AVGO · Q2 2026 Earnings

Bullish

Broadcom

Reported June 3, 2026

30-second summary

30-second take. Broadcom posted Q2 revenue of $22.19B (+48% YoY, +14.9% QoQ), $187M above the $22.0B guide, with AI semiconductor revenue of $10.8B (+143% YoY) beating the $10.7B guide and Q3 now guided to $29.4B (+84% YoY) with AI semis stepping to $16.0B (+200% YoY) — a $5.2B sequential dollar increase, more than double the Q1→Q2 step. Non-GAAP gross margin came in at 77.1% ($17,109M / $22,187M), in line with the 77% flat-QoQ guide, and adjusted EBITDA margin held at 69% (+100bps vs the ~68% guide), so the operating leverage story is fully intact heading into a Q3 print that, if it holds, validates the glide path toward the 2027 $100B+ silicon line of sight.

Headline numbers

EPS

Q2 FY2026

$2.44

Revenue

Q2 FY2026

$22.19B

+48.0% YoY

Gross margin

Q2 FY2026

69.5%

Free cash flow

Q2 FY2026

$10.26B

Operating margin

Q2 FY2026

48.6%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$22.19B	$15.00B	+47.9%	$19.31B	+14.9%
EPS	$2.44	$1.58	+54.4%	$2.05	+19.0%
Gross margin	69.5%	67.9%	+160bps	68.1%	+140bps
Operating margin	48.6%	38.8%	+980bps	44.3%	+430bps
Free cash flow	$10.26B	$6.41B	+60.1%	$8.01B	+28.1%

Guidance

Guidance is issued one quarter forward. The Prior-guide column references the guide issued last quarter for the period just reported; the New-guide column is for next quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$22.0 billion	$22.187 billion	+$0.187 billion above guide	Beat
Revenue YoY growth	Q2 FY2026	47%	48%	+1 percentage point above guide	Beat
AI semiconductor revenue	Q2 FY2026	$10.7 billion	$10.8 billion	+$0.1 billion above guide	Beat
Semiconductor revenue	Q2 FY2026	$14.8 billion, up 76% YoY	$15.009 billion	+$0.209 billion above guide, growth of 79% YoY vs. guided 76% YoY	Beat
Infrastructure software revenue	Q2 FY2026	$7.2 billion, up 9% YoY	$7.178 billion	-$0.022 billion below guide, but inline with 9% YoY growth	Beat
Consolidated gross margin	Q2 FY2026	77%	69.5%	-7.5 percentage points below guide	Missed
Adjusted EBITDA margin	Q2 FY2026	approximately 68%	69%	+1 percentage point above guide	Beat
Non-GAAP operating margin	Q2 FY2026	—	67.3%	in-line	Met
Non-GAAP tax rate	Q2 FY2026	approximately 16.5%	~16.5% (derived from EPS)	in-line	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$29.4 billion	+84% YoY
AI semiconductor revenue	Q3 FY2026	$16.0 billion (expected to grow over 200% YoY)	+200% YoY
Non-GAAP Operating Income	Q3 FY2026	67% of projected revenue	—

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Semiconductor solutions	$15.009B	$8.408B	+78.5%
Infrastructure software	$7.178B	$6.596B	+8.8%

Capacity & utilization

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
AI semiconductor revenue	$10.8 billion	—	—
AI semiconductor YoY growth	143%	—	—

Profitability

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Adjusted EBITDA	$15.244 billion	$10,001 million	—
Adjusted EBITDA margin	69%	67%	—
Non-GAAP operating margin	67.3%	—	—
Free cash flow margin	46%	43%	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Quarterly dividend per share	$0.65	—	—

Management tone

Transcript not available for this quarter; tone analysis deferred. The press release is consistent with the Q1 narrative: AI semi revenue framed as "above our forecast," Q3 acceleration to 200%+ YoY characterized as "momentum continues," and operating leverage at 67% non-GAAP operating margin described as "strong." No new strategic disclosures (customer count, backlog update, supply chain) appear in the press release; those would need to come from the call.

Answers to last quarter's watch list

Q2 FY2026 AI semiconductor revenue vs. the $10.7B (+140% YoY) guide. AI semis printed $10.8B (+143% YoY), a $100M beat, and Q3 is guided to $16.0B (+200%+ YoY) — a $5.2B sequential step that more than doubles the Q1→Q2 increment. The required exit-rate for the 2027 $100B+ silicon trajectory is being validated quarter by quarter; the Q3 guide implies an annualized exit run-rate of ~$64B by end-FY2026.

Resolved positively

Q2 consolidated gross margin landing vs. the 77% flat-QoQ guide. Non-GAAP gross margin came in at 77.1%, in line with the flat-QoQ guide, and adjusted EBITDA margin beat at 69% (+100bps vs guide). The system-sales-margin-dilution thesis is not yet visible in the reported numbers.

Resolved positively

Seventh XPU customer or any additional named hyperscaler. The press release does not disclose a new XPU customer. Any update would have come from the call.

Continue monitoring

Networking as % of AI revenue in Q2 actuals vs. the 40% guide. Not broken out in the press release.

Continue monitoring

Infrastructure software re-acceleration vs. the +9% Q2 YoY guide. Software landed at $7.18B (+9% YoY), exactly on the guide and a sharp recovery from Q1's +1.4%. The reacceleration thesis held. Whether it sustains toward "low double-digit FY2026" framing is the next test.

Resolved positively

Non-AI semiconductor follow-through on the +4% Q2 guide. Implied non-AI of ~$4.2B (~flat to slightly positive YoY) is broadly in line with the +4% guide. The stabilization holds; no acceleration yet. Status: Resolved in line.

Any supply-chain re-disclosure. No incremental supply-chain commentary in the press release. The "supply secured through 2028" framing from Q1 is the operative assumption until the call transcript is available.

Continue monitoring

What to watch into next quarter

Q3 FY2026 AI semiconductor revenue vs. the $16.0B (+200%+ YoY) guide. A beat with explicit Q4 dollar quantification would establish the FY2026 AI exit-rate above $64B annualized; an in-line print with sequential flattening would suggest the curve is bending.

Q3 FY2026 non-GAAP gross margin trajectory as AI mix continues to climb. Q2 held at 77.1% even as AI crossed 49% of consolidated revenue; whether Q3 sustains at this level into a richer XPU/system mix is the next test for the operating leverage thesis.

Q3 non-AI semiconductor and software trajectories. Software at +9% needs to step toward low double-digits; non-AI needs to confirm the modest +4% recovery is durable rather than a one-quarter shelf.

Updated backlog and customer disclosures from the Q2 call. The Q1 narrative was anchored to a $73B AI backlog, six XPU customers including OpenAI, and supply secured through 2028. Any of those data points moving — backlog growth, seventh customer, additional capacity — directly resets the 2027 ceiling. Conversely, silence on backlog after two consecutive quarters of disclosure would be conspicuous.

Sources

Broadcom Q2 FY2026 press release (8-K exhibit, filed 2026-06-03): https://www.sec.gov/Archives/edgar/data/1730168/000173016826000051/avgo-05032026x8kxex99.htm
Earnings call transcript not yet available; tone, Q&A, and incremental strategic disclosure analysis deferred to a transcript-supplemented update.

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