Broadcom reports record Q3 revenue, lifts Q4 AI outlook

Broadcom (NASDAQ: AVGO ) held its third-quarter earnings conference call on Wednesday.

Below is the complete transcript from the call.

This content is powered APIs.

For comprehensive financial data and transcripts, visit Access the full call at Watch the full earnings call below: Summary Broadcom Inc. reported record financial results for Q3 FY 2026, with consolidated revenue of $29.6 billion, up 86% year-on-year, driven by a significant increase in AI semiconductor revenue.

AI semiconductor revenue grew 221% year-on-year to $16.7 billion, making up 56% of total revenue, with strong demand expected to continue into Q4.

The company forecasted Q4 consolidated revenue of $34.8 billion, up 93% year-on-year, with AI revenue expected to be $21.7 billion, up 236% year-on-year.

Operating income increased by 92% year-on-year to $20.1 billion, with an operating margin of 68%, showcasing strong operational leverage.

Broadcom announced strategic partnerships and long-term agreements with key customers like Google, Anthropic, and OpenAI, highlighting the growth in demand for its custom accelerators and AI networking solutions.

Future outlook includes AI revenue doubling to $115 billion in fiscal 2027 and doubling again to $230 billion in fiscal 2028, supported by secured supply lines and customer demand.

Non-AI semiconductor revenue remained stable, with a forecasted slight increase in Q4, while infrastructure software revenue showed growth, driven by new enterprise AI solutions.

Management emphasized continued investments in semiconductor and AI technology, including substrate and laser capacity expansions, to meet growing market demands.

Full Transcript OPERATOR Welcome to Broadcom Inc.'s third quarter fiscal year 2026 financial results conference call.

At this time, for opening remarks and introductions, I would like to turn the call over to Gu, Head of Investor Relations at Broadcom Inc.

Please go ahead.

Gu, Head of Investor Relations Thank you, Cherie, and good afternoon, everyone.

Joining me on today's call are Hock Tan, President and CEO; Amy Teener, Chief Financial Officer; and Charlie Kawwas, President, Semiconductor Solutions Group.

Broadcom distributed a press release and financial tables after the market closed describing our financial performance for the third quarter fiscal year 2026.

If you did not receive a copy, you may obtain the information from the Investor section of Broadcom's website at broadcom.com.

This conference call is being webcast live, and an audio replay of the call can be accessed for one year through the Investors section of Broadcom's website.

During the prepared comments, Hock and Amy will be providing details of our third quarter fiscal year 2026 results, guidance for our fourth quarter of fiscal year 2026, as well as commentary regarding the business environment.

We'll take questions after the end of our prepared comments.

Please refer to our press release today and our recent filings with the SEC for information on risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call.

In addition to U.S.

GAAP reporting, Broadcom reports certain financial measures on a non—GAAP basis.

A reconciliation between GAAP and non—GAAP measures, to the extent possible, is included in the tables attached to today's press release.

Comments made during today's call will primarily refer to our non—GAAP financial results.

I will now turn the call over to Hock.

Hock Tan, President and Chief Executive Officer Well, thank you, Gu, and thank you everyone here for joining us today.

We delivered an exceptional quarter with revenue, operating income, and free cash flow all exceeding prior records, and driving this was our Q3 AI semiconductor revenue, which grew 221% year on year and up 54% sequentially.

This brought our consolidated revenue to 29.6 billion, which was up 86% year on year.

Operating income grew even faster at 92% year on year, with operating margin at a record 68% of revenue, reflecting strong operating leverage.

Q3 demand was simply hot, and we're just getting started.

Our six XPU customers are accelerating the adoption of custom accelerators, and AI semiconductor revenue more than tripled year over year to 16.7 billion during the quarter.

We delivered Ironwood TPU version 7 in high volume to both Anthropic and Google.

At the same time, we began production shipments of the next generation TPU version 8i for Google.

This new TPU generation has been designed with more memory and bandwidth compared to Ironwood and, just like Ironwood, is optimized for inference workloads, and in performance it is comparable, if not surpasses, the VARO Rubit GPU.