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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 58.39+0.1%Jul 13 8:00 PM EDTNews

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To: Jim Mullens who wrote (141200)1/3/2018 1:49:56 PM
From: slacker7111 Recommendation

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Lance Bredvold

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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.

Slacker
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