Q2 2026 Broadcom Inc Earnings Call Transcript
Key Points
- Broadcom Inc (AVGO) reported a record Q2 revenue of $22.2 billion, up 48% year on year, driven by strong performance in AI semiconductors.
- AI semiconductor revenue reached a record $10.8 billion, up 143% year on year, indicating robust demand and growth potential.
- The company expects AI semiconductor revenue to double in the second half of 2026, with a forecast of $56 billion for the full year, up approximately 180% from fiscal 2025.
- Broadcom Inc (AVGO) has secured long-term agreements with major tech companies like Google, Anthropic, and OpenAI, ensuring sustained business growth.
- The infrastructure software segment also showed strong performance, with Q2 software revenue up 9% year on year and expected to grow by 31% in Q3.
- Gross margin declined by 230 basis points year on year to 77.1% due to the increasing proportion of semiconductor products in the mix.
- Despite strong revenue growth, the company faces pressure on semiconductor margins due to the lower margins of ASICs and TPUs.
- The rapid growth in AI semiconductor revenue is causing a decline in consolidated gross margin, expected to be approximately 74% in Q3.
- There is a significant backlog in AI semiconductor bookings, with $30 billion in bookings against $10.8 billion shipped, indicating potential supply chain challenges.
- The company's visibility into future demand extends to 2028, but this long lead time may pose risks if market conditions change.
Welcome to Broadcom Inc., second quarter fiscal year 2026 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; Charlie Kawwas, President, Semiconductor Solutions Group; and Ram Velaga, President, Infrastructure Software Group.
Also joining is Kirsten Spears, Chief Financial Officer. As we announced, Kirsten will be retiring June 12. And today, we have joining us our incoming Chief Financial Officer, Amie Thuener. Thank you, Kirsten, for your leadership over the past 12 years.
Broadcom distributed a press release and financial tables after the market closed, describing our financial performance for the second quarter fiscal year 2026. If you did not receive a copy, you may obtain the information from the Investor section of Broadcom's website at broadcom.com.
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
