The Revenue LinesNarrow moat

Qualcomm (QCOM) — moat facet

The biggest line is shrinking, the most profitable is flat, and the two that are growing are not yet big enough to carry it.

Qualcomm reports two businesses and, inside the chip business, three revenue streams, which gives four lines worth reading separately. In fiscal 2025, the year to September, QCT handset chips had revenue of $27,793 million, QTL licensing $5,582 million, QCT IoT $6,617 million and QCT automotive $3,957 million 1. Together they make $43,949 million of reportable-segment revenue, and the other $335 million of the $44,284 million total sits in unallocated items and small non-reportable units, among them the data-centre business 2.

Segment earnings before tax, fiscal 2025 ($m)$11,670m on $38,367mQCT (handsets, IoT, automotive)$4,043m on $5,582mQTL licensingQualcomm Form 10-K FY2025, segment information
Licensing is 13% of revenue and a quarter of segment profit.

Size and profit run in opposite orders. Handsets are 63% of revenue 3, but QCT as a whole earned $11,670 million before tax on $38,367 million, a 30% margin, while QTL earned $4,043 million on $5,582 million, 72% 4. Licensing is 13% of revenue and about a quarter of segment profit 5. Qualcomm does not split QCT's profit by stream, so the handset, IoT and automotive leaves carry revenue but no margin of their own.

Growth runs in the opposite order too. In the nine months to June 2026 handset revenue fell 9% to $18,934 million while automotive rose 38% to $4,015 million and IoT 9% to $5,244 million 6; licensing rose 2% to $4,252 million 7. The largest line is the one shrinking, because Apple is replacing Qualcomm's modems with its own.

The leaves follow the chart's bands, with the small Other band explained here. The company-level story, the patent toll and the Apple transition, is argued under The Patent Toll and Apple Bought the Cheapest Part, and Is Now Building It; the leaves keep to each line's own record.

Taken together, the question is whether the three lines that are growing can outgrow the one that is not. In the June 2026 quarter they did not: QCT revenue fell to $8,504 million from $8,993 million 8. The number to watch is total QCT revenue turning positive year on year while handsets are still falling.

Moat trajectory: Narrowing

QCT revenue fell 5% in the June 2026 quarter; the growing lines did not offset handsets.

The number that tests this moat
Moat Explorer calc
QCT revenue growth, latest quarter
-5% in Q3 fiscal 2026 ($8,504M against $8,993M)

Turning positive while handsets still fall would show the growing lines outrunning the Apple loss.

How it's calculated: QCT revenue Q3 fiscal 2026 / Q3 fiscal 2025 - 1
Source: Qualcomm Form 10-Q, Q3 fiscal 2026 ↗
Dig deeper
DIG DEEPER 01
QCT Handsets
Sixty-three percent of revenue, a record in fiscal 2025, and falling 20% a quarter as Apple leaves.
DIG DEEPER 02
QTL Licensing
A 72%-margin royalty on phones whoever made the chip, and it has not grown in two years.
DIG DEEPER 03
QCT IoT
PCs, glasses, routers and scanners: a line that recovered from its bust but has not yet become a second engine.
DIG DEEPER 04
QCT Automotive
Quadrupled since fiscal 2021 and still growing 61% a quarter: the one bet that is plainly working.
References
  1. ReportedIn fiscal 2025, the year to September, QCT handset chips had revenue of $27,793 million, QTL licensing $5,582 million, QCT IoT $6,617 million and QCT automotive $3,957 million .
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  2. ReportedTogether they make $43,949 million of reportable-segment revenue, and the other $335 million of the $44,284 million total sits in unallocated items and small non-reportable units, among them the data-centre business .
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  3. Moat Explorer calcHandsets are 63% of revenue , but QCT as a whole earned $11,670 million before tax on $38,367 million, a 30% margin, while QTL earned $4,043 million on $5,582 million, 72% .
    Moat Explorer calculation from Qualcomm's Forms 10-K and 10-Q: shares of revenue and segment profit, growth rates — FY2021 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  4. ReportedHandsets are 63% of revenue , but QCT as a whole earned $11,670 million before tax on $38,367 million, a 30% margin, while QTL earned $4,043 million on $5,582 million, 72% .
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  5. Moat Explorer calcLicensing is 13% of revenue and about a quarter of segment profit .
    Moat Explorer calculation from Qualcomm's Forms 10-K and 10-Q: shares of revenue and segment profit, growth rates — FY2021 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  6. ReportedIn the nine months to June 2026 handset revenue fell 9% to $18,934 million while automotive rose 38% to $4,015 million and IoT 9% to $5,244 million ; licensing rose 2% to $4,252 million .
    Qualcomm Form 10-Q, quarter ended 28 June 2026 - QCT revenue streams, QTL revenue and EBT, and the drivers of each for the quarter and nine months — Q3 FY2026 · publ. 29 July 2026 · source ↗
  7. ReportedIn the nine months to June 2026 handset revenue fell 9% to $18,934 million while automotive rose 38% to $4,015 million and IoT 9% to $5,244 million ; licensing rose 2% to $4,252 million .
    Qualcomm Form 10-Q, quarter ended 28 June 2026 - QCT revenue streams, QTL revenue and EBT, and the drivers of each for the quarter and nine months — Q3 FY2026 · publ. 29 July 2026 · source ↗
  8. ReportedIn the June 2026 quarter they did not: QCT revenue fell to $8,504 million from $8,993 million .
    Qualcomm Form 10-Q, quarter ended 28 June 2026 - QCT revenue streams, QTL revenue and EBT, and the drivers of each for the quarter and nine months — Q3 FY2026 · publ. 29 July 2026 · source ↗
Sources
Generated September 23, 2026