Broadcom (AVGO) investor relations material

Executive summary

• Q1 FY26 revenue reached a record $19.3 billion, up 29% year-over-year, driven by strong AI semiconductor and networking demand.

• Net income rose to $7.35 billion, up 34% year-over-year, with operating income increasing 37% to $8.56 billion.

• Adjusted EBITDA was $13.13 billion (68% of revenue), reflecting strong operating leverage.

• Returned $10.9 billion to shareholders in Q1 via $3.1 billion in dividends and $7.8 billion in share repurchases.

• Cash from operations reached $8.26 billion, supporting significant capital returns.

Financial highlights

• Q1 gross margin was $13.16 billion (68% of revenue); operating income was $12.8 billion, up 31% year-over-year.

• Free cash flow was $8.01 billion (41% of revenue); cash and cash equivalents at quarter-end were $14.17 billion.

• Research and development expense increased 32% year-over-year to $2.97 billion, mainly due to higher stock-based compensation.

• Outstanding debt was $67.97 billion, with $2.25 billion due within 12 months.

• Basic EPS was $1.55, diluted EPS was $1.50, both up from $1.17 and $1.14, respectively.

Outlook and guidance

• Q2 FY26 revenue guidance is $22 billion, up 47% year-over-year, with AI momentum expected to accelerate.

• Q2 semiconductor revenue forecast at $14.8 billion, up 76% year-over-year; AI semiconductor revenue to reach $10.7 billion, up 140%.

• Infrastructure software revenue for Q2 expected at $7.2 billion, up 9% year-over-year.

• Gross margin expected to remain flat at 77%; adjusted EBITDA at 68%.

• Management notes potential for significant revenue fluctuations due to customer concentration and macroeconomic uncertainty.