• Total Revenue: $15 billion, up 20% year-on-year.

• Adjusted EBITDA: $10 billion, up 35% year-on-year.

• Semiconductor Revenue: $8.4 billion, up 17% year-on-year.

• AI Semiconductor Revenue: Over $4.4 billion, up 46% year-on-year.

• Infrastructure Software Revenue: $6.6 billion, up 25% year-on-year.

• Gross Margin: 79.4% of revenue.

• Operating Income: $9.8 billion, up 37% year-on-year.

• Operating Margin: 65% of revenue.

• Free Cash Flow: $6.4 billion, representing 43% of revenue.

• Capital Expenditures: $144 million.

• Cash and Debt: $9.5 billion in cash and $69.4 billion in gross principal debt.

• Q3 Revenue Guidance: Approximately $15.8 billion, up 21% year-on-year.

• Q3 AI Semiconductor Revenue Guidance: $5.1 billion, up 60% year-on-year.

• Q3 Infrastructure Software Revenue Guidance: Approximately $6.7 billion, up 16% year-on-year.

• Warning! GuruFocus has detected 5 Warning Signs with RBRK.

Release Date: June 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Broadcom Inc (NASDAQ:AVGO) reported a record total revenue of $15 billion for fiscal Q2 2025, marking a 20% year-on-year increase.

• AI semiconductor revenue reached over $4.4 billion, up 46% year-on-year, continuing a trajectory of nine consecutive quarters of strong growth.

• Infrastructure software revenue grew by 25% year-on-year to $6.6 billion, driven by the successful integration of VMware and strong VCF sales.

• The company forecasts AI semiconductor revenue to grow by 60% year-on-year in Q3, marking the tenth consecutive quarter of growth.

• Broadcom Inc (NASDAQ:AVGO) achieved a gross margin of 79.4% in Q2, better than originally guided, due to favorable product mix.

Negative Points

• Non-AI semiconductor revenue was down 5% year-on-year, with sectors like industrial and wireless experiencing declines.

• Free cash flow as a percentage of revenue was impacted by increased interest expenses from debt related to the VMware acquisition.

• The company anticipates a sequential decline in consolidated gross margin by approximately 130 basis points in Q3 due to a higher mix of XPUs.

• Broadcom Inc (NASDAQ:AVGO) faces uncertainty regarding potential impacts from changing export control regulations.

• The transition of VMware customers to a subscription model is ongoing and expected to take another 1.5 years to complete.

Q & A Highlights

Q: Can you provide more color on the inference commentary and whether it's more of the XPU side or connectivity side that's driving growth? A: We are seeing increased deployment of XPUs next year, more than we originally thought, along with more networking. It's a combination of both, and we are seeing much more inference now. - Hock Tan, President and CEO