The 32% Customer With No NameThin moat
Broadcom (AVGO) — moat facet
Twenty-one percent, then twenty-eight, then thirty-two — a dependency that is not stabilising, carrying contractual liability the filing calls potentially unlimited.
The single most important number in Broadcom's filings is one it declines to attach a name to. In fiscal 2025 one customer accounted for 32% of net revenue, against 28% in 2024 and 21% in 2023 — eleven points of additional dependence in two years — with the revenue sitting in the semiconductor solutions segment1.
The credit exposure moved further and faster. That customer represented 44% of net accounts receivable at the November 2025 year end, up from 18% a year earlier. A jump of that size in a single year usually reflects timing — a large shipment near the period close — but it means that at the balance-sheet date nearly half of what Broadcom was owed sat with one counterparty.
Broadcom's contracts make this heavier still. The company discloses that warranty and indemnification provisions with some of its largest customers are "potentially unlimited," and that liabilities may greatly exceed the revenue from the relevant products2. A supplier this concentrated, carrying uncapped liability to the concentrated party, has less negotiating room than its margins suggest.
The next figure has already arrived: 50% of revenue in the quarter to August 20263. A relationship that has gone 21 to 28 to 32 to 50 is not stabilising, and every additional point makes the eventual generational re-compete more consequential. The company itself says it expects significant customer concentration to continue4.
Eleven points of additional dependence on one counterparty in two years, and a receivable share that went from 18% to 44% in one. Neither is a crisis while the customer is among the strongest credits in technology, and the revenue is real. But a relationship trending this way makes the eventual generational re-compete progressively more consequential, and Broadcom says the concentration will persist.
The credit exposure moved further and faster than the revenue exposure. Nearly half of what Broadcom was owed at the fiscal year end sat with one counterparty, and the company discloses that indemnification provisions with some of its largest customers are potentially unlimited. Watch whether the receivable share normalises next year or persists.
Source: Broadcom Form 10-K, FY2025 (significant customer information) ↗- ReportedIn fiscal 2025 one customer accounted for 32% of net revenue, against 28% in 2024 and 21% in 2023 — eleven points of additional dependence in two years — with the revenue sitting in the semiconductor solutions segment.Broadcom Form 10-K, FY2025 — Significant Customer Information: during fiscal years 2025, 2024 and 2023 one customer accounted for 32%, 28% and 21% of net revenue respectively, with that revenue included in the semiconductor solutions segment; one customer accounted for 44% and 18% of net accounts receivable as of November 2, 2025 and November 3, 2024; sales to distributors accounted for 48% of net revenue in each of fiscal 2025 and 2024; aggregate sales through all channels to the top five end customers were approximately 40% of net revenue in each of fiscal 2025 and 2024; the company expects to continue to experience significant customer concentration — FY2025 (ended November 2, 2025) · publ. December 18, 2025 · source ↗
- ReportedThe company discloses that warranty and indemnification provisions with some of its largest customers are "potentially unlimited," and that liabilities may greatly exceed the revenue from the relevant products.Broadcom Form 10-K, FY2025 — risk factors on distributors and channel partners: demand fluctuates with distributors' product inventory levels and the timing of delivery to end customers; distributors and other channel partners are generally not subject to minimum purchase commitments; customer contracts typically contain warranty and indemnification provisions and in certain cases liquidated damages, and in some agreements with the largest customers the associated liabilities are potentially unlimited and may greatly exceed the revenue received from the relevant products — FY2025 · publ. December 18, 2025 · source ↗
- ReportedThe next figure has already arrived: 50% of revenue in the quarter to August 2026.Broadcom Inc., Form 10-Q for the quarter ended 2 August 2026 - remaining performance obligations approximately $179.2 billion, including a long-term contract for custom AI accelerators entered in the quarter ended 3 May 2026, about 25% expected within 12 months; one semiconductor customer, a distributor, 50% of net revenue in the quarter (32% a year earlier) and top five end customers about 55%; distributors 56% of net revenue for three quarters; purchase commitments $126,821M ($52,674M for fiscal 2027, $72,952M for fiscal 2028); operating income $15,955M (54% of revenue) against $5,887M (37%); infrastructure software revenue $8,752M (+29%) and operating income $7,325M (+40%), attributed to VMware Cloud Foundation including additional license revenue; subscriptions and services revenue $5,312M against $4,779M, products $24,279M against $11,173M — Quarter ended 2 August 2026 · publ. 2026-09-10 · source ↗
- ReportedThe company itself says it expects significant customer concentration to continue.Broadcom Form 10-K, FY2025 — Significant Customer Information: during fiscal years 2025, 2024 and 2023 one customer accounted for 32%, 28% and 21% of net revenue respectively, with that revenue included in the semiconductor solutions segment; one customer accounted for 44% and 18% of net accounts receivable as of November 2, 2025 and November 3, 2024; sales to distributors accounted for 48% of net revenue in each of fiscal 2025 and 2024; aggregate sales through all channels to the top five end customers were approximately 40% of net revenue in each of fiscal 2025 and 2024; the company expects to continue to experience significant customer concentration — FY2025 (ended November 2, 2025) · publ. December 18, 2025 · source ↗