Key Highlights

● Third-quarter Revenue was US$29.6 billion, up 86% year on year.

● AI semiconductor revenue reached US$16.7 billion, up 221% year on year.

● Free Cash Flow was US$13.7 billion, about 46% of revenue.

● Fourth-quarter guidance calls for revenue of about US$34.8 billion and AI revenue of US$21.7 billion.

Latest verified development

Broadcom Inc. (NASDAQ:AVGO) released its fiscal third-quarter report on 2 September 2026 after the market close. The quarter ended 2 August 2026 and was dominated by custom Artificial Intelligence (AI) accelerators and networking products, which management said continued to see very strong demand.

Third-quarter results

Revenue was US$29.6 billion, up 86% year on year. Semiconductor solutions contributed US$20.8 billion, up 127%, and infrastructure software US$8.8 billion, up 29%. AI semiconductor revenue was US$16.7 billion, up 221% year on year and 54% on the previous quarter, according to chief executive Hock Tan, which is about 56% of total revenue on a simple calculation. Infrastructure software, though slower growing, still made up nearly 30% of revenue.

GAAP Net Income was US$13.1 billion, up 216%, and non-GAAP net income was US$16.4 billion, up 95%. Diluted Earnings per Share were US$2.68 on a GAAP basis and US$3.32 non-GAAP. Non-GAAP Operating Income was US$20.1 billion. Free cash flow was US$13.7 billion, about 46% of revenue, from Operating Cash Flow of US$14.2 billion less Capital Expenditure of US$0.5 billion. Chief financial officer Amie Thuener said Broadcom achieved record revenue, operating profit and free cash flow.

Guidance and Shareholder returns

For the fourth quarter, which ends on 1 November 2026, Broadcom guided to revenue of about US$34.8 billion, up 93%, and AI semiconductor revenue of US$21.7 billion, up 236%, with non-GAAP operating income of about 66% of revenue. The guided AI figure would be about 62% of guided revenue, again a simple calculation.

The earlier outlook for the third quarter had been revenue of US$29.4 billion and AI semiconductor revenue of roughly US$16 billion, so reported results came in above that guidance.

The release cites a quarterly Dividend of US$0.65 per share, with the next payment dated 30 September 2026 to holders of record on 21 September. The earlier June payment totalled US$3.1 billion.

Fourth-quarter AI step-up and the Margin question

Gross margin was guided lower for the third quarter, and the mix between semiconductors and infrastructure software, free cash flow conversion and customer concentration in custom accelerators all sit behind the headline growth. The roughly US$3.1 billion quarterly dividend outlay remains a substantial use of cash.

Guidance implies AI semiconductor revenue stepping up from US$16.7 billion to US$21.7 billion in a single quarter, a pace that sets a high bar for delivery.