The Revenue LinesWide moat

Broadcom (AVGO) — moat facet

Two segments that behave like two companies: one sold $20.8 billion of parts to a handful of buyers last quarter, the other $8.8 billion of subscriptions to thousands of enterprises and kept 84 cents of every dollar.

Broadcom reports two segments, and they are not two halves of one business. Semiconductor Solutions sold $36,858 million in fiscal 2025 and Infrastructure Software $27,029 million1, a split close enough to even that the company was fairly described as half a software house. Nine months later that description is out of date: in the quarter to 2 August 2026 semiconductors took $20,839 million against software's $8,752 million2, better than two to one, because one line grew 127% and the other 29%3.

Fiscal 2025 revenue by type and region ($B)Products, Asia Pacific$33.6BSubs & services, Americas$11.0BProducts, Americas$7.9BSubs & services, EMEA$5.7BProducts, EMEA$3.3BSubs & services, Asia Pac$2.3BBroadcom Form 10-K FY2025, revenue disaggregated by type and region
The chips ship where equipment is built and the software is sold where the budget sits: three quarters of product revenue went to Asia Pacific, and most subscription revenue was booked in the Americas.

The two sell to different worlds. The semiconductor segment covers custom accelerators, Ethernet switching and routing silicon, network interface cards and optical components, alongside the older wireless, broadband and storage franchises4; it is paid per part, against designs frozen years before the first shipment. The software segment is private cloud, mainframe software, cybersecurity, enterprise software and the Fibre Channel storage-networking business5, billed as subscriptions to enterprises that renew or do not. Broadcom's own revenue-by-type table puts the difference plainly — $44,847 million of products against $19,040 million of subscriptions and services in fiscal 20256 — and so does its geography table, where $33,596 million of those products shipped to Asia Pacific while $11,031 million of the subscriptions were sold in the Americas7. The chips go where equipment is built; the software is sold where the budget sits.

Profit does not follow revenue in the proportion the chart implies. In fiscal 2025 the semiconductor segment earned $21,232 million of operating income and the software segment $20,765 million8: the smaller line earned almost exactly as much as the larger one, on margins of 57.6% against 76.8%9. In the latest quarter both improved, to 61.3% and 83.7%10, which is the unusual part. A business growing at 127% and a business growing at 29% are widening their margins at the same time, for reasons that have nothing in common — one is filling fabs it does not own, the other is raising prices and cutting costs.

Neither segment figure is the company's profit. Broadcom keeps stock compensation and acquisition-related amortisation outside the segments as unallocated expenses, $12,543 million over the first nine months of fiscal 202611, against $47,849 million of combined segment operating income12. The gap is not an accounting curiosity; it is most of what the two engines earn before the cost of having bought one of them is deducted. Nor is the balance between them as settled as a single year suggests: across fiscal 2019 to 2025 the semiconductor segment earned $97,254 million of operating income and the software segment $58,680 million13, and more than half of software's share of that arrived in the last two years alone.

Two notes on the chart before the pages that follow. Broadcom ran a third segment, IP licensing, until fiscal 2020 — $145 million in 2017, $134 million in 2018 and $73 million in 201914 — and folded it into semiconductors when it recast to two15; the bands here follow the recast. And the software band really is zero before fiscal 2018, because the segment did not exist until Brocade was bought: everything in it was purchased, in four transactions, over six years.

That asymmetry is the thing to carry into both pages. One line has extraordinary orders and almost no customers — a single distributor accounted for 50% of all Broadcom's revenue in the latest quarter16. The other has thousands of customers and, underneath a headline growth rate of 29%, a subscriptions and services line growing at 11%17. Which of those two figures is the real one decides what Broadcom is three years from now. Segment revenue at 29% describes a software business still compounding; subscriptions and services at 11% describes an annuity being priced harder, and leaves the company's growth resting entirely on the other page.

Moat trajectory: Widening

Both lines improved their margins in the same year for opposite reasons: semiconductors from volume, 57.6% to 61.3%, and software from price and cost cuts, 76.8% to 83.7%. The mix has swung hard back toward chips, which is the more cyclical half.

The number that tests this moat
Moat Explorer calc
Semiconductor share of segment operating income, latest quarter
63.5% ($12,770M of $20,095M) in Q3 FY2026, against 49.9% a year earlier

The two lines earned almost exactly the same in fiscal 2025. If the chip share keeps climbing, Broadcom is becoming a cyclical semiconductor company again, whatever the software annuity is worth.

How it's calculated: Moat Explorer calculation from the segment table: $12,770M / ($12,770M + $7,325M); prior year $5,217M / ($5,217M + $5,238M).
Source: Broadcom Form 10-Q, quarter ended 2 August 2026 (Moat Explorer calc) ↗
Dig deeper
DIG DEEPER 01
Semiconductor Solutions
Four fifths of the segment is now AI, and the fifth that is not has sat at about $4.1 billion a quarter for six quarters.
DIG DEEPER 02
Infrastructure Software
The headline says 29% and the recurring billings say 11%; the difference is the accounting of a licence conversion that will annualise.
References
  1. ReportedSemiconductor Solutions sold $36,858 million in fiscal 2025 and Infrastructure Software $27,029 million, a split close enough to even that the company was fairly described as half a software house.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  2. ReportedNine months later that description is out of date: in the quarter to 2 August 2026 semiconductors took $20,839 million against software's $8,752 million, better than two to one, because one line grew 127% and the other 29%.
    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 ↗
  3. ReportedNine months later that description is out of date: in the quarter to 2 August 2026 semiconductors took $20,839 million against software's $8,752 million, better than two to one, because one line grew 127% and the other 29%.
    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 ↗
  4. ReportedThe semiconductor segment covers custom accelerators, Ethernet switching and routing silicon, network interface cards and optical components, alongside the older wireless, broadband and storage franchises; it is paid per part, against designs frozen years before the first shipment.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  5. ReportedThe software segment is private cloud, mainframe software, cybersecurity, enterprise software and the Fibre Channel storage-networking business, billed as subscriptions to enterprises that renew or do not.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  6. ReportedBroadcom's own revenue-by-type table puts the difference plainly — $44,847 million of products against $19,040 million of subscriptions and services in fiscal 2025 — and so does its geography table, where $33,596 million of those products shipped to Asia Pacific while $11,031 million of the subscriptions were sold in the Americas.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  7. ReportedBroadcom's own revenue-by-type table puts the difference plainly — $44,847 million of products against $19,040 million of subscriptions and services in fiscal 2025 — and so does its geography table, where $33,596 million of those products shipped to Asia Pacific while $11,031 million of the subscriptions were sold in the Americas.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  8. ReportedIn fiscal 2025 the semiconductor segment earned $21,232 million of operating income and the software segment $20,765 million: the smaller line earned almost exactly as much as the larger one, on margins of 57.6% against 76.8%.
    Broadcom Inc., Form 10-K FY2025 - segment note and MD&A: semiconductor solutions net revenue $36,858M and infrastructure software $27,029M; segment operating income $21,232M and $20,765M; products $44,847M and subscriptions and services $19,040M, with products of $33,596M sold in Asia Pacific and subscriptions and services of $11,031M in the Americas; segment descriptions (custom accelerators or XPUs, Ethernet switching and routing silicon, Ethernet NICs, physical layer devices and optical components, racks and systems; private cloud, mainframe, cybersecurity, enterprise software and the FC SAN business); five major end markets; the warning that selling or leasing AI racks will likely increase operating margin but compress or lower future gross margin; VMware Cloud Foundation distribution; net property, plant and equipment $2,530M against total assets $171,092M; one semiconductor solutions customer, a distributor, 32% of net revenue for fiscal 2025 and 28% for fiscal 2024 — Fiscal year ended 2 November 2025 · publ. 2025-12-12 · source ↗
  9. Moat Explorer calcIn fiscal 2025 the semiconductor segment earned $21,232 million of operating income and the software segment $20,765 million: the smaller line earned almost exactly as much as the larger one, on margins of 57.6% against 76.8%.
    Moat Explorer calculation from Broadcom's Forms 10-K and its Form 10-Q for the quarter ended 2 August 2026: segment operating margins $21,232M/$36,858M = 57.6% and $20,765M/$27,029M = 76.8% for fiscal 2025, $12,770M/$20,839M = 61.3% and $7,325M/$8,752M = 83.7% for the quarter, $8,576M/$17,267M = 49.7% for fiscal 2020, $16,486M/$28,182M = 58.5% for fiscal 2023 and $13,977M/$21,478M = 65.1% for fiscal 2024; semiconductor revenue excluding AI $20,839M - $16,700M = about $4.1B, against about $4.0-4.2B in each of the six preceding quarters; combined segment operating income for the nine months $29,554M + $18,295M = $47,849M; infrastructure software revenue growth $7,637M/$6,621M = 15% over three fiscal years; cumulative segment operating income fiscal 2019 to 2025 $97,254M for semiconductors and $58,680M for software — Fiscal 2019 to the quarter ended 2 August 2026 · publ. 2026-09-22 · source ↗
    Method: Moat Explorer calculation from Broadcom's Forms 10-K FY2019, FY2021, FY2023 and FY2025 and its Form 10-Q for the quarter ended 2 August 2026; operands are in the source line.
  10. Moat Explorer calcIn the latest quarter both improved, to 61.3% and 83.7%, which is the unusual part.
    Moat Explorer calculation from Broadcom's Forms 10-K and its Form 10-Q for the quarter ended 2 August 2026: segment operating margins $21,232M/$36,858M = 57.6% and $20,765M/$27,029M = 76.8% for fiscal 2025, $12,770M/$20,839M = 61.3% and $7,325M/$8,752M = 83.7% for the quarter, $8,576M/$17,267M = 49.7% for fiscal 2020, $16,486M/$28,182M = 58.5% for fiscal 2023 and $13,977M/$21,478M = 65.1% for fiscal 2024; semiconductor revenue excluding AI $20,839M - $16,700M = about $4.1B, against about $4.0-4.2B in each of the six preceding quarters; combined segment operating income for the nine months $29,554M + $18,295M = $47,849M; infrastructure software revenue growth $7,637M/$6,621M = 15% over three fiscal years; cumulative segment operating income fiscal 2019 to 2025 $97,254M for semiconductors and $58,680M for software — Fiscal 2019 to the quarter ended 2 August 2026 · publ. 2026-09-22 · source ↗
    Method: Moat Explorer calculation from Broadcom's Forms 10-K FY2019, FY2021, FY2023 and FY2025 and its Form 10-Q for the quarter ended 2 August 2026; operands are in the source line.
  11. ReportedBroadcom keeps stock compensation and acquisition-related amortisation outside the segments as unallocated expenses, $12,543 million over the first nine months of fiscal 2026, against $47,849 million of combined segment operating income.
    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 ↗
  12. Moat Explorer calcBroadcom keeps stock compensation and acquisition-related amortisation outside the segments as unallocated expenses, $12,543 million over the first nine months of fiscal 2026, against $47,849 million of combined segment operating income.
    Moat Explorer calculation from Broadcom's Forms 10-K and its Form 10-Q for the quarter ended 2 August 2026: segment operating margins $21,232M/$36,858M = 57.6% and $20,765M/$27,029M = 76.8% for fiscal 2025, $12,770M/$20,839M = 61.3% and $7,325M/$8,752M = 83.7% for the quarter, $8,576M/$17,267M = 49.7% for fiscal 2020, $16,486M/$28,182M = 58.5% for fiscal 2023 and $13,977M/$21,478M = 65.1% for fiscal 2024; semiconductor revenue excluding AI $20,839M - $16,700M = about $4.1B, against about $4.0-4.2B in each of the six preceding quarters; combined segment operating income for the nine months $29,554M + $18,295M = $47,849M; infrastructure software revenue growth $7,637M/$6,621M = 15% over three fiscal years; cumulative segment operating income fiscal 2019 to 2025 $97,254M for semiconductors and $58,680M for software — Fiscal 2019 to the quarter ended 2 August 2026 · publ. 2026-09-22 · source ↗
    Method: Moat Explorer calculation from Broadcom's Forms 10-K FY2019, FY2021, FY2023 and FY2025 and its Form 10-Q for the quarter ended 2 August 2026; operands are in the source line.
  13. Moat Explorer calcNor is the balance between them as settled as a single year suggests: across fiscal 2019 to 2025 the semiconductor segment earned $97,254 million of operating income and the software segment $58,680 million, and more than half of software's share of that arrived in the last two years alone.
    Moat Explorer calculation from Broadcom's Forms 10-K and its Form 10-Q for the quarter ended 2 August 2026: segment operating margins $21,232M/$36,858M = 57.6% and $20,765M/$27,029M = 76.8% for fiscal 2025, $12,770M/$20,839M = 61.3% and $7,325M/$8,752M = 83.7% for the quarter, $8,576M/$17,267M = 49.7% for fiscal 2020, $16,486M/$28,182M = 58.5% for fiscal 2023 and $13,977M/$21,478M = 65.1% for fiscal 2024; semiconductor revenue excluding AI $20,839M - $16,700M = about $4.1B, against about $4.0-4.2B in each of the six preceding quarters; combined segment operating income for the nine months $29,554M + $18,295M = $47,849M; infrastructure software revenue growth $7,637M/$6,621M = 15% over three fiscal years; cumulative segment operating income fiscal 2019 to 2025 $97,254M for semiconductors and $58,680M for software — Fiscal 2019 to the quarter ended 2 August 2026 · publ. 2026-09-22 · source ↗
    Method: Moat Explorer calculation from Broadcom's Forms 10-K FY2019, FY2021, FY2023 and FY2025 and its Form 10-Q for the quarter ended 2 August 2026; operands are in the source line.
  14. ReportedBroadcom ran a third segment, IP licensing, until fiscal 2020 — $145 million in 2017, $134 million in 2018 and $73 million in 2019 — and folded it into semiconductors when it recast to two; the bands here follow the recast.
    Broadcom Inc., Form 10-K FY2019 - three reportable segments before fiscal 2020: semiconductor solutions net revenue $17,368M, $18,934M and $17,491M, infrastructure software $5,156M, $1,780M and nil, and IP licensing $73M, $134M and $145M for fiscal years 2019, 2018 and 2017; semiconductor solutions revenue fell 8% in fiscal 2019; two reportable segments from the fiscal year ending 1 November 2020 — Fiscal year ended 3 November 2019 · publ. 2019-12-20 · source ↗
  15. ReportedBroadcom ran a third segment, IP licensing, until fiscal 2020 — $145 million in 2017, $134 million in 2018 and $73 million in 2019 — and folded it into semiconductors when it recast to two; the bands here follow the recast.
    Broadcom Inc., Form 10-K FY2021 - segment note on the recast two-segment basis: semiconductor solutions net revenue $20,383M, $17,267M and $17,441M and infrastructure software $7,067M, $6,621M and $5,156M for fiscal years 2021, 2020 and 2019; segment operating income $10,976M, $8,576M and $8,538M, and $4,936M, $4,363M and $3,391M — Fiscal year ended 31 October 2021 · publ. 2021-12-17 · source ↗
  16. ReportedOne line has extraordinary orders and almost no customers — a single distributor accounted for 50% of all Broadcom's revenue in the latest quarter.
    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 ↗
  17. ReportedThe other has thousands of customers and, underneath a headline growth rate of 29%, a subscriptions and services line growing at 11%.
    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 ↗
Sources
Generated September 22, 2026