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Broadcom AVGO reported first-quarter fiscal 2025 non-GAAP earnings of $1.60 per share, surpassing the Zacks Consensus Estimate by 6.67% and increasing 45.5% year over year.
AVGO’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average earnings surprise being 3.57%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net revenues increased 25% year over year to $14.9 billion, surpassing the Zacks Consensus Estimate by 2.03%. Broadcom's revenue growth in the first quarter of fiscal 2025 was driven by a surge in AI-related semiconductor revenues and the expansion of infrastructure software revenues.
Broadcom Inc. Price, Consensus and EPS Surprise
Broadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. Quote
AI revenues benefited from continued investments from hyperscale partners in AI XPUs and connectivity solutions for AI data centers.
AVGO shares jumped more than 12.82% in the after-hours trading to $202.45 following an optimistic second-quarter fiscal 2025 guidance.
AVGO’s Q1 Top-Line Details
Semiconductor solutions revenues (55% of net revenues) totaled $8.2 billion, rising 11% year over year and beating the Zacks Consensus Estimate by 0.56%. The uptick was driven by strong AI semiconductor revenues.
AI-related revenues grew 77% year over year to $4.1 billion, which was a major driver of overall revenue growth. This growth was driven by higher shipments of networking solutions to hyperscalers for AI applications.
Non-AI semiconductor revenues declined 9% sequentially to $4.1 billion.
Broadband revenues, which hit the lowest point in the previous quarter, experienced a strong double-digit sequential rebound in the reported quarter.
Server storage revenues declined in the single digits sequentially in the reported quarter.
Industrial resale revenues saw a double-digit decline in the first quarter of fiscal 2025.
Infrastructure software revenues (45% of net revenues) rose 47% year over year to $6.7 billion, bolstered by the acquisition of VMware and strong demand for infrastructure software solutions.
AVGO’s Operating Details
The non-GAAP gross margin was 79.1%, expanding 370 basis points (bps) year over year.
Research and development, as a percentage of net revenues, decreased 250 bps year over year to 9.6%. Selling, general and administrative expenses also decreased 260 bps to 3.6%.
Adjusted EBITDA increased 40.9% year over year to $10.1 billion. The adjusted EBITDA margin expanded 780 bps on a year-over-year basis to 67.6%.
The non-GAAP operating margin grew 880 bps year over year to 65.9%.