QUALCOMM INC/DE, 10-Q filed on 4/27/2022
Quarterly Report
v3.22.1
Cover Page - shares
shares in Millions
6 Months Ended
Mar. 27, 2022
Apr. 25, 2022
Cover [Abstract]    
Entity Registrant Name QUALCOMM INC/DE  
Entity Central Index Key 0000804328  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Current Fiscal Year End Date --09-25  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 27, 2022  
Document Transition Report false  
Entity File Number 0-19528  
Entity Registrant State of Incorporation DE  
Entity Employer ID 95-3685934  
Entity Address 5775 Morehouse Dr.  
Entity City San Diego  
Entity State CA  
Entity Zip Code 92121-1714  
City Area Code (858)  
Entity Phone Number 587-1121  
Title of 12(b) Security Common Stock, $0.0001 par value  
Trading Symbol QCOM  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   1,120
v3.22.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
shares in Millions, $ in Millions
Mar. 27, 2022
Sep. 26, 2021
Current assets:    
Cash and cash equivalents $ 7,173 $ 7,116
Marketable securities 4,373 5,298
Accounts receivable, net 4,084 3,579
Inventories 4,555 3,228
Other current assets 1,425 854
Total current assets 21,610 20,075
Deferred tax assets 1,545 1,591
Property, plant and equipment, net 4,893 4,559
Goodwill 7,261 7,246
Other intangible assets, net 1,258 1,458
Other assets 7,735 6,311
Total assets 44,302 41,240
Current liabilities:    
Trade accounts payable 3,724 2,750
Payroll and other benefits related liabilities 1,124 1,531
Unearned revenues 534 612
Short-term debt 3,485 2,044
Other current liabilities 4,565 5,014
Total current liabilities 13,432 11,951
Unearned revenues 228 364
Income taxes payable 1,479 1,713
Long-term debt 12,195 13,701
Other liabilities 3,640 3,561
Total liabilities 30,974 31,290
Commitments and contingencies (Note 5)
Stockholders’ equity:    
Preferred stock, $0.0001 par value; 8 shares authorized; none outstanding $ 0 $ 0
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 8 8
Preferred stock, shares outstanding 0 0
Common stock and paid-in capital, $0.0001 par value; 6,000 shares authorized; 1,122 and 1,125 shares issued and outstanding, respectively $ 0 $ 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 6,000 6,000
Common stock, shares, issued 1,122 1,125
Common stock, shares, outstanding 1,122 1,125
Retained earnings $ 13,113 $ 9,822
Accumulated other comprehensive income 215 128
Total stockholders’ equity 13,328 9,950
Total liabilities and stockholders’ equity $ 44,302 $ 41,240
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Revenues:        
Equipment and services $ 9,417 $ 6,239 $ 18,098 $ 12,681
Licensing 1,747 1,696 3,770 3,489
Total revenues 11,164 7,935 21,868 16,170
Costs and expenses:        
Cost of revenues 4,648 3,432 8,951 6,921
Research and development 2,034 1,780 3,963 3,433
Selling, general and administrative 624 557 1,232 1,124
Total costs and expenses 7,306 5,769 14,146 11,478
Operating income 3,858 2,166 7,722 4,692
Interest expense (137) (141) (275) (283)
Investment and other (expense) income, net (298) 104 (158) 323
Income before income taxes 3,423 2,129 7,289 4,732
Income tax expense (489) (367) (956) (515)
Net income $ 2,934 $ 1,762 $ 6,333 $ 4,217
Basic earnings per share $ 2.61 $ 1.55 $ 5.63 $ 3.72
Diluted earnings per share $ 2.57 $ 1.53 $ 5.55 $ 3.66
Shares used in per share calculations:        
Basic 1,125 1,133 1,124 1,134
Diluted 1,140 1,151 1,141 1,154
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Statement of Comprehensive Income [Abstract]        
Net income $ 2,934 $ 1,762 $ 6,333 $ 4,217
Other comprehensive income (loss), net of income taxes:        
Foreign currency translation (losses) gains (41) (33) (83) 54
Net unrealized losses on available-for-sale debt securities (61) (9) (80) (6)
Net unrealized gains on derivative instruments 270 36 272 46
Other losses 0 0 0 (3)
Certain reclassifications included in net income (11) (6) (22) (17)
Total other comprehensive income (loss) 157 (12) 87 74
Comprehensive income $ 3,091 $ 1,750 $ 6,420 $ 4,291
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Operating Activities:    
Net income $ 6,333 $ 4,217
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization expense 834 751
Income tax provision less than income tax payments (403) (235)
Share-based compensation expense 994 814
Net losses (gains) on marketable securities and other investments 213 (301)
Other items, net (35) (32)
Changes in assets and liabilities:    
Accounts receivable, net (501) 658
Inventories (1,337) (60)
Other assets (1,812) (60)
Trade accounts payable 979 291
Payroll, benefits and other liabilities (371) 148
Unearned revenues (139) (105)
Net cash provided by operating activities 4,755 6,086
Investing Activities:    
Capital expenditures (1,074) (952)
Purchases of debt and equity marketable securities (936) (4,192)
Proceeds from sales and maturities of debt and equity marketable securities 1,563 3,147
Acquisitions and other investments, net of cash acquired (288) (1,236)
Proceeds from other investments 97 167
Other items, net 0 32
Net cash used by investing activities (638) (3,034)
Financing Activities:    
Proceeds from short-term debt 1,462 1,579
Repayment of short-term debt (1,462) (1,579)
Proceeds from issuance of common stock 187 174
Repurchases and retirements of common stock (2,129) (1,965)
Dividends paid (1,529) (1,473)
Payments of tax withholdings related to vesting of share-based awards (562) (501)
Other items, net (11) (23)
Net cash used by financing activities (4,044) (3,788)
Effect of exchange rate changes on cash and cash equivalents (16) 29
Net increase (decrease) in total cash and cash equivalents 57 (707)
Total cash and cash equivalents at beginning of period 7,116 6,707
Total cash and cash equivalents at end of period $ 7,173 $ 6,000
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Common stock and paid-in capital
Retained earnings
Accumulated other comprehensive income
Balance at beginning of period at Sep. 27, 2020 $ 6,077 $ 586 $ 5,284 $ 207
Common stock issued under employee benefit plans   174    
Repurchases and retirements of common stock   (1,129) (836)  
Share-based compensation   860    
Tax withholdings related to vesting of share-based payments   (501)    
Value of stock awards assumed in acquisition attributable to pre-acquisition service   10    
Net income 4,217   4,217  
Dividends     (1,522)  
Other comprehensive income (loss)       74
Balance at end of period at Mar. 28, 2021 $ 7,424 0 7,143 281
Dividends per share announced $ 1.30      
Balance at beginning of period at Dec. 27, 2020 $ 7,380 113 6,974 293
Common stock issued under employee benefit plans   173    
Repurchases and retirements of common stock   (685) (836)  
Share-based compensation   441    
Tax withholdings related to vesting of share-based payments   (52)    
Value of stock awards assumed in acquisition attributable to pre-acquisition service   10    
Net income 1,762   1,762  
Dividends     (757)  
Other comprehensive income (loss)       (12)
Balance at end of period at Mar. 28, 2021 $ 7,424 0 7,143 281
Dividends per share announced $ 0.65      
Balance at beginning of period at Sep. 26, 2021 $ 9,950 0 9,822 128
Common stock issued under employee benefit plans   187    
Repurchases and retirements of common stock   (662) (1,467)  
Share-based compensation   1,037    
Tax withholdings related to vesting of share-based payments   (562)    
Value of stock awards assumed in acquisition attributable to pre-acquisition service   0    
Net income 6,333   6,333  
Dividends     (1,575)  
Other comprehensive income (loss)       87
Balance at end of period at Mar. 27, 2022 $ 13,328 0 13,113 215
Dividends per share announced $ 1.36      
Balance at beginning of period at Dec. 26, 2021 $ 11,333 0 11,275 58
Common stock issued under employee benefit plans   186    
Repurchases and retirements of common stock   (640) (311)  
Share-based compensation   516    
Tax withholdings related to vesting of share-based payments   (62)    
Value of stock awards assumed in acquisition attributable to pre-acquisition service   0    
Net income 2,934   2,934  
Dividends     (785)  
Other comprehensive income (loss)       157
Balance at end of period at Mar. 27, 2022 $ 13,328 $ 0 $ 13,113 $ 215
Dividends per share announced $ 0.68      
v3.22.1
Basis of Presentation and Significant Accounting Policies Update
6 Months Ended
Mar. 27, 2022
Basis of Presentation [Abstract]  
Basis of Presentation and Significant Accounting Policies Update Basis of Presentation and Significant Accounting Policies Update
Financial Statement Preparation. These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the interim financial information includes all normal recurring adjustments necessary for a fair statement of the results for the interim periods. These condensed consolidated financial statements are unaudited and should be read in conjunction with our Annual Report on Form 10-K for our fiscal year ended September 26, 2021. Operating results for interim periods are not necessarily indicative of operating results for an entire fiscal year. We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three and six months ended March 27, 2022 and March 28, 2021 included 13 weeks and 26 weeks, respectively.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation.
v3.22.1
Composition of Certain Financial Statement Items
6 Months Ended
Mar. 27, 2022
Condensed Financial Information Disclosure [Abstract]  
Composition of Certain Financial Statement Items Composition of Certain Financial Statement Items
Inventories (in millions)
March 27,
2022
September 26,
2021
Raw materials$253 $267 
Work-in-process2,517 1,475 
Finished goods1,785 1,486 
$4,555 $3,228 
Short-term Debt (in millions)
March 27,
2022
September 26,
2021
Commercial paper$500 $500 
Current portion of long-term debt2,985 1,544 
$3,485 $2,044 
Interest Rate Swaps. Beginning in the second quarter of fiscal 2022, we entered into interest rate swaps 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. We entered into these agreements, in part, to manage interest rate risk associated with our cash equivalents and marketable securities, in addition to changes in the fair value of our outstanding debt. At March 27, 2022, the notional amount of these swaps, which are denominated in U.S. dollars and mature between 2027 and 2032, was $1.6 billion. The fair value of these swaps, which is included in other noncurrent liabilities, was $74 million at March 27, 2022. The net gains and losses on the interest rate swaps, as well as the offsetting gains or losses on the related fixed-rate notes attributable to the hedged risks, are recognized in earnings as interest expense in the current period.
Revenues. We disaggregate our revenues by segment (Note 6), by products and services (as presented on our condensed consolidated statement of operations), and for our QCT (Qualcomm CDMA Technologies) 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 (Qualcomm Technology Licensing) 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):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Handsets (1)$6,325 $4,065 $12,307 $8,281 
RFFE (2) 1,160 903 2,292 1,964 
Automotive (3)339 240 595 452 
IoT (internet of things) (4)1,724 1,073 3,201 2,117 
Total QCT revenues$9,548 $6,281 $18,395 $12,814 
(1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
(2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components.
(3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
(4) Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, transportation and logistics and utilities).
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022 (1)
March 28,
2021 (2)
March 27,
2022 (1)
March 28,
2021 (2)
Revenues recognized from previously satisfied performance obligations$185 $122 $367 $176 
(1) Primarily related to certain QCT sales-based royalty revenues related to system software, QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
(2) Primarily related to QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In the six months ended March 27, 2022 and March 28, 2021, we recognized revenues of $340 million and $314 million, respectively, that were recorded as unearned revenues at September 26, 2021 and September 27, 2020, respectively.
Remaining performance obligations, substantially all of which are included in unearned revenues, 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 remaining performance obligations are primarily comprised of certain customer contracts for which we received license fees upfront. At March 27, 2022, we had $882 million of remaining performance obligations, of which $362 million, $362 million, $112 million, $42 million and $4 million was expected to be recognized as revenues for the remainder of fiscal 2022 and each of the subsequent four years from fiscal 2023 through 2026, respectively, and no amounts expected thereafter.
Concentrations. A significant portion of our revenues are concentrated with a small number of customers/licensees of our QCT and QTL segments. The comparability of customer/licensee concentrations for the interim periods presented are impacted by the timing of customer/licensees device launches and/or innovation cycles and other seasonal trends, among other fluctuations in demand. Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Customer/licensee (w)19 %16 %22 %25 %
Customer/licensee (x)19 16 19 14 
Customer/licensee (y)10 15 *13 
Customer/licensee (z)*13 *11 
* Less than 10%
Investment and Other (Expense) Income, Net (in millions)
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Interest and dividend income$20 $22 $37 $42 
Net (losses) gains on marketable securities(240)(85)(223)33 
Net (losses) gains on other investments(21)176 73 209 
Net (losses) gains on deferred compensation plan assets(43)23 (30)77 
Impairment losses on other investments(20)(15)(21)(16)
Net losses on derivative instruments (5)(17)(19)(7)
Equity in net earnings of investees10 12 17 11 
Net gains (losses) on foreign currency transactions(12)(26)
$(298)$104 $(158)$323 
v3.22.1
Income Taxes
6 Months Ended
Mar. 27, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We estimate our annual effective income tax rate to be 14% for fiscal 2022, which is lower than the U.S. federal statutory rate primarily due to a significant portion of our income qualifying for preferential treatment as foreign-derived intangible income (FDII) at a 13% effective tax rate, excess tax benefits associated with share-based awards and benefits from our federal research and development tax credit. Our effective tax rate for the second quarter of fiscal 2022 was 14%. Our effective tax rate of 17% for the second quarter of fiscal 2021 included $87 million of discrete net tax charges recorded in the second quarter of fiscal 2021, which principally related to a tax audit settlement with the Internal Revenue Service and foreign currency losses on a noncurrent receivable related to our refund claim of Korean withholding tax.
Unrecognized tax benefits were $2.1 billion at both March 27, 2022 and September 26, 2021 and primarily related to our refund claim of Korean withholding tax. If successful, the refund will result in a corresponding reduction in U.S. foreign tax credits. We expect that the total amount of unrecognized tax benefits at March 27, 2022 will increase in the next 12 months as licensees in Korea continue to withhold taxes on future payments due under their licensing agreements at a rate higher than we believe is owed; such increase is not expected to have a significant impact on our income tax provision.
v3.22.1
Capital Stock
6 Months Ended
Mar. 27, 2022
Stockholders' Equity Attributable to Parent [Abstract]  
Capital Stock Capital StockStock Repurchase Program. On October 12, 2021, we announced a new $10.0 billion stock repurchase program. This was in addition to the then remaining authority of $0.9 billion under the previous program. The stock repurchase programs have no expiration date. During the second quarter of fiscal 2022, we utilized the remaining repurchase authority under the previous program and began repurchases under the new program. At March 27, 2022, $9.1 billion remained authorized for repurchase under our stock repurchase program.
Shares Outstanding. Shares of common stock outstanding at March 27, 2022 were as follows (in millions):
Balance at September 26, 20211,125 
Issued11 
Repurchased(14)
Balance at March 27, 20221,122 
Dividends. On March 9, 2022, we announced a 10% increase in our quarterly dividend per share of common stock from $0.68 to $0.75, which is effective for dividends payable after March 24, 2022. On April 13, 2022, we announced a cash dividend of $0.75 per share on our common stock, payable on June 23, 2022 to stockholders of record as of the close of business on June 2, 2022.
Earnings Per Common Share. Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per share is computed by dividing net income by the combination of the weighted-average number of dilutive common share equivalents, comprised of shares issuable under our share-based compensation plans and the weighted-average number of common shares outstanding during the reporting period. The following table provides information about the diluted earnings per share calculation (in millions):
 Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Dilutive common share equivalents included in diluted shares16 18 17 20 
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period— — — — 
v3.22.1
Commitments and Contingencies
6 Months Ended
Mar. 27, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Legal and Regulatory Proceedings.
Consolidated Securities Class Action Lawsuit: On January 23, 2017 and January 26, 2017, securities class action complaints were filed by purported stockholders of us in the United States District Court for the Southern District of California against us and certain of our then current and former officers and directors. The complaints alleged, among other things, that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact in connection with certain allegations that we are or were engaged in anticompetitive conduct. The complaints sought unspecified damages, interest, fees and costs. On May 4, 2017, the court consolidated the two actions. On July 3, 2017, the plaintiffs filed a consolidated amended complaint asserting the same basic theories of liability and requesting the same basic relief. On September 1, 2017, we filed a motion to dismiss the consolidated amended complaint, and on March 18, 2019, the court denied our motion. On January 15, 2020, we filed a motion for judgment on the pleadings, which the court denied on February 3, 2022. No trial date has been set. We believe the plaintiffs’ claims are without merit.
In re Qualcomm/Broadcom Merger Securities Litigation: On June 8, 2018 and June 26, 2018, securities class action complaints were filed by purported stockholders of us in the United States District Court for the Southern District of California against us and two of our then current officers. The complaints alleged, among other things, that we violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by failing to disclose that we had submitted a notice to the Committee on Foreign Investment in the United States (CFIUS) in January 2018. The complaints sought unspecified damages, interest, fees and costs. On March 18, 2019, the plaintiffs filed a consolidated complaint asserting the same basic theories of liability and requesting the same basic relief. On May 10, 2019, we filed a motion to dismiss the consolidated complaint, and on March 10, 2020, the court granted our motion. On May 11, 2020, the plaintiffs filed a second amended complaint, and on October 8, 2020, the court granted our motion to dismiss the case with prejudice. On November 7, 2020, the plaintiffs filed a notice of appeal with the United States Court of Appeals for the Ninth Circuit (Ninth Circuit), and a hearing on the appeal was held on November 16, 2021. On February 8, 2022, the Ninth Circuit affirmed the district court’s dismissal of the case.
Consumer Class Action Lawsuits: Since January 18, 2017, a number of consumer class action complaints have been filed against us in the United States District Courts for the Southern and Northern Districts of California, each on behalf of a putative class of purchasers of cellular phones and other cellular devices. In April 2017, the Judicial Panel on Multidistrict Litigation transferred the cases that had been filed in the Southern District of California to the Northern District of California. On July 11, 2017, the plaintiffs filed a consolidated amended complaint alleging that we violated California and federal antitrust and unfair competition laws by, among other things, refusing to license standard-essential patents to our competitors, conditioning the supply of certain of our baseband chipsets on the purchaser first agreeing to license our entire patent portfolio, entering into exclusive deals with companies, including Apple Inc., and charging unreasonably high royalties that do not comply with our commitments to standard setting organizations. The complaint seeks unspecified damages and disgorgement and/or restitution, as well as an order that we be enjoined from further unlawful conduct. On August 11, 2017, we filed a motion to dismiss the consolidated amended complaint. On November 10, 2017, the court denied our motion, except to the extent that certain claims seek damages under the Sherman Antitrust Act. On July 5, 2018, the plaintiffs filed a motion for class certification, and on September 27, 2018, the court granted that motion. On January 23, 2019, the Ninth Circuit granted us permission to appeal the court’s class certification order, and on January 24, 2019, the court stayed the case pending our appeal. On December 2, 2019, a hearing on our appeal of the class certification order was held before the Ninth Circuit, and on September 29, 2021, the Ninth Circuit vacated the district court’s class certification order, ruling that the court had failed to correctly assess the propriety of applying California law to a nationwide class. The Ninth Circuit remanded the case to the district court and instructed the court to consider the effect of United States Federal Trade Commission (FTC) v. QUALCOMM Incorporated (which the Ninth Circuit decided in favor of Qualcomm in August 2020) on this case. We believe the plaintiffs’ claims are without merit.
Since November 2017, several other consumer class action complaints have been filed against us in Canada (in the Ontario Superior Court of Justice, the Supreme Court of British Columbia and the Quebec Superior Court), Israel (in the Haifa District Court) and the United Kingdom (in the Competition Appeal Tribunal), each on behalf of a putative class of purchasers of cellular phones and other cellular devices, alleging violations of certain of those countries’ competition and consumer protection laws. The claims in these complaints are similar to those in the U.S. consumer class action complaints. The complaints seek damages. We believe the plaintiffs’ claims are without merit.
ParkerVision, Inc. v. QUALCOMM Incorporated: On May 1, 2014, 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. On August 21, 2014, ParkerVision amended the complaint, alleging that we infringed 11 ParkerVision patents and sought damages and injunctive and other relief. 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 court entered judgment in our favor on all claims and closed the case. On April 20, 2022, ParkerVision filed a notice of appeal to the United States Court of Appeals for the Federal Circuit. We believe that ParkerVision’s claims are without merit.
Korea Fair Trade Commission (KFTC) Investigation (2015): On March 17, 2015, the KFTC notified us that it was conducting an investigation of us relating to the Korean Monopoly Regulation and Fair Trade Act (MRFTA). On December 27, 2016, the KFTC announced that it had reached a decision in the investigation, finding that we violated provisions of the MRFTA. On January 22, 2017, we received the KFTC’s formal written decision, which found that the following conducts violate the MRFTA: (i) refusing to license, or imposing restrictions on licenses for, cellular communications standard-essential patents with competing modem chipset makers; (ii) conditioning the supply of modem chipsets to handset suppliers on their execution and performance of license agreements with us; and (iii) coercing agreement terms including portfolio license terms, royalty terms and free cross-grant terms in executing patent license agreements with handset makers. The KFTC’s decision orders us to: (a) upon request by modem chipset companies, engage in good-faith negotiations for patent license agreements, without offering unjustifiable conditions, and if necessary submit to a determination of terms by an independent third party; (b) not demand that handset companies execute and perform under patent license agreements as a precondition for purchasing modem chipsets; (c) not demand unjustifiable conditions in our license agreements with handset companies and, upon request, renegotiate existing patent license agreements; and (d) notify modem chipset companies and handset companies of the decision and order imposed on us and report to the KFTC new or amended agreements. According to the KFTC’s decision, the foregoing will apply to transactions between us and the following enterprises: (1) handset manufacturers headquartered in Korea and their affiliate companies; (2) enterprises that sell handsets in or to Korea and their affiliate companies; (3) enterprises that supply handsets to companies referred to in (2) above and the affiliate companies of such enterprises; (4) modem chipset manufacturers headquartered in Korea and their affiliate companies; and (5) enterprises
that supply modem chipsets to companies referred to in (1), (2) or (3) above and the affiliate companies of such enterprises. The KFTC’s decision also imposed a fine of 1.03 trillion Korean won (approximately $927 million), which we paid on March 30, 2017.
On February 21, 2017, we filed an action in the Seoul High Court to cancel the KFTC’s decision. The Seoul High Court held hearings concluding on August 14, 2019, and on December 4, 2019, announced its judgment affirming certain portions of the KFTC’s decision and finding other portions of the KFTC’s decision unlawful. The Seoul High Court cancelled the KFTC’s remedial orders described in (c) above, and solely insofar as they correspond thereto, the Seoul High Court cancelled the KFTC’s remedial orders described in (d) above. The Seoul High Court dismissed the remainder of our action to cancel the KFTC’s decision. On December 19, 2019, we filed a notice of appeal to the Korea Supreme Court challenging those portions of the Seoul High Court decision that are not in our favor. The KFTC filed a notice of appeal to the Korea Supreme Court challenging the portions of the Seoul High Court decision that are not in its favor. Both we and the KFTC have filed briefs on the merits. The Korea Supreme Court has not yet ruled on our appeal or that of the KFTC. We believe that our business practices do not violate the MRFTA.
Korea Fair Trade Commission (KFTC) Investigation (2020): On June 8, 2020, the KFTC informed us that it was conducting an investigation of us relating to the MRFTA. The KFTC has not provided a formal notice on the scope of its investigation, but we believe it concerns our business practices in connection with our sale of radio frequency front-end (RFFE) components. We continue to cooperate with the KFTC as it conducts its investigation. If a violation is found, a broad range of remedies is potentially available to the KFTC, including imposing a fine (of up to 3% of our sales in the relevant markets during the alleged period of violation) and/or injunctive relief prohibiting or restricting certain business practices. It is difficult to predict the outcome of this matter or what remedies, if any, may be imposed by the KFTC. We believe that our business practices do not violate the MRFTA.
Icera Complaint to the European Commission (EC): On June 7, 2010, the EC notified and provided us with a redacted copy of a complaint filed with the EC by Icera, Inc. (subsequently acquired by Nvidia Corporation) alleging that we were engaged in anticompetitive activity. On July 16, 2015, the EC announced that it had initiated formal proceedings in this matter. On July 18, 2019, the EC issued a decision finding that between 2009 and 2011, we engaged in predatory pricing by selling certain baseband chipsets to two customers at prices below cost with the intention of hindering competition and imposed a fine of approximately 242 million euros. On October 1, 2019, we filed an appeal of the EC’s decision with the General Court of the European Union. The court has not yet ruled on our appeal. We believe that our business practices do not violate the European Union (EU) competition rules.
In the third quarter of fiscal 2019, we recorded a charge of $275 million to other expenses related to this EC fine. We provided a financial guarantee in the first quarter of fiscal 2020 to satisfy the obligation in lieu of cash payment while we appeal the EC’s decision. The fine is accruing interest at a rate of 1.50% per annum while it is outstanding. In the fourth quarter of fiscal 2019, we designated the liability as a hedge of our net investment in certain foreign subsidiaries, with gains and losses recorded in accumulated other comprehensive income as a component of the foreign currency translation adjustment. At March 27, 2022, the liability, including related foreign currency gains and accrued interest (which, to the extent they were not related to the net investment hedge, were recorded in investment and other income, net), was $276 million and included in other current liabilities.
European Commission (EC) Investigation: On October 15, 2014, the EC notified us that it was conducting an investigation of us relating to Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (TFEU). On January 24, 2018, the EC issued a decision finding that pursuant to an agreement with Apple Inc. we paid significant amounts to Apple on the condition that it exclusively use our baseband chipsets in its smartphones and tablets, reducing Apple’s incentives to source baseband chipsets from our competitors and harming competition and innovation for certain baseband chipsets, and imposed a fine of 997 million euros. On April 6, 2018, we filed an appeal of the EC’s decision with the General Court of the European Union. From May 4, 2021 to May 6, 2021, a hearing on our appeal was held before the court. The court has announced that it will issue a decision on June 15, 2022. We believe that our business practices do not violate the EU competition rules.
In the first quarter of fiscal 2018, we recorded a charge of $1.2 billion to other expenses related to this EC fine. We provided financial guarantees in the third quarter of fiscal 2018 to satisfy the obligation in lieu of cash payment while we appeal the EC’s decision. The fine is accruing interest at a rate of 1.50% per annum while it is outstanding. In the first quarter of fiscal 2019, we designated the liability as a hedge of our net investment in certain foreign subsidiaries, with gains and losses recorded in accumulated other comprehensive income as a component of the foreign currency translation adjustment. At March 27, 2022, the liability, including related foreign currency gains and accrued interest (which, to the extent they were not related to the net investment hedge, were recorded in investment and other income, net), was $1.2 billion and included in other current liabilities.
Contingent Losses and Other Considerations: We will continue to vigorously defend ourselves in the foregoing matters. However, 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. Other than with respect to the EC fines, we have not recorded any accrual at March 27, 2022 for contingent losses associated with these matters 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 arising in the ordinary course of our business (for example, proceedings relating to employment matters or the initiation or defense of proceedings relating to intellectual property rights) 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.
v3.22.1
Segment Information
6 Months Ended
Mar. 27, 2022
Segment Reporting [Abstract]  
Segment Information 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 similarity of activities 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 based on 3G/4G/5G and other technologies, including RFFE, for use in mobile devices, automotive systems for telematics, connectivity and digital cockpit and IoT including wireless networks, broadband gateway equipment, consumer electronic devices and industrial devices. 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), our cloud AI inference processing initiative and other technology and service initiatives.
Our CODM allocates resources to and evaluates the performance of our segments based on revenues and earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. 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, certain share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development expenses, certain selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories and property, plant and equipment to fair value, 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. Our CODM does not evaluate our operating segments using discrete asset information.
The table below presents revenues and EBT for reportable segments (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenues
QCT$9,548 $6,281 $18,395 $12,814 
QTL1,580 1,614 3,398 3,273 
QSI10 14 19 
Reconciling items30 30 61 64 
Total$11,164 $7,935 $21,868 $16,170 
EBT
QCT$3,340 $1,584 $6,455 $3,503 
QTL1,154 1,191 2,560 2,461 
QSI(269)98 (147)256 
Reconciling items(802)(744)(1,579)(1,488)
Total$3,423 $2,129 $7,289 $4,732 
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenues
Nonreportable segments$30 $30 $61 $64 
EBT
Unallocated cost of revenues$(53)$(72)$(106)$(148)
Unallocated research and development expenses(433)(415)(886)(821)
Unallocated selling, general and administrative expenses(138)(113)(292)(291)
Unallocated interest expense(137)(141)(275)(282)
Unallocated investment and other (expense) income, net(34)14 (11)85 
Nonreportable segments(7)(17)(9)(31)
$(802)$(744)$(1,579)$(1,488)
v3.22.1
Acquisitions
6 Months Ended
Mar. 27, 2022
Business Combinations [Abstract]  
Acquisitions Acquisitions Nuvia. On March 16, 2021, we completed the acquisition of NuVia, Inc. (NUVIA) for $1.1 billion (net of $174 million cash acquired), substantially all of which was paid in cash. In connection with the acquisition, we assumed or replaced unvested NUVIA stock awards with Qualcomm stock awards with an estimated fair value of $258 million, which have post-acquisition requisite service periods of up to four years. NUVIA has certain in-process technologies and is comprised of a CPU (central processing unit) and technology design team with expertise in high performance processors, SoC (system-on-chip) and power management for compute-intensive devices and applications. Upon completion of development, NUVIA’s technologies are expected to be integrated into certain QCT products. We recorded $885 million of goodwill, which is not deductible for tax purposes and was allocated to our QCT segment for annual impairment testing purposes. Goodwill is primarily attributable to assembled workforce and certain revenue and cost synergies expected to arise after the acquisition. We also recorded a $247 million in-process research and development intangible asset related to a single project, which is expected to be completed in fiscal 2023 and, upon completion, will be amortized over its useful life, which is expected to be seven years. Our results of operations for fiscal 2021 included the operating results of NUVIA since the acquisition date, the amounts of which were not material.
Veoneer. On October 4, 2021, we and SSW Partners, a New York-based investment partnership, entered into a definitive agreement (the Merger Agreement) to acquire Veoneer, Inc. (Veoneer) for $37.00 per share in cash. The transaction closed on April 1, 2022 (the Closing Date). Total cash consideration payable in the transaction, inclusive of (i) approximately $4.6 billion for amounts paid in respect of Veoneer’s outstanding capital stock and equity awards and amounts to be paid to settle Veoneer’s outstanding convertible senior notes due 2024; and (ii) the $110 million termination fee paid to Magna International Inc. (Magna) in the first quarter of fiscal 2022, was approximately $4.7 billion. On the Closing Date, SSW Partners acquired all of the outstanding capital stock of Veoneer, shortly after which it transferred Veoneer’s Arriver business to Qualcomm. We intend to incorporate Arriver’s computer vision, drive policy and driver assistance technologies into our Snapdragon automotive platform to deliver an integrated software SoC ADAS (advanced driver assistance systems) platform for automakers and Tier-1 automotive suppliers. SSW Partners retained Veoneer’s Tier-1 automotive supplier businesses, primarily consisting of the Active Safety and Restraint Control Systems businesses (the Non-Arriver businesses), which it intends to sell in one or more transactions.
We funded substantially all of the cash consideration payable in the transaction in exchange for (i) the Arriver business and (ii) the right to receive a majority of the proceeds upon the sale of the Non-Arriver businesses by SSW Partners. We have also agreed to provide certain funding of approximately $300 million to the Non-Arriver businesses while SSW Partners seeks a buyer(s). Such amounts, along with cash retained in the Non-Arriver business, are expected to be used to fund working and other near-term capital needs, as well as certain costs incurred in connection with the close of the acquisition.
Although we do not own or operate the Non-Arriver businesses, we have determined as of the Closing Date that we are the primary beneficiary, within the meaning of the Financial Accounting Standards Board (FASB) accounting guidance related to consolidation (ASC 810), of these businesses under the variable interest model. Accordingly, we will consolidate the Non-Arriver businesses on a one-quarter reporting lag starting from the Closing Date until such businesses are sold by SSW Partners. We expect to present the assets and liabilities of the Non-Arriver businesses as held for sale and its operating results as discontinued operations. We also expect to initially use a one-quarter reporting lag to consolidate the Arriver business within our consolidated financial statements, until certain integration activities are complete, which are expected to occur in the fourth quarter of fiscal 2022.
In accordance with the Merger Agreement, we paid to Magna a termination fee of $110 million in the first quarter of fiscal 2022 on behalf of Veoneer in connection with the termination of the previously announced agreement and plan of merger, dated as of July 22, 2021, by and among Magna and Veoneer. The termination fee was recorded in other noncurrent assets as advanced consideration for the acquisition at March 27, 2022 and was classified as cash used by investing activities in the condensed consolidated statements of cash flows in the six months ended March 27, 2022.
Our initial accounting for this business combination is currently underway. We expect to record and disclose the preliminary purchase price allocation in the third quarter of fiscal 2022.
v3.22.1
Fair Value Measurements
6 Months Ended
Mar. 27, 2022
Fair Value Measurements [Abstract]  
Fair Value Measurements Fair Value Measurements
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 27, 2022 (in millions):
Level 1Level 2Level 3Total
Assets    
Cash equivalents$4,823 $1,274 $— $6,097 
Marketable securities:    
Corporate bonds and notes— 3,832 — 3,832 
Equity securities404 — — 404 
Mortgage- and asset-backed securities— 131 — 131 
U.S. Treasury securities and government-related securities— — 
Total marketable securities404 3,969 — 4,373 
Derivative instruments— 196 — 196 
Other investments712 — 24 736 
Total assets measured at fair value$5,939 $5,439 $24 $11,402 
Liabilities    
Derivative instruments$— $83 $— $83 
Other liabilities711 — — 711 
Total liabilities measured at fair value$711 $83 $— $794 
Long-term Debt. At March 27, 2022, the aggregate fair value of our outstanding floating- and fixed-rate notes, based on Level 2 inputs, was approximately $15.5 billion.
v3.22.1
Marketable Securities
6 Months Ended
Mar. 27, 2022
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities Marketable Securities
Our marketable securities were all classified as current and were comprised as follows (in millions):
March 27,
2022
September 26,
2021
Available-for-sale debt securities:  
Corporate bonds and notes$3,832 $4,459 
Mortgage- and asset-backed securities131 147 
U.S. Treasury securities and government-related securities10 
Total available-for-sale debt securities3,969 4,616 
Equity securities
404 682 
Total marketable securities$4,373 $5,298 
The contractual maturities of available-for-sale debt securities were as follows (in millions):
March 27,
2022
Years to Maturity
Less than one year$682 
One to five years3,156 
No single maturity date131 
Total$3,969 
Debt securities with no single maturity date included mortgage- and asset-backed securities.
v3.22.1
Basis of Presentation and Significant Accounting Policies Update (Policies)
6 Months Ended
Mar. 27, 2022
Basis of Presentation [Abstract]  
Fiscal Period, Policy We operate and report using a 52-53 week fiscal year ending on the last Sunday in September. Each of the three and six months ended March 27, 2022 and March 28, 2021 included 13 weeks and 26 weeks, respectively.
Use of Estimates, Policy The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and the accompanying notes. Actual results could differ from those estimates.
Revenue Recognition We disaggregate our revenues by segment (Note 6), by products and services (as presented on our condensed consolidated statement of operations), and for our QCT (Qualcomm CDMA Technologies) 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 (Qualcomm Technology Licensing) revenues represent licensing revenues that are recognized over time and are principally from royalties generated through our licensees’ sales of mobile handsets.
Segment Reporting Policy We are organized on the basis of products and services and have three reportable segments.
Segment Reporting EBT Policy Our CODM allocates resources to and evaluates the performance of our segments based on revenues and earnings (loss) before income taxes (EBT). Segment EBT includes the allocation of certain corporate expenses to the segments, including depreciation and amortization expense related to unallocated corporate assets. 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, certain share-based compensation, gains and losses on our deferred compensation plan liabilities and related assets and certain research and development expenses, certain selling, general and administrative expenses and other expenses or income that were deemed to be not directly related to the businesses of the segments. Additionally, unallocated charges include recognition of the step-up of inventories and property, plant and equipment to fair value, 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. Our CODM does not evaluate our operating segments using discrete asset information.
v3.22.1
Composition of Certain Financial Statement Items (Tables)
6 Months Ended
Mar. 27, 2022
Condensed Financial Information Disclosure [Abstract]  
Inventories
Inventories (in millions)
March 27,
2022
September 26,
2021
Raw materials$253 $267 
Work-in-process2,517 1,475 
Finished goods1,785 1,486 
$4,555 $3,228 
Short-term Debt
Short-term Debt (in millions)
March 27,
2022
September 26,
2021
Commercial paper$500 $500 
Current portion of long-term debt2,985 1,544 
$3,485 $2,044 
QCT Revenues Disaggregated QCT revenue streams were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Handsets (1)$6,325 $4,065 $12,307 $8,281 
RFFE (2) 1,160 903 2,292 1,964 
Automotive (3)339 240 595 452 
IoT (internet of things) (4)1,724 1,073 3,201 2,117 
Total QCT revenues$9,548 $6,281 $18,395 $12,814 
(1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
(2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components.
(3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
(4) Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, transportation and logistics and utilities).
Revenue recognized from performance obligations satisfied in previous periods
Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022 (1)
March 28,
2021 (2)
March 27,
2022 (1)
March 28,
2021 (2)
Revenues recognized from previously satisfied performance obligations$185 $122 $367 $176 
(1) Primarily related to certain QCT sales-based royalty revenues related to system software, QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
(2) Primarily related to QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
Customer Concentrations - Revenues Revenues from each customer/licensee that were 10% or greater of total revenues were as follows:
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Customer/licensee (w)19 %16 %22 %25 %
Customer/licensee (x)19 16 19 14 
Customer/licensee (y)10 15 *13 
Customer/licensee (z)*13 *11 
Investment and Other Income, Net
Investment and Other (Expense) Income, Net (in millions)
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Interest and dividend income$20 $22 $37 $42 
Net (losses) gains on marketable securities(240)(85)(223)33 
Net (losses) gains on other investments(21)176 73 209 
Net (losses) gains on deferred compensation plan assets(43)23 (30)77 
Impairment losses on other investments(20)(15)(21)(16)
Net losses on derivative instruments (5)(17)(19)(7)
Equity in net earnings of investees10 12 17 11 
Net gains (losses) on foreign currency transactions(12)(26)
$(298)$104 $(158)$323 
v3.22.1
Capital Stock Earnings per Common Share (Tables)
6 Months Ended
Mar. 27, 2022
Earnings Per Share [Abstract]  
Schedule of Capital Units
Shares Outstanding. Shares of common stock outstanding at March 27, 2022 were as follows (in millions):
Balance at September 26, 20211,125 
Issued11 
Repurchased(14)
Balance at March 27, 20221,122 
Schedule of Earnings Per Share, Basic and Diluted The following table provides information about the diluted earnings per share calculation (in millions):
 Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Dilutive common share equivalents included in diluted shares16 18 17 20 
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period— — — — 
v3.22.1
Segment Information (Tables)
6 Months Ended
Mar. 27, 2022
Segment Reporting [Abstract]  
Revenues, EBT, and Assets for reportable segments
The table below presents revenues and EBT for reportable segments (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenues
QCT$9,548 $6,281 $18,395 $12,814 
QTL1,580 1,614 3,398 3,273 
QSI10 14 19 
Reconciling items30 30 61 64 
Total$11,164 $7,935 $21,868 $16,170 
EBT
QCT$3,340 $1,584 $6,455 $3,503 
QTL1,154 1,191 2,560 2,461 
QSI(269)98 (147)256 
Reconciling items(802)(744)(1,579)(1,488)
Total$3,423 $2,129 $7,289 $4,732 
Reconciling items for reportable segments - revenues
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenues
Nonreportable segments$30 $30 $61 $64 
EBT
Unallocated cost of revenues$(53)$(72)$(106)$(148)
Unallocated research and development expenses(433)(415)(886)(821)
Unallocated selling, general and administrative expenses(138)(113)(292)(291)
Unallocated interest expense(137)(141)(275)(282)
Unallocated investment and other (expense) income, net(34)14 (11)85 
Nonreportable segments(7)(17)(9)(31)
$(802)$(744)$(1,579)$(1,488)
Reconciling items for reportable segments - EBT
Reconciling items for revenues and EBT in the previous table were as follows (in millions):
Three Months EndedSix Months Ended
March 27,
2022
March 28,
2021
March 27,
2022
March 28,
2021
Revenues
Nonreportable segments$30 $30 $61 $64 
EBT
Unallocated cost of revenues$(53)$(72)$(106)$(148)
Unallocated research and development expenses(433)(415)(886)(821)
Unallocated selling, general and administrative expenses(138)(113)(292)(291)
Unallocated interest expense(137)(141)(275)(282)
Unallocated investment and other (expense) income, net(34)14 (11)85 
Nonreportable segments(7)(17)(9)(31)
$(802)$(744)$(1,579)$(1,488)
v3.22.1
Fair Value Measurements (Tables)
6 Months Ended
Mar. 27, 2022
Fair Value Measurements [Abstract]  
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis
The following table presents our fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 27, 2022 (in millions):
Level 1Level 2Level 3Total
Assets    
Cash equivalents$4,823 $1,274 $— $6,097 
Marketable securities:    
Corporate bonds and notes— 3,832 — 3,832 
Equity securities404 — — 404 
Mortgage- and asset-backed securities— 131 — 131 
U.S. Treasury securities and government-related securities— — 
Total marketable securities404 3,969 — 4,373 
Derivative instruments— 196 — 196 
Other investments712 — 24 736 
Total assets measured at fair value$5,939 $5,439 $24 $11,402 
Liabilities    
Derivative instruments$— $83 $— $83 
Other liabilities711 — — 711 
Total liabilities measured at fair value$711 $83 $— $794 
v3.22.1
Marketable Securities (Tables)
6 Months Ended
Mar. 27, 2022
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities
Our marketable securities were all classified as current and were comprised as follows (in millions):
March 27,
2022
September 26,
2021
Available-for-sale debt securities:  
Corporate bonds and notes$3,832 $4,459 
Mortgage- and asset-backed securities131 147 
U.S. Treasury securities and government-related securities10 
Total available-for-sale debt securities3,969 4,616 
Equity securities
404 682 
Total marketable securities$4,373 $5,298 
Investments Classified by Contractual Maturity Date
The contractual maturities of available-for-sale debt securities were as follows (in millions):
March 27,
2022
Years to Maturity
Less than one year$682 
One to five years3,156 
No single maturity date131 
Total$3,969 
v3.22.1
Composition of Certain Financial Statement Items Inventories (Details) - USD ($)
$ in Millions
Mar. 27, 2022
Sep. 26, 2021
Inventory, Net [Abstract]    
Raw materials $ 253 $ 267
Work-in-process 2,517 1,475
Finished goods 1,785 1,486
Inventories $ 4,555 $ 3,228
v3.22.1
Composition of Certain Financial Statement Items Short-term Debt (Details) - USD ($)
$ in Millions
Mar. 27, 2022
Sep. 26, 2021
Short-term Debt [Abstract]    
Commercial Paper $ 500 $ 500
Current Portion of Long-Term Debt 2,985 1,544
Short-term debt $ 3,485 $ 2,044
v3.22.1
Composition of Certain Financial Statement Items Interest Rate Swaps (Details)
$ in Millions
Mar. 27, 2022
USD ($)
Other Noncurrent Liabilities  
Derivative Instruments and Hedging Activities Disclosures  
Derivative, Fair Value, Net $ 74
Interest Rate Swap  
Derivative Instruments and Hedging Activities Disclosures  
Derivative, Notional Amount $ 1,600
v3.22.1
Composition of Certain Financial Statement Items Revenues (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Revenue        
Revenues $ 11,164 $ 7,935 $ 21,868 $ 16,170
Contract with Customer, Performance Obligation Satisfied in Previous Period 185 [1] 122 [2] 367 [1] 176 [2]
Contract with Customer, Liability, Revenue Recognized     340 314
Revenue, Remaining Performance Obligation, Amount 882   882  
QCT        
Revenue        
Revenues 9,548 6,281 18,395 12,814
Handsets | QCT        
Revenue        
Revenues [3] 6,325 4,065 12,307 8,281
RFFE | QCT        
Revenue        
Revenues [4] 1,160 903 2,292 1,964
Automotive | QCT        
Revenue        
Revenues [5] 339 240 595 452
IoT | QCT        
Revenue        
Revenues [6] 1,724 $ 1,073 3,201 $ 2,117
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-28        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 362   $ 362  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 6 months   6 months  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-09-26        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 362   $ 362  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year   1 year  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-09-25        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 112   $ 112  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year   1 year  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 42   $ 42  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year   1 year  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-09-29        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 4   $ 4  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year   1 year  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-09-28        
Revenue        
Revenue, Remaining Performance Obligation, Amount $ 0   $ 0  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year   1 year  
[1] Primarily related to certain QCT sales-based royalty revenues related to system software, QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
[2] Primarily related to QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives.
[3] Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components.
[4] Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components.
[5] Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit.
[6] Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, transportation and logistics and utilities).
v3.22.1
Composition of Certain Financial Statement Items Concentrations (Details) - Sales - Customer Concentration Risk
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Customer/licensee (w)        
Concentration Risk        
Concentration Risk, Percentage 19.00% 16.00% 22.00% 25.00%
Customer/licensee (x)        
Concentration Risk        
Concentration Risk, Percentage 19.00% 16.00% 19.00% 14.00%
Customer/licensee (y)        
Concentration Risk        
Concentration Risk, Percentage 10.00% 15.00%   13.00%
Customer/licensee (z)        
Concentration Risk        
Concentration Risk, Percentage   13.00%   11.00%
v3.22.1
Composition of Certain Financial Statement Items Investment and Other (Expense) Income, Net (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Investment Income, Net [Abstract]        
Interest and dividend income $ 20 $ 22 $ 37 $ 42
Net (losses) gains on marketable securities (240) (85) (223) 33
Net (losses) gains on other investments (21) 176 73 209
Net (losses) gains on deferred compensation plan assets (43) 23 (30) 77
Impairment losses on other investments (20) (15) (21) (16)
Net losses on derivative instruments (5) (17) (19) (7)
Equity in net earnings of investees 10 12 17 11
Net gains (losses) on foreign currency transactions 1 (12) 8 (26)
Investment and other (expense) income, net $ (298) $ 104 $ (158) $ 323
v3.22.1
Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended 12 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Sep. 25, 2022
Sep. 26, 2021
Income Taxes            
Effective income tax rate (benefit) 14.00% 17.00%        
Income Tax Expense (Benefit) $ 489 $ 367 $ 956 $ 515    
Unrecognized tax benefits $ 2,100   $ 2,100     $ 2,100
Internal Revenue Service (IRS)            
Income Taxes            
Income Tax Expense (Benefit)   $ 87        
Forecast            
Income Taxes            
Effective income tax rate (benefit)         14.00%  
Forecast | FDII Effective Tax Rate            
Income Taxes            
Effective income tax rate (benefit)         13.00%  
v3.22.1
Capital Stock Share Repurchase Program (Details) - USD ($)
$ in Millions
Mar. 27, 2022
Oct. 12, 2021
$30B stock repurchase program announced July 26, 2018    
Stock Repurchase Program    
Remaining authorized amount   $ 900
$10B stock repurchase program announced October 12, 2021    
Stock Repurchase Program    
Authorized amount   $ 10,000
Remaining authorized amount $ 9,100  
v3.22.1
Capital Stock Shares Outstanding (Details)
shares in Millions
6 Months Ended
Mar. 27, 2022
shares
Shares Outstanding [Abstract]  
Balance at September 26, 2021 1,125
Issued 11
Repurchased (14)
Balance at March 27, 2022 1,122
v3.22.1
Capital Stock Dividends (Details) - $ / shares
3 Months Ended 6 Months Ended
Jun. 23, 2022
Jun. 02, 2022
Apr. 13, 2022
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Mar. 09, 2022
Subsequent Event                
Percentage increase in common stock dividends               10.00%
Dividends per share announced       $ 0.68 $ 0.65 $ 1.36 $ 1.30  
Amount of Increased Common Stock Dividends per Share Announced               $ 0.75
Subsequent Event                
Subsequent Event                
Dividends per share announced     $ 0.75          
Dividends Payable, Date Declared     Apr. 13, 2022          
Dividends Payable, Date to be Paid Jun. 23, 2022              
Dividends Payable, Date of Record   Jun. 02, 2022            
v3.22.1
Capital Stock Earnings per Common Share (Details) - shares
shares in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Earnings Per Share [Abstract]        
Dilutive common share equivalents included in diluted shares 16 18 17 20
Shares of common stock equivalents not included because the effect would be anti-dilutive or certain performance conditions were not satisfied at the end of the period 0 0 0 0
v3.22.1
Commitments and Contingencies Legal and Regulatory Proceedings (Details)
€ in Millions, $ in Millions, ₩ in Billions
3 Months Ended
Jul. 18, 2019
EUR (€)
Jan. 24, 2018
EUR (€)
Mar. 30, 2017
KRW (₩)
Mar. 30, 2017
USD ($)
Jun. 30, 2019
USD ($)
Dec. 24, 2017
USD ($)
Mar. 27, 2022
USD ($)
Loss Contingencies [Line Items]              
Loss Contingency Accrual             $ 0
KFTC Complaint              
Loss Contingencies [Line Items]              
Loss contingency, loss in period       $ 927      
KFTC Complaint | Korea (South), Won              
Loss Contingencies [Line Items]              
Loss contingency, loss in period | ₩     ₩ 1,030        
Icera Complaint to EC              
Loss Contingencies [Line Items]              
Loss contingency, loss in period         $ 275    
Per annum interest rate for outstanding fines             1.50%
Accrual for EC fine - other current liabilities             $ 276
Icera Complaint to EC | Euro Member Countries, Euro              
Loss Contingencies [Line Items]              
Loss contingency, loss in period | € € 242            
EC              
Loss Contingencies [Line Items]              
Loss contingency, loss in period           $ 1,200  
Per annum interest rate for outstanding fines             1.50%
Accrual for EC fine - other current liabilities             $ 1,200
EC | Euro Member Countries, Euro              
Loss Contingencies [Line Items]              
Loss contingency, loss in period | €   € 997          
v3.22.1
Segment Information (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Mar. 27, 2022
Mar. 28, 2021
Mar. 27, 2022
Mar. 28, 2021
Segment Reporting Information [Line Items]        
Revenues $ 11,164 $ 7,935 $ 21,868 $ 16,170
EBT 3,423 2,129 7,289 4,732
Cost of revenues (4,648) (3,432) (8,951) (6,921)
Research and development expenses (2,034) (1,780) (3,963) (3,433)
Selling, general and administrative expenses (624) (557) (1,232) (1,124)
Interest expense (137) (141) (275) (283)
Investment and other (expense) income, net (298) 104 (158) 323
Reconciling Items        
Segment Reporting Information [Line Items]        
Revenues 30 30 61 64
EBT (802) (744) (1,579) (1,488)
Cost of revenues (53) (72) (106) (148)
Research and development expenses (433) (415) (886) (821)
Selling, general and administrative expenses (138) (113) (292) (291)
Interest expense (137) (141) (275) (282)
Investment and other (expense) income, net (34) 14 (11) 85
QCT        
Segment Reporting Information [Line Items]        
Revenues 9,548 6,281 18,395 12,814
EBT 3,340 1,584 6,455 3,503
QTL        
Segment Reporting Information [Line Items]        
Revenues 1,580 1,614 3,398 3,273
EBT 1,154 1,191 2,560 2,461
QSI        
Segment Reporting Information [Line Items]        
Revenues 6 10 14 19
EBT (269) 98 (147) 256
Other Segments | Reconciling Items        
Segment Reporting Information [Line Items]        
Revenues 30 30 61 64
EBT $ (7) $ (17) $ (9) $ (31)
v3.22.1
Acquisitions (Details) - USD ($)
$ / shares in Units, $ in Millions
Apr. 01, 2022
Oct. 04, 2021
Mar. 16, 2021
Mar. 27, 2022
Sep. 26, 2021
Business Acquisition          
Goodwill       $ 7,261 $ 7,246
Subsequent Event          
Business Acquisition          
Investments in and Advances to Affiliates, at Fair Value, Gross Additions $ 300        
NUVIA          
Business Acquisition          
Payments to Acquire Businesses, Net of Cash Acquired     $ 1,100    
Cash     174    
Fair value of stock awards assumed or replaced in connection with acquisition     $ 258    
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period     4 years    
Goodwill     $ 885    
In-process research and development (IPR&D)     $ 247    
Weighted average amortization period (years)     7 years    
Veoneer | Other Noncurrent Assets          
Business Acquisition          
Termination fee paid   $ 110      
Veoneer | Subsequent Event          
Business Acquisition          
Business Acquisition, Share Price $ 37.00        
Payments to acquire business including debt assumed $ 4,700        
Veoneer | Subsequent Event | Remaining Payment          
Business Acquisition          
Payments to acquire business including debt assumed $ 4,600        
v3.22.1
Fair Value Measurements Fair Value Hierarchy (Details) - Fair Value, Recurring
$ in Millions
Mar. 27, 2022
USD ($)
Assets  
Cash equivalents $ 6,097
Marketable securities 4,373
Derivative instruments 196
Other investments 736
Total assets measured at fair value 11,402
Liabilities  
Derivative instruments 83
Other liabilities 711
Total liabilities measured at fair value 794
Level 1  
Assets  
Cash equivalents 4,823
Marketable securities 404
Derivative instruments 0
Other investments 712
Total assets measured at fair value 5,939
Liabilities  
Derivative instruments 0
Other liabilities 711
Total liabilities measured at fair value 711
Level 2  
Assets  
Cash equivalents 1,274
Marketable securities 3,969
Derivative instruments 196
Other investments 0
Total assets measured at fair value 5,439
Liabilities  
Derivative instruments 83
Other liabilities 0
Total liabilities measured at fair value 83
Level 3  
Assets  
Cash equivalents 0
Marketable securities 0
Derivative instruments 0
Other investments 24
Total assets measured at fair value 24
Liabilities  
Derivative instruments 0
Other liabilities 0
Total liabilities measured at fair value 0
Corporate bonds and notes  
Assets  
Marketable securities 3,832
Corporate bonds and notes | Level 1  
Assets  
Marketable securities 0
Corporate bonds and notes | Level 2  
Assets  
Marketable securities 3,832
Corporate bonds and notes | Level 3  
Assets  
Marketable securities 0
Equity securities  
Assets  
Marketable securities 404
Equity securities | Level 1  
Assets  
Marketable securities 404
Equity securities | Level 2  
Assets  
Marketable securities 0
Equity securities | Level 3  
Assets  
Marketable securities 0
Mortgage- and asset-backed securities  
Assets  
Marketable securities 131
Mortgage- and asset-backed securities | Level 1  
Assets  
Marketable securities 0
Mortgage- and asset-backed securities | Level 2  
Assets  
Marketable securities 131
Mortgage- and asset-backed securities | Level 3  
Assets  
Marketable securities 0
U.S. Treasury and government-related Securities  
Assets  
Marketable securities 6
U.S. Treasury and government-related Securities | Level 1  
Assets  
Marketable securities 0
U.S. Treasury and government-related Securities | Level 2  
Assets  
Marketable securities 6
U.S. Treasury and government-related Securities | Level 3  
Assets  
Marketable securities $ 0
v3.22.1
Fair Value Measurements Long-term Debt (Details)
$ in Billions
Mar. 27, 2022
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]  
Long-term Debt, Fair Value $ 15.5
v3.22.1
Marketable Securities (Details) - USD ($)
$ in Millions
Mar. 27, 2022
Sep. 26, 2021
Marketable Securities    
Available-for-sale Securities, Current $ 3,969 $ 4,616
Marketable securities 4,373 5,298
Less than one year 682  
One to five years 3,156  
No single maturity date 131  
Debt Securities, Available-for-sale 3,969  
Corporate bonds and notes    
Marketable Securities    
Available-for-sale Securities, Current 3,832 4,459
Mortgage- and asset-backed securities    
Marketable Securities    
Available-for-sale Securities, Current 131 147
U.S. Treasury and government-related Securities    
Marketable Securities    
Available-for-sale Securities, Current 6 10
Equity securities    
Marketable Securities    
Marketable securities $ 404 $ 682