What you need to know
- Qualcomm reported its fiscal Q1 2021 earnings, which show impressive growth.
- As the company continues to ride the 5G wave, with chip sales growing 79%.
- Qualcomm expects the purchase of Nuvia to affect its short-term financials, albeit with long-term gains.
Qualcomm reported its quarterly earnings today, and while the company missed some forecasts, it still showed impressive growth, most likely due to the push for 5G. According to the report, Qualcomm's revenue grew 63% while income shot up 118% YoY. In addition, revenues from Qualcomm's chip sales nearly doubled YoY to $4.22 billion. That further points to the growth of 5G and is something that outgoing CEO, Steve Mollenkopf, expects to ramp up in the current quarter and beyond.
We delivered an exceptional quarter, more than doubling earnings year-over-year due to strong 5G demand in handsets and growth in our RF front-end, automotive, and IoT adjacencies, which drove record earnings in our chip business. We remain well-positioned as the 5G ramp continues and we extend our core technology roadmap to adjacent industries.
Qualcomm's numbers highlight how the smartphone industry is beginning to recover from the impact of the pandemic. The company managed to expand its chip offerings, giving consumers more options beyond the top tier models that were likely out of reach for many. The Snapdragon 765 was a popular option in many of the best Android phones last year, and Qualcomm continues to offer a range of chips that bring 5G to lower price points, like the Snapdragon 690 and Snapdragon 480, both of which will continue to drive chip sales.
Of course, the company expects the sale of iPhones and recent Samsung Galaxy S21 devices to help drive this quarter, but it also helps that the recently launched Snapdragon 870 could bring cheaper flagship models to the global market. And then there's Nuvia, the chip startup that Qualcomm is preparing to purchase. In the short term, Qualcomm will take time to integrate it into the business, but in the long term, buying Nuvia is a pretty big deal, as it could help Qualcomm to further boost its chips, particularly for Windows laptops.
All in all, Qualcomm expects a healthy year for 5G devices, with shipments expected to reach more than 450 million units. The year has only begun and the first smartphones powered by Qualcomm's latest flagship chips have just been launched, so there's going to be a lot more to see in the coming months.
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