Broadcom Inc (NASDAQ: AVGO) stock rose over 3.7% post third quarter of 2020 performance. Net revenue rose 6% yoy to $5.8 billion, which is better than expected. Semiconductor solutions revenue fell 4% yoy to $4.2 billion but Infrastructure software revenue offset the weakness rising over 41% yoy to $1.6 billion. Semiconductor solutions segment rose 5% sequentially, boosted by the ongoing strength in networking and broadband. Networking rose 9% sequentially driven by the ongoing healthy demand from cloud customers as the firm started to ramp for next generation Tomahawk 3 and Trident 3 switch products. The firm sees this momentum to continue in fourth quarter with continued demand from cloud in telcos driving solid sequential growth. Routing demand also remained strong as telcos launch Jericho 2 in the edge and core networks.

Broadband rose 7% sequentially during the third quarter while the group continue to see solid demand for the next generation cable modems — cable DOCSIS 3.1, which was partially offset by a decline in the satellite set-top boxes. Wireless fell 4% sequentially as expected. CA rose 6% yoy while Bookings at core accounts continued to grow double-digit year-on-year and has offset the expected reduction in the services business. Symantec contributed over $400 million in the quarter, with rising bookings, offsetting the transition out of the smaller commercial accounts. The firm forecasts revenues from CA to sustain while Symantec revenue to rise 4%.

Gross margins accounted 74% of revenue during the quarter rising over 110 basis points from Q2 and up over 220 basis points year-on-year. The year-on-year increase in software as a percentage of our overall revenues was the large part of the increase. Operating income from continuing operations reached $3.2 billion and represented 55% of net revenue. Operating margins rose over 180 basis points quarter-over-quarter and year-on-year, on the back of fall in operating expenses and better gross margin due to mix. As per the cash flow, the firm reported a record quarterly free cash flow of $3.1 billion, which is 53% of revenue and rising >33% year-on-year.