Broadcom Q4 Earnings Beat Estimates, Revenues Rise Y/Y, Shares Fall

Broadcom AVGO reported fourth-quarter fiscal 2025 non-GAAP earnings of $1.95 per share, beating the Zacks Consensus Estimate by 4.3% and jumping 37.3% year over year.

Revenues rallied 28.2% year over year to $18.02 billion and beat the Zacks Consensus Estimate by 2.94%. 

AVGO shares dropped more than 5% at the time of writing this article. The stock has appreciated 128.8% in the trailing 12 months compared with the Zacks Computer & Technology sector’s return of 25.4%.

AVGO’s Q4 Details

Semiconductor solutions revenues (61.5% of net revenues) totaled $11.07 billion, up 35% year over year. The uptick was driven by the strong AI revenues, which surged 74% year over year. Infrastructure software revenues (38.5% of net revenues) soared 19% year over year to $6.94 billion. 
 

Broadcom Inc. Price and Consensus

Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote

The non-GAAP gross margin was 78% up 100 basis points (bps) year over year. 

Research and development expenses, as a percentage of net revenues, decreased 150 bps year over year to 8.5%. SG&A expenses, as a percentage of net revenues, decreased 100 bps to 3.3%.

Adjusted EBITDA rose 34% year over year to $12.22 billion. The adjusted EBITDA margin was 67.8% up 310 bps year over year.

The non-GAAP operating margin expanded 350 bps year over year to 66.2%.

AVGO’s Balance Sheet & Cash Flow

As of Nov. 2, 2025, cash and cash equivalents were $16.18 billion compared with $10.72 billion as of Aug. 3, 2025.

Total debt (including the current portion of $3.15 billion) was $65.14 billion as of Aug. 3, 2025, compared with $64.23 billion as of Aug. 3, 2025.

Broadcom generated $7.70 billion in cash flow from operations compared with $7.17 billion in the previous quarter. The free cash flow was $7.47 billion compared with $7.02 billion in the prior quarter.

On Sept. 30, 2025, AVGO paid a cash dividend of 59 cents per share, totaling $2.80 billion. The company raised its quarterly dividend payout by 10% to 65 cents per share.

AVGO Offers Solid Q1 Guidance

For the first quarter of fiscal 2026, Broadcom expects revenues of $19.1 billion. AI revenues are expected to double year over year to $8.2 billion, driven by strong demand for custom AI accelerators and Ethernet AI switches.

The adjusted EBITDA margin is expected to be 67% for the first quarter of fiscal 2026.

Zacks Rank & Stocks to Consider

Currently, AVGO has a Zacks Rank #3 (Hold).

Advanced Energy Industries AEIS, Amphenol APH and Reddit RDDT are some better-ranked stocks that investors can consider in the broader sector. 

Advanced Energy Industries, Amphenol and Reddit each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Advanced Energy Industries, Amphenol and Reddit is currently pegged at 33.4%, 38.7% and 38.6%, respectively.

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This article originally published on Zacks Investment Research (zacks.com).

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