Broadcom Inc Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vivek Arya - Bofa Merrill Lynch Asset Holdings Inc - Analyst : Just wanted to clarify, Hock, you said $73 billion over 18 months for AI, that's roughly $50 billion-ish plus for fiscal '26 for AI. I just wanted to get -- make sure I got that right. And then the main question, Hock, is that there is sort of this emerging debate about customer-owned tooling, your ASIC customers potentially wanting to do more things on their own. How do you see your XPU content and share at your largest customer evolve over the next one or two years?

Question: Harlan Sur - JPMorgan Chase & Co - Analyst : Congratulations on the strong results, guidance, and execution. Hock, again, I just want to sort of verify this, right? So you talked about total AI backlog of $73 billion over the next six quarters, right? This is just a snapshot of your order book like right now. But given your lead times, I think customers can and still will place orders for AI in quarters four, five and six. So as time moves forward, that backlog number for more shipments in the second half will probably still go up, right? Is that the correct interpretation? And then given the strong and growing backlog, right, the question is: does the team have 3 nanometer, 2 nanometer wafer supply, colos, substrate, HBM supply commitments to support all of the demand in your order book? And I know one of the areas where you are trying to mitigate this as in advanced packaging, right? You're bringing up your Singapore facility. Can you guys just remind us what part of the advanced packaging process the team is focusing on with the Singapore facility?

Question: Blayne Curtis - Jefferies - Analyst : I wanted to ask, with the original $10 billion deal you talked about, a rack sale, I just wanted to -- with the follow-on order as well as the fifth customer, can you just maybe describe how you're going to deliver those? Is it an XPU? Or is it a rack? And then maybe you can kind of just walk us through the math and kind of what the deliverable is? Obviously, Google uses own networking. I'm kind of curious, too, would it be a copy exact of what Google does, now that you could talk to it to name? Or would you have your own networking in there as well?

Question: Stacy Rasgon - Sanford C Bernstein & Co LLC - Analyst : I wanted to touch on gross margins and maybe it feeds into a little bit the prior question. So I understand why the AI business is somewhat dilutive to gross margins. We have the HBM pass-through. And then presumably with the system sales that will be more dilutive. And you hinted at this in the past, but I was wondering if it could be a little more explicit. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 10:00PM, AVGO.OQ - Q4 2025 Broadcom Inc Earnings Call As this AI revenue starts to ramp, as we start to get system sales, how should we be thinking about that gross margin number, say, we're looking out four quarters or six quarters? Is it low 70s? I mean could it start with the six at the corporate level? And I guess I'm also wondering I understand how that comes down, but what about the operating margins? Do you think you get enough operating leverage on the OpEx side to keep operating margins flat? Or do they need to come down as well?

Question: James Schneider, Ph.D. - Goldman Sachs Group Inc - Analyst : Hock, I was wondering if you might care to calibrate your expectations for AI revenue in fiscal '26 a little bit more closely. I believe you talked about acceleration in fiscal '26 off of the 65% growth rate you did in fiscal '25. And then you're guiding to 100% growth for Q1. So I'm just wondering if the Q1 is a good jumping off point for the growth rate you expect for the full year or something maybe a little bit less than that? And then maybe if you could separately clarify whether your $1 billion of orders for the fifth customer is indeed OpenAI, which you made a separate announcement about.

Question: C.J. Muse - Cantor Fitzgerald LP - Analyst : I guess, Hock, I wanted to talk about custom silicon and maybe speak to how you expect content to grow for Broadcom generation to generation. And as part of that, your competitor announced CPX offering, essentially accelerator for an accelerator for massive context windows. I'm curious if you see a broadening opportunity for your existing five customers to have multiple XPU offerings. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 10:00PM, AVGO.OQ - Q4 2025 Broadcom Inc Earnings Call

Question: Harsh Kumar - Piper Jaffray Inc - Analyst : Yes. Hock and team, first of all, congratulations on some pretty stunning numbers. I've got an easy one and a more strategic one. The easy one is: you guide in AI, Hock and Kirsten, is calling for almost $1.7 billion of sequential growth. I was curious maybe you can talk about the diversity of the growth between the three existing customers? Is it pretty well spread out, all of them growing? Or is one sort of driving much of the growth? And then Hock, strategically, one of your competitors bought a photonic fabric company recently. I was curious about your take on that technology and if you think it's disruptive or you think it's just gimmickry at this point in time.

Question: Christopher Rolland - Susquehanna Financial Group LLLP - Analyst : Just first, a clarification and then my question and sorry to come back to this issue. But if I understand you correctly, Hock, I think you were saying that OpenAI would be a general agreement, so it's not binding, maybe similar to the agreements with both NVIDIA and AMD. And then secondly, you talked about flat non-AI semiconductor revenue, maybe what's going on there? Is there still an inventory overhang? And what could -- what do we need to get that going again? Do you see growth eventually in that business?

Question: Joseph Moore - Morgan Stanley - Analyst : Great. So if you have $21 billion of rack revenue in the second half of '26, I guess do we stay at that run rate beyond that? Are you going to continue to sell racks? Or does that sort of that type of business mix shift over time? And I'm really just trying to figure out the percentage of your 18-month backlog that's actually full systems at this point.