01—Abstract
Summary
Summary of the 10-Q filed June 11, 2025. Cited figures are marked; the original filing is the authoritative source.
Broadcom Inc. reported robust financial results for the fiscal quarter and first two quarters ended May 4, 2025.
Total net revenue surged by 20%a and 22% year-over-year, respectively, driven by strong performance in both its Semiconductor Solutions and Infrastructure Software segments. The Semiconductor Solutions segment saw a 17% increase driven by demand for AI networking solutions, while Infrastructure Software experienced a significant 25% and 35% jump, largely attributed to strong VMware Cloud Foundation (VCF) sales and a transition to subscription models. Gross margin improved to 68% from 62% year-over-year, benefiting from a higher software revenue mix and reduced amortization of acquisition-related intangible assets.
Net income also saw substantial growth, increasing by 139% for the first two quarters. The company continued its capital return program, paying $5,559 millionb in dividends and repurchasing $2,450 million of common stock in the first two quarters. Broadcom maintains a strong liquidity position with $9,472 million in cash and cash equivalents and ample capacity under its revolving credit facility.
The company also announced a new $10 billionc stock repurchase program. Despite the positive results, investors should note the significant customer concentration, with a single distributor accounting for 29% of net revenue, and the ongoing integration risks associated with the VMware acquisition, as highlighted in the risk factors section.
02—Key points
Key Highlights
- Total net revenue for the first two fiscal quarters increased by 22% to $29.92 billion compared to the prior year.
- Operating income for the first two fiscal quarters more than doubled, increasing by 139% to $12.09 billion.
- Gross margin improved significantly to 68% for the first two fiscal quarters, up from 62% in the prior year, driven by a higher software revenue mix.
- The Infrastructure Software segment revenue grew by 35% year-over-year for the first two fiscal quarters, largely due to VMware Cloud Foundation (VCF) performance.
- The Semiconductor Solutions segment revenue increased by 14% year-over-year for the first two fiscal quarters, boosted by demand for AI networking solutions.
- Broadcom returned $5.56 billion to shareholders through dividends and repurchased $2.45 billion in stock during the fiscal quarter ended May 4, 2025.
- The company ended the quarter with $9.47 billion in cash and cash equivalents, indicating a strong liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Broadcom kept $0.33.
- Revenue$15.00B100.0%
- Cost of revenue−$4.81B32.0%
- Gross profit$10.20B68.0%
- Operating costs−$4.37B29.1%
- Operating income$5.83B38.8%
- Interest, other & tax−$864.0M5.8%
- Net income$4.96B33.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed June 11, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $15.00B$12.49B | +20.2% |
| Cost of Revenue | $4.81B$4.71B | +2.0% |
| Gross Profit | $10.20B$7.78B | +31.1% |
| R&D Expenses | $2.69B$2.42B | +11.5% |
| SG&A Expenses | $1.08B$1.28B | −15.2% |
| Operating Expenses | $4.37B$4.81B | −9.2% |
| Operating Income | $5.83B$2.96B | +96.6% |
| Interest Expense | $769.00M$1.05B | −26.6% |
| Net Income | $4.96B$2.12B | +134.1% |
| EPS (Basic) | $1.05$0.46 | +128.3% |
| EPS (Diluted) | $1.03$0.44 | +134.1% |
| Shares Outstanding (Basic) | 4.71B4.64B | +1.3% |
| Shares Outstanding (Diluted) | 4.83B4.80B | +0.6% |
05—Questions
Frequently Asked Questions
What was Broadcom's revenue performance in the reported quarter and year-to-date?
Broadcom reported total net revenue of $15.004 billion for the fiscal quarter ended May 4, 2025, an increase of 20% compared to $12.487 billion in the same quarter last year. For the first two fiscal quarters, total net revenue was $29.920 billion, up 22% from $24.448 billion in the prior year period.
How did the Semiconductor Solutions and Infrastructure Software segments perform?
The Semiconductor Solutions segment revenue increased by 17% to $8.408 billion for the fiscal quarter and by 14% to $16.620 billion for the first two fiscal quarters, driven by strong demand for AI networking solutions. The Infrastructure Software segment saw substantial growth, with revenue up 25% to $6.596 billion for the fiscal quarter and 35% to $13.300 billion for the first two fiscal quarters, primarily due to strong VMware Cloud Foundation (VCF) sales and a transition to subscription models.
What is Broadcom's profitability outlook based on the gross margin and operating income?
Broadcom demonstrated improved profitability, with gross margin increasing to 68% for both the fiscal quarter and the first two fiscal quarters, up from 62% in the comparable prior year periods. This improvement was attributed to a higher software revenue mix and reduced amortization of acquisition-related intangible assets. Operating income for the first two fiscal quarters surged by 139% to $12.089 billion, reflecting strong revenue growth and margin expansion.
How is Broadcom returning capital to shareholders?
Broadcom continues to return capital to shareholders through dividends and share repurchases. In the first two fiscal quarters ended May 4, 2025, the company paid $5.559 billion in dividends and repurchased $2.450 billion of common stock in the fiscal quarter ended May 4, 2025. Additionally, a new $10 billion stock repurchase program was authorized in April 2025.
06—Continue