Slide 1: Fourth quarter and fiscal 2018 earnings
November 7, 2018 Fourth quarter and 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 executing on our str
Slide 3: Qualcomm reports fourth quarter and fiscal 2018 earnings
Qualcomm reports fourth quarter and fiscal 2018 earnings Quarter ended September 30, 2018 • We delivered a strong quarter, with Non-GAAP earnings per share above the high end of our prior expectations, on greater than expected chipset demand in QCT and lower operating expenses. • We are executing we
Slide 4: Fourth quarter fiscal 2018 results vs. guidance
Fourth quarter fiscal 2018 results vs. guidance Q4 ‘18 Guidance* Q4 ‘18 Results(4) Revenues $5.1B - $5.9B $5.8B Non-GAAP(1) combined R&D and SG&A expenses Flat sequentially Decreased 1% sequentially Non-GAAP(1) diluted EPS(2) $0.75 - $0.85 $0.90 MSM chip shipments 205M – 225M 232M QCT EBT margin % 1
Slide 5: First quarter fiscal 2019 guidance
First quarter fiscal 2019 guidance As of November 7, 2018 Q1 ‘19 Guidance* Revenues $4.5B - $5.3B Non-GAAP(1) combined R&D and SG&A expenses Decrease 5% - 7% sequentially Non-GAAP(1) diluted EPS(2) $1.05 - $1.15 Diluted shares ~ 1.23B MSM chip shipments 175M – 195M QCT EBT margin % 13% - 15% QTL rev
Slide 6: Qualcomm will adopt new revenue recognition guidance under ASC 606
Will most significantly impact our QTL royalty revenues Qualcomm will • Royalty revenues will be estimated and recognized in the period in which the licensees’ sales occur adopt new revenue • Rather than on an as reported basis one quarter in arrears recognition guidance under • Results in accelerat
Slide 7: MSM chip shipments
MSM chip shipments Calendar year, millions 919 903 818 823 793 – 813e* 270 242 175– Quarter 217 237 195e* December 203 236 211 220 232 September June 225 225 201 199 187 March 188 233 189 187 179 2014 2015 2016 2017 2018 * Guidance as of November 7, 2018. 7
Slide 8: Global 3G/4G/5G device shipment estimates
Global 3G/4G/5G device shipment* estimates Calendar year, as of November 7, 2018 ~1.90B – 2.00Be ~1.80B – 1.90Be ~1.755B Up 5% at midpoint** Up 5% at midpoint** 2017 2018 2019 * Global 3G/4G/5G device shipments represent our estimate of CDMA-based, OFDMA-based and CDMA/OFDMA multimode subscriber dev
Slide 9: Cumulative $84.7 billion returned to stockholders
Cumulative $84.7 billion returned to stockholders As of November 7, 2018 Stock Repurchases* (Billions) $22.57 At September 30, 2018, $8.9 billion remained $11.25 authorized for repurchase under our current stock $4.61 $4.55 $3.92 repurchase program. $3.02 $0.95 $1.50 $1.48 $1.67 $1.31 $1.34 $0.17 $0
Slide 10: Financial strength
Financial strength In Billions Sep ‘17 Sep ‘18 Total cash, cash equivalents & marketable securities $38.6 $12.1^ Total assets $65.5 $32.7 Stockholders’ equity $30.7 $0.9 Debt* $21.9 $16.4 EBITDA**(4) $4.1 $2.3 Adjusted EBITDA**(4) $8.1 $6.7 ^ Stock repurchases and repayment of long-term debt signifi
Slide 11: 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 12: Reconciliations
Reconciliations 12
Slide 13: 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 14: 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 $5,833 $20 $— ($50) $5,803 Net income (loss) $1,280 ($11) ($195) ($1,567) ($493) Q4 ‘18 Diluted EPS (3) $0.90 ($0.01) ($0.14) ($1.10) ($0.35) Diluted shares (3)
Slide 15: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA(1) In millions FY ‘17 FY ‘18 Net income (loss): $2,465 ($4,864) Plus income tax expense 555 5,377 Plus depreciation and amortization expense 1,461 1,561 Plus interest expense 494 768 Less investment and other income, net 900 539 EBITDA $4,075 $2,303 Adjustments: QSI (2) ($
Slide 16: Combined R&D and SG&A expenses
Combined R&D and SG&A expenses In millions Q3 ‘18 Q4 ‘18 % Increase Results Results (Decrease) Non-GAAP combined R&D and SG&A expenses 1,865 1,840 (1%) Plus amounts attributable to QSI 3 3 Plus amounts attributable to other items (1) 23 18 Total combined R&D and SG&A expenses excluding certain share
Slide 17: Tax rates
Tax rates In millions QSI(2) Share-based Other Items (2)(3)(4) GAAP Results Non-GAAP Results Compensation(2) Income (loss) before income $1,269 ($20) ($224) ($1,800) ($775) taxes Income tax benefit 11 9 29 233 282 Q4 ‘18 Net income (loss)(1) $1,280 ($11) ($195) ($1,567) ($493) Tax rate (1%) —% 4% 33
Slide 18: Tax rates
Tax rates Estimated annual tax Impact of the rate excluding the Non-GAAP QSI (1) Share-based Other Items (1)(2) GAAP deferred tax Compensation (1) Results impact of the deferred Results asset item tax asset item Estimated* Q1 tax rate Not provided Not provided (43%) (3%) (28%) (13%) (87%) FY ‘19 Est
Slide 19: Fiscal 2018 results
Fiscal 2018 results In millions, except per share data Non-GAAP Results QSI Share-based Other Items (1) GAAP Results Compensation Revenue $22,732 $100 $— ($100) $22,732 FY ‘18 Net income (loss) (1) 5,443 22 (743) (9,586) (4,864) Diluted EPS (2) $3.69 $0.01 ($0.50) ($6.53) ($3.32) Diluted shares (2)
Slide 20: Business outlook
Business outlook As of November 7, 2018 Q1 ‘18 Results(1) Q1 ‘19 Estimates(2)(3)(4) Revenues $6.1B $4.5B - $5.3B Year-over-year change decrease 13% - 26% GAAP diluted EPS ($4.03) $0.78 - $0.88 Less diluted EPS attributable to QSI 0.01 (0.02) Less diluted EPS attributable to share-based compensation
Slide 21: Combined R&D and SG&A expenses guidance
Combined R&D and SG&A expenses guidance In millions Q4 ‘18 Results Q1 ‘19 Estimates* Non-GAAP combined R&D and SG&A expenses 1,840 5% - 7% decline sequentially Plus amounts attributable to QSI 3 Not Provided Plus amounts attributable to other items (1) 18 Not Provided Total combined R&D and SG&A exp
Slide 22: Non-GAAP interest expense, net of investment and other income guidance
Non-GAAP interest expense, net of investment and other income guidance In millions Q4 ‘18 Results Q1 ‘19 Estimates* Non-GAAP interest expense, net of investment and other ($11) ~($100) income Plus amounts attributable to QSI (22) Not provided Plus amounts attributable to share-based compensation — N
Slide 23: Previous business outlook
Previous business outlook As of July 25, 2018 Q4 ‘18 Previous Guidance Estimate(2) Revenues $5.1B - $5.9B GAAP diluted EPS $0.58 - $0.68 Less diluted EPS attributable to QSI $0.03 Less diluted EPS attributable to share-based compensation ($0.12) Less diluted EPS attributable to other items(1) ($0.08
Slide 24: Operating expense cost plan
Operating expense cost plan As of November 7, 2018 FY ‘17 Baseline Spend(1) FY ‘19 estimate Non-GAAP operating expense $7,440 Greater than $6,400 Plus operating expense attributable to QSI 16 Not Provided Plus operating expense attributable to share-based compensation 780 Not Provided Plus operating
Slide 25: 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,