The issue this file is about
The problemOne business can produce two profit figures. There is the profit in the accounts, and there is the profit in the presentation, reached by removing items the company regards as unrepresentative of how it trades. Both can be correct at the same time, and a reconciliation table is supposed to show the reader exactly what moved between them. The question that rarely gets asked is the third one. How long does the difference last? The part created by buying other companies runs off on a fixed schedule, and the accounting rules require that schedule to be published. The part created by paying people in shares has no schedule and no end. Treating those two halves as one number is where the reading goes wrong.
The caseBroadcom Inc. For the fiscal quarter ended 2 August 2026, operating income was $15,955 million as reported and $20,095 million as adjusted. The $4,140 million between them is $2,006 million of amortisation of acquisition-related intangible assets, $2,019 million of stock-based compensation and $115 million of restructuring and other charges. The quarterly report filed on 9 June 2026 sets out what is left of the first of those three: $27,583 million, laid out fiscal year by fiscal year to 2030 and beyond.
Why it matters at your sizeThe arithmetic is the same with the zeros removed. Buy a competitor for $18 million, let the purchase price allocation put $11 million of it on customer relationships and developed technology with six year lives, and roughly $1.8 million a year sits in the income statement until the schedule runs out. The management pack will add it back. The lender's covenant definition may not. A buyer looking at the business three years later will ask for the same schedule and will read it as the price of the last deal rather than the cost of this one. The schedule exists whether or not anyone prints it. The only real choice is whether the number is known before somebody else asks for it.
Going into Wednesday the argument about Broadcom had a name and a number attached to it. The company designs custom accelerators and networking silicon for a small group of very large buyers, and the question in front of the market was whether that revenue was still compounding at the rate it had been. The Motley Fool published on 2 September 2026, under the headline Broadcom Earnings: AI Chip Sales Tripled. Here's the $34.8 Billion Number Investors Need to Watch, written by Johnny Rice and covering the third quarter of fiscal 2026.
The release furnished on Form 8-K after the close on 2 September 2026 answered that question in plain terms. It quotes the chief executive saying that third quarter AI semiconductor revenue of $16.7 billion grew 221% year over year and 54% quarter over quarter, and that fourth quarter AI semiconductor revenue is expected to reach $21.7 billion. Total net revenue was $29,591 million against $15,952 million, which the release labels as up 86%. Fourth quarter revenue guidance is approximately $34.8 billion.
That is the question that got asked, and it was answered. What follows is the question the same documents raise and nobody put to them.
Fiscal quarter ended 2 August 2026 against the fiscal quarter ended 3 August 2025. Sources: Broadcom Inc., Form 8-K filed 2 September 2026, Exhibit 99.1; Form 10-Q for the fiscal quarter ended 3 May 2026, filed 9 June 2026.
Amortisation of acquired intangible assets that Broadcom had already scheduled at 3 May 2026, set out fiscal year by fiscal year through 2030 and beyond. Every dollar of that line has been removed from the adjusted result in each period shown in this quarter's release. The schedule is printed in the quarterly report. It is the one part of the difference between the two profit figures that comes with a date on it.
1. Two profit numbers, and the space between them
GAAP is the rule book that governs what a US public company must report. A non-GAAP figure is the same company's own alternative measure, allowed provided it is defined, reconciled to the nearest GAAP number and not given more prominence than that number. It is a normal part of reporting, not a workaround. The reader's job is to look at the reconciliation and decide whether each removed item is something that will stop.
The release presents both. Operating income for the quarter was $15,955 million as reported against $5,887 million a year earlier, which is growth of 171.02%. On the adjusted basis it was $20,095 million against $10,455 million, which is growth of 92.20%. Both statements are in the same table. The reported figure grew faster because it started from a lower base, and it started from a lower base because more was being deducted from it.
The same pattern holds over the longer period. For the three fiscal quarters ended 2 August 2026, net revenue was $71,089 million against $45,872 million, growth of 54.97%. Operating income was $35,306 million as reported and $47,849 million as adjusted, a difference of $12,543 million.
One point of fairness before going further, because it cuts the other way. For the three fiscal quarters ended 3 August 2025 the comparable figures were $17,976 million as reported and $30,076 million as adjusted, a difference of $12,100 million, which was 40.23% of the adjusted number. A year later the difference of $12,543 million was 26.21% of the adjusted number. In absolute terms it grew by $443 million. Against a revenue base that grew 54.97%, it shrank considerably as a share of the result. The adjustments are not running away from the business. The business is growing past them.
2. What is inside the space
The reconciliation names four items. For the quarter, amortisation of acquisition-related intangible assets is $2,006 million, stock-based compensation is $2,019 million, restructuring and other charges are $115 million, and acquisition-related costs are nil. Those four add to $4,140 million, which is the whole of the difference. Nothing is left over.
The $2,006 million of amortisation is itself two lines on the face of the income statement: $1,499 million sitting inside cost of revenue and $507 million sitting inside operating expenses. The $2,019 million of stock-based compensation is three lines: $224 million in cost of revenue, $1,344 million in research and development and $451 million in selling, general and administrative. The restructuring charge is $12 million in cost of revenue and $103 million in operating expenses. Each of those figures is disclosed separately in the release, so the composition can be rebuilt from the statements rather than taken on trust from the reconciliation.
The three fiscal quarters break down the same way: $5,942 million of amortisation, $6,287 million of stock-based compensation, $312 million of restructuring and other charges and $2 million of acquisition-related costs, adding to the $12,543 million difference with nothing unexplained.
Amortisation is 48.45% of the quarter's difference and stock-based compensation is 48.77%. Across the three fiscal quarters the split is 47.37% and 50.12%. The two halves are close to equal in size. They are nothing alike in behaviour.
3. The half with a published end date
When one company buys another, the price is spread across what was bought. Some goes to identifiable assets such as technology, customer relationships and trade names. Those are written off over their useful lives, and that write-off is a real expense in the income statement even though the cash left on the day of the deal. It is the accounting cost of a purchase already paid for. It stops when the assets are fully written down.
Because the assets have finite lives, the amount left to write off is knowable, and the standards require it to be disclosed. The quarterly report filed on 9 June 2026 gives the schedule. Measured at 3 May 2026, expected amortisation expense was $3,940 million for the remainder of fiscal 2026, $6,818 million in fiscal 2027, $5,689 million in fiscal 2028, $4,562 million in fiscal 2029, $3,378 million in fiscal 2030 and $3,196 million thereafter. The six figures add to $27,583 million, which is exactly the net book value of the intangible assets subject to amortisation on the same date.
The same note gives the weighted-average remaining amortisation periods: five years for purchased technology, six years for customer contracts and related relationships, eleven years for trade names and ten years for the other category. It also gives the composition. At 3 May 2026 the gross carrying amount of intangible assets subject to amortisation was $50,442 million against accumulated amortisation of $22,859 million, leaving $27,583 million, with in-process research and development of $750 million on top for a total net book value of $28,333 million.
That total can be checked against the balance sheet in the release. Intangible assets, net, were $32,273 million at 2 November 2025 and $26,325 million at 2 August 2026, a fall of $5,948 million over the three fiscal quarters. The amortisation charged in those same three quarters was $5,942 million. The two figures differ by $6 million. Between 3 May 2026 and 2 August 2026 the balance fell from $28,333 million to $26,325 million, a fall of $2,008 million, against a quarterly charge of $2,006 million, a difference of $2 million. The balance sheet moves by the charge, quarter after quarter, because that is all that is happening to it.
| Intangible assets subject to amortisation, at 3 May 2026 | Gross | Accumulated | Net | Average life |
|---|---|---|---|---|
| Purchased technology | $32,851m | $(17,322)m | $15,529m | 5 years |
| Customer contracts and related relationships | $15,791m | $(4,961)m | $10,830m | 6 years |
| Trade names | $1,612m | $(455)m | $1,157m | 11 years |
| Other | $188m | $(121)m | $67m | 10 years |
| Subject to amortisation | $50,442m | $(22,859)m | $27,583m | |
| In-process research and development | $750m | — | $750m | not amortised |
Source: Broadcom Inc., Form 10-Q for the fiscal quarter ended 3 May 2026, filed 9 June 2026. Note 4. In-process research and development is not amortised until the related project is completed, so it does not appear in the schedule above.
This is the part of the adjusted presentation a reader can plan around. If the company continues to present its results on the basis it has used in every period in this release, then that schedule is a schedule of future add-backs, and it declines every year after fiscal 2027 unless something is bought. That last clause is where the discipline sits, because acquisitions reset the schedule upward. What the schedule shows is the shape of the runoff from deals already done.
4. The half without one
Shares and share options given to employees as part of their pay. The accounting charge is the estimated value of those awards spread over the period the employee has to work to earn them. No cash leaves the company when the charge is recorded. What leaves instead is a slice of ownership, which is why the number of shares tends to rise and why buying shares back is often described in the same breath.
Stock-based compensation for the quarter was $2,019 million, against $2,092 million in the previous quarter and $2,322 million a year earlier. For the three fiscal quarters it was $6,287 million, against $5,373 million. It has no schedule, because there is nothing to run off. It recurs for as long as people are paid this way.
The effect shows up in two places. Additional paid-in capital rose from $71,308 million at 2 November 2025 to $77,330 million at 2 August 2026, an increase of $6,022 million, which is $265 million less than the $6,287 million of stock-based compensation recorded over the same period. And the share count moved the wrong way for anyone expecting the buyback to shrink it. Weighted-average diluted shares were 4,884 million for the three fiscal quarters against 4,841 million a year earlier, an increase of 43 million shares or 0.89%. Over those same three fiscal quarters the cash flow statement records $8,450 million spent on repurchases of common stock under the repurchase programme.
A note on what is not divided here. The $8,450 million of repurchases and the 43 million share increase are not put into a ratio. Repurchases are a cash amount over a period; the share figure is a weighted average of two different periods, and it is affected by issuance, vesting, the treasury stock method and the timing of each buy. Dividing one by the other would produce a number with no defined meaning. Both are stated as filed and left separate.
There is one further place the two treatments differ, and the release states it explicitly. The weighted-average diluted share count used for the adjusted earnings per share figure is 4,937 million for the quarter, which is 50 million higher than the 4,887 million used for the reported figure. The footnote explains why: the non-GAAP share count excludes the effect of stock-based compensation expected to be incurred in future periods and not yet recognised, which would otherwise be assumed to repurchase shares under the treasury stock method. So the adjusted presentation removes the compensation expense from the numerator and, consistently, removes its share-buying assumption from the denominator. That is a coherent treatment, and it is worth reading the footnote to see it.
5. The third tax number
Most readers know there are two profit numbers in a release like this one. Fewer notice that there are three tax numbers, and that the adjusted presentation carries the largest of them rather than the smallest.
For the three fiscal quarters ended 2 August 2026 the income statement shows a provision for income taxes of $3,853 million on income before income taxes of $33,600 million, an effective rate of 11.47%. The reconciliation then adds $3,505 million of non-GAAP tax reconciling adjustments to reach a non-GAAP provision of $7,358 million. Measured against adjusted operating income of $47,849 million less non-GAAP interest expense of $2,194 million plus non-GAAP other income of $334 million, that is an effective rate of 16.00%. The supplemental cash flow disclosure in the same release states that cash paid for income taxes over those three fiscal quarters was $2,228 million.
The income statement charge is what the accounting rules say the period earned in tax cost, including amounts deferred to later years. The adjusted charge is that number recomputed as if the removed expenses had never been removed for tax purposes, which raises it. Cash paid is money that actually went to tax authorities in the period, which follows payment dates rather than accounting periods. None of the three is the wrong answer. They answer three different questions, and using one to argue about another is where readers get into trouble.
The point worth keeping is directional. The adjusted presentation here charges more tax than the statutory accounts do, not less. That is the conservative direction, and it deserves to be said plainly in a piece that spends most of its length on what the adjusted presentation removes.
6. Where the cash went while the profit was being reported
Net income for the three fiscal quarters was $29,747 million and cash from operating activities was $32,950 million. That gap is smaller than the non-cash charges alone would suggest, and the cash flow statement shows why. Non-cash items added $12,163 million: $6,047 million of amortisation of intangible and right-of-use assets, $6,287 million of stock-based compensation, $484 million of depreciation, and smaller lines for deferred taxes, loss on debt extinguishment and non-cash interest. Working capital then took $8,960 million back out.
The two largest users are ordinary consequences of growth. Trade accounts receivable rose $6,562 million over the three fiscal quarters, from $7,145 million at 2 November 2025 to $13,707 million at 2 August 2026, an increase of 91.84% against revenue growth of 54.97%. Inventory rose $2,253 million, from $2,270 million to $4,523 million, an increase of 99.25%. Accounts payable moved the other way, rising $2,440 million on the balance sheet to $4,000 million.
A note on what is not computed here. Days of sales outstanding and days of inventory are not calculated for the 2 November 2025 balance sheet, because the revenue and cost of revenue for the fiscal quarter then ended are not in either document used for this file. Quoting a days figure for one date and not the other would invite a comparison that has not been made. The balances and the growth rates are given as filed and no days ratio is asserted.
The absorption is 27.19% of operating cash flow for the period. It did not stop free cash flow from being large: $31,937 million for the three fiscal quarters after $1,013 million of capital expenditure, and $13,665 million in the quarter alone, which the release describes as 46 percent of revenue. It is worth noticing all the same, because a business growing receivables at 91.84% while revenue grows 54.97% is lending working capital to its customers whether or not it describes the arrangement that way.
7. The balance sheet the acquisitions left behind
Goodwill stood at $97,801 million at 2 August 2026 and at $97,801 million at 2 November 2025. It did not move by a single million across three fiscal quarters, which is what an unchanged goodwill balance looks like when nothing has been bought and nothing has been written down. That figure is 51.98% of total assets of $188,148 million and 98.11% of total stockholders' equity of $99,690 million. Add intangible assets, net, of $26,325 million and the two together are 65.97% of total assets.
The part of an acquisition price that could not be attributed to any identifiable asset. It is not written off over time. It sits on the balance sheet until a test says it is worth less than the carrying amount, at which point it is written down in one movement. An unchanged goodwill balance therefore tells you two things at once: nothing was acquired, and nothing failed the test.
Subtract goodwill and intangible assets from total stockholders' equity and the remainder is negative $24,436 million. That is a computed figure, and it is not a defect. It is what the balance sheet of a company assembled by acquisition looks like when the acquisitions were paid for with a mixture of stock and debt. Total debt fell from $65,136 million to $59,419 million over the three fiscal quarters, a reduction of $5,717 million, with $10,528 million of payments against $4,474 million of new borrowings. Retained earnings rose from $9,761 million to $22,151 million.
| Balance sheet, in millions | 2 Aug 2026 | 2 Nov 2025 | Change |
|---|---|---|---|
| Cash and cash equivalents | $23,975 | $16,178 | +$7,797 |
| Trade accounts receivable, net | $13,707 | $7,145 | +$6,562 |
| Inventory | $4,523 | $2,270 | +$2,253 |
| Goodwill | $97,801 | $97,801 | nil |
| Intangible assets, net | $26,325 | $32,273 | $(5,948) |
| Total assets | $188,148 | $171,092 | +$17,056 |
| Total debt | $59,419 | $65,136 | $(5,717) |
| Additional paid-in capital | $77,330 | $71,308 | +$6,022 |
| Total stockholders' equity | $99,690 | $81,292 | +$18,398 |
Source: Broadcom Inc., Form 8-K filed 2 September 2026, Exhibit 99.1. Condensed consolidated balance sheets. Total debt is the sum of short-term debt and long-term debt as presented, and the change column is computed.
8. What the release does not say, and the quarterly report does
A quarterly release is a short document. It carries the statements, the reconciliation and the guidance. The notes live in the quarterly report, and for this company the quarterly report filed on 9 June 2026 carries three disclosures that are larger than anything discussed above and appear nowhere in the release.
Customer concentration. The quarterly report states that direct sales to one semiconductor solutions customer, which is a distributor, accounted for 42% of net revenue for each of the fiscal quarter and two fiscal quarters ended 3 May 2026, against 29% for each of the comparable periods a year earlier. It states that aggregate sales to the top five end customers, through all channels, were approximately 45% of net revenue against approximately 40%. It states that sales to distributors were 56% of net revenue for the two fiscal quarters. It then says that the company expects to continue to experience significant customer concentration in future periods, and that the loss of, or a significant decrease in demand from, any of the top five end customers could have a material adverse effect.
Purchase commitments. The same report sets out contractual commitments at 3 May 2026. Unconditional purchase commitments total $128,110 million, described as commitments to purchase goods or services, primarily inventory, that are enforceable and legally binding and specify all significant terms including fixed or minimum quantities, price provisions and approximate timing. The note states that commitments cancellable without penalty, and unconditional commitments with a remaining term of one year or less, are excluded from the table. Other contractual commitments are a further $4,105 million. A separate $1,662 million of unrecognised tax benefits and accrued interest and penalties is excluded from the table because the timing of settlement cannot be reliably estimated.
The shape of that table is the striking part. Of the $128,110 million, $55,214 million falls in fiscal 2027 and $72,870 million in fiscal 2028, which together are 99.98% of the total. Fiscal 2029 carries $4 million and the years after that carry nothing. Against total assets of $179,158 million at the same date, the purchase commitments are 71.51%. That comparison is made on one date deliberately: both figures are as of 3 May 2026, taken from the same document.
A promise to buy, made in advance, that the buyer cannot walk away from without paying. It is not a liability on the balance sheet, because nothing has been delivered yet, so it does not appear in the debt figure or the total liabilities line. It is disclosed in the notes instead. For a manufacturer it is usually the mechanism by which capacity gets reserved: supply is secured today for revenue expected later.
The backstop. The third disclosure is in the subsequent events note and repeated in Item 5 of the same report. It states that on 8 June 2026 the company arranged for an investor partner, named in Item 5 as Apollo, to take on certain agreements to purchase AI racks based on custom AI accelerators designed by the company and the related lease agreements with a customer that enable access to compute capacity. In connection with that arrangement the company entered into a backstop agreement with the investor partner for the customer's lease obligations over five-year terms. The note states that the backstop will increase over time as the AI racks are deployed and decrease as the customer makes payments on its lease obligations, with a maximum exposure of $29 billion, and that in the event of default by the customer the company has various remedies including assuming the lease or effecting a sale of the AI racks, which would reduce the maximum exposure.
A promise to stand behind somebody else's payments. If the customer does not pay the investor who financed the equipment, the company that made the equipment does. It is the same idea as a guarantee on a lease. It costs nothing while the customer pays, appears in the notes rather than on the balance sheet, and becomes an obligation only if the arrangement it supports stops working.
Three figures are therefore disclosed, each larger than the quarter's revenue, none of which is a liability on the balance sheet: $128,110 million of purchase commitments, $4,105 million of other contractual commitments and a backstop with a stated maximum exposure of $29 billion. They are not added together here. The commitments are measured at 3 May 2026, the backstop was arranged on 8 June 2026 and is described as changing over time rather than as a fixed amount, and the report gives no figure for it at any balance sheet date. Adding a point-in-time schedule to a moving maximum would produce a total that does not correspond to anything.
What is worth stating is the relationship between all of this and the growth in the release. The company disclosed in the same document, among its risk factors, that it has entered into and may enter into financing arrangements where it provides a backstop or a guarantee, and that such arrangements have and may impose financial obligations upon it or increase its exposure to credit or customer default risks. That is the company's own language. The revenue is being reported now. Some of the arrangements that support it are described in the notes and nowhere else.
9. What the segments show underneath the headline
The release splits revenue two ways. Semiconductor solutions was $20,839 million against $9,166 million, growth of 127.35%, and moved from 57% of revenue to 70%. Infrastructure software was $8,752 million against $6,786 million, growth of 28.97%, and moved from 43% to 30%.
That shift matters for everything above, for an arithmetical reason. The amortisation charge is fixed by a schedule set when the assets were acquired, and it is now spread across a revenue base that has nearly doubled in a year. Whichever transactions produced those intangible assets, and the filings do not break the balance down by transaction, the charge does not grow with the business. It runs off while the revenue grows. That is why the difference between the two operating income figures fell from 40.23% of the adjusted number to 26.21% while rising $443 million in absolute terms.
10. What to take from this if you run a smaller company
Five things transfer directly, and none of them require a hundred billion dollars of anything.
Know the schedule before somebody asks for it. If a business has bought anything, the purchase price allocation created a schedule of future amortisation. It is a required disclosure in a full set of accounts and it is a standard diligence request. Knowing the annual figure for the next five years turns an awkward question into a prepared answer.
Separate the two halves when presenting adjusted results. Amortisation of acquired intangibles ends. Stock-based compensation does not. Presenting them as one line called adjustments invites the reader to treat both as temporary, and the more sophisticated the reader, the more likely they are to push back on exactly that. Splitting them out voluntarily is a credibility gain, not a concession.
Check the covenant definition against the presentation. Adjusted profit as presented to investors and adjusted profit as defined in a facility agreement are two different measures that share a name. The place this becomes urgent is a quarter when reported profit is thin and everything depends on which add-backs the definition permits. That is the wrong quarter to read the document for the first time.
Read the notes for the obligations, not just the balance sheet for the liabilities. Minimum purchase quantities, take-or-pay terms, guarantees of a customer's or a subsidiary's obligations, and personal guarantees given by owners are all promises that bind and none of them show up in the debt figure. For a smaller company they are frequently the largest commitments in existence.
Watch receivables against revenue, not against last month. Receivables growing faster than revenue means the company is funding its customers. That is sometimes a deliberate commercial choice and sometimes an unnoticed drift, and the two look identical on a balance sheet. The only way to tell them apart is to have decided in advance which one is happening.
11. What the filings do not say
Naming the limits is part of the reading. Five things are not in either document, and no figure for any of them is asserted anywhere above.
The intangible assets note gives the schedule and the categories. It does not attribute the balance to any particular acquisition, so no split by transaction is offered here. The release gives revenue by segment. It does not give operating income by segment, so no segment margin is computed. The customer concentration disclosure gives percentages and describes one customer as a distributor. It does not name any customer, and none is named here. The backstop note gives a maximum exposure and a mechanism. It gives no balance at any date, no amount deployed and no fee, so the exposure at 2 August 2026 is unknown and is not estimated. And the release quotes AI semiconductor revenue of $16.7 billion for the quarter and guides to $21.7 billion; that measure is not a segment in the financial statements and is not reconciled in the release, so it is quoted here as the release states it and is not used in any ratio.
One further limit is structural. The quarterly report for the fiscal quarter ended 2 August 2026 had not been filed when this file was written. The notes used here are therefore those in the report for the fiscal quarter ended 3 May 2026, filed 9 June 2026, and every note figure is dated accordingly. Where a note figure and a release figure are compared, the dates are stated so the reader can see which is which.
12. Why this company was in the news this week
The results were furnished on Form 8-K after the close on Wednesday 2 September 2026. The Motley Fool published the same evening, at 23:01 UTC, under the headline Broadcom Earnings: AI Chip Sales Tripled. Here's the $34.8 Billion Number Investors Need to Watch, by Johnny Rice, covering the third quarter of fiscal 2026 and reporting revenue of $29.59 billion and adjusted earnings per share of $3.32. It noted that the fourth quarter revenue guidance of $34.8 billion sat below the $35.03 billion it attributed to analyst data from LSEG. The following day the same publication ran a piece by Danny Vena headlined Broadcom's AI Revenue Just Soared 221%, and Profits Tripled. So, Why Is the Stock Flat?, dated 3 September 2026.
Both are cited as reporting, and both were opened and their dates and reporting periods confirmed before being named here. Neither is used as a source for any figure. Every number in this file comes from the two filings listed in the sources below. No share price, market capitalisation or price movement appears anywhere above, because putting a price move beside an accounting reading invites a causal claim that filings cannot support.
13. The short answer
Broadcom reported a quarter in which revenue rose 86% and operating income rose 171% as reported and 92% as adjusted. Both figures are correct and the reconciliation between them is complete. The $4,140 million that separates them is close to half amortisation of acquired intangibles and close to half stock-based compensation. The first half has a published schedule showing $27,583 million still to come, declining every year after fiscal 2027 unless something further is bought. The second half has no schedule at all. And the notes to the quarterly report carry three disclosures larger than any figure in the release: 42% of revenue from one customer, $128,110 million of purchase commitments falling almost entirely in two fiscal years, and a backstop of a customer's lease obligations with a stated maximum exposure of $29 billion.
None of that contradicts the quarter. It sits alongside it, in documents that are public, free and mostly unread.
Questions this file answers
What did Broadcom report for the quarter ended 2 August 2026?
Net revenue of $29,591 million, up 86%. Operating income of $15,955 million on a GAAP basis and $20,095 million on the company's non-GAAP basis. Net income of $13,088 million on a GAAP basis and $16,372 million on a non-GAAP basis. Cash from operations of $14,197 million and free cash flow of $13,665 million.
What is the difference between the two operating income figures?
For the quarter it is $4,140 million, made up of $2,006 million of amortisation of acquisition-related intangible assets, $2,019 million of stock-based compensation and $115 million of restructuring and other charges. For the three fiscal quarters it is $12,543 million, which is 26.21% of the adjusted figure and 17.64% of revenue.
Is the adjusted presentation improper?
No. It is disclosed, defined and reconciled line by line to the nearest GAAP measure in the same document, which is what the rules require. The point made here is narrower. The two halves of the difference behave differently over time, and only one of them has a published end date.
What is the $27,583 million figure?
It is the expected amortisation expense on intangible assets subject to amortisation, scheduled by fiscal year, as disclosed in the quarterly report filed on 9 June 2026 and measured at 3 May 2026. The schedule reads $3,940 million for the remainder of fiscal 2026, $6,818 million in 2027, $5,689 million in 2028, $4,562 million in 2029, $3,378 million in 2030 and $3,196 million thereafter.
Is the gap growing?
Not as a proportion. For the three fiscal quarters ended 3 August 2025 the difference was $12,100 million, which was 40.23% of the adjusted figure. For the three fiscal quarters ended 2 August 2026 it was $12,543 million, which was 26.21%. In absolute terms it rose $443 million; against a revenue base that grew 54.97% it fell sharply as a share.
Why are there three different tax numbers?
For the three fiscal quarters ended 2 August 2026 the income statement carries a provision for income taxes of $3,853 million. The non-GAAP reconciliation adds $3,505 million of non-GAAP tax reconciling adjustments to reach $7,358 million. The supplemental cash flow disclosure states that cash paid for income taxes was $2,228 million. The three measure different things: the accounting charge, the charge recomputed on the adjusted result, and the money that left.
What is the backstop mentioned in the filings?
The quarterly report filed on 9 June 2026 discloses that on 8 June 2026 the company arranged for an investor partner to take on certain agreements to purchase AI racks and the related lease agreements with a customer, and that the company entered into a backstop agreement with the investor partner for the customer's lease obligations over five-year terms, with a maximum exposure of $29 billion. The filing states the backstop increases as racks are deployed and decreases as the customer pays, and that on a customer default the company has remedies including assuming the lease or selling the racks.
How concentrated is the customer base?
The quarterly report filed on 9 June 2026 states that direct sales to one semiconductor solutions customer, a distributor, accounted for 42% of net revenue for the fiscal quarter and two fiscal quarters ended 3 May 2026, against 29% a year earlier, and that aggregate sales to the top five end customers through all channels were approximately 45% against 40%.
Related free tool: SEC Filing Deadline Calendar
This is analysis of public filings, not advice on your facts, and not investment advice. Nothing here is a recommendation regarding any security. Unfolding Values has no relationship with Broadcom Inc., holds no position in its securities, and is not an audit firm. Figures are as filed and as of the dates stated, and figures described as computed are derived from filed figures with their inputs shown. Every measure discussed is disclosed and reconciled by the company as accounting and disclosure rules require, and the use of non-GAAP measures described here is ordinary and permitted. Nothing in this file asserts wrongdoing by any company or person. Descriptions of what a company reported say nothing about anyone's reasons or intentions. Forward-looking observations about accounting outcomes are statements of what standards require and of what a company has disclosed, and are not predictions of results. For a read on your own filing, reach out.
Do this with help: a Pre-Filing QC Review puts the eyes of principals who have led SEC reporting and served as principal accounting officer for US-listed issuers on your 10-Q before it reaches EDGAR. 10-Q $1,500, 10-K $2,500, fixed.
From the Filing Seat
Get the monthly From the Filing Seat note: one practical SEC/GAAP insight from the filing seat. No spam.