Qualcomm marks 'huge' quarter based on revenue diversification

“Revenue diversification” are key words for Qualcomm.

The company blasted out a fourth fiscal quarter that beat estimates, including with a 43% improvement in revenues to a record $9.3 billion and a 75% jump in net income to $2.9 billion.

Qualcomm shares surged  5% shortly after market close on Wednesday to 146.20.

The fiscal 2021 results were even better, with $33.4 billion in revenues, up by 55% over a year ago and net income of $9.8 billion, up 104%.

“We are well positioned to continue to lead in mobile and enable the digital transformation of industries with our broad portfolio of relevant technologies,” said CEO Cristiano Amon. “Our results across RF front-end, automotive and IoT attest to the success of our technology roadmap and revenue diversification strategy.”

Amon added in an analyst call that as edge computing grows and adopts AI, “we are well positioned to become a leader in AI processing.”

Patrick Moorhead, analyst at Moor Insights & Strategy, called the fourth quarter “huge” and added, “There’s no question that the company’s diversification plans beyond the smartphone’s baseband modem are paying off.”

He noted that for the fiscal quarter, IoT grew 66%, automotive grew 44% and RF grew 45%. Handset revenue was up 56%.

“I find it interesting that the company grew this much during a supply-constrained environment,” Moorhead added. “Some have said that Qualcomm’s multi-foundry approach was too complex, but now it’s looking very smart.”

Qualcomm broke out its IoT business that grew by 67% for the fiscal year to $5.1 billion, noting the opportunities include tablets and PCs, wearables and voice and music. Edge networking includes 5G wireless fiber and wireless access points, while industrial IoT includes energy and metering, logistics and warehousing, industrial handhelds, retail and asset tracking.

In its auto segment, Amon said Qualcomm’s Snapdragon digital chassis Auto is the basis of partnership with automakers for a joint roadmap that will be scalable and upgradeable. He called it a “platform for innovation.”  Snapdragon Ride is also Qualcomm’s open and competitive ADAS platform.

Earnings per share growth is expected to increase by greater than 20% in fiscal 2022, Qualcomm said.

"Across the board, we'll  have really strong growth rates in the  [2022] year and beyond,"  CFO Akosh Palkhiwala told analysts.

Amon said supply constraints will improve in the second half of 2022.