses Flat sequentially Non-GAAP(1) diluted EPS(2) $0.75 - $0.85 MSM chip shipments 205M – 225M QCT EBT margin % 16% - 18% QTL revenues(3) $1.0B - $1.2B QTL EBT margin
Slide 6: MSM chip shipments
MSM chip shipments Calendar year, millions 919 903 818 823 270 242 217 237 Quarter December 203 236 211 220 205 - 225e* September June 225 225 201 199 187 March 188 233 189 187 179 2014 2015 2016 2017 2018 * Guidance as of July 25, 2018. 6
Slide 7: Global 3G/4G device shipment estimates
Global 3G/4G device shipment* estimates Calendar year, as of July 25, 2018 ~1.8B – 1.9Be ~1.755B Up 5% at ~1.70B midpoint** Up 3% 2016 2017 2018 * Global 3G/4G device shipments represent our estimate of CDMA-based, OFDMA-based and CDMA/OFDMA multimode subscriber devices shipped globally, excluding T
Slide 8: Cumulative $62.7 billion returned to stockholders
Cumulative $62.7 billion returned to stockholders As of July 25, 2018 $11.25 Stock Repurchases* (Billions) At June 24, 2018, $9.0 billion remained authorized $4.61 $4.55 for repurchase under the $3.92 May 2018 stock repurchase $3.02 $1.67 program.** $1.50 $1.48 $1.31 $1.34 $1.42 $0.95 $0.17 $0.28 $0
Slide 9: Financial strength
Financial strength In Billions Jun ‘17 Jun ‘18 Domestic $10.0 $5.7 Offshore $27.8 $30.2 Total cash, cash equivalents & marketable securities $37.8 $35.9 Total assets $64.4 $62.1 Stockholders’ equity $31.3 $23.1 Debt* $21.9 $22.5 EBITDA**(4) $1.2 $1.4 Free cash flow***(4) $— $1.8 * Including short-te
Slide 10: Footnotes
Footnotes 1. Non-GAAP results exclude the QSI (Qualcomm Strategic Initiatives) segment and certain share-based compensation, acquisition-related items, tax items and other items. Further discussion regarding the Company’s use of Non-GAAP financial measures and detailed reconciliations between GAAP a
Slide 11: Reconciliations
Reconciliations 11
Slide 12: Note regarding use of Non-GAAP financial measures
Note regarding use of Non-GAAP financial measures The Non-GAAP financial information presented herein should be considered in addition to, not as a substitute for or superior to, financial measures calculated in accordance with GAAP. In addition, “Non-GAAP” is not a term defined by GAAP, and as a re
Slide 13: Non-GAAP results
Non-GAAP results In millions, except per share data Non-GAAP Results QSI Share-based Other Items (1)(2) GAAP Results Compensation Revenues $5,629 $20 $— ($50) $5,599 Net income (loss) $1,508 ($5) ($155) ($129) $1,219 Q3 ‘18 Diluted EPS $1.01 $— ($0.10) ($0.09) $0.82 Diluted shares 1,487 1,487 1,487
Slide 14: EBITDA
EBITDA(1) In millions Q3 ‘17 Q3 ‘18 Net income $865 $1,219 Less: Income tax benefit 7 263 Plus: Depreciation and amortization expense 393 414 Plus: Interest expense 133 212 Less: Interest and dividend income 147 182 EBITDA $1,237 $1,400 (1) EBITDA is defined as net income (before adjustments for non
Slide 15: Free cash flow
Free cash flow(a) In millions Share-based Three months ended June 24, 2018 Non-GAAP Results QSI Compensation(b) Other Items(c) GAAP Results Net cash provided (used) by operating activities(b) $2,278 $1 $— ($226) $2,053 Less: Capital expenditures 214 — — — 214 Free cash flow $2,064 $1 $— ($226) $1,83
Slide 16: Tax rates
Tax rates In millions Non-GAAP Results QSI(2) Share-based Other Items (2)(3)(4)(5) GAAP Results Compensation(2) Income (loss) before income taxes $1,416 ($7) ($189) ($264) $956 Income tax benefit 92 2 34 135 263 Q3 ‘18 Net income (loss)(1) $1,508 ($5) ($155) ($129) $1,219 Tax rate (benefit) (6%) —%
Slide 17: QTL EBT margin
QTL EBT margin Q3 ‘18 Results QTL EBT margin 72% Excluding the partial payment from the other licensee* 15% QTL EBT margin excluding the partial payment from the other licensee* 57% * $500 million payment pursuant to an interim agreement with the other licensee in dispute. This represents partial pa
Slide 18: Combined R&D and SG&A expenses
Combined R&D and SG&A expenses In millions Q2 ‘18 Q3 ‘18 % Increase Results Results (Decrease) Non-GAAP combined R&D and SG&A expenses $1,840 $1,865 1% QSI 3 3 Other items (1) 216 23 Total combined R&D and SG&A expenses excluding certain shared-based 2,059 1,891 (8%) compensation Share-based compens
Slide 19: Business outlook
Business outlook As of July 25, 2018 Q4 ‘17 Results(1) Q4 ‘18 Estimates(2) Revenues $5.9B $5.1B - $5.9B Year-over-year change decrease 14% - flat GAAP diluted EPS $0.11 $0.58 - $0.68 Less diluted EPS attributable to QSI 0.02 0.03 Less diluted EPS attributable to share-based compensation (0.10) (0.12
Slide 20: Combined R&D and SG&A expenses guidance
Combined R&D and SG&A expenses guidance* In millions Q3 ‘18 Results Q4 ‘18 Guidance* (est.) Non-GAAP combined R&D and SG&A expenses excluding the impact of an $1,865 Mid-single digit % decrease extra week in the fiscal fourth quarter calendar Impact of an extra week in the fiscal fourth quarter cale
Slide 21: Non-GAAP interest expense, net of investment and other income guidance
Non-GAAP interest expense, net of investment and other income guidance In millions Q3 ‘18 Results Q4 ‘18 Guidance* Non-GAAP interest expense, net of investment and other ($8) ~Flat Sequentially income Plus: Amounts attributable to QSI (9) Not provided Plus: Amounts attributable to share-based compen
Slide 22: Previous business outlook
Previous business outlook As of April 25, 2018 Q3 ‘18 Previous Guidance Estimate(2) Revenues $4.8B - $5.6B GAAP diluted EPS $0.35 - $0.50 Less diluted EPS attributable to QSI $0.03 Less diluted EPS attributable to share-based compensation ($0.13) Less diluted EPS attributable to other items(1) ($0.1
Slide 23: Diluted EPS impact of the interim agreement with the other licensee in dispute
Diluted EPS impact of the interim agreement with the other licensee in dispute while negotiations continue* Q3 ‘18 Results GAAP diluted EPS impact $0.30 Less diluted EPS impact attributable to QSI $0.00 Less diluted EPS impact attributable to share-based compensation $0.00 Less diluted EPS impact at
Slide 24: Thank you!
Thank you! Follow us on: For more information, visit us at: www.qualcomm.com & www.qualcomm.com/blog Nothing in these materials is an offer to sell any of the References in this presentation to “Qualcomm” may mean Qualcomm components or devices referenced herein. Incorporated, Qualcomm Technologies,