Broadcom Inc. (AVGO) FY2025 10-K and Q3 FY2026 10-Q Summary

Business

From the FY2025 10-K, accession 0001730168-25-000121.

Broadcom designs, develops and supplies semiconductor and semiconductor-based solutions alongside infrastructure software. Its lineage runs back more than 60 years through AT&T/Bell Labs, Lucent and Hewlett-Packard, and the company as it exists today was assembled through acquisition, LSI Corporation, Broadcom Corporation, Brocade, CA, Inc., Symantec Enterprise Security and VMware, Inc. The stated strategy is sustained technology leadership in category-leading infrastructure products, pursued through heavy internal R&D combined with strategic acquisition of businesses and technologies.

The company operates on a 52- or 53-week fiscal year ending on the Sunday closest to October 31, and refers to fiscal years by the calendar year in which they end. Fiscal year 2025 was a 52-week year; fiscal year 2024 was a 53-week year.

Two reportable segments.

Semiconductor solutions covers all semiconductor product lines plus intellectual property licensing. Products span digital and mixed-signal CMOS devices, III-V devices, network interface cards, modules, switches, subsystems and, increasingly, full racks. Broadcom groups these into five end markets:

• Networking Connectivity. Custom silicon solutions (ASIC platforms, including the custom accelerators Broadcom calls XPUs, built for hyperscalers, frontier-AI-model companies and system integrators); Ethernet switching and routing silicon; Ethernet NIC controllers; physical layer devices (PHYs), including automotive Ethernet; and fiber optic components. Broadcom's AI positioning rests on open, standards-based Ethernet for moving data within and across AI server racks and data center sites, paired with XPUs for accelerated compute.
• Wireless Device Connectivity. RF front-end modules and discrete filters built on proprietary FBAR filter technology, Wi-Fi/Bluetooth combination chips, custom touch controllers and inductive charging ASICs.
• Servers and Storage Systems. PCIe switches, SAS and RAID controllers and adapters, Fibre Channel host bus adapters, HDD read-channel SoCs and preamplifiers, and custom flash controllers for SSDs.
• Broadband. Complete SoC platforms for set-top boxes (cable, satellite, IPTV, over-the-top, terrestrial) and for broadband access (DSL, cable, PON and WLAN, for both customer premise equipment and central office).
• Industrial. Optocouplers, industrial fiber optics, industrial and medical sensors, motion encoders, LED devices and Ethernet ICs, serving factory automation, power generation and distribution, medical equipment, defense and aerospace, and vehicle subsystems.

Infrastructure software comprises five portfolios: Private Cloud, Mainframe Software, Cybersecurity, Enterprise Software and FC SAN Management. The private cloud portfolio is anchored on VMware Cloud Foundation (VCF), which integrates compute, networking, storage, management and security with native Kubernetes, and is sold with advanced services layered on top, VMware vDefend, Avi Load Balancer, Tanzu Platform, Private AI, Live Recovery, plus VCF Edge, vSphere Foundation and Telco Cloud Platform. The mainframe portfolio covers AIOps and automation, databases and data management, DevX/DevOps, cybersecurity and compliance, and foundational and open mainframe tooling. The cybersecurity portfolio is built on the Symantec and Carbon Black assets across endpoint, network, information, application, and identity and access security. Many of the largest companies in the world, including most of the Fortune 500, and many government agencies are customers.

How revenue reaches the company. Distributors and OEMs, or their contract manufacturers, account for the substantial majority of semiconductor sales; revenue is recognized on delivery to distributors, which can make quarterly net revenue lumpy, and is reduced for estimated returns and distributor allowances. Software customers are generally large enterprises, served directly and through resellers, distributors, hyperscale cloud providers, value-added OEMs and VMware cloud service provider partners. VCF offers license portability between on-premises data centers and supported cloud endpoints.

Manufacturing model. Primarily outsourced, but with owned fabrication capacity, notably Fort Collins, Colorado (the sole source for the FBAR filters used in many wireless devices) and Breinigsville, Pennsylvania (sole source for InP-based wafers used in fiber optics), plus Singapore. The primary warehouse is in Malaysia, and revenue for the majority of products is recognized when title and control transfer in Penang.

Intellectual property and people. As of November 2, 2025 Broadcom held approximately 19,000 U.S. and other patents with 2,170 pending applications, expiring between 2025 and 2044, with no substantial dependence on any single patent or group. It employed approximately 33,000 people worldwide, roughly 57% of them in research and development roles, about 49% in North America, 36% in Asia and 15% in EMEA. Global voluntary attrition in fiscal year 2025 was approximately 4.1%.

Tax structure. Singapore Economic Development Board incentives apply reduced rates to qualifying Singapore income and are scheduled to expire through November 2030 (the otherwise-applicable Singapore corporate rate is 17%); a Malaysian tax holiday expires in 2028. Before indirect taxes, these incentives reduced the provision for income taxes by approximately $2,709 million in fiscal 2025 and $2,261 million in fiscal 2024. Management flagged that Singapore's global minimum tax enactment becomes effective in fiscal year 2026 and expects a material impact on fiscal 2026 results of operations and cash flows.

Risk factors

From the FY2025 10-K, accession 0001730168-25-000121, as updated in the FY26Q3 10-Q, accession 0001730168-26-000080. Condensed to the substantive risks.

Customer concentration is extreme and rising. Broadcom has historically depended on a small number of end customers, OEMs, contract manufacturers and certain distributors for a majority of its revenue. For the three fiscal quarters ended August 2, 2026, sales to distributors accounted for 56% of net revenue, and aggregate sales through all channels to the top five end customers were approximately 50% of net revenue. A single distributor customer in the semiconductor segment accounted for 50% of net revenue in the third quarter of fiscal 2026 alone. Customers may cancel, reduce or delay orders for reasons including reduced capital expenditure, lack of access to sufficient capital, delayed or cancelled AI infrastructure buildouts, or internal development of competing products and customer-owned tooling.

Counterparty credit risk from new AI financing structures. This is the risk that changed most in fiscal 2026. Top customers, including AI solutions customers, have made greater demands on pricing and contractual terms, seeking to lease XPUs, or requiring Broadcom to purchase and then lease them full AI racks or systems rather than buy chips or racks outright, and seeking alternative financing arrangements including the AI XPV platform or other novel or deferred payment models. Such arrangements may impose financial obligations including backstops or guarantees, may not generate the revenue, free cash flow or profitability that Broadcom or investors expect, and increase exposure both to counterparty credit risk and to a decline in value of the underlying assets. Management notes it has entered into and may continue to enter such arrangements, which could increase fixed obligations, hurt financial condition and reduce financial and business flexibility; credit rating downgrades are named as a possible consequence of backstops and guarantees.

AI-cycle risk in a cyclical industry. The semiconductor industry is highly cyclical and subject to rapid price movement, wide swings in supply and demand, and constant technological change. Broadcom states plainly that the industry is undergoing profound change due to AI and has experienced a significant upturn "which may not be sustainable due to a market correction, the perceived existence of an AI spending 'bubble' or other factors." Some AI customers may have constrained resources or capital and be unable to pay for required infrastructure.

Supply chain single-point dependency. Broadcom runs a primarily outsourced model. During the three fiscal quarters ended August 2, 2026, approximately 95% of wafers manufactured by contract manufacturers were produced by TSMC, whose capacity Broadcom believes it consumes a meaningful portion of, and which also fabricates for competitors and has raised prices before. Separately, more than three-quarters of manufacturing materials in the period came from five suppliers, some single-source; memory chips are specifically named as a component where suppliers have extended lead times, limited supply or prioritized other customers.

Gross margin mix. Semiconductor gross margin is structurally lower than infrastructure software gross margin. Management states directly that the sale of XPUs, network switches and other AI-related products, including the sale or leasing of AI racks or systems based on XPUs, will likely increase operating margin but compress or lower future gross margin, and that this would adversely impact the stock price.

Software model dependency. Growth in software depends on demand for the data center virtualization portfolio and on customer acceptance of the subscription licensing model and simplified portfolios. If businesses shift workloads off-premises to public cloud providers, the market for these deployments narrows. Many software customers hold multi-year enterprise license agreements with no contractual obligation to buy more; failure to renew at similar scope on attractive terms would materially hurt the business. The timing of contracts that lack termination-for-convenience clauses causes material variation in revenue recognized period to period.

Geopolitics, trade and governmental regulation. A majority of products are produced, sourced and sold internationally. Export controls, restricted entity listings, tariffs and retaliatory measures can limit or prevent business with certain customers or suppliers. Broadcom states that U.S. tariffs and counter-tariffs, including semiconductor-related tariffs, have not had a material impact on its financial condition or results to date, but that tariffs and other macroeconomic factors could materially increase costs and disrupt supply. The company has been, and may again be, subject to regulatory investigations into contracting and business practices in Korea, Japan and the European Union.

Taxes. Global minimum tax adoption has already materially increased the provision for income taxes and may increase it further if more incentive jurisdictions adopt similar provisions. The One Big Beautiful Bill Act is named as a source of further change. If the VMware spin-off from Dell in November 2021 is determined not to have been tax-free, or if the VMware acquisition caused the spin-off to fail Section 355 qualification, Broadcom may have to indemnify Dell and its affiliates for tax liabilities that could be material.

Indebtedness. Aggregate indebtedness was $61,079 million as of August 2, 2026. Broadcom cites increased vulnerability to adverse conditions, reduced planning flexibility, competitive disadvantage versus less-levered peers, greater difficulty borrowing further, and the need to dedicate a substantial portion of operating cash flow to debt service.

Cybersecurity. As a critical vendor in the digital supply chain for governmental entities and critical infrastructure operators, Broadcom and its products may be targeted by actors seeking to threaten essential public services. The company discloses that elements of its proprietary source code have been exposed in the past in an unauthorized manner, that it has from time to time been subject to disruptive cyber-attacks and unauthorized network intrusions, though no such incident has been material, and that its logging, alerting and detection mechanisms have technical limitations that have led to gaps in visibility.

Key person. Success depends in large part on the senior management team and in particular on Hock E. Tan, President and Chief Executive Officer. No senior manager is bound by a written employment contract and the company carries no key person life insurance.

Other named risks. Design-win processes are lengthy, expensive and grant no guarantee of subsequent sales; products are custom enough that excess inventory may not be resellable. Operating results fluctuate substantially quarter to quarter and year to year. Acquisitions, integrations and dispositions carry regulatory, financing, control and estimation risk. Legal proceedings, IP protection, warranty and product liability claims, product complexity and defects, privacy and data security law, corporate responsibility requirements, and technical standards compliance all appear as material factors. Stock price volatility, the discretionary nature of the repurchase program, and the fact that dividends require Board approval each quarter and may be reduced or discontinued complete the list.

Management's discussion, fiscal year 2025

From the FY2025 10-K, accession 0001730168-25-000121, covering the fiscal year ended November 2, 2025 versus the fiscal year ended November 3, 2024.

Results. Total net revenue was $63,887 million, up $12,313 million or 24% from $51,574 million. Products revenue was $44,847 million (70% of the total) against $34,960 million, and subscriptions and services revenue was $19,040 million (30%) against $16,614 million. Fiscal 2025 products revenue included $7,800 million of upfront license revenue; to conform presentation, $4,601 million of upfront license revenue was reclassified from subscriptions and services into products for fiscal 2024, with immaterial related costs.

By segment, semiconductor solutions revenue was $36,858 million, up $6,762 million or 22%, driven by strong demand for networking solutions, primarily custom AI accelerators and AI networking products. Infrastructure software revenue was $27,029 million, up $5,551 million or 26%, driven by demand for VCF, including license revenue recognized on contracts where customers do not have the right to terminate and the transition to a subscription license model. The segment mix was unchanged year over year at 58% semiconductor and 42% software.

Gross margin was $43,294 million versus $32,509 million, and 68% of net revenue versus 63%, the increase attributed to higher software revenue, strong AI-related semiconductor demand, higher software gross margin percentage from increased license revenue, and lower software labor costs after VMware integration.

Research and development rose $1,667 million, or 18%, primarily on higher stock-based compensation. Selling, general and administrative fell $748 million, or 15%, on lower headcount-driven compensation and lower VMware acquisition costs, partly offset by higher stock-based compensation. Amortization of acquisition-related intangibles in operating expenses fell $1,213 million, or 37%, as customer-related intangibles from pre-VMware software acquisitions reached full amortization. Restructuring and other charges in operating expenses fell $942 million, or 61%, on lower VMware-integration termination costs; management stated these restructuring activities were substantially complete. Operating income was $25,484 million (40% of revenue) versus $13,463 million (26%).

Interest expense was $3,210 million versus $3,953 million, down on reduced debt balances and refinancing at lower effective rates. Other income, net was $455 million versus $406 million, up on a gain on sale of a business partly offset by lower interest income.

Fiscal 2025 recorded a benefit from income taxes of $397 million, against a $3,748 million provision in fiscal 2024. The benefit came primarily from recognition of uncertain tax benefits on expiring statutes of limitations and audit settlements plus excess tax benefits from stock-based awards, partly offset by income from operations and a $1,321 million valuation allowance established against federal corporate alternative minimum tax credit carryforwards after the July 4, 2025 enactment of the One Big Beautiful Bill Act. The fiscal 2024 provision was driven largely by a non-recurring intra-group transfer of IP rights to the United States. Net income was $23,126 million, against $5,895 million in fiscal 2024 and $14,082 million in fiscal 2023.

Stock-based compensation. Total stock-based compensation expense was $7,568 million versus $5,670 million. During the quarter ended May 4, 2025 Broadcom granted two-year time- and market-based restricted stock unit awards in lieu of the annual employee equity grant historically made in the second quarter; each award vests on the same basis as two annual grants with staggered vesting start dates of March 15, 2025 and March 15, 2026 and successive four-year vesting periods, with expense recognized over four to five years. The remaining weighted-average service period was 3.4 years.

Customers and geography. One semiconductor distributor customer accounted for 32% of net revenue, up from 28%. Aggregate sales to the top five end customers were approximately 40% in both years. Shipments or deliveries to China (including Hong Kong) were 17% of net revenue, down from 20%, though management believes a substantially smaller percentage of revenue ultimately depends on end customers located there.

Liquidity. At November 2, 2025 primary liquidity consisted of $16,178 million in cash and cash equivalents, expected operating cash flow, and capacity under a $7.5 billion unsecured revolving credit facility. Outstanding indebtedness was $67,120 million, with $3,152 million of principal payable within twelve months. Working capital increased to $13,059 million from $2,898 million. Cash rose to $16,178 million from $9,348 million, driven by $27,537 million of operating cash flow less $11,142 million of dividends, $3,860 million of employee withholding tax payments on net-settled equity awards, $2,812 million of net borrowing repayments and $2,450 million of buybacks. Trade receivables rose to $7,145 million from $4,416 million on higher billings. Management stated it expects capital expenditures to be higher in fiscal 2026 than in fiscal 2025.

Cash flows. Operating activities provided $27,537 million versus $19,962 million, a $7,575 million increase driven by $17,231 million higher net income, partly offset by $5,973 million lower non-cash adjustments for deferred and other non-cash taxes and $3,863 million from changes in operating assets and liabilities. Investing used $580 million versus $23,070 million, a $22,490 million decrease reflecting the absence of the $25,416 million paid for VMware net of cash acquired in fiscal 2024, offset by $3,185 million lower proceeds from business sales. Financing used $20,127 million versus $1,733 million, an $18,394 million increase on the prior year's term loan proceeds for VMware, plus fiscal 2025 debt repayments and higher dividends, partly offset by lower buybacks and withholding tax payments.

Capital returns. Dividends declared and paid were $2.360 per share totalling $11,142 million, versus $2.105 per share totalling $9,814 million. In April 2025 the Board authorized repurchases of up to $10 billion through December 31, 2025, subsequently extended to December 31, 2026; Broadcom repurchased and retired 16 million shares for $2,450 million during fiscal 2025, leaving $7,550 million authorized as of November 2, 2025. Separately, 17 million shares were withheld from employees in net share settlements (38 million in fiscal 2024), and in the second half of fiscal 2025 the company began settling vesting withholding taxes using proceeds from selling a portion of the vested shares.

Acquisition history relevant to the period. VMware was acquired on November 22, 2023 in a cash-and-stock transaction; VMware stockholders received approximately $30,788 million in cash and 544 million Broadcom shares with a fair value of $53,398 million, and Broadcom assumed $8,250 million of VMware senior unsecured notes. VMware's end-user computing business was sold to KKR & Co. Inc. on July 1, 2024 for cash consideration of $3.5 billion after working capital adjustments. On April 23, 2024 Broadcom acquired certain System-on-Chip design, development and manufacturing assets of Seagate Technology Holdings plc for $600 million.

Current quarter, fiscal 2026 third quarter

From the 10-Q for the fiscal quarter ended August 2, 2026, accession 0001730168-26-000080, unless noted.

Results. Total net revenue was $29,591 million for the quarter, against $15,952 million a year earlier, and $71,089 million for the three fiscal quarters, against $45,872 million. Products revenue was $24,279 million for the quarter (82% of net revenue, versus 70% a year earlier) against $11,173 million; subscriptions and services were $5,312 million (18%, versus 30%) against $4,779 million. The mix shift toward hardware is the defining feature of the period.

By segment, semiconductor solutions revenue was $20,839 million for the quarter against $9,166 million, and $48,363 million for the three quarters against $25,786 million, on strong demand for networking solutions, primarily custom AI accelerators and AI networking products. Infrastructure software revenue was $8,752 million for the quarter against $6,786 million, and $22,726 million for the three quarters against $20,086 million, on demand for VCF including additional license revenue recognized on contracts where customers do not have the right to terminate. Segment operating income was $12,770 million for semiconductors (against $5,217 million) and $7,325 million for software (against $5,238 million).

Gross margin was $20,456 million for the quarter against $10,703 million, and $49,028 million for the three quarters against $31,045 million, 69% of net revenue in both fiscal 2026 periods, versus 67% and 68% in the prior-year quarter and three quarters. Management attributed the improvement to the margin benefit of revenue growth, partly offset by a higher mix of semiconductor revenue, which carries lower gross margin than software.

Research and development fell $155 million, or 5%, for the quarter on lower compensation from reduced headcount offset by higher engineering project costs, but rose $859 million, or 11%, for the three quarters, reflecting the full-period impact of the fiscal 2025 two-year equity grant. Selling, general and administrative fell $76 million (7%) for the quarter and $34 million (1%) for the three quarters on lower headcount-driven compensation. Total operating expenses were $4,501 million for the quarter against $4,816 million. Operating income was $15,955 million (54% of net revenue) against $5,887 million (37%), and $35,306 million for the three quarters against $17,976 million.

Stock-based compensation expense was $2,019 million for the quarter, down from $2,322 million on fully vested awards and headcount reduction, and $6,287 million for the three quarters, up from $5,373 million on the full-period impact of the Two-Year Equity Awards. The remaining weighted-average service period was 2.9 years.

Interest expense was $778 million for the quarter against $807 million, and $2,355 million for the three quarters against $2,449 million, down on reduced debt and refinancing. Other income, net was $98 million for the quarter against $205 million (the prior-year quarter included a gain on sale of a business), and $649 million for the three quarters against $333 million, the current-period figure including a $315 million gain from reversing excise tax charges on the VMware acquisition after final Inflation Reduction Act regulations exempted purchases of common stock on acquisitions.

The provision for income taxes was $2,187 million for the quarter and $3,853 million for the three quarters, against $1,145 million and $1,252 million, the increase primarily from higher income before income taxes. Net income was $13,088 million for the quarter against $4,140 million, and $29,747 million for the three quarters against $14,608 million. Diluted earnings per share were $2.68 for the quarter against $0.85, and $6.09 for the three quarters against $3.02, on 4,887 million and 4,884 million diluted weighted-average shares.

The AI XPV platform and the Backstop, the material new disclosure. Broadcom states it sees "unprecedented demand" for its custom XPUs and AI networking solutions from customers including the leading frontier AI labs, but that deploying AI infrastructure at that scale requires those customers to access significant capital. To bridge that gap, the company established the AI XPV platform with certain sophisticated financial partners, intended to enable more than 20 gigawatts of compute capacity using its XPUs and customized networking for the leading frontier AI labs through 2028. Under the structure, financial partners fund and Broadcom provides the technology. Where necessary Broadcom may provide residual value guarantees, which it characterizes as contingent liabilities with a low probability of occurring.

In June 2026 the platform launched with an initial tranche of $35 billion led by a financial partner, to facilitate deployment of more than 1 gigawatt of compute infrastructure for a customer the filing does not identify. Broadcom arranged for the financial partner to take on agreements to purchase AI racks based on Broadcom-designed custom accelerators, together with the related lease agreements with the customer.

Broadcom entered a backstop agreement with the financial partner covering the customer's lease obligations over the five-year lease terms. The backstop amount rises as racks are delivered and deployed and falls as the customer pays down its lease obligations. On a customer lease default, Broadcom's liability equals any difference between 85% of the outstanding amounts owed on the lease backstop and the value of the AI racks realized on sale. Remedies limiting exposure include assuming the applicable lease, reselling the racks to the seller at a fixed price under certain conditions, or arranging a sale of the racks. Maximum potential liability under the Backstop, on deployment of all AI racks and on an undiscounted basis, was approximately $29 billion. The fair value of the Backstop was not material and no amounts have been paid under it.

A related disclosure: in connection with the lease agreements enabling access to compute capacity, the customer may under certain circumstances issue Broadcom convertible promissory notes up to an aggregate principal amount of $42 billion, subject to conditions including that the notes or their proceeds be used solely for the customer's obligations under the lease agreements. As of August 2, 2026, no notes had been issued.

Commitments. Contractual purchase commitments as of August 2, 2026 totalled $126,821 million, $1,110 million in the remainder of fiscal 2026, $52,674 million in fiscal 2027, $72,952 million in fiscal 2028 and $85 million in fiscal 2029, chiefly unconditional, enforceable commitments to purchase goods and services, primarily inventory. Other contractual commitments, for IT and other service agreements, totalled $3,941 million. A further $1,755 million of unrecognized tax benefits with accrued interest and penalties is excluded from the table because timing of settlement cannot be reliably estimated.

On the demand side of those obligations, remaining performance obligations, the transaction price allocated to unsatisfied or partially unsatisfied obligations under certain multi-year customer contracts in the semiconductor solutions and infrastructure software segments, including contracts where customers do not have termination rights, were approximately $179.2 billion as of August 2, 2026, and Broadcom expects approximately 25% of that amount to be recognized as revenue over the next twelve months. Those committed amounts include obligations under a long-term contract for custom AI accelerators entered into in the fiscal quarter ended May 3, 2026. The figure excludes software, subscription and service contracts where the customer is not committed, principally those permitting termination for convenience, rights the company says customers generally do not exercise, as well as contracts with an original duration of one year or less and contracts with sales- or usage-based IP royalties, and Broadcom states it is therefore not indicative of revenue for future periods.

Customer concentration intensified sharply. One semiconductor distributor customer accounted for 50% of net revenue for the quarter and 46% for the three quarters, up from 32% and 30% a year earlier. Aggregate sales to the top five end customers were approximately 55% for the quarter and 50% for the three quarters, up from approximately 40% in both prior-year periods. Broadcom also noted that as of the quarter ended August 2, 2026 it no longer has termination-for-convenience provisions for the majority of new software contracts.

Liquidity and balance sheet. Primary liquidity at August 2, 2026 was $23,975 million of cash and cash equivalents, operating cash flow, and the $7.5 billion unsecured revolving credit facility, which was undrawn at both August 2, 2026 and November 2, 2025. Outstanding indebtedness was $61,079 million in principal, with $2,252 million payable within twelve months; carrying amounts were $2,252 million short-term and $57,167 million long-term, $59,419 million in total, with estimated aggregate fair value of $55,990 million. The commercial paper program permits up to $4.0 billion outstanding, and none was outstanding at either date. Liquidity requirements now explicitly include "potential financing arrangements," and the company notes that having provided a backstop and possibly entering similar arrangements increases its exposure to counterparty credit risk.

Working capital increased to $31,335 million from $13,059 million at November 2, 2025. Cash rose to $23,975 million from $16,178 million on $32,950 million of operating cash flow, less $9,281 million of dividends, $8,450 million of stock repurchases and $6,054 million of net debt payments. Trade receivables nearly doubled to $13,707 million from $7,145 million on higher semiconductor revenue and collection timing. Inventory rose to $4,523 million from $2,270 million to support higher expected AI-related shipments. Other current assets rose to $9,968 million from $5,980 million. Accounts payable rose to $4,000 million from $1,560 million.

Quarterly cash and capital returns. In the fiscal quarter ended August 2, 2026 Broadcom generated $14,197 million of cash from operations, paid $3,103 million in cash dividends and repurchased $5,641 million of its senior notes through cash tender offers and redemptions.

For the three fiscal quarters, operating activities provided $32,950 million against $19,834 million, a $13,116 million increase driven by $15,139 million higher net income and $782 million higher non-cash adjustments, chiefly stock-based compensation, offset by $2,805 million from changes in operating assets and liabilities. Investing used $1,436 million against $213 million, a $1,223 million increase on higher capital expenditures ($1,013 million versus $386 million) and higher net purchases of short-term investments; the prior-year period also included $300 million of proceeds from a business sale. Financing used $23,717 million against $18,251 million, comprising $4,474 million of long-term borrowing proceeds, $10,528 million of debt payments, $9,281 million of dividends and $8,450 million of buybacks.

Across the three fiscal quarters Broadcom issued senior unsecured notes with aggregate principal of $4,500 million and repaid and repurchased $10,541 million of senior notes.

On repurchases: the April 2025 authorization was extended through December 31, 2026 and increased to $11 billion, and in March 2026 the Board authorized a further program of up to $10 billion through December 31, 2026. Broadcom repurchased and retired 25 million shares for $8,450 million during the three fiscal quarters, against 16 million shares for $2,450 million a year earlier, leaving $10.1 billion of authorization available as of August 2, 2026.

Interest rate exposure. Principal borrowings were $61.1 billion at August 2, 2026 against $67.1 billion at November 2, 2025, with estimated aggregate fair value of $56.0 billion and $64.6 billion. A hypothetical 50 basis point change in market rates would change the fair value of borrowings by approximately $1.7 billion and $1.9 billion respectively, without affecting interest expense on outstanding borrowings.

Outlook. From the third-quarter results press release furnished on Form 8-K, accession 0001730168-26-000076, September 2, 2026. Broadcom guided fourth-quarter fiscal 2026 revenue to approximately $34.8 billion, an increase of 93% from the prior-year period, with non-GAAP operating income of approximately 66% of projected revenue, flat, management noted, against the same margin a year earlier. The guidance covers the fourth quarter ending November 1, 2026. The company stated it is not readily able to reconcile projected non-GAAP measures to the comparable GAAP measures without unreasonable effort, and that actual results will vary from the guidance, possibly materially.

Other current-period notes. There were no significant changes in critical accounting estimates during the three fiscal quarters. Broadcom reclassified $1,916 million and $5,691 million of upfront license revenue from subscriptions and services to products revenue for the prior-year quarter and three quarters to conform to current presentation, with immaterial related costs. The aggregate fair value of restricted stock units that vested during the three fiscal quarters was $19,854 million. Management stated it does not believe the final outcome of any pending legal proceeding, regulatory investigation or tax dispute, individually or as a whole, will have a material adverse effect on the condensed consolidated financial statements, and that no material amounts have been accrued or disclosed for loss contingencies in the periods presented.

Subsequent events

From Note 11 of the 10-Q for the fiscal quarter ended August 2, 2026, accession 0001730168-26-000080.

On September 1, 2026, the Board of Directors declared a quarterly cash dividend of $0.65 per share on the common stock, payable on September 30, 2026 to stockholders of record on September 21, 2026.

That dividend declaration is the only event disclosed in the note. Broadcom reported no post-period acquisitions, divestitures, financings, borrowings or litigation outcomes in its subsequent-events disclosure for this quarter.