In This Article:
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Total Revenue: $19 billion, up 25% year on year.
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Adjusted EBITDA: $10.1 billion, up 41% year on year.
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Semiconductor Revenue: $8.2 billion, up 11% year on year.
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AI Revenue: $4.1 billion, up 77% year on year.
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Infrastructure Software Revenue: $6.7 billion, up 47% year on year.
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Gross Margin: 79.1% of revenue.
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Operating Income: $9.8 billion, up 44% year on year.
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Operating Margin: 66% of revenue.
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Free Cash Flow: $6 billion, representing 40% of revenue.
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Capital Expenditures: $100 million.
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Cash and Debt: $9.3 billion in cash and $68.8 billion in gross principal debt.
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Dividends Paid: $2.8 billion in cash dividends.
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Share Repurchase: $2 billion to repurchase 8.7 million shares.
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Q2 Revenue Guidance: $14.9 billion, up 19% year on year.
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Q2 AI Revenue Guidance: $4.4 billion, up 44% year on year.
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Q2 Infrastructure Software Revenue Guidance: $6.5 billion, up 23% year on year.
Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Broadcom Inc (NASDAQ:AVGO) reported a record total revenue of $19 billion for fiscal Q1 2025, up 25% year on year.
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AI revenue reached $4.1 billion, up 77% year on year, surpassing the guidance of $3.8 billion.
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The company is making significant R&D investments in AI, including the development of the industry's first 2-nanometer AI XPU.
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Infrastructure software revenue grew by 47% year on year, driven by the integration of VMware and the shift to subscription-based models.
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Broadcom Inc (NASDAQ:AVGO) is expanding its customer base, with four additional hyperscalers engaged in developing custom AI accelerators.
Negative Points
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Non-AI semiconductor revenue was down 9% sequentially due to a seasonal decline in wireless.
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Enterprise networking remains flat as customers work through channel inventory.
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Industrial sales were down double digits in Q1 and are expected to decline further in Q2.
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Free cash flow as a percentage of revenue is impacted by cash interest expenses and cash taxes.
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Concerns about geopolitical tensions and potential regulatory impacts on AI diffusion rules could pose risks to future operations.
Q & A Highlights
Q: Hock, you talked about four more customers coming online. Can you elaborate on the trend you're seeing? Can any of these customers be as significant as the current three? A: Hock Tan, President and CEO: These four are not yet customers as we define it. We enable hyperscalers to create compute systems, and it takes time to develop the software to make it work. There's no reason these four won't create demand similar to the first three, but it will likely happen later.