QUALCOMM Incorporated (NASDAQ:QCOM) Q3 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 04:45 pm ET

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QUALCOMM Incorporated (NASDAQ:QCOM) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Qualcomm Third Quarter Fiscal 2020 Earnings Conference Call. [Operator Instructions] Later, we will conduct a question-and-answer session. [Operator Instructions]

As a reminder, this conference is being recorded July 29th, 2020. The playback number for today's call is 877-660-6853. International callers please dial 201-612-7415. The playback reservation number is 13706353.

I would now like to turn the call over to Mauricio Lopez-Hodoyan, Vice President of Investor Relations. Mr. Lopez-Hodoyan, please go ahead.

Executive
Mauricio Lopez-Hodoyan

Thank you, and good afternoon, everyone. Today's call will include prepared remarks by Steve Mollenkopf and Akash Palkhiwala. In addition, Cristiano Amon, Alex Rogers and Don Rosenberg will join the question-and-answer session. You can access our earnings release and a slide presentation that accompany this call on our Investor Relations website. In addition, this call is being webcast on qualcomm.com and a replay will be available on our website later today.

During the call today, we will use non-GAAP financial measures as defined in Regulation G. And you can find the related reconciliations to GAAP on our website. We will also make forward-looking statements including projections and estimates of future events, business or industry trends or business or financial results. Actual events or results could differ materially from those projected in our forward-looking statements. Please refer to our SEC filings, including our most recent 10-K, which contain important factors that could cause actual results to differ materially from the forward-looking statements.

And now to comments from Qualcomm's Chief Executive Officer, Steve Mollenkopf.

Executive
Steve Mollenkopf

Thank you, Mauricio, and good afternoon, everyone. Our fiscal third quarter non-GAAP earnings of $0.86 per share was above the high end of guidance, driven by strong licensing revenue and solid performance in our chipset division. We recently signed a new long-term global patent license agreement with Huawei, including across license granting back rights to certain of Huawei's patents.

We also entered into an agreement settling amounts due under the prior license agreement. We were pleased to have successfully reached resolution with Huawei. As Akash will explain later, royalty revenue from Huawei begins in fiscal Q4 and is not included in our fiscal Q3 results. Alex and the QTL team have done an outstanding job in executing over 100 agreements covering 5G and building by a wide margin, the most extensive licensing program in mobile.

This is a tribute to our track record of driving important and fundamental innovation. With the signing of the Huawei agreement, we are now entering a period in which we have multi-year license agreements with every major handset OEM. Our entire company has executed very well despite the ongoing impact of COVID-19, while maintaining the safety of our employees as our highest priority.

We continue to advance our product and technology roadmaps, support our customers and meet a very complex set of R&D and supply chain requirements. And the current environment has not impeded the pace of our innovation. In the last four months of work-from-home, invention disclosures are up over 30%,