Broadcom (AVGO) investor relations material

Executive summary

• Q2 FY2026 revenue reached a record $22.2 billion, up 48% year-over-year, driven by strong AI semiconductor demand and VMware Cloud Foundation in infrastructure software.

• Q2 GAAP net income rose 88% to $9.3 billion, with non-GAAP net income at $12.1 billion; operating income was $14.9 billion, up 52% year-over-year.

• Adjusted EBITDA reached $15.2 billion (69% of revenue), above guidance and up 52% year-over-year.

• Strategic partnerships and long-term agreements with major AI customers like Google, Anthropic, OpenAI, and Meta underpin future growth.

• Cash from operations reached $10.5 billion for the quarter, supporting significant capital returns and investments.

Financial highlights

• Q2 consolidated revenue: $22.2 billion, up 48% year-over-year; gross margin: 77.1% (non-GAAP), 69% (GAAP), reflecting higher semiconductor mix.

• Operating income: $14.9 billion, up 52% year-over-year; net income: $9.3 billion, up from $5.0 billion a year ago.

• Adjusted EBITDA: $15.2 billion (69% of revenue); free cash flow: $10.3 billion (46% of revenue); cash balance at $19.6 billion.

• Q2 GAAP diluted EPS was $1.91, up from $1.03; non-GAAP diluted EPS was $2.44, up from $1.58.

• Working capital rose to $23.4 billion, driven by higher receivables, cash, and inventory to support AI accelerator shipments.

Outlook and guidance

• Q3 FY2026 consolidated revenue expected at $29.4 billion, up 84% year-over-year.

• Q3 semiconductor revenue forecast at $20.5 billion, up 124% year-over-year; AI semiconductor revenue at $16 billion, up over 200%.

• Q3 infrastructure software revenue expected at $8.9 billion, up 31% year-over-year.

• Q3 gross margin expected to decline to 74% due to product mix; operating margin stable at 67%.

• Full-year 2026 AI semiconductor revenue expected at $56 billion, up ~180% from 2025; 2027 AI revenue guidance reiterated at over $100 billion.