Broadcom Inc. Fiscal Third Quarter 2026 Earnings

A quick primer before the numbers below.

• GAAP vs. non-GAAP. GAAP figures follow standard accounting rules. Non-GAAP figures strip out certain non-cash items, mainly stock based compensation and the amortization of acquired intangible assets, so they usually come in higher and are meant to show the underlying trend of the business.
• EPS. Simply profit divided by the number of shares outstanding, in other words profit per share.
• Operating cash flow vs. free cash flow. Operating cash flow is the cash the business actually generated. Free cash flow is what remains after paying for equipment and facilities, the cash genuinely available for paying down debt, dividends, or buybacks.
• Guidance. Management's own forecast for the next quarter, not an audited or reported result.
• Year over year. Compares this quarter with the same quarter one year earlier, not with the most recent quarter. So "up 86 percent year over year" means revenue this quarter is 86 percent higher than it was in the same quarter last year.

AI semiconductor revenue is now the dominant growth engine. According to the company, AI semiconductor revenue reached $16.7 billion in the quarter, up 221 percent year over year and up 54 percent from the prior quarter. Semiconductor solutions overall grew 127 percent to $20,839 million and now represents 70 percent of total revenue, up from 57 percent in the prior year quarter, according to the filing.

Infrastructure software grew far more slowly and its share of revenue fell. Infrastructure software revenue was $8,752 million, up 29 percent year over year, but its share of total revenue fell to 30 percent from 43 percent a year earlier, according to the filing. This segment carries meaningfully higher gross margin than semiconductor solutions.

Non-GAAP gross margin has declined for three straight quarters. Non-GAAP gross margin was 75.0 percent this quarter, calculated from company reported figures as non-GAAP gross profit divided by revenue, both reported this quarter. That compares with 77.1 percent last quarter and 78.3 percent in the prior year quarter, both calculated from company reported figures using the same method.

GAAP operating income was $15,955 million, up from $5,887 million in the prior year quarter. GAAP operating margin was 53.9 percent, calculated from company reported figures. Non-GAAP operating income was $20,095 million, up from $10,455 million in the prior year quarter, for non-GAAP operating margin of 67.9 percent, calculated from company reported figures.

GAAP net income was $13,088 million, or $2.68 per diluted share. Non-GAAP net income was $16,372 million, or $3.32 per diluted share. The filing attributes most of the gap to $2,006 million in amortization of acquisition related intangible assets and $2,019 million in stock based compensation expense for the quarter. Broadcom was profitable on both a GAAP and a non-GAAP basis this quarter.

Operating cash flow was $14,197 million, up 98 percent from $7,166 million in the prior year quarter. Capital expenditures were $532 million. Free cash flow, defined by the company as operating cash flow less capital expenditures, was $13,665 million, equal to 46 percent of revenue.

Semiconductor solutions revenue was $20,839 million, up 127 percent year over year, and represented 70 percent of total revenue. According to the company, AI semiconductor revenue within this segment was $16.7 billion, up 221 percent year over year and up 54 percent from the prior quarter. Management stated in the filing that demand for custom AI accelerators and AI networking continues to be very strong.

Infrastructure software revenue was $8,752 million, up 29 percent year over year, but its share of total revenue fell to 30 percent from 43 percent in the prior year quarter. The filing does not break out revenue for individual products within this segment.

According to the company, fourth quarter fiscal year 2026 AI semiconductor revenue is expected to reach $21.7 billion, up 236 percent year over year. This is management guidance, not a reported result.

Cash and cash equivalents were $23,975 million at quarter end, up from $19,628 million at the end of the prior quarter and up from $16,178 million at fiscal year end 2025. Total current assets were $52,173 million against total current liabilities of $20,838 million.

Short term debt was $2,252 million and long term debt was $57,167 million, together down from combined debt of $65,136 million at fiscal year end 2025, calculated from company reported figures. Total liabilities were $88,458 million, down from $89,800 million at fiscal year end 2025. Total stockholders equity was $99,690 million, up from $81,292 million at fiscal year end 2025.

Weighted average diluted shares outstanding were 4,887 million for the quarter, up from 4,860 million in the prior year quarter. The company repurchased no common stock under its repurchase program during the quarter, consistent with the same quarter a year earlier. Repurchases under the program totaled $8,450 million for the first three fiscal quarters of 2026.

The company guided fourth quarter fiscal year 2026 revenue to approximately $34.8 billion, an increase of approximately 93 percent from the prior year period according to the company. This is management guidance. The guidance midpoint implies sequential growth of approximately 17.6 percent from this quarter's reported revenue, calculated from company reported figures.

The company also guided fourth quarter non-GAAP operating income to approximately 66 percent of projected revenue, which would equal approximately $22,968 million at the guided revenue midpoint, calculated from company reported figures. According to the company, fourth quarter AI semiconductor revenue is expected to reach $21.7 billion. Reaching the guided total revenue figure alongside that AI semiconductor figure implies non-AI revenue of approximately $13.1 billion, calculated from company reported figures.

This quarter proved Broadcom can convert accelerating AI semiconductor demand into higher absolute profit and record free cash flow at the same time. Revenue growth accelerated from 48 percent in the prior quarter to 86 percent, and both GAAP and non-GAAP operating income grew faster than revenue.

This quarter did not resolve whether gross margin can stabilize as AI semiconductor solutions keep taking share from higher margin infrastructure software. Non-GAAP gross margin has declined in each of the last three quarters, and the business mix implied by fourth quarter guidance, with AI semiconductor revenue guided to grow faster than total revenue, suggests that pressure is more likely to continue than to ease.

• Whether non-GAAP gross margin stabilizes or continues declining in the fourth quarter
• Whether reported AI semiconductor revenue reaches the guided $21.7 billion
• Whether infrastructure software revenue growth accelerates from its current 29 percent pace
• Whether diluted share count stabilizes as stock based compensation expense continues near $2 billion per quarter