Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) reported record second-quarter revenue and earnings on Wednesday, driven by surging demand for custom AI accelerators, though shares fell more than 5% in after-hours trading as AI semiconductor guidance for the third quarter came in below some investor expectations.
The chipmaker posted Q2 revenue of $22.19 billion, up 48% year-over-year and slightly ahead of analyst estimates of $22.13 billion.
Adjusted earnings per share rose 54% to $2.44, topping the $2.39 consensus.
Semiconductor solutions revenue climbed 79% to $15.01 billion, beating estimates of $14.65 billion, while AI semiconductor revenue reached $10.8 billion, up 143% year-over-year, though short of the buyside estimate of $11.3 billion. Infrastructure software revenue rose 9% to $7.18 billion.
The semiconductor revenue was above the company’s own forecast, it said in a statement, attributing it to increasing demand for custom AI accelerators and AI networking.
Free cash flow for the quarter reached $10.26 billion, representing 46% of revenue, while non-GAAP net income rose 55% to $12.07 billion. Adjusted EBITDA climbed 52% to $15.24 billion.
For the third quarter, Broadcom guided for revenue of approximately $29.4 billion, up 84% year-over-year and ahead of the analyst consensus of $28 billion, though below the buyside target of $30 billion. AI semiconductor revenue is forecast to reach $16 billion in Q3, representing growth of more than 200% year-over-year, but again trailing the buyside estimate of approximately $18 billion.
Non-GAAP operating margin is expected to hold steady at approximately 67% of projected revenue.
Broadcom declared a quarterly dividend of $0.65 per share, having returned $3.09 billion to shareholders via dividends in Q2.