A Percentage of Somebody Else's PriceNarrow moat
Qualcomm (QCOM) — moat facet
The toll rose 5% across two years in which Qualcomm's revenue rose 24%. It did not shrink. It did not grow either.
The royalty is a percentage of a phone's selling price, which makes Qualcomm a shareholder in the smartphone industry's pricing power rather than in its own.
That has been a good place to stand. Handset prices have risen for a decade as the mix shifted toward premium devices, and a percentage of a rising number rises without anyone doing anything. It also means QTL's revenue is set by variables Qualcomm does not control: how many phones the world buys, at what prices, from which manufacturers.
Look at what that produced recently. QTL licensing revenue was $5,306 million in fiscal 2023, $5,572 million in 2024 and $5,582 million in 2025 — essentially flat across three years in which Qualcomm's total revenue rose 24%.1 The toll did not shrink. It did not grow either.
The base is also negotiable at the edges. Royalties are typically capped at a device price ceiling, so the premium tier — the phones whose prices actually rose — contributes less than proportionally. And regulatory settlements have moved the base before.
A flat $5.6 billion at a 72% margin is an extraordinary asset. It is not a growth asset, and any argument that licensing carries the company through the handset decline has to reckon with three years of it standing still.
Flat licensing revenue against a smartphone industry whose value rose means Qualcomm's share of handset economics is falling. Three years of $5.6 billion is a toll shrinking in real terms.
$5,306M in fiscal 2023, $5,572M in 2024, $5,582M in 2025, against total company revenue up 24% over the same period. The toll is not shrinking and it is not growing. Anyone arguing that licensing carries Qualcomm through the handset decline needs this number to move, and it has not moved since 2023.
Source: Qualcomm Form 10-K, FY2025 ↗- ReportedQTL licensing revenue was $5,306 million in fiscal 2023, $5,572 million in 2024 and $5,582 million in 2025 — essentially flat across three years in which Qualcomm's total revenue rose 24%.Qualcomm Incorporated, Form 10-K FY2025 — Item 7, Management's Discussion and Analysis, and the reportable-segment note. QCT revenues $38,367M (2024 $33,196M, 2023 $30,382M) with EBT of $11,670M ($9,527M, $7,924M) at 30% of revenues (29%, 26%); QCT revenue streams handsets $27,793M ($24,863M, $22,570M), automotive $3,957M ($2,910M, $1,872M) and IoT $6,617M ($5,423M, $5,940M). QTL revenues $5,582M ($5,572M, $5,306M) against total costs and expenses of $1,539M ($1,545M, $1,678M), for EBT of $4,043M ($4,027M, $3,628M) — 72% of revenues in each of the three years. Reportable-segment revenues $43,949M, $38,786M and $35,716M against consolidated revenues of $44,284M, $38,962M and $35,820M. During the second quarter of fiscal 2025 Qualcomm executed final agreements for new long-term licensing arrangements. — FY2025 · publ. 2025-11-05 · source ↗