Broadcom Inc.

Broadcom reported Q3 consolidated revenue of $29.6 billion, up 86% year over year; gross margin was 75% of revenue; operating income was a record $20.1 billion, up 92%; operating margin was 67.9%; and non-GAAP EPS was $3.32, up 96%. Semiconductor Solutions revenue was a record $20.8 billion, up 127%, including AI semiconductor revenue of $16.7 billion, up 221%. Infrastructure software revenue was $8.8 billion, up 29%. Free cash flow was a record $13.7 billion, and cash ended at $24 billion. For Q4, Broadcom guided consolidated revenue to $34.8 billion, up 93% year over year; semiconductor revenue to about $26.1 billion, up 136%; AI semiconductor revenue to $21.7 billion, up over 236%; and infrastructure software revenue to about $8.7 billion, up 24% to 25%. Q4 consolidated gross margin is expected to be about 73%, operating margin about 66%, the non-GAAP tax rate about 16%, non-GAAP diluted share count about 4.94 billion, and capex about $1.4 billion. Management also said fiscal 2026 AI revenue is expected to be $58 billion, above prior guidance of $56 billion, with fiscal 2027 AI revenue around $115 billion and fiscal 2028 around $230 billion.

Hock Tan characterized the quarter as exceptional and repeatedly emphasized that AI demand is still accelerating. He highlighted strong execution across custom accelerators and networking for Google, Anthropic, OpenAI, and Meta, and said the company is building a long runway for XPU and AI networking revenue growth. His tone was confident and forceful, but he also stressed that the outlook is carefully structured around supply, deployment timing, and customer readiness rather than pure demand alone.

Amie Thuener said Q3 revenue, operating income, and EPS all set records, with gross margin at 75% and operating margin at 67.9%. She noted that gross margin benefited less than revenue growth because AI semiconductors were a larger share of the mix, while software margins remained very strong at 94% gross margin and about 84% operating margin. She also cited $13.7 billion of free cash flow, $532 million of capex, $24 billion of cash, $3.1 billion of dividends paid, and $5.6 billion of long-term debt repaid, plus another $1.5 billion paid after quarter end. For Q4, she guided gross margin to about 73%, tax rate to about 16%, shares to about 4.94 billion, and capex to $1.4 billion.

Analysts focused on supply constraints, the realism of Broadcom’s long-term AI revenue trajectory, and whether customer deployments will be bottlenecked by wafers, substrates, HBM, land, power, and shell availability. Hock Tan said the company has secured supply for its $115 billion fiscal 2027 and $230 billion fiscal 2028 AI revenue outlooks, but the timing of chip deployment depends on data center readiness and customer execution. He also said Broadcom will begin deploying its Singapore fab for substrates starting in fiscal 2027, which should help address a key supply bottleneck.