Qualcomm posted exceptional Q1 2022 results with revenue jumping 41% YoY to $11.2B, driven by robust handset chip demand and 5G adoption. Operating income surged 78% to $3.9B as operating leverage improved significantly. Equipment and services revenue grew 51% YoY to $9.4B while licensing remained stable at $1.7B. However, rising inventory levels (+41% YoY to $4.6B) and growing accounts receivable signal potential supply chain pressures ahead. The results demonstrate Qualcomm's strengthening market position in mobile chips but highlight increasing working capital demands.
Key Risks
Apple in-sourcing risk could impact 20%+ of revenue by 2024
MediaTek competition intensifying in mid-range segment
Semiconductor cycle downturn could pressure margins
Key Opportunities
5G penetration at 45% provides multi-year growth runway
Automotive ADAS expansion beyond current $13B pipeline
IoT diversification with 60%+ growth rate continuing
RF content increases driving higher ASPs in 5G
Bottom Line
Qualcomm delivered exceptional Q1 results that validate its strategy while highlighting both opportunities and challenges ahead. The core mobile business remains strong with significant 5G runway, while diversification efforts are gaining meaningful traction. However, rising inventory levels and working capital demands require close monitoring. The company appears well-positioned competitively but must navigate customer concentration risk and potential semiconductor cycle downturn. The key metrics to watch are inventory turns, automotive/IoT growth rates, and RF attachment rates in coming quarters.