Broadcom Inc. — Third Quarter Fiscal Year 2026 Earnings Summary

Financial Performance

• Net revenue reached $29.6 billion for the third quarter, an 86% increase year-over-year from $15.952 billion.
• GAAP operating income was $16.0 billion, up 171% year-over-year; Non-GAAP operating income was $20.1 billion, up 92% year-over-year.
• GAAP diluted EPS was $2.68, up 215% year-over-year; Non-GAAP diluted EPS was $3.32, up 96% year-over-year.
• Net income was $13.1 billion on a GAAP basis (up 216% year-over-year) and $16.4 billion on a Non-GAAP basis (up 95% year-over-year).
• Cash flow from operations was $14.2 billion, up 98% year-over-year; capital expenditures were $0.5 billion.
• Free cash flow was $13.7 billion, representing 46% of revenue, up 95% year-over-year.
• Cash and cash equivalents ended the quarter at $24.0 billion, compared to $19.6 billion in the prior quarter.

Guidance and Future Outlook

• Fourth quarter fiscal year 2026 revenue is guided to approximately $34.8 billion, an increase of 93% from the prior year period.
• Fourth quarter fiscal year 2026 Non-GAAP operating income is guided to be approximately 66% of projected revenue, flat from the prior year.
• Management expects AI semiconductor revenue to accelerate to $21.7 billion in Q4, up 236% year-over-year.

Business Segments and Product Lines

• Semiconductor solutions segment revenue was $20.8 billion, up 127% year-over-year, representing 70% of total net revenue.
• Infrastructure software segment revenue was $8.8 billion, up 29% year-over-year, representing 30% of total net revenue.
• AI semiconductor revenue specifically grew 221% year-over-year to $16.7 billion in Q3, and 54% quarter-over-quarter.

Market and Competitive Landscape

• Management cited very strong demand for custom AI accelerators and networking solutions.
• The semiconductor industry is described as undergoing profound change due to AI.

Risks and Challenges

• Potential risks include global economic conditions, government regulations, trade restrictions, and political uncertainty.
• Risks involve cyclicality in the semiconductor industry, loss of significant customers, and fluctuations in customer demand timing and volume.
• Challenges include dependence on contract manufacturing, limited suppliers, and the ability to accurately estimate demand to adjust supply chains.
• Specific risks relate to the integration of acquired businesses (such as VMware), potential tax liabilities, and significant indebtedness requiring sufficient cash flows to service.
• Forward-looking statements are subject to uncertainties regarding R&D returns, cybersecurity threats, and legal proceedings.

Management Commentary and Tone

• Hock Tan, President and CEO, stated that demand for custom AI accelerators and networking continues to be very strong.
• Amie Thuener, CFO, noted that Broadcom achieved record revenue, operating profit, and free cash flow in Q3.
• Management expressed confidence that momentum in AI semiconductor revenue will continue and accelerate in Q4.

Other Key Points

• The Board of Directors approved a quarterly cash dividend of $0.65 per share.
• A dividend of $0.65 per share totaling $3.1 billion was paid on June 30, 2026.
• The upcoming dividend is payable on September 30, 2026, to stockholders of record on September 21, 2026.
• The company is not readily able to provide a reconciliation of projected non-GAAP financial measures to GAAP measures without unreasonable effort.
• Non-GAAP financial measures exclude amortization of acquisition-related intangible assets, stock-based compensation, restructuring charges, and acquisition-related costs.