Executive Summary
Broadcom Inc (AVGO) delivered impressive financial results for Q1 2025, achieving record revenues of $14.9 billion, a remarkable 25% increase year-on-year. This growth was primarily driven by a significant surge in AI-related sales, which reached $4.1 billion, marking a staggering 77% increase compared to the previous year. The company's consolidated adjusted EBITDA also reached a historic high of $10.1 billion, up 41% year-on-year, underscoring robust operational efficiency and a strong market position. Management has reaffirmed their commitment to R&D investments to maintain leadership in cutting-edge AI technologies, contributing to a very promising outlook for the upcoming quarters.
Key Performance Indicators
QoQ: 35.29% | YoY:123.97%
QoQ: 27.27% | YoY:315.32%
QoQ: 465.63% | YoY:303.45%
Key Insights
1. **Revenue**: $14.9 billion (up 25% YoY).
2. **Gross Profit**: $10.1 billion with a margin of 68% (up from 51.99% YoY).
3. **Operating Income**: $9.8 billion (up 44% YoY).
4. **Net Income**: $5.5 billion (up 315% YoY).
5. **EPS**: $1.17 (up 303.45% YoY).
The quarterly results reaffirm Broadcom's strong market positioning, particularly in semiconductor solutions, with AI revenue forecasts suggesting substantial growth in the $60-$90 billion serviceable addressable market for fisc...
Financial Highlights
1. Revenue: $14.9 billion (up 25% YoY).
2. Gross Profit: $10.1 billion with a margin of 68% (up from 51.99% YoY).
3. Operating Income: $9.8 billion (up 44% YoY).
4. Net Income: $5.5 billion (up 315% YoY).
5. EPS: $1.17 (up 303.45% YoY).
The quarterly results reaffirm Broadcom's strong market positioning, particularly in semiconductor solutions, with AI revenue forecasts suggesting substantial growth in the $60-$90 billion serviceable addressable market for fiscal 2027.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
14.92B |
24.71% |
6.13% |
| Gross Profit |
10.15B |
51.99% |
12.70% |
| Operating Income |
6.26B |
123.97% |
35.29% |
| Net Income |
5.50B |
315.32% |
27.27% |
| EPS |
1.17 |
303.45% |
465.63% |
Key Financial Ratios
operatingProfitMargin
42%
operatingCashFlowPerShare
$1.3
freeCashFlowPerShare
$1.28
dividendPayoutRatio
50.4%
Management Commentary
AI Growth and Future Prospects: Hock Tan stated, "Total revenue was a record $14.9 billion, and AI revenue of $4.1 billion was up 77% year on year. We expect Q2 AI revenue to grow to $4.4 billion, which is up 44% yoY."
Investment in R&D: Tan also emphasized the importance of R&D, stating, "We are pushing the envelope... with the industry's first two-nanometer AI XPU packaging 3.5D."
"Our hyperscale partners continue to invest aggressively in the next generation Frontier models... we expect these three hyperscale customers will generate a serviceable addressable market or SAM in the range of $60 to $90 billion in fiscal 2027."
â Hock Tan
"Free cash flow in the quarter was $6 billion and represented 40% of revenue. We spent $100 million on capital expenditures."
â Kirsten Spears
Forward Guidance
Management anticipates continued strong growth in Q2 2025, expecting total consolidated revenue to approximate $14.9 billion, with semiconductor revenue expected to reach $8.4 billion, up 17% YoY. AI revenue guidance suggests a further increase to $4.4 billion in Q2 as demand for high-performance accelerators mounts within AI data centers. Management also stated that their effective tax rate for Q2 is projected to be about 14%.