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Good morning investors!

During the ever important earnings season, we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover on a regular basis.

Earnings season is in full swing and we just had one of the biggest weeks of the season — let’s dive in.

Broadcom (AVGO)

Broadcom $AVGO ( ▼ 7.08% ) delivered a strong quarter, surpassing expectations with record revenue and earnings growth, driven by strength in AI semiconductor solutions and infrastructure software.

The company reported $14.92 billion in revenue, up 25% YoY, exceeding estimates of $14.62 billion. Net income surged 317% YoY to $5.5 billion, fueled by robust demand for AI-related products and higher operating efficiency. Diluted EPS came in at $1.60, beating estimates of $1.51.

Semiconductor revenue reached $8.2 billion (+11% YoY), while infrastructure software revenue soared 47% YoY to $6.7 billion, highlighting strong enterprise adoption. AI-related revenue jumped 77% YoY to $4.1 billion, reflecting continued hyperscaler investment.

Operating income skyrocketed 201% YoY to $6.3 billion, with operating expenses decreasing by 27% YoY, improving margins. Operating cash flow grew 27% YoY to $6.1 billion, supporting $2 billion in share buybacks and a quarterly dividend increase to $0.59 (+11%).

For Q2 2025, Broadcom expects revenue of $14.9 billion (+19% YoY) and an EBITDA margin of approximately 66%, signaling sustained growth momentum.

AVGO shares are -1.9% so far this week.

Costco (COST)

Costco $COST ( ▼ 1.01% ) reported solid revenue growth in Q2 2025, surpassing estimates, though earnings came in slightly below expectations due to rising expenses.

The company generated $63.72 billion in revenue (+9% YoY) and net income of $1.8 billion (+3% YoY), or $4.02 per diluted share.

Strong same-store sales growth of 6.8% YoY helped drive top-line expansion, supported by e-commerce sales surging 22% YoY and continued momentum in membership revenue, which climbed 7% YoY to $1.1 billion.

However, operating expenses rose 11% YoY to $61.4 billion, pressuring margins and contributing to the EPS miss. Free cash flow increased 9% YoY to $3.6 billion, reflecting Costco’s ability to generate strong cash flow despite cost pressures.

Costco remains focused on membership retention and warehouse expansion, with paid members reaching 78.4 million (+7% YoY) and total warehouses increasing to 897 (+38 YoY).

While the company did not provide specific financial guidance, its emphasis on steady expansion and customer loyalty should continue to support long-term growth.

COST shares are -4.0% so far this week.

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CrowdStrike (CRWD)

CrowdStrike $CRWD ( ▼ 8.81% ) delivered strong revenue and EPS growth in Q4 2025, surpassing expectations, but higher costs weighed on profitability.

The company reported revenue of $1.06 billion (+25% YoY), beating estimates by 2.91%, while non-GAAP EPS rose 8% YoY to $1.03, exceeding projections by 19.77%; however, GAAP net income fell to -$92.3 million from $53.7 million a year ago due to rising expenses.

Subscription revenue, which makes up the majority of CrowdStrike’s business, grew 27% YoY to $1.01 billion, while services revenue saw modest growth of 2% YoY to $50.2 million. Annual Recurring Revenue (ARR) climbed 23% to $4.24 billion, with net new ARR of $224 million in the quarter. However, cost of revenue surged 31% YoY and operating expenses increased 43% YoY, leading to a GAAP operating loss of -$85.3 million, a steep decline from the prior year’s $29.7 million profit.

Despite record full-year free cash flow, Q4 free cash flow declined 15% YoY to $239.8 million, reflecting increased investments. The company's gross margin contracted slightly to 74.1%, though retention remained strong at 97%. CrowdStrike also highlighted continued expansion in its Next-Gen SIEM, Cloud Security, and Identity Protection businesses, with these segments now surpassing $1.3 billion in combined ARR.

For Q1 2026, CrowdStrike expects revenue between $1.10B-$1.11B and non-GAAP EPS of $0.64-$0.66. Full-year fiscal 2026 guidance includes revenue of $4.74B-$4.81B and EPS of $3.33-$3.45, reflecting confidence in sustained growth despite cost pressures.

CRWD shares are -11.3% so far this week.

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Target (TGT)

Target $TGT ( ▼ 2.21% ) reported mixed Q4 2024 earnings, with revenue slightly beating estimates but profits declining due to higher costs and weaker consumer spending.

The company posted net income of $1.1 billion, down 20% YoY, while revenue came in at $30.92 billion, a 3% decline YoY, though it surpassed expectations by 0.32%.

Same-store sales increased 1.5% YoY, with digital revenue surging 13% YoY to $7.1 billion, offsetting a 7% YoY decline in in-store sales.

However, operating income dropped 21% YoY to $1.5 billion, and operating cash flow fell 15% YoY to $7.4 billion, reflecting margin pressures from increased digital fulfillment and supply chain costs. Despite these challenges, Target repurchased $506 million in shares during the quarter.

Looking ahead, Target expects flat comparable sales for FY 2025, with 1% revenue growth YoY. EPS is projected between $8.80 and $9.80, though Q1 profits may be pressured by tariff uncertainties, weak February sales, and a softer consumer environment.

TGT shares are -8.2% so far this week.

AutoZone (AZO)

AutoZone $AZO ( ▼ 0.23% ) reported mixed Q2 2025 earnings, with revenue growing modestly but missing expectations, while higher operating expenses pressured profitability.

The company posted net income of $487.9 million, down 5% YoY, with revenue of $3.95 billion, increasing 2% YoY but falling 0.75% short of estimates.

Same-store sales inched up 0.5%, while domestic commercial revenue saw a strong 7% YoY increase. However, international same-store sales dropped 8.2% YoY, and operating income declined 5% YoY to $706.8 million, as operating expenses grew 6% YoY. Despite these challenges, AutoZone remained committed to shareholder returns, repurchasing $329.4 million in shares during the quarter.

Looking ahead, management remains optimistic about sales momentum in the spring and summer seasons, with expectations for continued growth in both DIY and commercial segments. However, ongoing margin pressures and international headwinds could remain a challenge.

AZO shares are +3.6% so far this week.

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Thank you, and until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.