Broadcom posts record Q3 FY2025 revenue of $16.0bn, AI accelerator sales up 63%, raises Q4 guidance

ByInvestment Club

Overview

Broadcom Inc. reported record results for the third quarter of fiscal 2025, with revenue up 22% year-over-year to $16.0bn. Growth was driven by surging demand for custom AI accelerators, robust networking, and VMware contributions in infrastructure software. Margins expanded significantly, profitability rebounded sharply from last year’s one-off tax charges, and free cash flow reached record levels. Management raised Q4 guidance on accelerating AI momentum.

“Broadcom achieved record third quarter revenue on continued strength in custom AI accelerators, networking and VMware. Q3 AI revenue growth accelerated to 63% year-over-year to $5.2 billion. We expect growth in AI semiconductor revenue to accelerate to $6.2 billion in Q4, delivering eleven consecutive quarters of growth, as our customers continue to strongly invest”, said Hock Tan, President and CEO of Broadcom Inc.

Q3 FY2025 vs. Q3 FY2024:

  • Total revenue was $15.95bn (+22% YoY), marking a record quarter.
    • Semiconductor solutions revenue grew to $9.17bn (+26% YoY), led by $5.2bn in AI semiconductor sales (+63% YoY) alongside networking strength.
    • Infrastructure software revenue rose to $6.79bn (+17% YoY), supported by VMware integration and demand for enterprise software solutions.
  • GAAP net income was $4.14bn, reversing a $1.88bn loss in Q3 FY2024, with non-GAAP net income up to $8.40bn (+37% YoY).
  • GAAP diluted EPS was $0.85 versus a $(0.40) loss a year ago, while non-GAAP diluted EPS rose to $1.69 (+36% YoY).
  • Adjusted EBITDA increased to $10.7bn (+30% YoY), or 67% of revenue, reflecting strong operating leverage.
  • Operating cash flow surged to $7.17bn (+44% YoY), while free cash flow hit $7.02bn, 44% of revenue.
  • Cash and equivalents stood at $10.7bn, up from $9.5bn last quarter, reinforcing balance sheet flexibility.
  • Broadcom returned $2.8bn to shareholders via dividends ($0.59/share) during the quarter.

For Q4 FY2025, Broadcom expects revenue of approximately $17.4bn (+24% YoY) with adjusted EBITDA of ~67% of revenue. Management highlighted accelerating AI semiconductor momentum, guiding $6.2bn in AI chip sales for Q4, which would mark the eleventh consecutive quarter of AI-driven growth. Broadcom reaffirmed its commitment to return excess cash to shareholders through dividends and repurchases.

Following its latest quarterly report, Broadcom shares jumped more than +4% in post-market trading after the company delivered results that exceeded Wall Street expectations. The bullish trend remains intact, with the price holding well above both the 50-day SMA ($290.03) and the 200-day SMA ($228.83), reinforcing strong technical momentum. The RSI stands at 57.97, comfortably in neutral territory and far from overbought conditions, suggesting further upside potential. With year-to-date performance already at approximately +32%, the setup indicates that new record highs for 2025 could be reached in the near term if positive sentiment continues.

Source: TradingView

Author: Ionuț-Adrian Lazar

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