Broadcom revenue jumps 48% on AI chip demand

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• AVGO

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The semiconductor and infrastructure-software provider Broadcom (AVGO) posted a 48% year-over-year increase in revenue to $22.2 billion in its fiscal second quarter, extending a growth streak fueled by artificial-intelligence chip demand [1][2][3][4][5]. The result marked an acceleration from 29% growth in the prior quarter and 20% in the year-ago period, reflecting the company’s deepening exposure to the AI build-out.

Quarterly non-GAAP earnings rose 54% to $2.44 a share, outpacing the 28% increase in the January quarter and the 44% gain a year earlier [1][2][3][5]. Adjusted EBITDA margin widened to 69%, up one percentage point sequentially and two points year-over-year, as operating leverage offset higher costs [1][2][3][5].

The semiconductor-solutions segment led the advance, with revenue surging 79% to $15.0 billion [1][2][3][4][5]. Within that, AI semiconductor sales reached $10.8 billion, up 143% from the year-ago quarter and 29% from the prior quarter [1][3][5]. Management attributed the strength to hyperscale deployments and enterprise adoption of custom accelerators.

Infrastructure-software revenue grew 9% to $7.2 billion, decelerating from 25% growth in the year-ago quarter and 1% in the prior quarter [1][2][3][4][5]. The company said the slowdown stemmed from moderating license renewals in its enterprise-security portfolio, while subscription revenue continued to expand.

Free cash flow rose 60% to $10.3 billion, lifting the margin to 46% [1][2][3][5]. Cash and cash equivalents climbed to $19.6 billion at quarter-end, up from $14.2 billion three months earlier [1][2][6][7]. Trade receivables increased to $10.8 billion, and inventory rose to $4.3 billion, reflecting higher shipments and planned build-ahead for expected demand [6][7].

Broadcom raised its fiscal third-quarter revenue guidance to $29.4 billion, implying 84% year-over-year growth, up from the $22.0 billion it had projected for the second quarter [1][2][3]. AI semiconductor revenue is now expected to exceed $16.0 billion, more than triple the year-ago level [1][3]. Non-GAAP operating margin guidance remained at 67%, unchanged from the second quarter [1][2].

The company also announced it had repurchased $7.8 billion of stock in the first quarter under a new $10 billion authorization [3][4]. The quarterly dividend was raised 10% to $0.65 a share in the prior quarter, marking the fifteenth consecutive annual increase [8][9].

Citations

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