Broadcom Q4 FY2025 Earnings Conference Call

Summary

Broadcom reported exceptional Q4 FY2025 results with record revenue of $18B, up 28% year-over-year, driven primarily by explosive growth in AI semiconductors and strong VMware adoption. The company's AI business achieved remarkable momentum with revenue of $6.5B in Q4 (up 74% YoY) and $20B for the full fiscal year (up 65% YoY). CEO Hock Tan highlighted the company's massive $73B AI backlog to be delivered over the next 18 months, including significant orders from existing customers and a new fifth XPU customer. The semiconductor segment showed particular strength with record revenue of $11.1B, while infrastructure software maintained solid growth at $6.9B driven by VMware Cloud Foundation adoption. Broadcom is evolving its business model from individual chip sales to complete system/rack solutions, which will impact gross margins but provide significant operating leverage. The company raised its dividend by 10% and provided strong Q1 FY2026 guidance of $19.1B revenue with AI revenue expected to double year-over-year to $8.2B, demonstrating continued acceleration in the AI market opportunity.

Key Points

• Record Q4 revenue of $18B (up 28% YoY) and fiscal 2025 revenue of $64B (up 24% YoY)
• AI revenue grew 65% YoY to $20B for fiscal 2025, with Q4 AI revenue at $6.5B (up 74% YoY)
• Total AI backlog of $73B to be delivered over next 18 months
• Received additional $11B order from fourth customer and $1B order from fifth XPU customer
• AI switches backlog exceeds $10B with Tomahawk 6 switch booking at record rates
• Infrastructure software revenue grew 19% YoY to $6.9B in Q4, driven by VMware adoption
• Moving to system/rack sales model for AI solutions beyond individual chip sales

Action Items

• Deliver $73B AI backlog over next 18 months
• Ramp up Singapore advanced packaging facility to address supply chain constraints
• Continue R&D investment in leading-edge AI semiconductors
• Execute on OpenAI 10 gigawatt agreement for 2027-2029 timeframe
• Present at New Street Research Virtual AI Conference on 12/15/2025
• Report Q1 FY2026 earnings on 03/04/2026

Decisions

• Increased quarterly dividend to $0.65 per share (10% increase)
• Extended share repurchase program through end of calendar year 2026
• Q1 2026 guidance: consolidated revenue of $19.1B (up 28% YoY)
• AI revenue guidance for Q1: $8.2B (up 100% YoY)
• Non-GAAP tax rate increased from 14% to 16.5% for fiscal 2026

Participants