Q2 2025 Broadcom Inc Earnings Call Transcript
Key Points
- Broadcom Inc (AVGO) reported a record total revenue of $15 billion for fiscal Q2 2025, marking a 20% year-on-year increase.
- AI semiconductor revenue reached over $4.4 billion, up 46% year-on-year, continuing a trajectory of nine consecutive quarters of strong growth.
- Infrastructure software revenue grew by 25% year-on-year to $6.6 billion, driven by the successful integration of VMware and strong VCF sales.
- The company forecasts AI semiconductor revenue to grow by 60% year-on-year in Q3, marking the tenth consecutive quarter of growth.
- Broadcom Inc (AVGO) achieved a gross margin of 79.4% in Q2, better than originally guided, due to favorable product mix.
- Non-AI semiconductor revenue was down 5% year-on-year, with sectors like industrial and wireless experiencing declines.
- Free cash flow as a percentage of revenue was impacted by increased interest expenses from debt related to the VMware acquisition.
- The company anticipates a sequential decline in consolidated gross margin by approximately 130 basis points in Q3 due to a higher mix of XPUs.
- Broadcom Inc (AVGO) faces uncertainty regarding potential impacts from changing export control regulations.
- The transition of VMware customers to a subscription model is ongoing and expected to take another 1.5 years to complete.
Welcome to Broadcom Inc's Second Quarter Fiscal Year 2025 Financial Results Conference Call. At this time, for opening remarks and introductions. I would like to turn the call over to Ji Yoo. Head of Investor Relations of Broadcom Inc.
Thank you, operator, and good afternoon, everyone. Joining me on today's call are Hock Tan, President and CEO; Kirsten Spears, Chief Financial Officer; and Charlie Case, President Semiconductor Solutions Group. Broadcom distributed a press release and financial tables after the market closed, describing our financial performance for the second quarter of fiscal year 2025.
If you did not receive a copy, you may obtain the information from the Investors section of the Broadcom's website at broadcom.com. This conference call is being webcast live, and an audio replay of the call can be accessed for one year through the Investors section of Broadcom's website. During the prepared comments, Hock and Kirsten will be providing details of our second quarter fiscal year 2025
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