|So, if we back out SBC from the higher GAAP figures we get basic R&D figures, not inflated by BRCM’s much higher percentagewise SBC.... double that of QCOM’s.|
If I’m interpreting this correctly---- 24% of BRCM’s GAAP R&D is composed of share based compensation, not actual hands-on work.
The share based compensation expense for Broadcom truly is insane and brings into question their ability to translate their cash flow into shareholder gains.
However, I think we both know that the costs for SBC are real. Qualcomm's SBC has cost shareholders billions over the last decade.
In either case, QCOM out spends BRCM on R&D by about 5 percentage points.
These are the last seven years of Q's R&D spending as a percentage of revenues.
20.02% 20.48% 19.98% 20.68% 21.72% 21.87% 24.61%
The 2017 number is pretty clearly an outlier. I dont think anybody expects Q to spend 24.6% of their revenues on R&D going forward. They have had larger costs this year while revenues were depressed by well over a billion dollars.
I cant vouch that Broadcom will continue to spend 19% to 20% going forward. Their acquisitions complicate any historical analysis. However, the numbers support the idea that Broadcom doesnt really spend much less than Q on R&D as a percentage of revenue.
I didnt expect these numbers. I went into my analysis thinking that there would be a large gap and was surprised by the results.