Qualcomm (QCOM.)o) released its 2024 first fiscal year report (as of December 2023) after the U.S. stock market on the morning of February 1, 2024 Beijing time, with the following highlights:
1. Overall performance: revenue & profit, both exceeded expectations. Qualcomm achieved revenue of 99 in the first quarter of fiscal 2024 (i.e., 23Q4).US$3.5 billion, a year-on-year increase of 5%, exceeding market expectations (95.).$1.4 billion). The rebound in revenue was mainly driven by the recovery of the mobile phone business; The company achieved a net profit of 27$6.7 billion, a year-on-year increase of 238%，Exceeding market expectations (22.)$5.3 billion).The recovery of business led to a recovery in revenue and profitability from the bottom.
2. Business segments: mobile phone business, bottoming out。Mobile phones are still the largest item in the company's business, accounting for more than 60%. Global mobile phone shipments in the quarter ushered in a year-on-year increase, especially the pull of Android products, which directly drove the company's mobile phone business revenue in this quarter to increase by 16% year-on-year2%。Although the automotive business still maintained double-digit growth, it currently accounts for less than 10%.
3. Qualcomm performance guidance: expected revenue of $8.9-9.7 billion in the second quarter of fiscal 2024 (i.e., 24Q1) (consensus expectation of 92.2.)$8.9 billion) and adjusted profit of $2.9 per share$2 to $2$4 (the market expected 2.)$22).
Dolphin's overall view:
Qualcomm's earnings report for the quarter was generally good. Both revenue and profit exceeded expectations, mainly due to the recovery of the company's mobile phone business. Global mobile phone shipments increased 8% year-over-year in the quarter6%, driving the company's performance out of the bottom. This is also in line with Dolphin's comment last season "Qualcomm: Android Brother "Hibernation Period" is finally over? "Judging from the situation of Qualcomm and the industrial chain, the downstream pulling of goods has begun to pick up, and the company's performance has also crossed the bottom."
Referring to Qualcomm's guidance for the next quarter: expected revenue of $8.9 billion to $9.7 billion in the second quarter of fiscal 2024 (i.e., 24Q1) (consensus of 92.).$8.9 billion) and adjusted profit of $2.9 per share$2 to $2$4 (the market expected 2.)$22). 。Due to seasonal factors, the company's revenue and profit both declined sequentially, but overall they were better than the previous bottom data. At the same time, it also shows that the mobile phone market has not yet seen hot demand, and the current is more of a repair at the bottom.
From the stock side,The company's inventory fell to 62 in the quarter$4.7 billion, continuing to decline, but still at a relatively high level. withThe industry has improved, and the company's inventory has continued to decline. The overall inventory at a relatively high level also confirms that the company's downstream demand has not yet been in short supply
Combined with this financial report and the company's guidance, Dolphin Jun believes that although Qualcomm's performance has come out of the bottom, there is still no sign of explosion. Since 60% of the company's revenue comes from the mobile phone businessQualcomm is still a veritable "mobile phone stock".Judging from the company's and industry data, the current mobile phone market is in the stage of recovery, which is more from the demand for replenishment after inventory removal. Driven by the absence of star products or innovative products, the mobile phone market is currently showing more bottom repair, rather than short supply. Through the early stage, the company's current stock price has entered the expectation of recovery. If we want to break through new highs, we still need more performance that has warmed up and exceeded expectations.
The following is Dolphin's specific analysis of Qualcomm's financial report:
1. Overall performance: Revenue & profit, both exceeded expectations
1.1. Revenue
Qualcomm achieved revenue of 99 in the first quarter of fiscal 2024 (i.e., 23Q4).US$3.5 billion, up 5% year-on-year, exceeding market expectations (95.).$1.4 billion). The company's revenue in the quarter ushered in a rebound, mainly driven by the recovery of the two major businesses of smartphones and automobiles.
1.2 Gross margin
Qualcomm achieved a gross profit of 56 in the first quarter of fiscal 2024 (i.e., 23Q4).$2.3 billion, a year-on-year increase of 38%。The year-on-year growth rate of gross profit was smaller than that of revenue, mainly because of the year-on-year decline in gross profit margin.
Qualcomm's gross margin for the quarter was 566%, down 07pct, better than market expectations (55.).6%）。With the recovery of the downstream mobile phone market, the company's overall gross profit margin has also rebounded from the bottom.
Qualcomm had inventory of $62 in the first quarter of fiscal 2024 (i.e., 23Q4).US$4.7 billion, down 99%。Although the current inventory is still relatively high, it has been depleted quarter by quarter
Inventory removal is an indicator of business recovery, but Dolphin Jun believes that the company's inventory is still at a relatively high level. With the destocking, the company's overall gross profit margin will also rise from the bottom.
1.3. Operating expenses
Qualcomm's operating expenses for the first quarter of fiscal 2024 (i.e., 23Q4) were $272.3 billion US dollars, down 53%。In the period of relatively sluggish performance, the company has also made corresponding controls on operating expenses.
For the specific cost situation, let's split it up:
1) R&D expenses: The company's R&D expenses in the quarter were 209.6 billion US dollars, down 69%。In the sluggish performance stage, the company reduced the related investment in R&D expenses;
2) Selling and administrative expensesThe Company's selling and administrative expenses for the quarter were 6US$2.7 billion, a year-on-year increase of 0.7 billion6%。There is a certain correlation between selling expenses and revenue, which increased slightly with revenue year-on-year.
1.4. Net profit
Qualcomm reported a net profit of 27 in the first quarter of fiscal 2024 (i.e., 23Q4).$6.7 billion, a year-on-year increase of 238%, exceeding market expectations (22.).$5.3 billion).Net profit margin for the quarter was 279%, profitability has improved significantly. As Android phones pick up from the bottom, the company's performance has also improved from the bottom.
2. Business segments: The mobile phone business bottomed out
Judging from Qualcomm's sub-business,The QCT (CDMA business) remained the company's largest revenue** in the quarter, accounting for more than 80% of the company's revenue, mainly including chip semiconductor business；The rest of the revenue mainly comes from the QTL (technology licensing) business, accounting for about 15%.
The QCT business is the most important part of the company, and the specific breakdown is as follows:
2.1. Mobile phone business
Qualcomm's mobile phone business achieved revenue of 66 in the first quarter of fiscal 2024 (i.e., 23Q4).$8.7 billion, a year-on-year increase of 162%, mainly driven by the recovery of the Android mobile phone market.
Referring to the data released by IDC, global smartphone shipments in the quarter were 32.6 billion units, a year-on-year increase of 86%。In particular, the company's customers Xiaomi achieved double-digit growth in the quarter, which directly led to the recovery of the company's mobile phone business.
The mobile phone business accounts for more than 70% of the QCT business, so changes in the mobile phone market will directly have a greater impact on Qualcomm. Although Qualcomm is also trying to expand new businesses to reduce the impact of business uniformity, the current impact of the mobile phone business on the company as a whole is still more than 60%.
Dolphin Jun believes that after the mobile phone industry has experienced inventory depletion, downstream customers are expected to accelerate the momentum of pulling goods, which in turn will promote the company's performance to rebound from the bottom.
2.2. Automotive business
Qualcomm's automotive business achieved revenue of 5$9.8 billion, a year-on-year increase of 311%。The automotive business is the fastest growing of the company's main businesses, benefiting from the growing demand for intelligent cockpits and autonomous driving in automobiles.
Although the company's automotive business still maintains a double-digit high growth rateHowever, the automotive business still accounts for less than 10% of the company's total revenue, which has a relatively small impact on the company's overall performance.
2.3IoT business
Qualcomm's IoT business achieved revenue of 11 in the first quarter of fiscal 2024 (i.e., 23Q4).US$3.8 billion, down 323%。The IoT business continues to maintain a double-digit decline, and there is no sign of improvement.
Qualcomm's IoT business mainly includes consumer electronics, edge networking and industrial products. There are relatively many types of businessHowever, Dolphin speculates that the sluggish demand for consumer electronics products such as XR is the main factor in the decline of the IoT business
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