AI Takeaway
Broadcom delivered exceptional Q2 FY2026 results with revenue surging 47.9% YoY to $22.2B, driven by AI semiconductor demand, while operating income nearly doubled and cash generation remained robust with $18.8B in YTD operating cash flow.
Revenue
$22.19B
++47.87% YoY
EPS (Basic)
$1.96
++86.67% YoY
Gross Margin
69.5%
++1.52% YoY
Operating Income
$10.79B
++85.07% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 47.9% YoY to $22.2B in Q2 FY2026, up from $15.0B in Q2 FY2025, reflecting strong demand for AI-related semiconductors and continued contribution from VMware infrastructure software revenues.
Source: Source: 10-Q Income Statement
Gross margin improved 151 basis points YoY to 69.5%, with gross profit rising 51.2% to $15.4B, suggesting a higher mix of software and premium semiconductor products contributing to profitability.
Source: Source: 10-Q Income Statement
Operating income surged 85.1% YoY to $10.8B, with operating margin expanding nearly 10 percentage points to 48.6%, as SG&A expenses declined 2.6% YoY while revenue nearly doubled, demonstrating significant operating leverage.
Source: Source: 10-Q Income Statement
2 more insights available
Upgrade to unlockBroadcom carries $64.9B in long-term debt, largely stemming from the VMware acquisition. While total liabilities declined 3.8% YoY to $91.5B, the debt burden remains substantial and exposes the company to refinancing and interest rate risks in a higher-rate environment.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.44 versus the $2.45 analyst consensus — a -0.2% miss for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $22.19B | $15B | +47.87% |
Cost of Revenue | $6.77B | $4.81B | +40.88% |
Gross Profit | $15.41B | $10.2B | +51.17% |
Operating Income | $10.79B | $5.83B | +85.07% |
EPS (Basic) | $1.96 | $1.05 | +86.67% |
EPS (Diluted) | $1.91 | $1.03 | +85.44% |
R&D Expense | $3B | $2.69B | +11.21% |
SG&A Expense | $1.05B | $1.08B | -2.59% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $179.16B | $164.63B | +8.82% |
Current Assets | $42.21B | $22.18B | +90.31% |
Total Liabilities | $91.47B | $95.04B | -3.76% |
Current Liabilities | $18.86B | $20.6B | -8.42% |
Cash & Equivalents | $19.63B | $9.47B | +107.22% |
Long-Term Debt | $64.91B | — | — |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash FlowYTD | $18.75B | $12.67B | +48.03% |
Investing Cash FlowYTD | $-323M | $-307M | -5.21% |
Financing Cash FlowYTD | $-14.98B | $-12.24B | -22.42% |
Dividends PaidYTD | $6.18B | $5.56B | +11.14% |
Share Buybacks | $600M | $2.45B | -75.51% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 69.5% | 68.0% | +1.52% |
Operating Margin | 48.6% | 38.8% | +9.77% |
Current Ratio | $2.238 | — | — |
Other companies in Semiconductors
Broadcom delivered outstanding Q2 FY2026 results with revenue of $22.2B, up 47.9% YoY, and diluted EPS of $1.91, up 85.4% YoY. Operating income surged to $10.8B with an operating margin of 48.6%, nearly 10 percentage points higher than the prior year.
Broadcom's 47.9% revenue growth to $22.2B in Q2 FY2026 was driven by strong AI semiconductor demand from hyperscale customers and the continued contribution of VMware's infrastructure software revenues. Gross margin also expanded to 69.5%, suggesting a favorable mix shift toward higher-value products.
Broadcom's financial health is strong, with cash & equivalents more than doubling to $19.6B, a current ratio of 2.24, and YTD operating cash flow of $18.8B. The main concern is $64.9B in long-term debt from the VMware acquisition, though total liabilities declined 3.8% YoY to $91.5B.
Broadcom paid $6.2B in dividends on a YTD basis through Q2 FY2026, an increase of 11.1% compared to the same period last year. Share buybacks were significantly reduced to $600M YTD from $2.45B in the prior-year period, suggesting capital allocation is prioritizing dividends and debt reduction.
Key risks include Broadcom's $64.9B long-term debt load from the VMware acquisition, potential customer concentration risk in AI semiconductor revenues, and ongoing VMware integration execution challenges. Additionally, R&D spending grew only 11.2% versus 47.9% revenue growth, raising questions about long-term innovation investment relative to the company's rapid expansion.