Qualcomm reported fiscal fourth quarter results on November 4 that beat expectations narrowly and still disappointed the market. Non-GAAP revenue fell 7 percent year over year to 10.44 billion dollars and non-GAAP earnings were 2.17 dollars a share, down 28 percent, against analyst expectations of about 10.11 billion dollars and 2.16 dollars. GAAP revenue fell 8 percent to 10.32 billion dollars. Shares fell about 7 percent in after hours trading.
The split inside the chip business, QCT, is the story. Handset revenue fell 26 percent to 5.14 billion dollars, which the company linked to industry wide memory conditions weighing on the smartphone market. Automotive revenue rose 89 percent to 1.99 billion dollars, its first 2 billion dollar quarter, exiting the year at an annualized run rate of about 8 billion dollars. IoT revenue rose 4 percent to 1.89 billion dollars. Together, automotive and IoT gains offset only about 56 percent of the handset decline. QCT revenue in total fell 8 percent to 9.02 billion dollars, and its pre tax margin narrowed to 24 percent from 29 percent. Licensing revenue fell 7 percent to 1.30 billion dollars.
Guidance pointed the same way. For the fiscal first quarter Qualcomm guided non-GAAP revenue of 10.4 billion to 11.2 billion dollars and earnings of 2.15 to 2.35 dollars a share, a midpoint below analyst estimates, and said the outlook assumes no further chip sales to Apple. Management said fiscal 2027 would be the inflection for non-handset revenue, expected to grow more than 60 percent and pass half of QCT revenue, with a 5 billion dollar data center revenue target.
Full year non-GAAP revenue was 43.24 billion dollars, down 2 percent, and non-GAAP earnings were 10.54 dollars a share. GAAP earnings of 12.70 dollars a share included a 5.7 billion dollar income tax benefit from releasing a valuation allowance.