Company DCF analysis file
Broadcom DCF Analysis
A Broadcom DCF must distinguish semiconductor and software demand from acquisition accounting and acquisition cash. The FY2025 result includes a full VMware year and 52 weeks, compared with 53 weeks and a partial acquired year. Reported growth is not automatically equal-week organic growth.
Revenue, expenses and profit on one annual basis
Historical Broadcom consolidated comparison, $ millions: FY2024 ended 2024-11-03 and FY2025 ended 2025-11-02. These annual periods are separate from the later interim observation below.
| Measure | FY2024 | FY2025 |
|---|---|---|
| Revenue | 51,574 | 63,887 |
| Total cost of revenue | 19,065 | 20,593 |
| Research and development | 9,310 | 10,977 |
| Selling, general and administrative | 4,959 | 4,211 |
| Acquisition amortization in operating expenses | 3,244 | 2,031 |
| Restructuring and other operating charges | 1,533 | 591 |
| Operating income | 13,463 | 25,484 |
| Net income | 5,895 | 23,126 |
Source: Annual financial statements. Annual values are reported unless a row is marked derived.
The cost-of-revenue total already includes its acquisition-amortization and restructuring charges. The additional amortization row shown here belongs to operating expenses. A cash reconciliation must identify both without treating either as the current payment to buy a business. Net income is also affected by tax and discontinued-operation differences, so it is not a clean substitute for recurring operating cash.
Keep semiconductor and software economics distinct
| Reported segment revenue, $ millions | FY2024 | FY2025 |
|---|---|---|
| Semiconductor solutions | 30,096 | 36,858 |
| Infrastructure software | 21,478 | 27,029 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
These segment sales reconcile to group revenue, but do not disclose two free-cash-flow margins. Chip supply, software renewal and product development require different assumptions. Keep the full/partial VMware-year and 53/52-week boundaries beside the comparison rather than describing the increase as organic.
Reconcile reported cash before forecasting investor cash
| Measure | FY2024 | FY2025 |
|---|---|---|
| Operating cash | 19,962 | 27,537 |
| Property purchases: positive deduction | 548 | 623 |
| Cash after property purchases: derived | 19,414 | 26,914 |
| Net business-acquisition cash payments | 25,978 | 0 |
| Business-sale proceeds | 3,485 | 300 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
The recurring subtotal is 27,537 minus 623 = $26,914 million in 2025. Acquisitions and disposals are separate investment decisions: combining the displayed transaction lines gives $27,214 million for 2025 and negative $3,079 million for 2024, not total cash movement. Small physical capex does not mean technology and customer relationships require no reinvestment.
The later interim period stays separate
| Observation | Period-specific evidence |
|---|---|
| Reported interim basis | Q3 FY2026 covers 2026-05-04 through 2026-08-02 and was released 2026-09-02. Revenue was $29,591 million in this quarter. |
| Interpretation boundary | The newer quarter has a different semiconductor/software mix from the acquisition-year comparison. Physical capex is only one investment category; a cash forecast must also fund the research, integration and transactions it assumes. |
Source: official interim reporting. The dated quarter is not annualized here and is not added to either full-year column. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
Reconcile operating profit, operating taxes, noncash acquisition charges, working capital and recurring technology investment. Treat further acquisitions as explicit prices and funding schedules, not free growth. Continue to fund the software and chip-development case after adding back amortization. Equity awards, debt and nonoperating assets need consistent treatment in the enterprise-to-equity bridge.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| Semiconductor demand | Customer shipments, product cost and supply cash | Demand slows after supply commitments are made |
| Software retention | Renewal value, service cost and development | Cost reductions weaken the revenue base being valued |
| Acquisition perimeter | Comparable acquired years and integration payments | Historical transaction benefits are assumed recurring |
Compare weaker semiconductor demand with unchanged near-term research spending, then test a separate software-retention case. Reconcile the acquisition perimeter before changing growth. A terminal value must rest on sustainable replacement and development cash, not simply an adjusted earnings figure with every acquisition charge removed.
Use the Broadcom financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
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