Broadcom Inc. Q4 FY2025 earnings call

• Fiscal 2025: Consolidated revenue grew 24% to a record $64 billion, driven by AI semiconductors ($20 billion, up 65%) and infrastructure software ($27 billion, up 26%).
• Q4 2025: Total revenue was a record $18 billion, up 28%. Adjusted EBITDA was $12.12 billion, up 34%. Semiconductors saw $11.1 billion revenue, up 35% with AI semiconductors at $6.5 billion, up 74%. Infrastructure Software had $6.9 billion revenue, up 19%. AI networking backlog exceeded $10 billion, with total AI backlog over $73 billion expected to be delivered over 18 months.
• Fiscal 2025 financials: Revenue hit $63.9 billion, adjusted EBITDA $43 billion, free cash flow $26.9 billion. Dividend increased to 65¢ per share in Q1 2026, with a record annual dividend of $2.60 per share.

Semiconductors: Q4 2025 revenue was $11.1 billion, up 35% year over year. AI semiconductor revenue was $6.5 billion, up 74% year over year, representing 61% of total revenue in the quarter. Non-AI semiconductors had Q4 revenue of $4.6 billion, up 2% year over year. Infrastructure Software: Q4 revenue was $6.9 billion, up 19% year over year, contributing 39% of total revenue.

• Q1 2026: Consolidated revenue expected $19.1 billion, up 28%. Semiconductor revenue ~$12.3 billion, up 50%, with AI semiconductor revenue ~$8.2 billion, up 100%. Infrastructure software revenue ~$6.8 billion, up 2%. Adjusted EBITDA expected ~67%. Gross margin expected down ~100 basis points due to higher AI revenue mix.

• Supply chain challenges, particularly with silicon fabrication and advanced packaging. Dependence on TSMC for silicon production. Impact of global minimum tax on tax rate.

Q: Vivek Arya asked about AI backlog and XPU content/share at largest customer.

A: Hock Tan discussed AI backlog of $73 billion over 18 months and XPU usage by customers, stating customer tooling hypothesis is overblown.

Q: Ross Seymore asked about TPUs and substitution effect.

A: Hock Tan said TPUs are a transactional move vs custom ASICs, with custom AI accelerator being a long-term strategic move.

Q: Harlan Sur asked about AI backlog growth and advanced packaging in Singapore.

A: Hock Tan confirmed $73 billion AI backlog over 18 months and discussed building Singapore fab for advanced packaging to address supply chain security.

Q: Blayne Curtis asked about $10 billion deal and delivery of orders.

A: Hock Tan said it's a system sale involving key components.

Q: Stacy Rasgon asked about gross margins and operating leverage.

A: Kirsten Spears and Hock Tan discussed AI revenue's lower gross margin but expected operating leverage to benefit operating margin despite gross margin decline.

Q: Jim Schneider asked about AI revenue growth calibration and OpenAI contract.

A: Hock Tan discussed dynamic AI backlog and OpenAI's multiyear journey with 10 gigawatts from 2027-2029.

Q: Ben Reitzes asked about OpenAI contract and its contribution.

A: Hock Tan confirmed OpenAI's 10 gigawatt agreement from 2027-2029 as part of their multiyear journey.

Q: CJ Muse asked about custom silicon content growth and competitor's CPX offering.

A: Hock Tan discussed multiple versions of custom XPU customer accelerators for each customer.

Q: Carl Ackerman asked about supply chain resiliency.

A: Hock Tan said they have a good handle on supply chain bottlenecks and are addressing them through design and capacity expansion.

Q: Christopher Rolland asked about OpenAI agreement and non-AI semiconductor revenue.

A: Hock Tan discussed OpenAI's multiyear journey and non-AI semiconductors seeing stability with broadband recovery and others stable.