Broadcom Inc. (AVGO) Announced Q3 2026 Earnings on September 2, 2026, Reporting "Consolidated revenue was a record $29.6 billion for the quarter, up 86% year-on-year"

Broadcom reported consolidated revenue of a record $29.6 billion for the third quarter of fiscal year 2026, representing an increase of 86% year-on-year.

Gross margin for the quarter was 75% of revenue, which was down 210 basis points sequentially as AI semiconductor revenue was a greater proportion of the total revenue mix. Q3 operating income was a record $20.1 billion, representing an increase of 92% from a year ago.

Operating margin reached a record 68% of revenue for the quarter.

Non-GAAP EPS was $3.32 for the quarter, up 96% year-on-year.

Free cash flow in the quarter was a record $13.7 billion, which represented 46% of revenue.

The Semiconductor Solutions segment generated record revenue of $20.8 billion, which was up 127% year-on-year, with gross margin for the segment at approximately 67% and operating margin at 61%. AI semiconductor revenue reached $16.7 billion for the quarter, which grew 221% year-on-year.

Infrastructure software revenue was $8.8 billion, representing a 29% increase year-on-year, with sustained ARR growth of 15% year-on-year.

During the quarter, management highlighted substantial updates to its custom silicon and networking portfolio.

Broadcom delivered the Ironwood TPU v7 in high volume to both Google and Anthropic, and started production shipments of the next-generation TPU version 8i to Google.

The company also shipped Jalapeno, OpenAI's first-generation custom accelerator, which is optimized for inference workloads.

For Meta, Broadcom expects production shipments of the custom MTIA accelerator in the fourth quarter. In networking, Broadcom taped out Tomahawk 7, the industry's first 200 terabit per second Ethernet switch. To support enterprise AI deployment, Broadcom announced the VMware Private AI Cloud.

Financially, the company established the AI XPV platform in partnership with Apollo and Blackstone to enable more than 20 gigawatts of compute infrastructure by the end of 2028, and closed a first tranche of $35 billion in June for Anthropic's 1 gigawatt deployment.

For the fourth quarter of fiscal 2026, Broadcom provided guidance expecting consolidated revenue of approximately $34.8 billion, which is up 93% year-on-year, with an operating margin of approximately 66%.

Fourth-quarter semiconductor revenue is guided to approximately $26.1 billion, up 136% year-on-year, driven by expected Q4 AI semiconductor revenue of $21.7 billion, up over 236% year-on-year. Q4 consolidated gross margin is expected to be approximately 73%, down from 78% a year ago due to the increasing proportion of custom XPUs in the revenue mix.

For the full fiscal year 2026, management expects AI revenue to reach $58 billion, representing a 186% increase year-on-year.

Looking further ahead, management expects fiscal 2027 AI semiconductor revenue to double to approximately $115 billion, and fiscal 2028 AI semiconductor revenue to double again to approximately $230 billion, while targeting to exceed $30 in earnings per share in fiscal 2028.

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