QCOM 10-K filed 2026-11-04 | Key takeaways
QCOM filed its 10-K; the most relevant disclosure change is expanded Business combinations: QUALCOMM completed two significant acquisitions in fiscal 2026: Alphawave IP Group plc (December 2025) for $2.3 billion to accelerate data center expansion, and Modular Inc (July 2026) for approximately $3.1 billion to strengthen AI-native software capabilitie. Customer concentration: Apple represented 10% or more of revenue; Samsung represented 10% or more of revenue.
Key takeaways
QCT revenues decreased 3% in fiscal 2026 compared to the prior year due to lower handset revenues, partially offset by higher automotive and IoT revenues; QTL revenues remained approximately flat.
The company completed the Alphawave acquisition in December 2025 for $2.3 billion (primarily $1.8 billion in equity consideration) to accelerate expansion into data centers, with preliminary goodwill of $2.2 billion allocated to the Data Center segment.
The company completed the Modular acquisition in July 2026 for approximately $3.1 billion (valued based on closing stock price), providing an AI-native software platform for data center and edge environments.
Apple and Samsung each comprised 10% or more of consolidated revenues in fiscal 2026, consistent with the prior year disclosure.
Goodwill increased significantly from $11.4 billion to $16.4 billion, and other intangible assets increased from $1.1 billion to $1.9 billion, reflecting the acquisitions completed during fiscal 2026.
Short-term debt increased from $0 to $2.5 billion as of September 27, 2026, while long-term debt decreased from $14.8 billion to $12.6 billion.
Beginning in Q1 FY2027, the Data Center business will be included within the QCT reportable segment to align to how management plans to manage the business going forward.
Key metrics
Customer concentration
Disclosure changes
- Business combinations
QUALCOMM completed two significant acquisitions in fiscal 2026: Alphawave IP Group plc (December 2025) for $2.3 billion to accelerate data center expansion, and Modular Inc (July 2026) for approximately $3.1 billion to strengthen AI-native software capabilities. The Alphawave acquisition resulted in preliminary goodwill of $2.2 billion allocated to the Data Center segment, while the Modular acquisition was valued based on the closing Qualcomm stock price on the acquisition date.
These acquisitions represent significant strategic investments in the company's diversification strategy beyond mobile handsets into data center and AI infrastructure, with material impact on goodwill, intangible assets, and future revenue composition - Segment reporting
Beginning in the first quarter of fiscal 2027, the Data Center business, previously presented as a nonreportable segment, will be included within the QCT reportable segment to align to how management plans to manage the business going forward.
This change affects how the company reports and manages its business segments, with implications for how investors should evaluate QCT segment performance - Income taxes
In Q2 FY2026, the company released a $5.7 billion valuation allowance on federal deferred tax assets following U.S. Department of Treasury and IRS issuance of Notice 2026-07, which allows reduction of CAMT by certain previously capitalized domestic R&D expenditures. The company now expects to realize its existing federal deferred tax assets and no longer expects to be subject to CAMT in the foreseeable future.
This $5.7 billion tax benefit was the primary driver of the 146% increase in net income in fiscal 2026 and significantly impacts the effective tax rate and future cash flows from operations - Goodwill and other intangible assets
Goodwill increased from $11.4 billion (FY2025) to $16.4 billion (FY2026), and other intangible assets, net increased from $1.1 billion (FY2025) to $1.9 billion (FY2026), reflecting the Alphawave and other business acquisitions completed during fiscal 2026.
The significant increase in goodwill and intangible assets reflects the acquisition strategy and will result in increased amortization expense in future periods - Customer concentration
Apple and Samsung each comprised 10% or more of consolidated revenues in fiscal 2026. The company derives a significant portion of revenues from a small number of mobile handset customers and licensees, particularly from their sale of premium-tier handset devices.
Customer concentration remains material, with particular risk from Apple's expected transition to internally developed modem products rather than QUALCOMM products - Short-term debt
Short-term debt increased from $0 (FY2025) to $2.5 billion (FY2026), consisting of commercial paper and current portion of long-term debt.
The increase in short-term debt reflects refinancing activities and affects the company's near-term debt maturity profile and liquidity requirements
Primary source
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