The foundation of business quality and long-term value creation
Broadcom Inc.'s revenue shows a clear upward trajectory over the multi-year series, with particularly strong gains in the most recent quarters. Revenue rose from the low‑single-digit billions in 2019–2020 to a steady mid‑teens level through 2024, then accelerated to $15.95B (2025-08), $18.02B (2025-11) and $19.31B (2026-02), marking the highest reported quarterly revenue in the dataset. The most notable inflection is the sustained jump beginning in 2024–2025 that produced consecutive sequential increases into early 2026.
Net income has been more variable over the same period. After several quarters of positive but modest profits, net income swung to a loss of -$1.88B (2024-08) before recovering into positive territory and rising to a peak of $8.52B (2025-11), then moderating to $7.35B (2026-02). That sequence highlights a pronounced inflection in mid‑2024 followed by strong profitability through 2025 and into 2026. The most recent quarterly revenue was $19.31B and the most recent quarterly net income was $7.35B.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Feb 2025 to Feb 2026
Revenue composition by disclosure category for the latest period
- Sales of semiconductor and semiconductor-based solutions, including complex digital and mixed signal devices, III-V based devices, network interface cards, switches, subsystems, racks, transceivers, optical components, radio frequency front-end modules and filters, Wi‑Fi/Bluetooth chipsets, custom touch controllers, inductive charging ASICs, PCIe switches, SAS and RAID controllers and adapters, fibre channel host bus adapters, HDD and SSD read channel SoCs and preamplifiers, custom flash controllers, set-top box system-on-chip platforms, broadband access SoC platforms, and a variety of industrial electronic components.
- Sales of integrated systems and subsystems that incorporate multiple semiconductor products, including mission-critical FC SAN modules, switches and subsystems, and racks and systems based on custom accelerators or XPUs.
- Sales of infrastructure software solutions across defined portfolios, including private cloud software (including VMware Cloud Foundation and related advanced services), mainframe software, cybersecurity solutions (including endpoint, network, information and application security, and identity and access management), enterprise software (AIOps, automation, DevOps and value stream management), and FC SAN management software.
- Revenue from software deployment models explicitly described, including on‑premises software licenses and SaaS offerings where customers access functionality through the SaaS model.
- Revenue from IP licensing royalty payments and revenue from litigation settlements related to intellectual property.
- Hyperscalers and companies with AI frontier models that deploy AI data center infrastructure, as well as OEMs and system integrators that develop servers, switches and racks for large-scale data centers.
- Service providers, enterprise data centers, and carriers that deploy networking and switching infrastructure.
- Wireless device manufacturers and consumer electronics OEMs that use RF front-end modules, connectivity chipsets, touch controllers and inductive charging ASICs.
- OEMs and contract manufacturers that incorporate semiconductor products into end products and manage manufacturing on behalf of OEMs.
- Global service providers and broadband service operators that deploy set-top box and broadband access solutions.
- Large enterprises across many industries and government agencies that deploy infrastructure and security software, including customers with multi-vendor computing environments.
- Resellers, distributors, hyperscale cloud providers, value-added OEMs and cloud service provider partners for software distribution and cloud delivery.
- Many long-standing customer relationships characterized by collaborative product development and system-level knowledge.
- Design, product and software development engineering presence primarily in the United States, Asia, and Europe.
- Manufacturing and sourcing operations concentrated in Asia, with internal III‑V semiconductor wafer fabrication in the United States and Singapore.
- Primary product warehousing in Malaysia and sales offices located in various countries to support global customers.
- Field engineering and development personnel located around the world, often near top customers to support product development cycles and manufacturing transitions.
- Direct sales force that focuses on supporting large OEM customers and providing specialized product and service knowledge.
- A select network of global distributors and regional distributors that serve customer relationships in their respective product ranges.
- Sales to OEMs either directly or via their contract manufacturers, with some customers requiring contracts both directly and with specified intermediaries such as contract manufacturers.
- Resellers, hyperscale cloud providers, value-added OEMs and cloud service provider partners used for distribution of private cloud software solutions.
- Dedicated regional customer support call centers and logistics infrastructure, including a principal warehouse, to handle order fulfillment and time‑critical deliveries.
- Infrastructure software revenue delivered through multiple deployment models, including on‑premises executable code and SaaS where customers access functionality via hosted offerings; private cloud software is available via subscription models and offers license portability between on‑premises and supported cloud endpoints.
- Semiconductor and hardware product sales are sold through distributors, OEMs and contract manufacturers; many customer relationships have been sustained over many years.
- IP licensing generates royalty payments and litigation settlements, which are cited as a distinct source of revenue.
- The filing describes availability of advanced software services that customers may elect to purchase in addition to core software offerings.
- Reliance on a relatively small number of customers to generate a significant portion of net revenue, with the filing noting that loss of or a significant decrease in demand from these customers could have a material adverse effect.
- Heavy use of third‑party foundries and contract manufacturers for front‑end wafer manufacturing and assembly and test operations, with specific reliance on named external providers and internal fabrication reserved for proprietary processes.
- Purchases of materials from a large supplier base where some parts are not readily available from alternate suppliers due to unique design or long redesign and qualification timelines.
- Long-term supplier relationships and proximity to Asian manufacturing and sourcing as key elements of supply chain strategy.
- Dependence on intellectual property rights and licensing arrangements, including revenue from IP licensing and exposure to third‑party IP claims and indemnity obligations that could require litigation, licensing, redesign or cessation of product manufacture.
Analyzing long-term margin stability and competitive positioning
In the most recent quarters Broadcom Inc.'s margins have rebounded to the upper end of the historical range. For the periods ending November 2, 2025 and February 1, 2026, gross margin was about 81.0% and 80.3% respectively, operating margin was 74.4% then 74.0%, and net profit margin moved from 36.2% to 36.6%. These two quarters represent a clear upward inflection relative to the preceding year.
Prior to that rebound, margins were noticeably lower from mid‑2024 through mid‑2025: gross margins fell into the low‑60s (e.g., 62.1% on 2025‑08‑03), operating margins dropped into the mid‑50s (e.g., 55.2% on 2025‑08‑03), and net margin reached a trough of 10.9% on 2024‑08‑04 before recovering through late 2025.
Latest observed values:
Gross Margin 80.3%,
Operating Margin 74.0%,
Net Profit Margin 36.6%.
Understanding Profit Margins
Between Feb 2025 and Feb 2026, Broadcom Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
In the most recent year Broadcom Inc.'s trailing twelve‑month operating cash flow has risen steadily, accelerating from $21.26B at 2025-02-02 to $29.68B at 2026-02-01. Net income (TTM) also recovered sharply over the same span, increasing from $10.07B at 2025-02-02 to $24.97B at 2026-02-01. Across the latest quarters, operating cash flow has consistently exceeded reported net income, with the gap narrowing as net income recovered in 2025.
A notable inflection occurred in mid‑2024 when net income fell to roughly $5.09B–$5.89B (2024-08 and 2024-11) while operating cash flow remained near $19B–$20B; after that trough, net income rose materially through 2025.
Over the full series, both metrics show an upward trend since 2019, with operating cash flow displaying smoother, steadier growth and net income exhibiting greater volatility. The most recent trailing twelve‑month operating cash flow was $29.68B and the most recent trailing twelve‑month net income was $24.97B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
Over the most recent year, Broadcom Inc.'s trailing twelve-month ROE has moved markedly higher: 14.4% (2025-02-02), 18.6% (2025-05-04), 25.8% (2025-08-03), 28.4% (2025-11-02) and 31.3% (2026-02-01). The latest sequence of quarters shows a clear upward trend and a return to mid‑teens-plus to low‑30s percentage territory over the past five reported quarters.
Viewed across the full history, ROE for Broadcom Inc. has experienced several notable inflection points: very high levels above 40–60% in 2018–2019 and again across 2021–2023, a decline into single digits by mid‑2024 (7.8% on 2024-08-04), followed by the recovery through late‑2024 into 2026 noted above. The most recent trailing twelve-month ROE was 31.3%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Over the past year Broadcom Inc.'s operating cash flow on a trailing twelve‑month basis has shown a steady upward trend, rising from $23.23B (period ending 2025-05-04) to $25.44B (2025-08-03), $27.54B (2025-11-02) and reaching $29.68B in the most recent period (2026-02-01). This reflects consistent growth in operating cash generation across the last four reported TTM periods.
Moved from large negative values in 2023–2024 (multiple periods near -$23B to -$26B) into positive TTM inflows in early 2025 ($2.81B on 2025-05-04 and $2.23B on 2025-02-02) before returning to modest outflows in the latest quarters (-$345.0M on 2025-08-03, $-580.0M on 2025-11-02, and $-521.0M on 2026-02-01).
Shifted from net inflows in early 2024 (e.g., $6.42B on 2024-02-04, $5.76B on 2024-05-05) to substantial net outflows across 2025–2026, with recent TTM values of -$26.38B (2025-05-04), -$24.33B (2025-08-03), -$20.13B (2025-11-02) and -$24.30B (2026-02-01).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
Broadcom Inc.'s trailing twelve-month price-to-earnings ratio has shown notable volatility over the past three years. After trading in the 20–60x range through 2022 and early 2023, the metric moved sharply higher in mid-to-late 2024, reaching 135.5x for the quarter ended 2024-08-04 and peaking at 138.9x for the quarter ended 2024-11-03 — the most pronounced inflection in the series.
Since that late-2024 peak the P/E has declined across 2025 and into early 2026: 105.0x in the quarter ended 2025-02-02, roughly 75–76x through mid-to-late 2025, and down to 64.4x in the most recent quarter. The most recent reported Price-to-Earnings ratio for Broadcom Inc. was 64.4x (period ended 2026-02-01).
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.