A method for precisely counting guest branch instructions in a virtualized computer system is described. In one embodiment, guest instructions execute in a direct execution mode of the virtualized computer system. The direct execution mode operates at a first privilege level having a lower privilege than a second privilege level. A branch count of previously executed first privilege level branch instructions is maintained as instructions execute. Execution of a first privilege level branch instruction caused by a control transfer to the direct execution mode is detected. Responsive to the detection, a guest branch instruction count is determined based on the first privilege level branch count.