AVGO Profit Margins
Gross, Operating & Net Margin Analysis for Broadcom Inc
Margin Quality
Excellent
Current Profit Margins
Gross Margin
67.8%
$43.29B gross profit
Operating Margin
39.9%
$25.48B operating income
Net Profit Margin
36.2%
$23.13B net income
5-Year Margin Trends
What Margins Indicate About AVGO
Business Quality
High gross margins above 50% suggest Broadcom Inc has strong pricing power and competitive advantages that allow premium pricing.
Operational Efficiency
Expanding operating margins show Broadcom Inc is improving operational leverage and cost management.
Profitability
Net margins above 15% demonstrate excellent profitability and suggest strong competitive positioning.
Investment Implications
Expanding margins across the board suggest improving business fundamentals, which often supports stock price appreciation.
Understanding Profit Margins
Gross Margin
(Revenue - Cost of Goods Sold) / Revenue. Measures pricing power and production efficiency before operating expenses.
Operating Margin
Operating Income / Revenue. Shows profitability from core operations after all operating expenses but before interest and taxes.
Net Profit Margin
Net Income / Revenue. The bottom line - shows how much profit the company keeps from each dollar of revenue after all expenses.
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Frequently Asked Questions
What is AVGO's profit margin?
AVGO (Broadcom Inc) has a net profit margin of 36.2%, meaning the company keeps $0.3619828760154648 in profit for every dollar of revenue. This represents an improvement from the previous year's net margin of 11.4%.
What is AVGO's gross margin?
AVGO's gross margin is 67.8%. Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold. A high gross margin like this indicates strong pricing power and efficient production.
What is AVGO's operating margin?
AVGO has an operating margin of 39.9%. Operating margin shows profitability after operating expenses but before interest and taxes. The 39.9% year-over-year improvement suggests better operational efficiency.
Are AVGO's profit margins good?
AVGO's margins are considered excellent. With a gross margin of 67.8% and net margin of 36.2%, Broadcom Inc demonstrates strong pricing power and operational efficiency.
How do profit margins affect AVGO stock?
Profit margins are a key indicator of AVGO's business quality and competitive position. High margins suggest strong competitive advantages and pricing power, which typically support premium valuations. Expanding margins often lead to stock price appreciation, while contracting margins can signal competitive pressures.
What drives AVGO's profit margins?
AVGO's profit margins are influenced by several factors: pricing power vs competitors, operational efficiency, scale advantages, input costs (materials, labor), Semiconductors & Semiconductor Equipment-specific dynamics, and management execution. The significant expansion in gross margin suggests changes in these underlying drivers.
Disclaimer: Margin analysis is based on reported financial statements and should be compared to industry peers for context. Different sectors have structurally different margin profiles. This information is for educational purposes only and should not be considered financial advice.