Composition of Certain Financial Statement Items

3 Months Ended

Dec. 28, 2025

Condensed Financial Information Disclosure [Abstract]

Composition of Certain Financial Statement Items

Note 2. Composition of Certain Financial Statement Items

Inventories (in millions)
	December 28, 2025		September 28, 2025
Raw materials	$	352	$	336
Work-in-process	4,026		3,985
Finished goods	2,287		2,205
	$	6,665	$	6,526

We have multi-year capacity purchase commitments with certain suppliers of our integrated circuit products. Total advance payments related to multi-year capacity purchase commitments recorded on our condensed consolidated balance sheets at December 28, 2025 and September 28, 2025 were $1.2 billion and $1.9 billion, respectively, of which $831 million and $1.5 billion were recorded in other current assets, respectively, and $331 million and $357 million were recorded in other assets, respectively.

Other Current Liabilities (in millions)
	December 28, 2025		September 28, 2025
Customer incentives and other customer-related liabilities	$	2,639	$	1,948
Income taxes payable	1,245		1,007
Other	1,345		1,201
	$	5,229	$	4,156

Interest Rate Swaps. At December 28, 2025 and September 28, 2025, we had outstanding interest rate swaps with an aggregate notional amount of $5.0 billion and $3.6 billion, respectively, 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.

Revenues. We disaggregate our revenues by segment (Note 6), by products and services (as presented on our condensed consolidated statements 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 Ended
	December 28, 2025		December 29, 2024
Handsets (1)	$	7,824	$	7,574
Automotive (2)	1,101		961
IoT (internet of things) (3)	1,688		1,549
Total QCT revenues	$	10,613	$	10,084

(1) Includes revenues from products sold for use in mobile handsets.

(2) Includes revenues from products sold for use in automobiles, including connectivity, digital cockpit and advanced driver assistance systems (ADAS) and automated driving (AD).

(3) Primarily includes products sold for use in the following industries and applications: consumer (including personal computers (PCs), extended reality (XR) and other personal computing devices), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, tracking and logistics and utilities).

Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods generally include certain sales-based royalty revenues related to system software, certain amounts related to customer incentives and licensing revenues recognized related to devices sold in prior periods (including revenues resulting from certain settlements and adjustments to prior period royalty estimates, which include the impact of the reporting by our licensees of actual royalties due) and were as follows (in millions):

	Three Months Ended
	December 28, 2025		December 29, 2024
Revenues recognized from previously satisfied performance obligations	$	206	$	263

Remaining performance obligations, which are primarily included in unearned revenues (as presented on our condensed consolidated balance sheets), 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 patent license agreements with key OEMs are generally long-term, with remaining terms expiring between fiscal 2027 and 2031. We generally seek to renew or renegotiate such license agreements prior to expiration.

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 periods presented are impacted by the timing of customer/licensee 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 Ended
	December 28, 2025		December 29, 2024
Customer/licensee (x)	25	%	24	%
Customer/licensee (y)	16		15
Customer/licensee (z)	11		14

Investment and Other Income, Net (in millions)
	Three Months Ended
	December 28, 2025		December 29, 2024
Interest and dividend income	$	136	$	169
Net (losses) gains on marketable securities	(55)		19
Net gains on other investments	210		30
Net gains on deferred compensation plan assets	43		15
Impairment losses on other investments	(12)		(24)
Other	28		34
	$	350	$	243