10-K – 2025-11-05 – qcom-20250928.htm

(1) Cumulative unrealized gains were $ 394 million and $ 370 million at September 28, 2025 and September 29, 2024, respectively. Cumulative unrealized losses, including impairments, were $ 457 million and $ 385 million at September 28, 2025 and September 29, 2024, respectively.

Other Current Liabilities (in millions)

September 28,
2025 September 29,
2024
Customer incentives and other customer-related liabilities $ 1,948   $ 2,480  

Income taxes payable 1,007   1,080  

Other 1,201   865  
$ 4,156   $ 4,425  

Revenues. We disaggregate our revenues by segment (Note 8), by products and services (as presented on our consolidated statements of operations), and for our QCT segment, by revenue stream, which is based on the industry and application in which our products are sold (as presented below). In certain cases, the determination of QCT revenues by industry and application requires the use of certain assumptions. Substantially all of QCT’s revenues consist of equipment revenues that are recognized at a point in time, and substantially all of QTL’s revenues represent licensing revenues that are recognized over time and are principally from royalties generated through our licensees’ sales of mobile handsets.
QCT revenue streams were as follows (in millions):

2025 2024 2023
Handsets (1) $ 27,793   $ 24,863   $ 22,570  

Automotive (2) 3,957   2,910   1,872  
IoT (internet of things) (3) 6,617   5,423   5,940  
Total QCT revenues $ 38,367   $ 33,196   $ 30,382  

(1) Includes revenues from products sold for use in mobile handsets.
(2) Includes revenues from products sold for use in automobiles, including connectivity, digital cockpit and ADAS/AD.
(3) Primarily includes products sold for use in the following industries and applications: consumer (including PCs, XR and other personal computing devices), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, tracking and logistics and utilities).
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods generally include certain sales-based royalty revenues related to system software, certain amounts related to customer incentives and QTL royalty revenues recognized related to devices sold in prior periods (including revenues resulting from certain settlements and adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and were as follows (in millions):

2025 2024 2023
Revenues recognized from previously satisfied performance obligations
$ 783   $ 558   $ 598  

Remaining performance obligations, which are primarily included in unearned revenues (as presented on our consolidated balance sheet), represent the aggregate amount of the transaction price of certain customer contracts yet to be recognized as revenues as of the end of the reporting period and exclude revenues related to (a) contracts that have an original expected duration of one year or less and (b) sales-based royalties (i.e., future royalty revenues) pursuant to our license agreements. Our patent license agreements with key OEMs are generally long-term, with terms expiring at varying dates between fiscal 2027 and 2031 . We generally seek to renew or renegotiate such license agreements prior to expiration.
Concentrations. A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL (Qualcomm Technology Licensing) segments. The comparability of customer/licensee concentrations for the periods presented are impacted by the timing of customer/licensee device launches and/or innovation cycles and other
F-16

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

seasonal trends, among other fluctuations in demand. Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:

2025 2024 2023
Customer/licensee (x)
21 % 22 % 27 %
Customer/licensee (y)
20 19 21
Customer/licensee (z)
13 12 *

* Less than 10%
We rely on sole- or limited-source suppliers for some products, particularly products in our QCT segment, subjecting us to possible shortages of raw materials or manufacturing capacity. The loss of a supplier or the inability of a supplier to meet performance or quality specifications or delivery schedules could harm our ability to meet our delivery obligations and/or negatively impact our revenues, business operations and ability to compete for future business.
Other Income, Costs and Expenses. Other expenses in fiscal 2025 consisted of $ 39 million in restructuring an d restructuring-related charges.
Other expenses in fiscal 2024 consisted primarily of $ 107 million in restructuring and restructuring-related charges (substantially all of which related to severance costs) and a $ 75 million charge related to the settlement of a securities class action lawsuit.
Other expenses in fiscal 2023 consisted of $ 712 million in total restructuring and restructuring-related charges (substantially all of which related to severance costs, resulting from certain cost reduction actions committed to in fiscal 2023) and a $ 150 million intangible asset impairment charge related to in-process research and development.
Discontinued Operations. In fiscal 2022, we and SSW Partners, a New York-based investment partnership, entered into and closed a definitive agreement to acquire Veoneer, Inc. (Veoneer). Total cash consideration paid in the transaction was $ 4.7 billion. We acquired Veoneer’s Arriver business and SSW Partners retained Veoneer’s Tier-1 automotive supplier businesses, primarily consisting of the Active Safety and the Restraint Control Systems businesses (the Non-Arriver businesses), with the intent to sell such businesses in multiple transactions. In exchange for us funding substantially all of the cash consideration payable in the transaction, we obtained the right to receive a majority of the proceeds upon the sale of the Non-Arriver businesses by SSW Partners. On June 1, 2023, SSW Partners completed the sale of Veoneer’s Active Safety business to Magna International Inc. for net cash proceeds of $ 1.5 billion. On March 1, 2024, SSW Partners completed the sale of Veoneer’s Restraint Control Systems business to American Industrial Partners Capital Fund VII. Although we did not own or operate the Non-Arriver businesses, we were the primary beneficiary, within the meaning of the FASB accounting guidance related to consolidation (ASC 810), of these businesses under the variable interest model, until sold by SSW. Factors considered in reaching this conclusion included, among others: (i) our involvement in the design of and our funding of substantially all of the total cash consideration payable in the transaction and (ii) our obligation to absorb losses and rights to receive returns from the Non-Arriver businesses. Accordingly, through the date of disposition by SSW Partners, the results of operations (including the gain or loss on sale, the amounts of which were not material) and cash flows of the Non-Arriver businesses are presented as discontinued operations, with the cash proceeds from those sales presented as investing activities.

Investment and Other Income, Net (in millions)

2025 2024 2023
Interest and dividend income $ 639   $ 675   $ 313  

Net gains on marketable securities
254   14   75  
Net gains on other investments 44   175   21  
Net gains on deferred compensation plan assets
127   198   86  
Impairment losses on other investments ( 113 ) ( 79 ) ( 132 )

Other 21   ( 21 ) ( 14 )

$ 972   $ 962   $ 349  

F-17

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Income Taxes
The components of the income tax provision from continuing operations were as follows (in millions):

2025 2024 2023
Current provision:      
Federal $ 1,682   $ 1,306   $ 1,229  
State 7   3   10  
Foreign (1) 981   805   491  
2,670   2,114   1,730  
Deferred provision (benefit):
     
Federal 4,373   ( 1,553 ) ( 1,475 )
State ( 5 ) ( 4 ) ( 8 )
Foreign (1) 84   ( 331 ) ( 143 )
4,452   ( 1,888 ) ( 1,626 )
$ 7,122   $ 226   $ 104  

(1) The foreign component of the income tax provision included foreign withholding taxes on royalty revenues included in U.S. earnings.
The components of income from continuing operations before income taxes by U.S. and foreign jurisdictions were as follows (in millions):

2025 2024 2023
United States $ 11,174   $ 9,169   $ 6,400  
Foreign 1,489   1,167   1,043  
$ 12,663   $ 10,336   $ 7,443  

The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision from continuing operations (in millions, except percentages). A significant portion of our U.S. income qualifies for preferential treatment as FDII at a 13 % effective tax rate.

2025 2024 2023
Expected income tax provision at federal statutory tax rate $ 2,659   $ 2,171   $ 1,563  
Valuation allowance on federal deferred tax assets resulting from OBBB
5,724   —   —  
Benefit from FDII deduction, excluding the impact of capitalizing research and development expenditures ( 735 ) ( 596 ) ( 447 )
Benefit from FDII deduction related to capitalizing research and development expenditures ( 492 ) ( 585 ) ( 598 )
Benefit related to research and development tax credits ( 237 ) ( 259 ) ( 235 )
Excess tax (benefit) deficiency associated with share-based awards ( 120 ) ( 176 ) 3  
Foreign currency losses (gains) related to Korean withholding tax receivable 98   ( 21 ) ( 66 )
Benefit related to the transfer of intellectual property between foreign subsidiaries
( 8 ) ( 317 ) —  
Benefit from fiscal 2021 and 2022 FDII deductions related to a change in sourcing of research and development expenditures —   —   ( 126 )
Benefit from releasing valuation allowance on unutilized foreign loss carryforwards —   —   ( 114 )

Other 233   9   124  
$ 7,122   $ 226   $ 104  
Effective tax rate 56 % 2 % 1 %

On July 4, 2025, tax reform legislation included in the OBBB was enacted in the United States. The OBBB includes significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures as incurred beginning in fiscal 2026 (under prior law such expenditures were capitalized and amortized over five years). The legislation also modifies international tax provisions, including changes to the FDII regime. Specifically, it renames FDII as FDDEI, maintains the current FDDEI effective tax rate of 13 % through fiscal 2026 and adjusts the FDDEI effective tax rate to a permanent 14 % rate in fiscal 2027 (compared to 16 % under prior law).
F-18

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a result of these changes, we expect to be subject to CAMT beginning in fiscal 2026. CAMT imposes a 15 % federal minimum tax on adjusted financial statement income, reduced by general business credits, including research and development credits. As we expect to perpetually be subject to CAMT, we no longer expect to realize substantially all of our existing federal deferred tax assets and recognized a charge of $ 5.7 billion to income tax expense to establish a valuation allowance in the fourth quarter of fiscal 2025. Changes in future taxable income (including less of our income qualifying for preferential treatment as FDDEI), tax laws (including changes to the CAMT rules) and other factors may change our determination regarding whether we will be able to realize our deferred tax assets. Our policy is to consider the impact of future years’ CAMT in our valuation allowance assessment of deferred tax assets.
Beginning in fiscal 2023 and through fiscal 2025, for federal income tax purposes, we were required to capitalize and amortize domestic research and development expenditures over five years (such expenditures were previously deducted as incurred). Our cash flows from operations were adversely affected due to significantly higher cash tax payments. However, since the resulting deferred tax asset was established at the statutory rate of 21 % (rather than the current effective tax rate of 13 % after considering the FDII deduction), capitalization favorably affected our total provision for income taxes and results of operations. With the enactment of OBBB, such impacts on our cash flows and tax provision are not expected to continue beginning in fiscal 2026.
In the fourth quarter of fiscal 2024, we completed an intra-group transfer of intellectual property to better align certain intellectual property ownership within our QCT business, which resulted in the recognition of a tax benefit of $ 317 million during the fourth quarter of fiscal 2024 from the establishment of a deferred tax asset. Such tax benefit was based on the value of the intellectual property transferred, which was measured using an income approach based on significant unobservable inputs.
Beginning in fiscal 2019, we applied for partial refund claims for taxes previously withheld from licensees in Korea on payments due under their license agreements to which we have claimed a foreign tax credit in the United States. As a result, $ 2.2  billion was recorded as noncurrent income taxes receivable (included in other assets) at both September 28, 2025 and September 29, 2024, and $ 2.6  billion and $ 2.5 billion were recorded as a noncurrent liability for uncertain tax benefits (included in other liabilities) at September 28, 2025 and September 29, 2024, respectively.
We had deferred tax assets and deferred tax liabilities as follows (in millions):

September 28,
2025 September 29,
2024
Capitalized research and development expenditures
$ 4,194   $ 3,015  
Unused tax credits 2,527   2,172  
Customer incentives 790   769  
Unused net operating losses 708   719  
Accrued liabilities and reserves 410   397  

Other 1,069   1,039  
Total gross deferred tax assets 9,698   8,111  
Valuation allowance ( 8,016 ) ( 2,061 )
Total net deferred tax assets 1,682   6,050  
Intangible assets ( 367 ) ( 388 )
Operating lease assets ( 256 ) ( 248 )
Unrealized gains on other investments and marketable securities ( 212 ) ( 169 )
Other ( 235 ) ( 197 )
Total deferred tax liabilities ( 1,070 ) ( 1,002 )
Net deferred tax assets $ 612   $ 5,048  
Reported as:    

Non-current deferred tax assets $ 743   $ 5,162  

Non-current deferred tax liabilities (1)
( 131 ) ( 114 )
$ 612   $ 5,048  

(1) Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.
At September 28, 2025, we had unused foreign net operating loss carryforwards of $ 2.6 billion, of which substantially all may be carried forward indefinitely, unused state net operating loss carryforwards of $ 790 million expiring from 2026 through 2037 and unused federal net operating loss carryforwards of $ 90 million, of which substantially all expire from 2026 through 2037. At September 28, 2025, we had unused state tax credits of $ 2.1 billion, of which substantially all may be
F-19

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

carried forward indefinitely, unused federal tax credits of $ 363 million expiring from 2028 through 2035 and unused tax credits of $ 64 million in foreign jurisdictions expiring from 2031 through 2045.
At September 28, 2025, in addition to the $ 5.7 billion valuation allowance on federal deferred tax assets as a result of the enactment of OBBB, we have provided valuation allowances on certain state tax credits, foreign deferred tax assets and state net operating losses of $ 2.1 billion, $ 133 million and $ 38 million, respectively. The valuation allowances reflect our current expectations regarding our ability to generate sufficient future taxable income in certain tax jurisdictions to utilize our net deferred tax assets. We believe, more likely than not, that we will have sufficient taxable income to utilize our remaining deferred tax assets.
A summary of the changes in the amount of unrecognized tax benefits for fiscal 2025, 2024 and 2023 follows (in millions):

2025 2024 2023
Beginning balance of unrecognized tax benefits $ 2,450   $ 2,296   $ 2,191  
Additions based on prior year tax positions 158   2   10  
Reductions for prior year tax positions and lapse in statute of limitations ( 93 ) ( 1 ) ( 63 )
Additions for current year tax positions 153   153   158  

Ending balance of unrecognized tax benefits $ 2,668   $ 2,450   $ 2,296  

Of the $ 2.7 billion of unrecognized tax benefits, $ 2.3 billion has been recorded to other liabilities. We believe that it is reasonably possible that our unrecognized tax benefits will change in fiscal 2026 and also certain amounts of which may result in cash payment in fiscal 2026. Unrecognized tax benefits at September 28, 2025 included $ 168 million for tax positions that, if recognized, would impact the effective tax rate. The unrecognized tax benefits differ from the amount that would affect our effective tax rate primarily because the unrecognized tax benefits were included on a gross basis and did not reflect related receivables or secondary impacts, such as the federal deduction for state taxes, adjustments to deferred tax assets and the valuation allowance that might be required if our tax positions are sustained. The increase in unrecognized tax benefits on prior year tax positions in fiscal 2025 relates primarily to transfer pricing positions taken in a foreign jurisdiction. The increase in unrecognized tax benefits for current year tax positions for the periods presented was primarily due to expected refunds of Korean withholding tax previously paid (which such increase had an insignificant impact to our income tax provision). If successful, the refund will result in a corresponding reduction in U.S. foreign tax credits. At September 28, 2025, total interest and penalties related to unrecognized tax benefits accrued in other current liabilities and other liabilities was $ 384 million, with a corresponding noncurrent income taxes receivable of $ 269 million recorded in other assets for expected refunds of certain tax benefits.
We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years prior to fiscal 2018. We are also subject to examination in other taxing jurisdictions in the U.S. and numerous foreign jurisdictions. These examinations are at various stages with respect to assessments, claims, deficiencies and refunds, many of which are open for periods after fiscal 2001.
Cash amounts paid for income taxes, net of refunds received, were $ 3.1 billion, $ 3.3 billion and $ 1.4 billion for fiscal 2025, 2024 and 2023, respectively.

Note 4. Capital Stock
Stock Repurchase Program. During the first quarter of fiscal 2025, we utilized the remaining repurchase authority under the $ 10.0 billion stock repurchase program announced on October 12, 2021 and we began repurchases under the $ 15.0 billion stock repurchase program announced on November 6, 2024, which has no expiration date. At September 28, 2025, $ 7.2 billion remained authorized for repurchase under our stock repurchase program.
Shares Outstanding. Shares of common stock outstanding at September 28, 2025 were as follows (in millions):

Balance at September 29, 2024
1,113  
Issued
17  
Repurchased
( 56 )
Balance at September 28, 2025
1,074

F-20

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Employee Benefit Plans
Equity Compensation Plans. On March 18, 2025, our stockholders approved the Amended and Restated Qualcomm Incorporated 2023 Long-Term Incentive Plan (the 2023 Plan), including an increase in the share reserve by 23 million shares. The 2023 Plan provides for the grant of RSUs and other stock-based awards. The RSUs generally include dividend-equivalent rights and vest over three years from the date of grant. The Board of Directors may amend or terminate the 2023 Plan at any time. Certain amendments, including an increase in the share reserve, require stockholder approval. At September 28, 2025, approximately 69 million shares were available for future grant under the 2023 Plan.
The following is a summary of employee RSU transactions that contain only service requirements to vest:

Number of Shares
(in millions) Weighted-Average
Grant Date Fair Value
RSUs outstanding at September 29, 2024 28   $ 129.61  
RSUs granted 22   163.17  

RSUs canceled/forfeited ( 2 ) 140.43  
RSUs vested ( 20 ) 133.93  
RSUs outstanding at September 28, 2025 28   151.75  

The weighted-average estimated grant date fair values of employee RSUs that contain only service requirements to vest granted during fiscal 2024 and 2023 were $ 134.31 and $ 116.80 per share, respectively. Upon vesting, we issue new shares of common stock. For the majority of RSUs, shares are issued on the vesting dates net of the amount of shares needed to satisfy statutory tax withholding requirements to be paid by us on behalf of the employees. As a result, the actual number of shares issued will be fewer than the number of RSUs outstanding. The annual pre-vest forfeiture rate for RSUs was estimated to be approximately 6 %, 6 % and 7 % in fiscal 2025, 2024 and 2023, respectively.
At September 28, 2025, total unrecognized compensation expense related to such non-vested RSUs granted prior to that date was $ 3.6 billion, which is expected to be recognized over a weighted-average period of 1.8 years. The total vest-date fair value of such RSUs that vested during fiscal 2025, 2024 and 2023 was $ 3.3 billion, $ 4.0 billion and $ 2.1 billion, respectively. The total shares withheld to satisfy statutory tax withholding requirements related to all share-based awards were 7 million, 6 million and 4 million in fiscal 2025, 2024 and 2023, respectively and were based on the value of the awards on their vesting dates as determined by our closing stock price.
The total tax benefits realized, including the excess tax benefits, related to share-based awards during fiscal 2025, 2024 and 2023 were $ 683 million, $ 840 million and $ 435 million, respectively.
Employee Stock Purchase Plan. We have an employee stock purchase plan that allows eligible employees to purchase shares of common stock at 85 % of the value of our common stock on specific dates through periodic payroll deductions. The shares reserved for future issuance under the employee stock purchase plan were 12 million at September 28, 2025. We recorded cash received from the exercise of purchase rights of $ 402 million, $ 379 million and $ 395 million during fiscal 2025, 2024 and 2023, respectively.
Share-based Compensation Expense. Total share-based compensation expense, related to all of our share-based awards, was comprised as follows (in millions):

2025 2024 2023

Cost of revenues $ 89   $ 89   $ 76  
Research and development 2,141   2,024   1,911  
Selling, general and administrative 553   535   497  
Share-based compensation expense before income taxes 2,783   2,648   2,484  
Related income tax benefit ( 616 ) ( 662 ) ( 463 )
$ 2,167   $ 1,986   $ 2,021  

F-21

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6. Debt
Long-term Debt. During the third quarter of fiscal 2025, we repaid $ 1.4 billion of unsecured fixed-rate notes that matured in May 2025. In May 2025, we also issued $ 1.5 billion of unsecured fixed-rate notes, consisting of $ 500 million of 4.50 % notes, $ 400 million of 4.75 % notes and $ 600 million of 5.00 % notes (collectively, May 2025 Notes) that mature on May 20, 2030, May 20, 2032 and May 20, 2035, respectively. The net proceeds from the May 2025 Notes will be used for general corporate purposes.
The following table provides a summary of our long-term debt:

September 28, 2025 September 29, 2024
Maturities Amount
(in millions) Effective Rate Maturities Amount
(in millions) Effective Rate
Fixed-rate notes
2027 - 2053
$ 15,107   2.39 % - 5.12 %
2025 - 2053
$ 14,972   2.37 % - 5.07 %

Total principal 15,107   14,972  
Unamortized discount, including debt issuance costs ( 201 ) ( 212 )
Hedge accounting adjustments ( 95 ) ( 126 )
Total long-term debt $ 14,811   $ 14,634  
Reported as:
Short-term debt $ —   $ 1,364  
Long-term debt 14,811   13,270  
 Total
$ 14,811   $ 14,634  

At September 28, 2025, future principal payments of our long-term debt were as follows (in millions):

2026 $ —  
2027
2,000  
2028
962  
2029
—  
2030
1,700  
Thereafter 10,445  
Total
$ 15,107  

At September 28, 2025, the aggregate fair value of the notes, based on Level 2 inputs, was approximately $ 14.2 billion.
At September 28, 2025, all of our outstanding long-term debt is comprised of unsecured fixed-rate notes. We may redeem the outstanding fixed-rate notes at any time in whole, or from time to time in part, at specified make-whole premiums as defined in the applicable form of note. The obligations under the notes rank equally in right of payment with all of our other senior unsecured indebtedness and will effectively rank junior to all liabilities of our subsidiaries.
The effective interest rates for the notes include the interest on the notes, amortization of the discount, which includes debt issuance costs, and if applicable, adjustments related to hedging. Interest is payable in arrears semi-annually for the notes. Cash interest paid related to our commercial paper program and long-term debt was $ 614 million, $ 656 million and $ 614 million during fiscal 2025, 2024 and 2023, respectively.
Interest Rate Swaps. At September 28, 2025 and September 29, 2024, we had outstanding interest rate swaps with an aggregate notional amount of $ 3.6 billion and $ 2.1 billion, respectively, that are designated as fair value hedges and allow us to effectively convert fixed-rate payments into floating-rate payments on a portion of our outstanding long-term debt.
Commercial Paper Program . We have an unsecured commercial paper program, which provides for the issuance of up to $ 4.5 billion. Net proceeds from this program are for general corporate purposes. Maturities of commercial paper can range from 1 to up to 397 days. At September 28, 2025 and September 29, 2024, we had no amounts of commercial paper outstanding.
Revolving Credit Facility. We have a Revolving Credit Facility that provides for unsecured revolving facility loans, swing line loans and letters of credit in an aggregate amount of up to $ 4.0 billion, which expires on August 8, 2029. At September 28, 2025 and September 29, 2024, no amounts were outstanding under the Revolving Credit Facility.
Debt Covenants. The Revolving Credit Facility requires that we comply with certain covenants, including that we maintain an interest coverage ratio as defined in the agreement. We are not subject to any financial covenants under the notes nor any covenants that would prohibit us from incurring additional indebtedness ranking equal to the notes, paying dividends
F-22

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

or issuing securities or repurchasing securities issued by us or our subsidiaries. At September 28, 2025, we were in compliance with the applicable covenants under the Revolving Credit Facility.

Note 7. Commitments and Contingencies
Legal and Regulatory Proceedings.
ParkerVision, Inc. v. QUALCOMM Incorporated: On May 1, 2014, ParkerVision, Inc. (ParkerVision) filed a complaint against us in the United States District Court for the Middle District of Florida alleging that certain of our products infringed seven ParkerVision patents. ParkerVision subsequently reduced the number of patents asserted to three. The asserted patents are now expired, and injunctive relief is no longer available. ParkerVision continues to seek damages related to the sale of many of our radio frequency (RF) products sold between 2008 and 2018. On March 23, 2022, the district court entered judgment in our favor on all claims and closed the case. ParkerVision appealed to the United States Court of Appeals for the Federal Circuit (Federal Circuit), and on September 6, 2024, the Federal Circuit reversed the judgment of the district court, citing certain substantive and procedural issues, and remanded the case to the district court for further proceedings. Following a claim construction ruling by the district court, the parties agreed to a stipulated judgment of non-infringement with respect to certain of ParkerVision’s claims (Receiver Claims). On October 2, 2025, the court entered a final judgment in our favor with respect to the Receiver Claims and severed and stayed ParkerVision’s remaining claims (Transmitter Claims), pending appeal of the court’s claim construction ruling and resulting determination of non-infringement of the Receiver Claims. On October 6, 2025, ParkerVision filed a notice of appeal to the Federal Circuit. We have moved to dismiss ParkerVision’s appeal as procedurally improper. We intend to continue to vigorously defend ourselves in this matter.
Arm Ltd. v. QUALCOMM Incorporated: On August 31, 2022, Arm Ltd. (Arm) filed a complaint against us in the United States District Court for the District of Delaware. Our subsidiaries Qualcomm Technologies, Inc. and NuVia, Inc. (Nuvia) are also named in the complaint. The complaint alleges that following our acquisition of Nuvia, we and Nuvia breached Nuvia’s Architecture License Agreement with Arm (the Nuvia ALA) by failing to comply with the termination obligations under the Nuvia ALA. Arm is seeking specific performance, including that we cease all use of and destroy any technology that was developed under the Nuvia ALA, including processor core technology (which Arm alleges includes our custom Qualcomm Oryon CPU cores). On September 30, 2022, we filed our Answer and Counterclaim in response to Arm’s complaint denying Arm’s claims. Our counterclaim seeks a declaratory judgment that we did not breach the Nuvia ALA or the Technology License Agreement between Nuvia and Arm, and that, following the acquisition of Nuvia, our architected cores (including all further developments, iterations or instantiations of the technology we acquired from Nuvia) and System-on-Chip (SoC) products incorporating such cores are fully licensed under our existing Architecture License Agreement with Arm (the Qualcomm ALA) and Technology License Agreement with Arm (the Qualcomm TLA). A trial was held beginning on December 16, 2024, and on December 20, 2024, the jury found that (i) Qualcomm did not breach the Nuvia ALA and (ii) Qualcomm CPUs that include designs acquired in the Nuvia acquisition are licensed under the Qualcomm ALA. The jury was unable to reach a verdict with respect to Arm’s claim as to whether Nuvia breached the Nuvia ALA. The parties filed various post-trial motions, including motions for judgment as a matter of law. On September 30, 2025, the court entered a final judgment upholding the jury’s verdict in favor of Qualcomm, granting judgment to Nuvia, and dismissing Arm’s remaining claims. On October 1, 2025, Arm filed a notice of appeal to the United States Court of Appeals for the Third Circuit. We intend to continue to vigorously defend ourselves against Arm’s claims in this matter.
On April 18, 2024, we filed a separate complaint (captioned QUALCOMM Incorporated v. Arm Ltd. ) against Arm in the United States District Court for the District of Delaware. The complaint alleges that Arm has breached the Qualcomm ALA by failing to provide certain deliverables that Arm is obligated to provide. The complaint seeks an order that Arm comply with its contractual obligations, damages, and additional relief. On December 16, 2024, we filed a First Amended Complaint alleging additional causes of action based on Arm improperly seeking to terminate the Qualcomm ALA and improperly publicizing that it was seeking to terminate the Qualcomm ALA. On June 3, 2025, we filed a Second Amended Complaint to add a claim that Arm has breached the Qualcomm TLA by failing to provide license offers at commercially reasonable prices and terms. Arm has moved to dismiss our amended complaint. Trial is scheduled to begin on March 9, 2026.
On October 22, 2024, Arm provided us with a notice alleging that we have breached the Qualcomm ALA by marketing products that contain CPUs that Arm alleges use designs, technology and code created by Nuvia employees prior to our acquisition of Nuvia; by seeking support and verification from Arm for additional products that use such alleged designs, technology and code; and by suing Arm for breach of the Qualcomm ALA. Arm’s notice asserts that it will have the right to terminate the Qualcomm ALA if such alleged breaches are not cured within 60 days of such notice. We disagree with Arm’s allegations, including that we are, or have been, in breach of the Qualcomm ALA. On January 8, 2025, Arm notified us that it was withdrawing its October 22, 2024 notice of breach and indicated that it has no current plan to terminate the Qualcomm ALA, while reserving its rights pending the outcome of the ongoing litigation.
Contingent Losses and Other Considerations: Litigation and investigations are inherently uncertain, and we face difficulties in evaluating or estimating likely outcomes or ranges of possible loss, particularly in antitrust and trade regulation investigations. We have no t recorded any accrual at September 28, 2025 for contingent losses associated with the matters described above based on our belief that losses, while reasonably possible, are not probable. Further, any possible amount or range of loss cannot be reasonably estimated at this time. The unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition or cash flows. We are engaged in numerous other legal actions not described above (including matters arising in the ordinary course of our business, such as
F-23

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

those relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights, among others) and, while there can be no assurance, we believe that the ultimate outcome of these other legal actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Indemnifications . We generally do not indemnify our customers, licensees and suppliers for losses sustained from infringement of third-party intellectual property rights. However, we are contingently liable under certain agreements to defend and/or indemnify certain customers, licensees, and suppliers against certain types of liability and/or damages arising from the infringement of third-party intellectual property rights and to indemnify certain companies that purchased businesses we previously consolidated against certain contingent losses. Our obligations under these agreements may be limited in terms of time and/or amounts, and in some instances, we may have recourse against third parties for certain payments made by us. Claims and reimbursements under indemnification arrangements have not been material to our consolidated financial statements. We have not recorded accruals for certain claims under indemnification arrangements based on our belief that additional liabilities, while possible, are not probable. Further, any possible range of loss cannot be reasonably estimated at this time.

Purchase Obligations . We have agreements with suppliers and other parties to purchase inventory, other goods and services and long-lived assets. Such agreements include multi-year capacity purchase commitments with certain suppliers of our integrated circuit products. Total advance payments related to multi-year capacity purchase commitments recorded on the consolidated balance sheets at September 28, 2025 and September 29, 2024 were $ 1.9 billion and $ 3.0 billion, respectively, of which $ 1.5 billion and $ 765 million were recorded in other current assets, respectively, and $ 357 million and $ 2.2 billion were recorded in other assets, respectively. Integrated circuit product inventory obligations represent purchase commitments (including those under multi-year capacity purchase commitments to the extent such minimum amounts are both fixed and determinable) for raw materials, semiconductor die, finished goods and manufacturing services, such as wafer bump, probe, assembly and final test. Under our manufacturing relationships with our foundry suppliers and assembly and test service providers, cancellation of outstanding purchase commitments is generally allowed but would require payment of costs incurred through the date of cancellation. Also, in some cases, we may be subject to incremental fees and/or the loss of amounts paid in advance due to capacity underutilization and/or the failure to meet minimum purchase volumes under multi-year capacity purchase commitments. Obligations under our purchase agreements, which primarily relate to integrated circuit product inventory obligations, at September 28, 2025 totaled $ 15.1 billion of which, $ 10.5 billion is expected to be paid in the next 12 months.
Operating Leases. We lease certain of our land, facilities and equipment under operating leases, with terms ranging from less than one year to 20 years, some of which include options to extend for up to 20 years. At September 28, 2025 and September 29, 2024, the weighted-average remaining lease term for operating leases was eight years and nine years , respectively. Operating lease expense was $ 184 million for both fiscal 2025 and 2024 and $ 204  million for fiscal 2023. At September 28, 2025, other assets included $ 735 million of operating lease assets, with corresponding lease liabilities of $ 102 million recorded in other current liabilities and $ 730 million recorded in other liabilities . At September 29, 2024, other assets included $ 719 million of operating lease assets, with corresponding lease liabilities of $ 98 million recorded in other current liabilities and $ 708 million recorded in other liabilities.
At September 28, 2025, future lease payments under our operating leases were as follows (in millions):

2026 $ 142  
2027
137  
2028
128  
2029
120  
2030
107  
Thereafter 461  
Total future lease payments 1,095  
Imputed interest ( 263 )
Total lease liability balance $ 832  

Note 8. Segment Information
We are organized on the basis of products and services and have three reportable segments. Our operating segments reflect the way our businesses and management/reporting structure are organized internally and the way our Chief Operating Decision Maker (CODM), who is our CEO, reviews financial information, makes operating decisions and assesses business performance. We also consider, among other items, the way budgets and forecasts are prepared and reviewed and the basis on which executive compensation is determined, as well as the similarities and the level of centralized resource planning within our operating segments, such as the nature of products, the level of shared products, technology and other resources, production processes and customer base. We conduct business primarily through our QCT semiconductor business and our QTL licensing business. QCT develops and supplies integrated circuits and system software with advanced connectivity and high-performance, low-power computing technologies for use in mobile devices; automotive systems for connectivity, digital
F-24

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cockpit and ADAS/AD; and IoT including consumer electronic devices, industrial devices and edge networking products. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products. Our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. We also have nonreportable segments, including QGOV (Qualcomm Government Technologies) and our Data Center business (formerly referred to as our cloud computing processing initiative).
Our CODM uses revenues and earnings (loss) before income taxes (EBT) to evaluate performance and allocate resources for our segments primarily through our budget and forecasting process. Our CODM primarily uses these metrics by comparing actual results to forecasted and prior period results. Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense (the majority of which is allocated to QCT). Certain income and charges are not allocated to segments in our management reports because they are not considered in evaluating the segments’ operating performance. Unallocated income and charges include certain interest expense, certain net investment income, share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development (R&D) expenses, certain selling, general and administrative (SG&A) expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include amortization of certain intangible assets and certain other acquisition-related charges, third-party acquisition and integration services costs and certain other items, which may include major restructuring and restructuring-related costs, asset impairment charges and awards, settlements and/or damages arising from legal or regulatory matters and recognition of the step-up of inventories and property, plant and equipment to fair value. Our CODM does not evaluate our operating segments using discrete asset information.
The table below presents revenues, EBT and significant expense categories regularly provided to the CODM for reportable segments (in millions):

2025 2024 2023
QCT:

Revenues
$ 38,367   $ 33,196   $ 30,382  
Cost of revenues
19,302   16,648   15,367  
Operating expenses (R&D and SG&A)
7,395   7,021   7,091  
EBT
$ 11,670   $ 9,527   $ 7,924  
QTL:

Revenues
$ 5,582   $ 5,572   $ 5,306  
Costs and expenses (1)
1,539   1,545   1,678  
EBT
$ 4,043   $ 4,027   $ 3,628  
QSI:

Revenues
$ —   $ 18   $ 28  
Cost of revenues
—   7   15  
Operating expenses
13   12   12  
Investment and other income (expense), net
193   105   ( 13 )
EBT
$ 180   $ 104   $ ( 12 )

(1) Substantially all of QTL’s costs and expenses are comprised of operating expenses .
F-25

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated revenues and EBT include the following reconciling items (in millions):

2025 2024 2023
Revenues:
Reportable segments
$ 43,949   $ 38,786   $ 35,716  
Nonreportable segments 192   176   144  
Unallocated revenues
143   —   ( 40 )
$ 44,284   $ 38,962   $ 35,820  
EBT:
Reportable segments
$ 15,893   $ 13,658   $ 11,540  
Nonreportable segments ( 39 ) ( 14 ) ( 38 )
Unallocated revenues
143   —   ( 40 )
Unallocated cost of revenues ( 270 ) ( 229 ) ( 205 )
Unallocated research and development expenses ( 2,357 ) ( 2,277 ) ( 2,034 )
Unallocated selling, general and administrative expenses ( 783 ) ( 781 ) ( 588 )
Unallocated other expense (Note 2)
( 39 ) ( 179 ) ( 862 )
Unallocated interest expense ( 664 ) ( 697 ) ( 694 )
Unallocated investment and other income, net
779   855   364  

$ 12,663   $ 10,336   $ 7,443  

Certain revenues were not allocated to our segments in our management reports because they were not considered in evaluating segment results. Unallocated revenues in fiscal 2025 were comprised of licensing revenues resulting from a recent settlement of a licensing dispute.
The net book value of long-lived tangible assets located outside of the U.S. (the majority of which is located in Taiwan and the rest of the Asia-Pacific region) was $ 3.4 billion and $ 3.5 billion at September 28, 2025 and September 29, 2024, respectively. The net book value of long-lived tangible assets located in the U.S. was $ 2.0 billion and $ 1.9 billion at September 28, 2025 and September 29, 2024, respectively.
We report revenues by country based on our customer’s/licensee’s headquarters. As a result, the revenues by country presented herein are not necessarily indicative of the country in which the device containing our products and/or intellectual property are ultimately sold to consumers. Revenues by country were as follows (in millions, except percentages):

2025 2024 2023
China (including Hong Kong) $ 20,340   46   % $ 17,826   46   % $ 13,386   37   %
United States 10,515   24   9,686   25   10,503   29  
South Korea 9,542   21   7,995   20   8,075   23  
Other foreign 3,887   9   3,455   9   3,856   11  
$ 44,284   100   % $ 38,962   100   % $ 35,820   100   %

Note 9. Acquisitions
Pending. On June 9, 2025, we announced that we reached an agreement to acquire Alphawave IP Group plc (Alphawave) at an implied enterprise value of approximately $ 2.4 billion (as of the announcement date). The purchase price will be paid in cash or, if validly elected by eligible shareholders of Alphawave, in shares of our common stock or securities exchangeable for shares of our common stock (Stock Consideration). The accounting purchase price we record for the transaction could differ significantly from the aforementioned amount due to movements in the price of our common stock and the number of Alphawave shareholders that elect for Stock Consideration, among other factors. Alphawave is a developer of high-speed wired connectivity and compute technologies delivering IP, custom silicon, connectivity products and chiplets. The acquisition aims to further accelerate, and provide key assets for, our expansion into data centers. The acquisition was approved by the requisite majority of Alphawave’s shareholders on August 5, 2025. The acquisition is subject to certain other closing conditions, including receipt of regulatory approvals. Subject to the satisfaction of these conditions, this acquisition is expected to complete during the first quarter of calendar 2026. In connection with the pending acquisition, we agreed to restrict the use of $ 2.3 billion in cash, which is presented as restricted cash on our consolidated balance sheet, for the purpose of satisfying payment of the consideration to effect the acquisition.
F-26

QUALCOMM Incorporated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Completed. During fiscal 2025, we acquired seven businesses for a total accounting purchase price of $ 668 million. These acquisitions were primarily for the purpose of executing on certain products and technology that support our diversification strategy in QCT industrial IoT and automotive. The acquired assets primarily consisted of $ 122 million of intangible assets and $ 526 million of goodwill, which was allocated to our QCT segment and which is primarily attributable to assembled workforce and certain synergies expected to arise after the acquisition.

Note 10. Fair Value Measurements and Marketable Securities
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 28, 2025 (in millions):

Level 1 Level 2 Total
Assets:      
Cash equivalents $ 2,890   $ 437   $ 3,327  
Marketable securities:      
Corporate bonds and notes $ —   $ 3,309   $ 3,309  
Mortgage- and asset-backed securities —   802   802  
U.S. Treasury securities and government-related securities 110   62   172  
Equity securities 352   —   352  

Total marketable securities 462   4,173   4,635  
Derivative instruments —   59   59  
Other investments (1)
1,099   —   1,099  
Total assets measured at fair value $ 4,451   $ 4,669   $ 9,120  
Liabilities:      
Derivative instruments $ —   $ 163   $ 163  
Other liabilities (1)
1,095   —   1,095  
Total liabilities measured at fair value $ 1,095   $ 163   $ 1,258  

(1) Other investments and other liabilities included in Level 1 are comprised of our deferred compensation plan assets and liabilities.
At September 28, 2025 and September 29, 2024, our marketable securities were all classified as current and were primarily comprised of available-for-sale debt securities (the vast majority of which were corporate bonds and notes).
The contractual maturities of available-for-sale debt securities were as follows (in millions):

September 28,
2025
Years to Maturity:
Less than one year $ 1,041  
One to five years 2,431  
Five to ten years 9  
No single maturity date 802  
Total $ 4,283  

Debt securities with no single maturity date included mortgage- and asset-backed securities.
F-27

SCHEDULE II
QUALCOMM Incorporated
VALUATION AND QUALIFYING ACCOUNTS

The table below details the activity of the valuation allowance on deferred tax assets for fiscal 2025, 2024 and 2023 (in millions):

Balance at
Beginning of
Period Charged (Credited) to
Costs and
Expenses
Other Balance at
End of
Period
Year ended September 28, 2025 $ 2,061   $ 5,915   $ 40   $ 8,016  
Year ended September 29, 2024 1,803   258   —   2,061  
Year ended September 24, 2023 2,223   ( 420 ) —   1,803  

S-1