Broadcom Revenue Guidance Jumps on AI Chip Demand
Broadcom revenue guidance signals stronger quarter as AI accelerator and networking chip demand bolsters profit and cash flow and may prompt repositioning.
KEY TAKEAWAYS
- Fourth-quarter revenue was $18.0 billion; adjusted EBITDA was $12.2 billion, 68.0% of revenue.
- The company guided first-quarter revenue to about $19.1 billion with adjusted EBITDA at 67.0% of revenue.
- AI chip sales were forecast to double to $8.2 billion in the first quarter.
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Broadcom Inc. (AVGO) said in a press release on Dec. 11, 2025, that its revenue guidance for the first quarter pointed to stronger growth as surging demand for custom AI accelerators and networking chips boosted profit and cash flow.
Fourth-Quarter Results and Cash Flow
For the quarter ended Nov. 2, 2025, Broadcom reported revenue of $18.0 billion, up 28% year over year, and adjusted EBITDA, a proxy for operating profit, of $12.2 billion, equal to 68% of revenue. GAAP net income was $8.5 billion, while non-GAAP net income reached $9.7 billion. GAAP diluted earnings per share (EPS) stood at $1.74, with non-GAAP EPS at $1.95.
Cash from operations totaled $7.7 billion. After capital expenditures of $237 million, free cash flow was $7.5 billion, or 41% of revenue. The company raised its quarterly common-stock dividend by 10% to $0.65 per share.
AI-Driven First-Quarter Outlook
Broadcom guided first-quarter fiscal 2026 revenue to about $19.1 billion, a 28% increase from the prior year, with adjusted EBITDA expected to be 67% of projected revenue. Management said AI chip sales—custom accelerators and semiconductors for AI networking—are forecast to double year over year to $8.2 billion.
The company reiterated its focus on AI infrastructure and infrastructure software and emphasized disciplined capital returns through dividends and share repurchases. Together, the guidance, strong cash generation, and dividend increase indicate that AI accelerator demand could sustain another year of revenue growth while preserving capital-return capacity.
