Broadcom 2025 Q4 Earnings Revenue Surges 28%, Net Income Doubles to $8.52B

Broadcom (AVGO), the 7th largest U.S. company by market capitalization, reported fiscal 2025 Q4 earnings on Dec 11, 2025, with results exceeding expectations. The company delivered a 28.2% year-over-year revenue increase and raised Q1 2026 guidance, projecting a 28% YoY revenue rise driven by AI semiconductor demand.

Revenue

Driven by robust demand, semiconductor solutions revenue reached $11.07 billion in Q4 2025, up 35% year-over-year, while infrastructure software revenue climbed 19% to $6.94 billion. Total net revenue hit $18.02 billion, reflecting a 28.2% growth compared to $14.05 billion in the prior year. The semiconductor segment’s performance was fueled by a 74% surge in AI-related sales, underscoring the company’s strategic focus on artificial intelligence technologies.

Earnings/Net Income

Broadcom’s EPS surged 95.7% to $1.80 in Q4 2025, with net income more than doubling to $8.52 billion, a 97% increase from $4.32 billion in 2024 Q4. This marks 11 consecutive years of profitability, highlighting the company’s operational resilience and market leadership. The earnings growth reflects strong pricing power and margin expansion.

Post-Earnings Price Action Review

The strategy of buying Broadcom shares 30 days after a quarter-over-quarter revenue increase and holding for 30 days delivered moderate returns but underperformed the market, with a CAGR of 16.98%, trailing the benchmark by 17.17 percentage points. While the strategy’s maximum drawdown of 0% and Sharpe ratio of 0.56 suggest low volatility, the 30.19% volatility metric indicates significant price swings. Investors seeking stability may find the strategy suitable, but the underperformance relative to broader markets warrants caution.

CEO Commentary

CEO Hock Tan highlighted Q4 revenue growth of $18.0 billion, driven by a 74% YoY increase in AI semiconductor revenue. He forecast Q1 2026 AI semiconductor revenue to double to $8.2 billion, supported by custom accelerators and Ethernet switches. CFO Kirsten Spears announced a 10% quarterly dividend hike to $0.65 per share, aligning with a record annual dividend target of $2.60. Leadership emphasized confidence in sustained growth through AI demand and operational efficiency.

Guidance

Broadcom provided Q1 2026 revenue guidance of $19.1 billion (+28% YoY) and adjusted EBITDA of 67% of revenue. The company expects AI semiconductor revenue to double YoY in Q1 2026. While guidance excludes GAAP reconciliation for adjusted EBITDA, the leadership reaffirmed its dividend policy, reflecting confidence in $26.9 billion in FY2025 free cash flow and $43.0 billion in adjusted EBITDA.

Additional News

Broadcom announced a 10% quarterly dividend increase to $0.65 per share, marking its 15th consecutive annual raise. The company secured a $10 billion custom AI chip order from OpenAI, boosting its AI chip backlog to over $100 billion. Additionally, Broadcom extended its share repurchase program and signed a multi-year agreement with Lloyds Banking Group to enhance digital infrastructure using VMware Cloud Foundation and mainframe solutions. These moves underscore its strategic expansion beyond semiconductors into enterprise software and digital transformation.

Key Takeaways:

• Dividend Growth:

  15th consecutive annual increase, reflecting strong cash flow.

• AI Momentum:

  $10B OpenAI order and $100B AI chip backlog.

• Strategic Diversification:

  Partnership with Lloyds Banking Group highlights software and infrastructure growth.

• Market Position:

  Guidance and dividend policy reinforce confidence in long-term profitability and shareholder returns.