EARNINGS REVIEW
Broadcom, FY26 Q1 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from later quarters have not been incorporated into the outlook.
AI semiconductor revenue more than doubled, accelerating growth. FCF was strong, but dividends and share repurchases exceeded it, making capital allocation another area to assess.
Assessment · AI semiconductors increasingly drive results. Slower software growth and concentration in customer investment remain risks; also assess how high shareholder returns affect net debt and liquidity.
Key management and company statements
Earnings release · Excerpt from the original“Q1 AI revenue of $8.4 billion grew 106% year-over-year”Meaning · Q1 AI revenue was 8.4 B$, up 106% year over year.
Context · The statement describes demand for custom AI accelerators and AI networking.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · revenue 14.916 → 19.311 B$ (+29.5% · +4.395 B$), operating income 6.260 → 8.563 B$ (+36.8% · +2.303 B$).
Quarter over quarter · revenue 18.015 → 19.311 B$ (+7.2% · +1.296 B$), operating income 7.508 → 8.563 B$ (+14.1% · +1.055 B$), operating margin 41.7% → 44.3% (+2.7%p).
Semiconductor revenue increased 52%, but Infrastructure Software increased approximately 1%. Consolidated growth alone can obscure the difference in the two businesses’ growth rates.
Results versus previous guidance
Approximate revenue guidance 19.100 B$ → actual 19.311 B$. 0.211 B$ above the point estimate.
02 Earnings sustainability · From operating income to net income
GAAP operating income increased sequentially, but net income declined. Separate the base effect of the preceding quarter’s net tax benefit of 1.649 B$ from the current quarter’s tax expense.
Adjusted EBITDA was 13.128 B$, approximately 68% of revenue, and differs in adjustment scope from GAAP operating income of 8.563 B$.
- Operating income
- 8.563 B$
- Net non-operating income
- −0.368 B$
- Income tax expense
- −0.846 B$
- Consolidated net income
- 7.349 B$
Net income of 7.349 B$ in the existing quarterly dataset is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
FCF of 8.010 B$ equals OCF of 8.260 B$ less CapEx of 0.250 B$. Company-reported shareholder returns of approximately 10.900 B$ exceeded quarterly FCF, so cash balances and debt should also be assessed.
- Consolidated net income
- 7.349 B$
- Total net adjustments for noncash items, working capital and other items¹
- 0.911 B$
- Operating cash flow
- 8.260 B$
- Cash CapEx
- −0.250 B$
- FCF
- 8.010 B$
¹ Total net adjustments calculated as OCF−net income. This is not a single disclosed line item; it combines noncash items, working capital, classification differences and other adjustments.
FCF versus previous quarter · 7.466 → 8.010 B$, 0.544 B$ improvement.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2025-11-02
Cash and current investments 16.178 / Debt 65.136 B$
Current-quarter net cash · 2026-02-01
Cash and current investments 14.174 / Debt 66.057 B$
Net debt worsened by 2.925 B$ from the previous quarter. The carrying amount of current debt is 2.252 B$. It may differ from the principal maturity schedule.
The company reported paying approximately 3.100 B$ in dividends and 7.800 B$ in share repurchases. The additional 10.000 B$ buyback authorization is neither an execution obligation nor cash already paid.
Common definition · Cash and current investments = cash equivalents + current investments and deposits. Debt = carrying amount of interest-bearing borrowings (current + noncurrent), excluding separately reported lease liabilities. This differs from total liabilities of 90.031 B$. Restricted cash, noncurrent securities and noncurrent deposits are excluded from cash and current investments.
05 Investment, capital allocation and cash returns
Expanding demand for custom AI accelerators and networking is an opportunity. A fabless model’s low own-facility CapEx ratio should not be interpreted as low customer or supply-chain risk.
This quarter, cash CapEx/revenue is 1.3% and FCF/revenue is 41.5%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
06 Next-quarter and full-year outlook: implications
YoY +46.6% · QoQ +13.9%. Revenue comparison bases are 15.004 B$ for the year-earlier corresponding quarter and 19.311 B$ for this quarter. Growth rates are calculated from the original amounts.
The company projected next-quarter AI semiconductor revenue of 10.700 B$ and adjusted EBITDA margin of approximately 68%. Growth expectations depend on the timing and execution of customer projects.
RPO / Backlog
QoQ 33.300 → 45.000 B$ (+35.1% · +11.700 B$).
YoY 22.400 → 45.000 B$ (+100.9% · +22.600 B$).
RPO under committed multi-year customer contracts, including software and certain semiconductor contracts; it differs from the full short-term semiconductor order backlog. Contract balances are not guaranteed next-quarter revenue or cash inflow. RPO scopes differ across companies.
RPO disclosure ↗Quarterly results · CY-aligned presentation
Amounts in B$. Based on the CY-aligned year of this report, the table shows all 4 quarters of the preceding year and the current year to date. Each fiscal quarter is assigned to the CY quarter with the greatest overlap in actual reporting dates, alongside its original FY/CY quarter and start/end dates. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2024 · 4 quarters | 2025 · 4 quarters | Change this quarter | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Metric | 2024 total4-quarter totalBalances are period-end | 1QFY24 Q224-02-05 ~24-05-05 | 2QFY24 Q324-05-06 ~24-08-04 | 3QFY24 Q424-08-05 ~24-11-03 | 4QFY25 Q124-11-04 ~25-02-02 | 2025 total4-quarter totalBalances are period-end | 1QFY25 Q225-02-03 ~25-05-04 | 2QFY25 Q325-05-05 ~25-08-03 | 3QFY25 Q425-08-04 ~25-11-02 | 4QFY26 Q125-11-03 ~26-02-01 | QoQvs FY25 Q4 | YoYvs FY25 Q1 |
| Revenue | 54.529 | 12.487 | 13.072 | 14.054 | 14.916 | 68.282 | 15.004 | 15.952 | 18.015 | 19.311 | +7.2%+1.296 B$ | +29.5%+4.395 B$ |
| Operating income | 17.640 | 2.965 | 3.788 | 4.627 | 6.260 | 27.787 | 5.829 | 5.887 | 7.508 | 8.563 | +14.1%+1.055 B$ | +36.8%+2.303 B$ |
| Operating margin | 32.3% | 23.7% | 29.0% | 32.9% | 42.0% | 40.7% | 38.8% | 36.9% | 41.7% | 44.3% | +2.7%p | +2.4%p |
| FCF | 20.734 | 4.448 | 4.791 | 5.482 | 6.013 | 28.911 | 6.411 | 7.024 | 7.466 | 8.010 | +0.544 B$ | +1.997 B$ |
| Operating cash flow | 21.260 | 4.580 | 4.963 | 5.604 | 6.113 | 29.684 | 6.555 | 7.166 | 7.703 | 8.260 | +7.2%+0.557 B$ | +35.1%+2.147 B$ |
| Cash CapEx | 0.526 | 0.132 | 0.172 | 0.122 | 0.100 | 0.773 | 0.144 | 0.142 | 0.237 | 0.250 | +5.5%+0.013 B$ | +150.0%+0.150 B$ |
| Net cash | −57.250 | −64.134 | −59.946 | −58.179 | −57.250 | −51.883 | −57.799 | −53.501 | −48.958 | −51.883 | −2.925 B$ | +5.367 B$ |
| Cash and current investments | 9.307 | 9.809 | 9.952 | 9.348 | 9.307 | 14.174 | 9.472 | 10.718 | 16.178 | 14.174 | −12.4%−2.004 B$ | +52.3%+4.867 B$ |
| Debt | 66.557 | 73.943 | 69.898 | 67.527 | 66.557 | 66.057 | 67.271 | 64.219 | 65.136 | 66.057 | +1.4%+0.921 B$ | −0.8%−0.500 B$ |
Indented rows are components or reference items for the parent metric. Net cash = cash and current investments − debt. Depending on the company definition, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals appear before each year’s quarters. Revenue, earnings and cash flow are sums of quarterly figures; margin is total operating income ÷ total revenue; net cash, cash and debt are balances at the end of the last quarter. Do not treat totals covering different lengths of time as directly comparable annual figures.
Net cash = cash and current investments − debt. A negative figure indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly figures have not been adjusted to force reconciliation with disclosed annual totals.
Comparison bases, calculation methods and quarterly sources
Calculation and presentation · Amounts in B$. Figures disclosed in millions of US dollars are divided by 1,000 without altering the source values. Where only cumulative cash flows are available, the previous cumulative period within the same fiscal year is deducted. YoY, QoQ and margins are calculated using amounts before display rounding. Earnings changes from negative or 0 bases are expressed as profit/loss transitions and absolute amounts.
Opinions and outlook · Management quotations include original excerpts and their translations. Quotations not identified as earnings-call transcripts come from earnings releases. Interpretations and implications are the author’s judgments. No numerical probability of achieving a target is assigned without quantitative verification.