Qualcomm posts shrinking sales and profits as rising costs hit smartphone market

Qualcomm's latest results show net income falling 25% year-over-year, with the company citing higher memory chip prices as a drag on its core device business tied to smartphones. The FY2025 SEC filing data shows revenue of $44.3B, up 13.7% year-over-year, alongside a 12.5% net margin and diluted EPS of $5.01, indicating that top-line growth is not translating into proportional profit growth as costs rise.

The divergence between rising revenue and falling net income points to margin compression as the central story here. Qualcomm's business is heavily levered to smartphone unit volumes and chip content, so an increase in memory input costs directly squeezes the profitability of its device segment even when shipment volumes or average selling prices hold up. This matters for anyone tracking the semiconductor supply chain, since memory pricing dynamics also touch DRAM and NAND suppliers as well as other fabless chip designers exposed to smartphone demand.

The second-order question is whether this cost pressure is transitory or a signal of a structurally tighter memory market that could pressure other chip designers over coming quarters. Bulls can point to the 13.7% revenue growth as evidence demand remains resilient despite cost headwinds, while bears will note that a 25% profit decline against double-digit revenue growth is a stark operating leverage problem that could persist if memory prices stay elevated. Watch subsequent commentary on gross margin guidance and any read-through to memory suppliers or other smartphone-exposed chipmakers for confirmation of whether this is company-specific or sector-wide.