Impressive Financial Results from Broadcom’s Acquisition of VMware
A recent quarterly earnings report from Broadcom has revealed outstanding financial performance following its acquisition of VMware. In the quarter ending February 2, Broadcom reported a revenue of $14.92 billion, marking a substantial 25% year-over-year increase. Net income also saw a remarkable surge to $5.5 billion, a 315% rise compared to the same period last year.
The integration of VMware into Broadcom’s infrastructure software business unit has been a key driver of this growth. The unit reported revenue of $6.7 billion in Q1 2025, up from $4.55 billion in the same quarter last year.
While Broadcom no longer separates VMware’s revenue in its reports, the significant increase in revenue suggests that VMware’s contributions have been substantial. Prior to the acquisition, Broadcom’s software sales experienced modest growth of 3% in FY 2023 and 4% in FY 2022.
This revenue growth has been largely attributed to Broadcom’s strategy of bundling VMware products into higher-priced subscription packages rather than selling them as standalone licenses. The largest bundle, VMware Cloud Foundation (VCF), has seen significant adoption among Broadcom’s top 10,000 customers.
Additionally, cost-cutting measures at VMware have contributed to the rise in net income. Broadcom’s software business achieved a 76% operating margin in Q1 2025, up from 59% a year ago.
Despite the financial success of the acquisition, concerns have been raised about customer dissatisfaction due to reported price hikes. Some customers have experienced significant cost increases, leading them to consider alternative solutions.
While Broadcom’s financial results demonstrate effective revenue growth, the long-term impact of customer migrations away from VMware remains uncertain.
