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Composition of Certain Financial Statement Items | 3 Months Ended
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Dec. 26, 2021
Condensed Financial Information Disclosure [Abstract] |
Composition of Certain Financial Statement Items | Composition of Certain Financial Statement Items
Inventories (in millions) |  |  |
| December 26, 2021 |  | September 26, 2021
Raw materials | $ | 243 |  |  | $ | 267 |
Work-in-process | 2,125 |  |  | 1,475 |
Finished goods | 1,493 |  |  | 1,486 |
| $ | 3,861 |  |  | $ | 3,228 |
Revenues. We disaggregate our revenues by segment (Note 6), by products and services (as presented on our condensed consolidated statement of operations), and for our QCT (Qualcomm CDMA Technologies) segment, by revenue stream, which is based on 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 26, 2021 |  | December 27, 2020 |  |  |  |
Handsets (1) |  |  |  |  |  |  |  |  | $ | 5,983 |  |  | $ | 4,216 |  |  |  |  |
RFFE (2) |  |  |  |  |  |  |  |  | 1,132 |  |  | 1,061 |  |  |  |  |
Automotive (3) |  |  |  |  |  |  |  |  | 256 |  |  | 212 |  |  |  |  |
IoT (internet of things) (4) |  |  |  |  |  |  |  |  | 1,476 |  |  | 1,044 |  |  |  |  |
Total QCT revenues |  |  |  |  |  |  |  |  | $ | 8,847 |  |  | $ | 6,533 |  |  |  |  |
(1) Includes revenues from products sold for use in mobile handsets, excluding RFFE (radio frequency front-end) components. (2) Includes all revenues from sales of 4G, 5G sub-6 and 5G millimeter wave RFFE products (a substantial portion of which are sold for use in mobile handsets) and excludes radio frequency transceiver components. (3) Includes revenues from products sold for use in automobiles, including telematics, connectivity and digital cockpit. (4) Primarily includes products sold for use in the following industries and applications: consumer (including computing, voice and music and XR), edge networking (including mobile broadband and wireless access points) and industrial (including handhelds, retail, transportation and logistics and utilities). Revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were as follows (in millions):
| Three Months Ended
| December 26, 2021 (1) |  | December 27, 2020 (2)
Revenues recognized from previously satisfied performance obligations | $ | 242 |  |  | $ | 110 |
(1) Primarily related to certain QCT sales-based royalty revenues related to system software, QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives. (2) Primarily related to QTL royalty revenues recognized related to devices sold in prior periods (including adjustments to prior period royalty estimates, which includes the impact of the reporting by our licensees of actual royalties due) and certain QCT customer incentives. Unearned revenues (which are considered contract liabilities) consist primarily of license fees for intellectual property with continuing performance obligations. In the three months ended December 26, 2021 and December 27, 2020, we recognized revenues of $187 million and $185 million, respectively, that were recorded as unearned revenues at September 26, 2021 and September 27, 2020, respectively. Remaining performance obligations, substantially all of which are included in unearned revenues, 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 remaining performance obligations are primarily comprised of certain customer contracts for which QTL received license fees upfront. At December 26, 2021, we had $969 million of remaining performance obligations, of which $508 million, $332 million, $94 million, $33 million and $2 million was expected to be recognized as revenues for the remainder of fiscal 2022 and each of the subsequent four years from fiscal 2023 through 2026, respectively, and no amounts expected thereafter. 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 interim periods presented are impacted by the timing of customer/licensees 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 26, 2021 |  | December 27, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer/licensee (x) | 26 | % |  | 34 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer/licensee (y) | 19 |  |  | 13 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer/licensee (z) | * |  | 10 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
* Less than 10%
Investment and Other Income, Net (in millions) |  |  |  |  |  |
| Three Months Ended |  |
| December 26, 2021 |  | December 27, 2020 |  |  |  |
Interest and dividend income | $ | 17 |  |  | $ | 21 |  |  |  |  |
Net gains on marketable securities | 17 |  |  | 118 |  |  |  |  |
Net gains on other investments | 93 |  |  | 34 |  |  |  |  |
Net gains on deferred compensation plan assets | 13 |  |  | 54 |  |  |  |  |
Impairment losses on other investments | (1) |  |  | (1) |  |  |  |  |
Net (losses) gains on derivative investments | (13) |  |  | 9 |  |  |  |  |
Equity in net earnings (losses) of investees | 7 |  |  | (2) |  |  |  |  |
Net gains (losses) on foreign currency transactions | 7 |  |  | (14) |  |  |  |  |
| $ | 140 |  |  | $ | 219 |  |  |  |  |

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