Broadcom Inc. Earnings Recaps
Broadcom shares fell 2.7% after earnings, a roughly flat reaction despite record revenue and sharply higher AI sales. The transcript points to no clear negative surprise: management raised its fiscal 2026 AI revenue outlook, while its more distant customer deployment plans remain forward-looking.
Key takeaways
- Q3 revenue was $29.6 billion, up 86% year over year; operating income grew 92%, and operating margin reached a record 68% of revenue.
- AI semiconductor revenue was $16.7 billion, up 221% year over year and 54% sequentially; XPU shipments rose more than 3.5x year over year.
- For Q4, Broadcom expects revenue from AI to reach $21.7 billion, up 236% year over year, with both XPU and AI networking revenue expected to triple year over year.
- Management expects fiscal 2026 AI revenue of $58 billion, up 186% year over year and above its prior $56 billion outlook.
- Longer-term customer plans include Anthropic deploying 5 gigawatts of TPU v8i in 2027 and OpenAI deploying 1.3 gigawatts of Jalapeno in 2027; these are management’s expectations, not realized results.
Shares tumbled 13% as investors were disappointed by cautious commentary on the software segment and a tempered outlook for AI semiconductor scaling despite record revenue; the sharp multiple contraction suggests concern over margin sustainability and execution risks ahead.
Key takeaways
- Q2 total revenue hit a record $22.2 billion, driven by AI semiconductor revenue of $10.8 billion, up 143% year-over-year, with strong bookings over $30 billion signaling solid demand.
- Semiconductor segment revenue grew 79% YoY, with networking and XPUs contributing significantly, though non-AI semiconductors showed modest 6% growth amid seasonal wireless declines.
- Infrastructure software revenue rose 9% YoY to $7.2 billion, meeting guidance but lacking impressive acceleration, with ARR growth of 17%; management forecasts only 31% software growth in Q3.
- Operating margins remained elevated at 67% (adjusted EBITDA 69%), but concerns linger about sustaining such exceptionally high margins as AI investments scale rapidly.
- Q3 semiconductor revenue guidance of $20.5 billion (up 124%) and AI semiconductor revenue acceleration to $16 billion are positive but may be offset by cautious tone on future execution and AI software adoption risks.
Broadcom delivered exceptional first-quarter results in fiscal 2026, with record revenue of $19.3 billion, driven by explosive growth in AI semiconductor sales, positioning the company for continued momentum ahead.
Key takeaways
- Total revenue increased 29% year-on-year, surpassing guidance, with operating leverage reflected in a record adjusted EBITDA of $13.1 billion (68% of revenue).
- AI semiconductor revenue surged 106% year-on-year to $8.4 billion; projected to reach $10.7 billion in Q2 2026, driven by robust customer demand and the ramp-up of custom AI accelerators.
- Infrastructure Software revenue rose 1% year-on-year to $6.8 billion, with VMware's bookings exceeding $9.2 billion and sustaining a 19% annual recurring revenue growth.
- Broadcom is on track for AI revenue exceeding $100 billion in 2027, bolstered by secured supply chains and deep strategic partnerships with key cloud service providers.
- Non-AI semiconductor revenue remained flat at $4.1 billion in Q1, with expectations for modest growth in the upcoming quarter.
Broadcom posted record fourth-quarter revenue of $18 billion, up 28% year-over-year, driven by robust growth in AI semiconductors and infrastructure software, setting the stage for continued expansion into 2026.
Key takeaways
- AI semiconductor revenue surged 74% year over year, contributing $6.5 billion in Q4, while total semiconductor revenue reached $11.1 billion.
- Infrastructure software revenue increased 19% to $6.9 billion, bolstered by strong contract bookings, bringing the total backlog for this segment to $73 billion.
- Anticipating further momentum, Q1 2026 revenue is forecasted at $19.1 billion, with AI revenue expected to double year over year.
- Broadcom's total order backlog now exceeds $162 billion, highlighting significant growth prospects, particularly in AI infrastructure components.
- Adjusted EBITDA for Q4 reached a record $12.12 billion, representing 68% of revenue, outperforming previous guidance.