Qualcomm Incorporated · NASDAQ:QCOM
Qualcomm — Investor Day (November 2021)
31 slides from Qualcomm's investor day presentation, Nov 16, 2021
Slide 1: Akash Palkhiwala
Slide 2: Key financial priorities
Key financial Revenue priorities growth Diversification Capital allocation Operating discipline
Slide 3: Significantly exceeding 2019 Analyst Day targets
Significantly exceeding 2019 Analyst Day targets One year in advance 3-year targets Revenue growth G22 Operating margin B otteritems Gersane CRE @cT: Grow faster than product revenues QTL: Current run-rate + Huawet resol ‘SAM and Apple lution QCT: Grows to>20% QTL: Approximately 70% Wh tox rate Cur
Slide 4: Record year across key Non-GAAP metrics
[-AWAB Record year across key Non-GAAP metrics gaa Revenues +55% $33.58 $2178 L Operating income +98% $11.8B $59B Earnings per share +104% $8.56 ; |
Slide 5: QCT record revenue growth beyond handsets
QCT record revenue growth beyond handsets Hay RF front-end 476% $4.2B i | Automotive +51% $097B $0.64B L loT +67% $51B $3.0B L
Slide 6: QCT revenue diversification
Handsets QCT revenue RF front-end diversification Combined revenues across RF front-end, Automotive and loT Non-handset £270 B ewe | 389 thon doubled: $4.8B— $10.2B aisha” atone | 38% over two years FYI9 FY2I lo
Slide 7: Operating margin expansion
Operating margin expansion One technology roadmap across all products Non-GAAP OpEx' as % of revenues 34% Pa" FYI9 Fy2t 15% QCT EBT? margin 29% FY21
Slide 8: Qualcomm's commitment to ESG
Qualcomm’s commitment to ESG Net-zero T bes across global greenhouse gas 0 lo) emissions for Scopes 1, 2, 3 by 2040 | O O % 0 5 ©) % ‘0 BUSINESS 4 Fe; renewable purchased reduction in Scope Binns 15°C MELD &> electricity for our land 2 greenhouse San Diego headquarters gas emissions by 2030 5G adopt
Slide 9: QCT
QCT U Handsets Snapdragon is the platform of choice forpremium- and high-tier Android smartphones (fs) RF front-end Redefine connectivity as modem + RF front-end and expand across industries a Automotive Preferred partner for the digital chassis loT Connectivity and smart processing for the cloud-co
Slide 10: 5G is a long-term growth driver for Qualcomm
5G is a long-term growth driver for Qualcomm 5G handset shipments’ Units in milions: >950 >750 ~525 cY2le CY22e CY23e % of total? ~40% ~60% ~75% >1100 CY24e ~85% 1 3G/4G/5G non-handset shipments: Ute ire ed growth [ CY25e CY30e
Slide 11: QCT Handsets: SAM expansion in FY21
QCT Handsets: SAM expansion in FY21 $I9B 2020 $10B FY20revenues $338 Modem-only Shift in OEM landscape 20216 $17B FY2Irevenues SAM growth drivers + 4G5Gtransition + Increased Snapdragon features and content Shift in OEM landscape + Chinese OEMs gaining share + Expands premium- and high-tier opportun
Slide 12: Android scale in handsets
Android scale in handsets QCT FY21 Android revenues ~40% higher than primary competitor ~85% of CY22 global handsets ~8/'N of QCT CY22 handset SAM
Slide 13: QCT Handsets: Revenue growth opportunity
QCT Handsets: Revenue growth opportunity 2021e 202he SAM growth drivers + 4G 5G transition: 1.5x ASP multiplier! + Increased Snapdragon features and content Revenue grows at least in-line with SAM + Planning assumption: 20% share of iPhone 2023 launch Android revenue grows significantly faster than
Slide 14: RF front-end: Positioned to be the global revenue leader
RF front-end: Positioned to be the global revenue leader a Handsets #1 in revenues — $3.9B FY21 Continued migrationto 5G OEM landscape shift. mmW global adoption ES Sar Automotive loT >$0.6B current design-win pipeline! ~$0.3B FY2Irevenues ~70% of 2024 cars connected? 5G adoption: wirelessfiber, tab
Slide 15: RF front-end: Revenue growth opportunity
RF front-end: Revenue growth opportunity $7B 2021e $4.2B FY21 revenues $24B *Automotive/IoT ‘*Handsets 2024e SAM growth drivers + 4G>5Gtransition + Automotive and loT Revenue grows at least in-line with SAM Non-Apple revenue grows significantly faster than SAM Commitments from all major OEMs'
Slide 16: Snapdragon digital chassis
Snapdragon digital chassis A platform forthe future of automotive Snapdragon car-to-cloud Pre-intograte software and services platforrna to drive new monetization models Snapdragon ride platform Scale ADAS 12¢ with Aniver! and integrate platform into digital chasis Snapdragon cockpit platform ‘Tansf
Slide 17: Automotive: Revenue growth opportunity
Automotive: Revenue growth opportunity SAM' Design-win pipeline'” Revenues' $15B fl 36% = / -' CAGR / $ ee / / / SEE | -$3.5B gap / \ See @ Telematics /Connectivity, $1B © Digital cockpit Fy2i @ ADAS/Autonomy 202! 20262 High confidence: 70% revenue coverage over next five years forecast + Design-win
Slide 18: IoT: Diversified revenues
loT: Diversified revenues One technology roadmap Nearly 14K customers Top 10 customers = 42% of revenues Consumer Bi = Compute XR @ sé Wearables Consumer electronics Edge Networking 5G Wi-Fi wireless fiber access points vRAN infrastructure Industrial i o! Retail Smart cities Energy Manufacturing
Slide 19: IoT: Revenue growth opportunity
loT: Revenue growth opportunity $67B + Industrial » Edge Networking om * Consumer 2021e 202460 £51B FY21 revenues Digital transformation drives SAM growth and demand for mobile technologies + Consumer growth driven by Windows PC and XR/metaverse devices + Edge Networking growth driven by wireless fi
Slide 20: QTL opportunity: Maintain current revenue scale and margin profile
QTL opportunity: Maintain current revenue scale and margin profile Strong cash flow supports R&D investments Handset Non-handset Represents >90% of current licensing revenues Established program in Automotive and loT modules Every major handset OEM licensed Automotive: strong trend towards connected
Slide 21: Transformative growth opportunities
Transformative growth opportunities PC ~250M units per year! $35B+ chiprevenue SAM! Arm transition ‘Snapdragon + Next-gen CPU leadership, XR/Metaverse 50+ Snapdragon AR/VR deviceslaunched ~90% share of global design wins Chinese OEM product launches starting 2023 Up to 1B units in 10 years? 7x TAM e
Slide 22: Our M&A model
Our M&A model Successful acquisitions S@TDIC RF front-endtechnology Kx Wi-Fi and networking ATHEROS CSR Bwetoothand audio <flarionS OFDMAtechnology SD ‘Snaptrack Positionlocation Recent ~ a Next-gen CPU. NUVIA. Pending 4\rriver — ADAS software Strong track record of transforming acquisitions into in
Slide 23: Capital structure priorities
Capital structure priorities 90% of free cash flow! returned to stockholders in the last two years GIT s598 val 2 B EEE 5585 eyecare om 175% of free cash flow! returned to stockholders in the last five years ) 315.68 £$47B Consistent capitalreturn strategy Continue to grow dividends + $272 current a
Slide 24: Three-year financial targets
Three-year financial targets FY22-FY24 QCT: Mid-teens revenue CAGR and 30%+ operating margin Apple % of QCT revenues: low single digit exiting FY24 Handset and RF front-end revenues: grow at least in-line with 12% SAM CAGR Automotive! revenues: ~$3.5B in five years and ~$8B in 10 years loT revenues:
Slide 25: Key takeaways
Key takeaways Cloud economy adoption has accelerated demand for the connected intelligent edge Diversified revenue growth across large addressable opportunities Leading technology roadmap that extends across all growth opportunities Financial discipline and focused execution Strong operating cash fl
Slide 26: Qualcomm
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Slide 27: Safe harbor
Safe harbor Inoxtion to histor Information. this presontction contains fowerc:icoking statemerts that are inherertly subject to risks end uncertalties, including but net limted to statements regarding our business, procuct, technoloey, inancict arc ‘ecquistion strategies, prcrties, plons. vers, oppo
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 Free cash flow and return of our free cash flow to stockholders Sum of Sum of Inmittions, except percentages FY2021 FY2020 2years FY2019 FY2018 FY2017 Syears Net cash providedby operating activitios $10,536 $5814 $16,350 $7,286 $3908 $5,001 $32,
Slide 30: Reconciliations of GAAP to Non-GAAP Results
Reconciliations of GAAP to Non-GAAP Results Less Share-Based Less Otherltems In millions, except per share data GAAP Results Less QSI ‘Compensation (re) Non-GAAP Results Fiscal 2021 Revenues $33,566 845, cS 854 $33,467 Operatingincome (loss) 9789 22 (1670) (335) 1772 Net income (loss) 9,043 751 (123
Slide 31: Reconciliations of GAAP to Non-GAAP financial measures
Reconciliations of GAAP to Non-GAAP financial measures Operating Expensesas a Percent of Revenues Less Share-Based Less Otherltems In millions, except percentages GAAP Resuits Less @sI ‘Compensation (x2) Non-GAAP Results Fiscal 2021 Revenues $33,566 $45 & $54 $33,467 Combined R&D and SGBA expenses 9