A month has gone by since the last earnings report for Qualcomm (QCOM). Shares have added about 11.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Qualcomm due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Qualcomm Beats Q1 Earnings Estimates on Solid Revenues

Qualcomm reported relatively healthy first-quarter fiscal 2024 results, with the bottom and top lines beating the respective Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario.

Net Income

On a GAAP basis, net income in the December quarter improved to $2,767 million or $2.46 per share from $2,235 million or $1.98 per share in the prior-year quarter. The increase in GAAP earnings was primarily attributable to top-line growth.

Quarterly non-GAAP net income came in at $3,101 million or $2.75 per share compared with $2,684 million or $2.37 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 37 cents.

Revenues

On a GAAP basis, total revenues in the fiscal first quarter were $9,935 million compared with $9,463 million in the prior-year quarter. The quarterly revenues beat the consensus mark of $9,505 million. Despite soft industrial IoT demand patterns, Qualcomm registered record automotive revenues owing to solid momentum from the Snapdragon Digital Chassis platform. Strength within the handset business also buoyed the top line. Non-GAAP revenues in the reported quarter were $9,922 million compared with $9,456 million in the year-earlier quarter.

Segment Results

Quarterly revenues from Qualcomm CDMA Technologies (QCT) were up 7% year over year to $8,423 million, as strength in the automotive platform and higher demand in handsets was partially offset by channel inventory drawdown within the IoT business. The segment’s revenues exceeded our revenue estimates of $8,056.4 million. The company witnessed solid market traction in the EDGE networking business that helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets.

Automotive revenues rose 31% to $598 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 13th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues. Handset revenues were up 16% to $6,687 million, primarily led by the increased deployment of the Snapdragon 8 Gen 3 mobile platform in new Android flagship launches. However, IoT revenues were down 32% to $1,138 million due to the channel inventory drawdown. EBT margin for the QCT segment rose to 31% from 28%.

Qualcomm Technology Licensing (QTL) revenues totaled $1,460 million, down 4% year over year due to lower licensing revenues. The segment’s revenues beat our estimates of $1,356.1 million. EBT margin declined to 74% from 73%.