BroadcomAVGO

01Broadcom has secured design wins for custom AI accelerators (XPUs) with hyperscale customers, a multi-year engagement requiring deep co-development that locks in revenue visibility and raises switching costs once silicon is qualified into a customer's infrastructure. Unlike merchant GPU suppliers, Broadcom's XPU model embeds proprietary design IP into each customer's specific architecture, making mid-program substitution costly and rare.

02VMware Cloud Foundation is the control plane for enterprise private and hybrid clouds; enterprises that have standardized on VCF face substantial migration cost and operational risk to switch, supporting durable subscription renewals at high incremental margins. This installed-base stickiness converts VMware into a recurring, high-margin annuity that diversifies Broadcom beyond cyclical semiconductor demand.

03Direct sales to one semiconductor solutions customer, which is a distributor, accounted for 42% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 3, 2026, and 29% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 4, 2025. We believe aggregate sales to our top five end customers, through all channels, accounted for approximately 45% of our net revenue for each of the fiscal quarter and two fiscal quarters ended May 3, 2026. The loss of, or any substantial reduction in our sales to, any of our top five end customers could have a material adverse effect on our business, results of operations and financial condition.

04Cash and cash equivalents increased to $19,628 million at May 3, 2026 from $16,178 million at November 2, 2025, primarily due to $18,753 million in net cash provided by operating activities, offset in part by $8,450 million of stock repurchases and $6,178 million of dividend payments. Interest expense was $1,577 million and $1,642 million for the two fiscal quarters ended May 3, 2026 and May 4, 2025, respectively. The decrease was primarily due to an overall reduction in outstanding debt balances and debt refinancing activities. During the two fiscal quarters ended May 3, 2026 and May 4, 2025, we repurchased and retired 25 million and 16 million shares for $8,450 million and $2,450 million, respectively. As of May 3, 2026, $10.1 billion of the authorized amount remained available for repurchase.