Broadcom, 2021 to 2025: How a Chip Conglomerate Became an AI Story
Broadcom's last five fiscal years as income-statement Sankey charts, covering the VMware deal, the margin dip that followed, and the AI ramp that reset the whole scale.
Tomorrow after the market closes, Broadcom reports its third quarter of fiscal 2026, per its investor relations calendar, and the bar is set at a number that would have sounded absurd five years ago. Guidance calls for roughly $29.4 billion of revenue, up 84% from a year earlier, with AI semiconductor revenue around $16.0 billion. Last quarter beat its own plan. Hock Tan said second-quarter AI revenue of $10.8 billion grew 143% year over year, above the company's forecast, and the stack of fiscal years below shows how Broadcom got from a diversified chip conglomerate to that point.
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Broadcom Inc. (AVGO), Fiscal 2021
Broadcom Inc.'s FY2021 revenue was $27.4B, up 15% year over year; gross margin 61%; operating margin 31%.
This is Broadcom before the transformation, and it was already an unusual company. Hock Tan had spent a decade assembling it through acquisitions, folding in Broadcom Corporation, Brocade, CA Technologies and the enterprise arm of Symantec, and running each addition for cash rather than growth. The result was a 61% gross margin and a 31% operating margin from chips for phones and data centers plus a software arm managed for steady cash flow. Nobody called it an AI company.
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Broadcom Inc. (AVGO), Fiscal 2022
Broadcom Inc.'s FY2022 revenue was $33.2B, up 21% year over year; gross margin 67%; operating margin 43%.
Fiscal 2022 was the payoff. Revenue rose 21% and the operating margin cleared 43% as cloud customers built out networking capacity, and the software experiment stopped looking like a side project. In May of that year Broadcom announced it would buy VMware for roughly $61 billion in cash and stock, according to the deal announcement, a bet that its operating discipline could work on the biggest software franchise it had ever touched.
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Broadcom Inc. (AVGO), Fiscal 2023
Broadcom Inc.'s FY2023 revenue was $35.8B, up 8% year over year; gross margin 69%; operating margin 45%.
Then came the waiting room. Growth slowed to 8% as the chip cycle cooled, yet margins reached their best level of the whole run, with operating income at 45% of revenue from a business running lean while regulators reviewed the VMware deal. The approval from China arrived days before the merger agreement was due to expire, and the acquisition closed on November 22, 2023, according to coverage of the close, three weeks after this fiscal year ended.
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Broadcom Inc. (AVGO), Fiscal 2024
Broadcom Inc.'s FY2024 revenue was $51.6B, up 44% year over year; gross margin 63%; operating margin 26%.
Fiscal 2024 is where the chart changes shape. Revenue jumped 44% to $51.6 billion with eleven months of VMware inside it, infrastructure software contributed $21.5 billion of that, and the cost of the swallow shows just as clearly, with amortization and integration expense dragging the operating margin to 26% and GAAP net income under $6 billion for the year, per the press release.
The same year opened the next act. AI revenue reached $12.2 billion, up 220%, per the year-end release, as hyperscalers bought custom accelerators and Ethernet switches as fast as Broadcom could supply them. Hock Tan told investors on the earnings call that the AI opportunity over the following three years looked massive. He was, if anything, underselling it.
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Broadcom Inc. (AVGO), Fiscal 2025
Broadcom Inc.'s FY2025 revenue was $63.9B, up 24% year over year; gross margin 68%; operating margin 40%.
Digestion came fast. By fiscal 2025 revenue reached $63.9 billion, up 24%, gross margin recovered to 68%, and the operating margin climbed back to 40% as integration charges rolled off. GAAP net income nearly quadrupled to $23.1 billion, per the press release, and infrastructure software grew 26% to $27.0 billion as VMware customers converted to subscriptions.
The AI line kept compounding. Fourth-quarter AI semiconductor revenue grew 74% from a year earlier, the company said, and guidance calls for it to double again in the first quarter of fiscal 2026 to $8.2 billion. Custom silicon for a short list of very large customers had become the growth engine, and OpenAI signed on for 10 gigawatts of it through 2029, per earnings-call coverage. The acquisition machine had built itself an organic one.
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Five charts, two different companies wearing the same name. The Broadcom of fiscal 2021 made its money selling chips into phones and switches while squeezing acquired software for cash, and the one heading into tomorrow's report expects more revenue in a single guided quarter than that company produced in a full year. The doctrine never moved. Buy or build a franchise customers cannot leave, then run it harder than anyone else will, and the AI cycle simply handed that discipline a market that finally grows on its own.
_Every chart on this page is generated live by Sankify from the company's own SEC filings. Nothing here is illustrative or mocked up._
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