QUALCOMM Incorporated reports 294% EBITDA growth in 2019 and 6.8% Revenue growth
11/06/2019 • About QUALCOMM Incorporated (
$QCOM) • By InTwits
QUALCOMM Incorporated reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 37.4% in FY2019, 10.1% in FY2018, 18.3% in FY2017, 33.6% in FY2016, 27.6% in FY2015
- QUALCOMM Incorporated has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%.
- In the last 5 years the company invested considerably less than D&A: $3,894m vs. $5,664m
- The company has highly profitable business model: ROIC is 38.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
QUALCOMM Incorporated's Revenue increased on 6.8%. Revenue growth showed slowdown in FY19Q4 - it was -17.0% YoY. During the last 5 years Revenue growth bottomed in FY2016 at -6.8% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 27.2 pp from 10.1% to 37.4% in FY2019.
Gross Margin increased on 9.6 pp from 54.9% to 64.6% in FY2019. During the last 5 years Gross Margin bottomed in FY2018 at 54.9%. SG&A as a % of Revenue decreased on 4.1 pp from 13.1% to 9.0% in FY2019. During the last 5 years SG&A as a % of Revenue topped in FY2018 at 13.1%.
Net Income margin jumped on 39.5 pp from -21.4% to 18.1% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 3.7%. CAPEX/Revenue increased slightly on 1.4 pp from 2.3% in FY2016 to 3.7% in FY2019. It's average level of CAPEX/Revenue for the last three years was 3.4%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2016 at 2.3% and was growing since that time.
Return on investment
The company operates at high and attractive ROIC (38.0%) and ROE (153.5%). ROIC jumped on 35.8 pp from 2.2% to 38.0% in FY2019. ROE jumped on 184 pp from -30.8% to 153% in FY2019.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is 1.8x. Net Debt / EBITDA dropped on 1.5x from 2.0x to 0.5x in FY2019. Debt decreased on 2.7% while cash increased slightly on 0.53%.
QUALCOMM Incorporated has no short term refinancing risk: cash is higher than short term debt (474.3%).
Valuation and dividends
QUALCOMM Incorporated's trades at EV/EBITDA 11.8x and P/E 23.4x.
Financial and operational results
FY ended 09/29/2019
QUALCOMM Incorporated ($QCOM) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 25,281 | 23,554 | 22,291 | 22,732 | 24,273 | 6.8% |
| Gross Profit | 14,903 | 13,805 | 12,499 | 12,488 | 15,674 | 25.5% |
| SG&A | 2,344 | 2,385 | 2,658 | 2,986 | 2,195 | -26.5% |
| EBITDA | 6,990 | 7,923 | 4,075 | 2,303 | 9,068 | 293.7% |
| EBIT | 5,776 | 6,495 | 2,614 | 742 | | |
| Interest expence | 104 | 297 | 494 | 768 | | |
| Tax | 1,219 | 1,131 | 555 | 5,377 | | |
| Net Income | 5,271 | 5,705 | 2,466 | -4,864 | 4,386 | |
| Stock Based Compensation | 923 | 935 | 914 | 883 | | |
Balance Sheet
|
|---|
| Cash | 7,560 | 5,946 | 35,029 | 11,777 | 11,839 | 0.5% |
| Accounts Receivable | 1,964 | 2,219 | 3,632 | 2,904 | | |
| Inventory | 1,492 | 1,556 | 2,035 | 1,693 | | |
| Accounts Payable | 1,300 | 1,858 | 1,971 | 1,825 | | |
| Short Term Debt | 1,000 | 1,749 | 2,495 | 1,005 | 2,496 | 148.4% |
| Long Term Debt | 9,969 | 10,008 | 19,398 | 15,365 | 13,437 | -12.5% |
Cash flow
|
|---|
| Capex | 994 | 539 | 690 | 784 | 887 | 13.1% |
| Dividends | 2,880 | 2,990 | 3,252 | 3,466 | | |
| Acquisitions | 3,019 | 812 | 1,544 | 326 | | |
Ratios
|
|---|
| Revenue growth | -4.6% | -6.8% | -5.4% | 2.0% | 6.8% | |
| EBITDA growth | -19.7% | 13.3% | -48.6% | -43.5% | 293.7% | |
|
|---|
| Gross Margin | 58.9% | 58.6% | 56.1% | 54.9% | 64.6% | 9.6% |
| EBITDA Margin | 27.6% | 33.6% | 18.3% | 10.1% | 37.4% | 27.2% |
| EBIT Margin | 22.8% | 27.6% | 11.7% | 3.3% | |
| SG&A, % of revenue | 9.3% | 10.1% | 11.9% | 13.1% | 9.0% | -4.1% |
| SBC, % of revenue | 3.7% | 4.0% | 4.1% | 3.9% | |
| Net Income Margin | 20.8% | 24.2% | 11.1% | -21.4% | 18.1% | 39.5% |
| CAPEX, % of revenue | 3.9% | 2.3% | 3.1% | 3.4% | 3.7% | 0.2% |
|
|---|
| ROIC | 14.6% | 15.8% | 5.7% | 2.2% | 38.0% | 35.8% |
| ROE | 14.9% | 18.1% | 7.9% | -30.8% | 153.5% | 184.3% |
| Net Debt/EBITDA | 0.5x | 0.7x | -3.2x | 2.0x | 0.5x | -1.5x |
| Interest expence / Average debt | 0.9% | 2.6% | 2.9% | 4.0% | | |
People
|
|---|
| Insider ownership | 0.1% | 0.1% | 0.1% | 0.1% | | |
| Employees | 33,000 | 30,500 | 33,800 | 35,400 | | |
| Revenue/Employee, th. $ | 766 | 772 | 659 | 642 | | |
QUALCOMM Incorporated ($QCOM) key quoterly financial indicators
| mln. $ | FY19Q1 | FY19Q2 | FY19Q3 | FY19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4,842 | 4,982 | 9,635 | 4,814 | | -19.8% | -4.6% | 72.1% | -17.0% |
| EBITDA | 1,063 | 1,285 | 5,670 | 1,051 | | 196.1% | 63.1% | 323.5% | |
| Net Income | 1,068 | 663 | 2,149 | 506 | | | 100.9% | 76.3% | |
Balance Sheet
|
|---|
| Cash | 10,066 | 10,135 | 13,923 | 11,839 | | -69.8% | -73.3% | -60.9% | 0.5% |
| Short Term Debt | 998 | 998 | 3,000 | 2,496 | | -71.2% | -73.3% | -57.8% | 148.4% |
| Long Term Debt | 15,388 | 15,405 | 13,426 | 13,437 | | -20.6% | -20.4% | -12.7% | -12.5% |
Ratios
|
|---|
| Gross Margin | 55.0% | 56.0% | 78.0% | 56.0% | | -0.9% | -1.1% | 22.5% | 5.1% |
| EBITDA Margin | 22.0% | 25.8% | 58.8% | 21.8% | | 16.0% | 10.7% | 34.9% | 26.3% |
| Net Income Margin | 22.1% | 13.3% | 22.3% | 10.5% | | 121.2% | 7.0% | 0.5% | 19.0% |
Peers in Semiconductors
Below you can find QUALCOMM Incorporated benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| NanoFlex Power Corp ($OPVS) | | | 72.5% | 354.8% | |
| MoSys, Inc. ($MOSY) | -18.4% | 37.2% | 46.8% | 87.7% | |
| SMART Global Holdings, Inc. ($SGH) | | -16.9% | 42.5% | 69.3% | |
| Micron Technology, Inc. ($MU) | | | 63.9% | 49.5% | -23.0% |
| Adesto Technologies Corporation ($IOTS) | 4.3% | 1.6% | 27.6% | 48.8% | |
| |
|---|
| Median (68 companies) | 10.6% | 6.1% | 11.0% | 4.9% | -12.7% |
|---|
| QUALCOMM Incorporated ($QCOM) | | -6.8% | -5.4% | 2.0% | 6.8% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| CEVA, Inc. ($CEVA) | 90.9% | 91.6% | 92.1% | 89.8% | |
| NVE Corporation ($NVEC) | 80.3% | 76.1% | 78.5% | 79.0% | |
| Rambus, Inc. ($RMBS) | 84.7% | 80.1% | 79.9% | 76.8% | |
| Universal Display Corporation ($OLED) | 64.2% | 83.9% | 80.8% | 75.5% | |
| Intermolecular, Inc. ($IMI) | 57.4% | 66.5% | 67.5% | 70.3% | |
| |
|---|
| Median (67 companies) | 47.3% | 47.2% | 48.6% | 50.2% | 45.7% |
|---|
| QUALCOMM Incorporated ($QCOM) | 58.9% | 58.6% | 56.1% | 54.9% | 64.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| NVE Corporation ($NVEC) | 66.0% | 61.8% | 65.6% | 65.1% | |
| Micron Technology, Inc. ($MU) | | 25.4% | 47.9% | 65.0% | 54.7% |
| NXP Semiconductors N.V. ($NXPI) | 41.5% | 21.6% | 46.2% | 49.9% | |
| Texas Instruments Incorporated ($TXN) | 42.0% | 43.5% | 46.7% | 48.6% | |
| Intel Corp ($INTC) | 41.0% | 35.2% | 41.7% | 45.7% | |
| |
|---|
| Median (68 companies) | 10.6% | 9.2% | 10.7% | 9.3% | 0.9% |
|---|
| QUALCOMM Incorporated ($QCOM) | 27.6% | 33.6% | 18.3% | 10.1% | 37.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 6.6% | 6.5% | 12.2% | 42.2% | |
| Renesola Ltd. ($SOL) | 0.0% | 0.0% | 78.0% | 41.7% | |
| First Solar, Inc. ($FSLR) | 4.0% | 7.9% | 17.5% | 33.0% | |
| Sigma Designs Inc ($SIGM) | 6.5% | 6.2% | 14.1% | 29.3% | |
| Micron Technology, Inc. ($MU) | | 46.9% | 23.3% | 29.2% | 41.8% |
| |
|---|
| Median (68 companies) | 4.0% | 3.7% | 4.7% | 4.4% | 14.9% |
|---|
| QUALCOMM Incorporated ($QCOM) | 3.9% | 2.3% | 3.1% | 3.4% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | 2.5% | 21.5% | 51.7% | |
| Texas Instruments Incorporated ($TXN) | 29.8% | 34.9% | 43.1% | 47.5% | |
| Micron Technology, Inc. ($MU) | | 0.8% | 21.5% | 42.9% | 18.5% |
| Applied Materials Inc ($AMAT) | 15.2% | 19.0% | 31.2% | 36.4% | |
| NVIDIA Corporation ($NVDA) | 13.3% | 13.1% | 27.3% | 35.3% | |
| |
|---|
| Median (76 companies) | 3.6% | 1.4% | 3.2% | 3.0% | -2.9% |
|---|
| QUALCOMM Incorporated ($QCOM) | 14.6% | 15.8% | 5.7% | 2.2% | 38.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.3x | 3.0x | 7.2x | 98.6x | |
| Inphi Corporation ($IPHI) | -6.4x | 4.5x | 33.7x | 32.2x | |
| JinkoSolar Holding Company Limited ($JKS) | 3.3x | 4.1x | 11.0x | 8.2x | |
| Lattice Semiconductor Corporation ($LSCC) | | 6.5x | 19.0x | 3.9x | |
| Renesola Ltd. ($SOL) | 35.0x | 123.6x | 2.3x | 3.3x | |
| |
|---|
| Median (45 companies) | -0.5x | -0.0x | 0.4x | 0.3x | -0.1x |
|---|
| QUALCOMM Incorporated ($QCOM) | 0.5x | 0.7x | -3.2x | 2.0x | 0.5x |
