QUALCOMM Inc (NASDAQ:QCOM) reported third-quarter results at the end of last month that came in above analyst expectations, led by strength in automotive and IoT.
Nakul Duggal, Qualcomm's senior vice president and general manager of automotive, dove deeper into what's driving the company's success in the automotive sector Monday on Benzinga's "Stock Market Movers" show.
"The automotive industry is going through a transformation like never before," Duggal said.
"Fundamentally what is happening is as automotive companies are becoming technology companies [is] they are looking to technology partners like ourselves."
What's Driving The Growth? Qualcomm continues to diversify its revenue streams and automotive is a big part of said efforts. The company generated $350 million in automotive revenue last quarter, representing nearly 40% growth year-over-year.
Duggal tells Benzinga that Qualcomm has been consistently focused on building its automotive segment for the last several years, which has helped the company become a leader in telematics and infotainment. Qualcomm is also focused on ramping up assisted and automated driving capabilities, he added.
"So all of those three categories coming together have contributed to the great results that we shared," Duggal said.
Qualcomm noted that it has $19 billion in its automotive design-win pipeline when it reported third-quarter results. The figure is based on continued traction and design-wins across global automakers for its Snapdragon Digital Chassis technology.
Duggal told Benzinga that Qualcomm is working much more closely with automakers than it did in the past.
"We are actually working directly with automakers to help define what their next-generation platforms look like ... and that's where our Snapdragon Digital Chassis comes in," he said.
Vehicles need to be connected to their surrounding environments at all times, whether it be for charging, to the cloud or for connectivity inside the vehicle, Duggal said.
"[Snapdragon] allows automakers to be able to add new functionality, update systems [and] upgrade software," he said.
He noted that Qualcomm doesn't announce specific partnerships until programs are closer to production, but he mentioned Volkswagen AG (OTC:VWAGY), Stellantis N.V. (NYSE:STLA) and Bayerische Motoren Werke AG (OTC:BMWYY).
"We really work with every major automaker globally," Duggal said.
See Also: Qualcomm Earns Legal Reprieve From EU Regulators Over Antitrust Ruling With An Apple Link
What's Next: The company's Automotive Investor Day is set to take place on Sept. 22. Qualcomm CFO Akash Palkhiwala previously told Benzinga the company will further explain at the event why it has an opportunity to "win big in this area."
"We hope to actually share a whole lot more detail about many more customers and partnerships that we are building," Duggal said.
When asked if investors should expect product demonstrations, announcements or new partnerships at the Automotive Investor Day, Qualcomm's Duggal said: "I think they will see a little bit of all of the above."
QCOM Price Action: Qualcomm has a 52-week high of $193.58 and a 52-week low of $118.22.
The stock was down 0.36% at $137.88 at press time, according to Benzinga Pro.
