From Nasdaq: 2025-06-05 18:14:00

Adjusted EBITDA for Q2 FY2025 was $10 billion, up by 35%, exceeding guidance. Semiconductor revenue was $8.4 billion, up 17% year over year, with AI semiconductor revenue at $4.4 billion, growing 46%. Non-AI semiconductor revenue was $4 billion, down 5%. Infrastructure software revenue was $6.6 billion, up 25%. Gross margin was 79.4%, operating income was $9.8 billion, and free cash flow was $6.4 billion for Q2 FY2025. Q3 guidance includes a forecasted consolidated revenue of $15.8 billion, up 21% year over year, with AI semiconductor revenue expected at $5.1 billion. The tax rate for Q3 and full-year 2025 is expected to be 14%.

The company reports success in converting enterprise customers to VCF subscription model, with over 87% of top customers adopting VCF. Inventory was at $2 billion for Q2 FY2025, with 34 days outstanding. Product innovation includes the Tomahawk 6 switch with 102.4 terabits per second capacity. Management forecasts the sustained growth rate of AI semiconductor revenue into fiscal 2026. XPU margins are slightly lower than other segments except Wireless. Near-term gross margin shifts expected due to increased XPUs in AI revenue mix.

Management emphasizes sustained growth trajectory for AI semiconductor revenue into fiscal 2026. Networking content within AI revenue expected to decrease to below 30% in fiscal 2026. Customer conversion to VCF subscription model ongoing with major accounts transitioning over the next year to year and a half. AI semiconductor demand driven by customer efforts to monetize platform investments through inference workloads. Regulatory risks remain uncertain due to changing export controls impacting AI product shipments.



Read more at Nasdaq: Broadcom AVGO Q2 2025 Earnings Call Transcript