AVGO · News · 20261001N

Gross Margin Drivers

Broadcom Inc. · 2026-10-01 · Importance 45 · Surprise 64

Broadcom’s gross margin contracted in third-quarter fiscal 2026 as the company’s revenue mix became more hardware-heavy. The mix shift was associated with a sharp increase in AI semiconductor revenue, which rose 221% year over year. Expense control nonetheless supported a 68% non-GAAP operating margin. Adjusted EPS increased 96% year over year, indicating that operating leverage partly offset the gross-margin pressure.

Key facts

• Broadcom experienced gross margin contraction attributed to a hardware-heavy mix. source