Broadcom reported financial results for the second quarter of fiscal 2025, which ended May 4. Despite a strong quarter that beat Wall Street analysts’ estimates, the company’s shares fell 4% in extended trading due to a weak outlook for the third fiscal quarter, after gaining about 12% this year and more than doubling last year, Reuters reports. The outlook for the current quarter underwhelmed investors who had expected significant growth driven by advances in AI.
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Broadcom’s fiscal second-quarter revenue increased 20% year over year to $15.00 billion, beating the $14.99 billion consensus estimate from analysts surveyed by LSEG. Adjusted non-GAAP net income was $1.58 per diluted share, up $0.48 from the prior-year period and slightly above the $0.02 consensus estimate from LSEG.
Net income (GAAP) for the second fiscal quarter increased 134% to $4.97 billion, or $1.03 per diluted share, from $2.12 billion, or $0.44 per diluted share, a year earlier. Adjusted EBITDA increased to $10.00 billion from $7.43 billion last year (an increase of 35% year over year), accounting for 67% of revenue.
AI revenue grew 46% year-over-year to $4.4 billion in the fiscal second quarter, driven by robust demand for AI networking solutions, said Hock Tan, Broadcom’s president and CEO. He said the company expects to increase AI revenue to $5.1 billion in the current quarter, marking 10 consecutive quarters of growth.
Tan said the company is still successfully collaborating with three major customers to develop custom AI accelerators, and is working with four more potential customers in this direction. He noted that the partners are “unwavering” in their plans to invest in AI infrastructure.
Broadcom’s Semiconductor solutions group generated 17% more revenue, totaling $8.41 billion (56% of total revenue), beating the $8.34 billion forecast by analysts surveyed by StreetAccount. Infrastructure software, including VMware, generated revenue of $6.60 billion (up 25%), beating StreetAccount’s estimate.
Broadcom said it expects to report about $15.8 billion in fiscal third-quarter revenue, up 21 percent from the same period last year and compared with the $15.7 billion Wall Street analysts had forecast.