American semiconductor and software maker Broadcom announced results for the first quarter of its fiscal year 2025, ending February 2, 2025. The quarter’s results beat Wall Street expectations, which, together with an optimistic forecast for the second fiscal quarter, led to a more than 12% increase in the company’s shares after the close of trading, writes the resource SiliconANGLE.
Broadcom’s fiscal first-quarter revenue rose 25% to $14.92 billion from $11.96 billion a year earlier, beating the $14.61 billion forecast by analysts polled by LSEG. Adjusted non-GAAP net income also beat LSEG’s consensus estimate of $1.61 per diluted share, compared with the $1.49 forecast. GAAP net income for the quarter rose to $5.5 billion, or $1.14 per diluted share, compared with $1.33 billion, or $0.28 per diluted share, a year earlier. Adjusted EBITDA increased to $10.08 billion from $7.16 billion last year (an increase of 41% year over year), accounting for 68% of revenue.
Image source: Broadcom
The company’s Semiconductor solutions group generated revenue of $8.21 billion, up 11% year-over-year. Infrastructure software, including VMware, earned $6.70 billion, up 47%. AI solutions revenue in the first fiscal quarter grew 77% year-over-year to $4.1 billion. The company expects AI chip revenue to grow further to $4.4 billion in the second quarter as hyperscale partners continue to invest in XPUs and data center AI communications solutions.
Last December, the company said it was developing custom AI chips for three major hyperscale cloud customers. In its quarterly earnings call today, Hock Tan, Broadcom’s president and CEO, noted that the company’s three largest customers are “aggressively” investing in building powerful new AI models and aiming to build clusters of 1 million AI accelerators by the end of 2027.
Broadcom is also “working closely” with two other hyperscalers and working on custom chips with four more potential customers. Broadcom has a long history of working with Google on TPUs, and last year it was reported to be building server AI accelerators for Apple, ByteDance, and OpenAI. Additionally, Fujitsu’s upcoming MONAKA processor will receive 3.5D packaging from Broadcom.
Remarkably, when asked whether Broadcom was planning another acquisition, Tan said no. “We’re too busy with AI and VMware. We’re not thinking about that at the moment,” The Register quotes him as saying. So perhaps the reports of Broadcom buying part of Intel were just rumors, the resource concluded.
Broadcom expects revenue of $14.9 billion for the current quarter, up 19% year over year and above Wall Street’s estimate of $14.76 billion. The company’s software segment is on track to earn $6.5 billion in the quarter, up 23% year over year, Tan said. Adjusted EBITDA is expected to account for 66% of revenue.