Executive Summary
Broadcom reported a strong QQ2 2025 performance, underscored by robust top-line growth, record-high gross margins, and exceptionally strong free cash flow generation. Revenue of $15.004 billion marked a 14.8% year-over-year increase and a modest 0.6% quarter-over-quarter gain, supported by favorable product mix and ongoing demand for data-center networking, storage, and infrastructure software solutions. GAAP profitability remained solid, with net income of $4.965 billion and an EPS of $1.05 (diluted $1.03), aided by an EBITDA of $10.194 billion and an EBITDA margin near 68%. Free cash flow reached $6.411 billion, illustrating Broadcom’s ability to translate operating profitability into substantial cash returns while funding a sizable share repurchase program and consistent dividends.
Balance-sheet health remains strong in absolute terms but carries a high debt and intangible asset profile. Total debt stood at $67.282 billion with net debt of $57.81 billion, while cash and equivalents totaled $9.472 billion. The company also reported a large intangible/goodwill base (~$134.194 billion), reflecting acquired franchises and technology platforms. Cash flow visibility is supported by $6.556 billion of operating cash flow and disciplined capital allocation, including $4.216 billion in net share repurchases and $2.785 billion in dividends in the period. The combination of durable gross margins, robust FCF, and a capital-return program positions Broadcom favorably within a high-mix, high-margin software-enabled semiconductor model, albeit with leverage and impairment risks that warrant ongoing monitoring.
Looking ahead, absent formal guidance in the data provided, the earnings trajectory appears conditional on continued data-center and networking demand, AI infrastructure expansion, and favorable pricing. Investors should monitor customer concentration in hyperscalers, competitive dynamics in high-end semiconductors, FX effects, and the potential for impairment of intangible assets if macro conditions soften. Overall, the QQ2 2025 results reinforce Broadcom’s ability to monetize its diversified portfolio and deliver substantial cash returns, supporting a constructive long-term investment view provided leverage and execution remain disciplined.
Key Performance Indicators
QoQ: -9.78% | YoY:364.80%
QoQ: -10.26% | YoY:362.50%
Key Insights
Revenue: $15.004B, up 14.78% YoY and 0.59% QoQ. Gross Profit: $10.197B; Gross Margin: 67.96%. Operating Income: $5.829B; Operating Margin: 38.85%. EBITDA: $10.194B; EBITDA Margin: 67.94%. Net Income: $4.965B; Net Margin: 33.09%. EPS (GAAP): $1.05; EPS (Diluted): $1.03; Weighted Avg Shares Out: 4.707B (GAAP), 4.826B (Diluted). Cash Flow: Net cash provided by operating activities $6.556B; Capital expenditures $0.144B; Free Cash Flow $6.411B. Balance Sheet: Cash & equivalents $9.472B; Total deb...
Financial Highlights
Revenue: $15.004B, up 14.78% YoY and 0.59% QoQ. Gross Profit: $10.197B; Gross Margin: 67.96%. Operating Income: $5.829B; Operating Margin: 38.85%. EBITDA: $10.194B; EBITDA Margin: 67.94%. Net Income: $4.965B; Net Margin: 33.09%. EPS (GAAP): $1.05; EPS (Diluted): $1.03; Weighted Avg Shares Out: 4.707B (GAAP), 4.826B (Diluted). Cash Flow: Net cash provided by operating activities $6.556B; Capital expenditures $0.144B; Free Cash Flow $6.411B. Balance Sheet: Cash & equivalents $9.472B; Total debt $67.282B; Net debt $57.81B; Total assets $164.63B; Total liabilities $95.044B; Total stockholders’ equity $69.586B. Liquidity & Returns: Current ratio ~1.08x (current assets $22.181B vs current liabilities $20.597B); ROIC not provided, but high margin and strong FCF imply solid capital efficiency. Shareholder returns: Net share repurchases $4.216B and dividends paid $2.785B. Intangible/goodwill: Goodwill $97.801B; Intangibles $36.393B (Goodwill & Intangibles $134.194B).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
15.00B |
14.78% |
0.59% |
| Gross Profit |
10.20B |
22.03% |
0.51% |
| Operating Income |
5.83B |
53.88% |
-6.88% |
| Net Income |
4.97B |
364.80% |
-9.78% |
| EPS |
1.05 |
362.50% |
-10.26% |
Management Commentary
Theme-based takeaways anticipated from the earnings call (based on the QQ2 2025 results):
- Demand environment: Management emphasized durable demand in data-center networking, enterprise storage, and infrastructure software as foundational to Broadcom’s growth trajectory. The result reflects a favorable mix and pricing resilience in high-margin product groups.
- Margin resilience: The company highlighted sustained gross margins around mid-to-high 60s percentage points, supported by product mix, pricing discipline, and ongoing efficiency gains even with elevated R&D and SG&A investments.
- Capital allocation: Emphasis on strong free cash flow generation and an active capital return program, including sizable share repurchases and stable dividends, signaling confidence in long-run cash generation and return of capital to shareholders.
- Balance sheet and risk factors: While cash generation is robust, the balance sheet includes substantial debt and a large goodwill/intangible asset base, which could pose impairment risk in a weaker macro scenario. Management likely underscored a commitment to deleveraging over time and maintaining liquidity buffers.
Transcript not provided.
—
Transcript not provided.
—
Forward Guidance
No formal forward guidance was included in the supplied data. Based on QQ2 2025 results, a cautious baseline would assume continued healthy demand for Broadcom’s data-center and networking platforms, with potential mid-single-digit to low-double-digit revenue growth in a stabilized macro environment. Key factors that could influence guidance include: (1) sustained AI and hyperscale data-center capex driving high-margin orders, (2) pricing power in core semiconductors and software-infrastructure products, (3) cadence of acquisitions or divestitures affecting the software assets and hardware mix, (4) ongoing macro uncertainty and FX movements, and (5) debt/financing conditions impacting capital allocation strategy. Investors should monitor quarterly revenue cadence by segment, gross margin trajectory, and the pace of deleveraging, as well as any management updates on capital-return commitments.