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Call sheet · Q3'26

Qualcomm (QCOM)

Q3'26 earnings call · held July 29, 2026 · compared with the Q2'26 call · management-credibility review
10/12
Disclosure score
2 high, 4 medium, 1 low flags
Financial quality
Bottom line
The sleeper story is Qualcomm executing on data center faster than anyone expected, with real revenue in December, not the multi-year development cycle the Street anticipated. Yes, Apple is exiting faster and margins are compressing, but that's noise. The binding constraint is gross margin compression from both input costs AND data center mix shift; even with double-digit price hikes, they're guiding margins down 150-200bps. Amon's tell: 'Nobody's comfortable. Everybody wants more supply.' Translation: they're capacity-constrained and choosing data center over Apple. My view changes if data center gross margins improve above 'significantly lower' or if December revenue disappoints.

The 30-second version

  • Data center is already generating revenue with two hyperscaler wins starting December, not the 'multi-year journey' story Wall Street expects
  • Apple accelerating exit to 'materially lower' than 20% share creates $7.5B hole, but non-handset growth at 60%+ fills it entirely in FY27
  • Gross margins falling below historical range despite price hikes is the real constraint nobody's talking about

What changed this quarter

MetricQ2'26Q3'26Change
QCT Revenue$9.1B (flat YoY)$8.5B (-7% YoY)-650 bps deceleration
QCT EBT Margin27%26%-100 bps compression
Handset Revenue$6.0B$5.1B-15% sequential collapse
Automotive Revenue$1.3B (+38% YoY)$1.6B (+61% YoY)+2300 bps YoY acceleration
IoT Revenue$1.7B (+9% YoY)$1.8B (+9% YoY)Stable growth
Non-Handset Combined$3.0B (+20% YoY)$3.4B (+28% YoY)+800 bps acceleration
EPS$2.65$2.21-17% sequential decline
Operating Cash FlowNot disclosedNot disclosedOpacity maintained
China Android RevenueMeaningful undershipmentBottoming in Q3Trough reached
Automotive Exit Run Rate$6B target$7B raised target+$1B upward revision

Accountability tracked

7 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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