TLDR
- Broadcom soars on Q3 beat: AI semis & VMware boost revenue, cash flow records
- AI drives Broadcom Q3 surge: revenue +22%, free cash flow hits $7B record
- Broadcom stock jumps as AI chips, software push Q3 revenue to $15.95B
- Q3 boom: Broadcom rides AI wave, net income rebounds, cash returns rise
- AI-fueled Broadcom crushes Q3 with 22% growth, strong guidance for Q4
Broadcom’s stock closed at $306.10, marking a 1.23% daily gain, before jumping 4.38% to $319.50 in after-hours trading.
The spike followed its third-quarter fiscal 2025 earnings report, which showed strong revenue and free cash flow growth. The company’s performance reflects expanding demand in AI-related semiconductors, networking hardware, and software solutions.
Q3 Results Show Sharp Year-over-Year Growth Across Key Financial Metrics
Broadcom posted third-quarter revenue of $15.95 billion, increasing 22% from $13.07 billion a year earlier. GAAP net income reached $4.14 billion, rebounding from a loss of $1.88 billion in the same quarter last year. Non-GAAP net income rose 37% to $8.40 billion, while adjusted EBITDA grew 30% to $10.70 billion.
The company recorded GAAP diluted earnings per share of $0.85 and non-GAAP diluted EPS of $1.69, both showing solid year-over-year improvements. Free cash flow hit a record $7.02 billion, climbing 47% from $4.79 billion in Q3 2024. Operating cash flow totaled $7.17 billion, driven by strong profit margins and disciplined capital spending of just $142 million.
Broadcom’s adjusted EBITDA margin remained at 67%, highlighting continued operating leverage. The company held $10.72 billion in cash and equivalents at quarter-end, up from $9.47 billion in the prior quarter. It returned $2.79 billion to shareholders through dividends, reaffirming its cash return strategy.
AI-Fueled Semiconductor Segment Leads Broad-Based Performance Gains
Revenue from Broadcom’s semiconductor segment rose 26% to $9.17 billion, boosted by strong AI accelerator demand. This accounted for 57% of total revenue, up slightly from the prior year’s 56%. AI-related semiconductor revenue surged 63% year-over-year to $5.2 billion in Q3.
The infrastructure software segment also delivered 17% growth, reaching $6.79 billion and comprising 43% of total revenue. The recent VMware integration helped lift segment results as software solutions continued gaining enterprise traction. Broadcom noted consistent customer investments across AI and networking infrastructure.
CEO Hock Tan confirmed that Q4 AI semiconductor revenue is projected to hit $6.2 billion, reflecting rising deployment across major data centers. The Q3 performance marked eleven consecutive quarters of AI-driven semiconductor growth. Broadcom expects continued expansion as enterprise AI adoption accelerates.
Q4 Guidance Points to Accelerated Growth Amid High Demand
Broadcom guided fourth-quarter fiscal 2025 revenue at approximately $17.4 billion, representing a 24% increase from the prior-year period. Adjusted EBITDA margin is expected to hold steady at 67% of projected revenue. Management reiterated confidence in growth trends across semiconductor and software segments.
The board declared a quarterly cash dividend of $0.59 per share, payable September 30, 2025, to shareholders of record as of September 22. This payout aligns with the company’s stated goal of returning excess capital to shareholders. Broadcom continues prioritizing operational discipline alongside strategic growth investments.
With strong financial momentum, Broadcom appears positioned to benefit from ongoing AI infrastructure buildouts and enterprise software demand. The company’s robust Q3 performance and upbeat guidance lifted market sentiment, driving a post-market stock rally.
