QTL LicensingWide moat

Qualcomm (QCOM) — moat facet

A 72%-margin royalty on phones whoever made the chip, and it has not grown in two years.

Licensing is Qualcomm's toll. QTL had revenue of $5,582 million in fiscal 2025 and earnings before tax of $4,043 million, a 72% margin 1, against 30% for the chip business. It is about 13% of revenue and roughly a quarter of segment profit 2.

QTL licensing revenue and pre-tax margin$6,412m, 80%FY2017$4,591m, 64%FY2019$6,358m, 73%FY2022$5,306m, 68%FY2023$5,582m, 72%FY2025Qualcomm Forms 10-K FY2019, FY2022, FY2024, FY2025
The toll fell 28% in the licensing disputes and has never regained its fiscal 2017 level.

What is priced is the phone, not the part. Qualcomm licenses its patents essential to cellular standards to device makers and collects a royalty on the devices they sell, whoever made the modem inside. That is why the Apple transition hits the chip business much harder than this line: Apple still owes royalties on iPhones with its own modem.

The history shows how exposed a toll is to a licensee who stops paying. Licensing revenue was $6,412 million in fiscal 2017, fell to $5,042 million in fiscal 2018 and $4,591 million in fiscal 2019, and its margin went from 80% to 64% 3, the years of the licensing disputes. After the settlements it recovered to $6,320 million in fiscal 2021 and $6,358 million in fiscal 2022 4. It fell to $5,306 million in fiscal 2023, with a 68% margin 5, as handset sales dropped, and has been flat since: $5,572 million in 2024 and $5,582 million in 2025 6.

Two licensees have moved the line recently. In fiscal 2025 Qualcomm signed new long-term licences with two key Chinese phone makers whose terms had expired, and comprehensive 4G and 5G licences with Transsion, ending the litigation between them; and from the second quarter of fiscal 2025 QTL revenue no longer included royalties from Huawei, whose licence expired 7.

The latest quarter was slightly down. QTL revenue was $1,278 million against $1,318 million and its margin 69% against 71% 8. The filing attributes the fall to $67 million lower estimated sales of cellular products and $25 million less recognised for devices sold in earlier periods, partly offset by $59 million from higher revenue per unit on favourable mix 9.

The toll is holding and not growing. It rises with phone prices and the 5G share of devices, and falls with phone volumes and any licensee that stops paying. The figure that would change the verdict is QTL revenue for fiscal 2026: below $5.5 billion, and a second licensee dispute or a shrinking handset market is eating into it.

Moat trajectory: Holding steady

Licensing revenue was $5.6bn in both fiscal 2024 and 2025 and fell 3% in the June 2026 quarter.

The number that tests this moat
Reported
QTL licensing revenue, nine months
$4,252M in fiscal 2026 to date, +2% on $4,172M

A full year below $5.5bn would mean a licensee dispute or a shrinking handset market is eating into the toll.

Source: Qualcomm Form 10-Q, Q3 fiscal 2026 ↗
References
  1. ReportedQTL had revenue of $5,582 million in fiscal 2025 and earnings before tax of $4,043 million, a 72% margin , against 30% for the chip business.
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  2. Moat Explorer calcIt is about 13% of revenue and roughly a quarter of segment profit .
    Moat Explorer calculation from Qualcomm's Forms 10-K and 10-Q: shares of revenue and segment profit, growth rates — FY2021 to Q3 FY2026 · publ. 2026-09-23 · source ↗
  3. ReportedLicensing revenue was $6,412 million in fiscal 2017, fell to $5,042 million in fiscal 2018 and $4,591 million in fiscal 2019, and its margin went from 80% to 64% , the years of the licensing disputes.
    Qualcomm Form 10-K FY2019 - QTL licensing revenue and EBT for fiscal 2017-2019 — FY2017-FY2019 · publ. November 2019 · source ↗
  4. ReportedAfter the settlements it recovered to $6,320 million in fiscal 2021 and $6,358 million in fiscal 2022 .
    Qualcomm Form 10-K FY2022 - QCT revenue by handsets, RFFE, automotive and IoT for fiscal 2021-2022 on the presentation used then; QTL revenue and EBT — FY2021-FY2022 · publ. November 2022 · source ↗
  5. ReportedIt fell to $5,306 million in fiscal 2023, with a 68% margin , as handset sales dropped, and has been flat since: $5,572 million in 2024 and $5,582 million in 2025 .
    Qualcomm Form 10-K FY2024 - QCT revenue streams and EBT for fiscal 2023-2024; QTL revenue and EBT for fiscal 2023-2024 — FY2023-FY2024 · publ. November 2024 · source ↗
  6. ReportedIt fell to $5,306 million in fiscal 2023, with a 68% margin , as handset sales dropped, and has been flat since: $5,572 million in 2024 and $5,582 million in 2025 .
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  7. ReportedIn fiscal 2025 Qualcomm signed new long-term licences with two key Chinese phone makers whose terms had expired, and comprehensive 4G and 5G licences with Transsion, ending the litigation between them; and from the second quarter of fiscal 2025 QTL revenue no longer included royalties from Huawei, whose licence expired .
    Qualcomm Form 10-K FY2025 - QCT revenue streams (handsets, automotive, IoT) and EBT, QTL revenue and EBT for fiscal 2024-2025; revenue stream definitions; segment reconciliation; customers at 10% or more (Apple, Samsung, Xiaomi); licensing agreements with two Chinese OEMs and Transsion; Huawei licence expiry — FY2024-FY2025 · publ. 5 November 2025 · source ↗
  8. ReportedQTL revenue was $1,278 million against $1,318 million and its margin 69% against 71% .
    Qualcomm Form 10-Q, quarter ended 28 June 2026 - QCT revenue streams, QTL revenue and EBT, and the drivers of each for the quarter and nine months — Q3 FY2026 · publ. 29 July 2026 · source ↗
  9. ReportedThe filing attributes the fall to $67 million lower estimated sales of cellular products and $25 million less recognised for devices sold in earlier periods, partly offset by $59 million from higher revenue per unit on favourable mix .
    Qualcomm Form 10-Q, quarter ended 28 June 2026 - QCT revenue streams, QTL revenue and EBT, and the drivers of each for the quarter and nine months — Q3 FY2026 · publ. 29 July 2026 · source ↗
Sources
Generated September 23, 2026