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    Broadcom Inc (AVGO)

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    Broadcom Inc. is a global technology leader specializing in the design, development, and supply of semiconductor and infrastructure software solutions. The company operates primarily in two segments: semiconductor solutions and infrastructure software, offering products that cater to enterprise and data center networking, home connectivity, smartphones, and data center servers . Broadcom's infrastructure software solutions enable customers to manage and secure applications across various platforms, including mainframe, distributed, mobile, and cloud . A significant portion of Broadcom's revenue is derived from semiconductor sales, with major contributions from distributors and OEMs .

    1. Semiconductor Solutions - Designs and supplies complex digital and mixed signal complementary metal oxide semiconductor devices, analog III-V based products, and mission-critical fibre channel storage area networking products. These devices are integral to enterprise and data center networking, home connectivity, smartphones, and data center servers.
    2. Infrastructure Software - Offers solutions for planning, developing, automating, managing, and securing applications across mainframe, distributed, mobile, and cloud platforms. This includes application development and delivery, application networking and security, and cybersecurity solutions, with a significant contribution from VMware.
    NamePositionStart DateShort Bio
    Hock E. TanPresident and Chief Executive OfficerMarch 2006Hock E. Tan has served as the President and CEO of Broadcom Inc. since March 2006. He was previously the President and CEO at Integrated Circuit Systems, Inc. from 1999 to 2005 .
    Kirsten M. SpearsChief Financial Officer and Chief Accounting OfficerDecember 2020Kirsten M. Spears has been the CFO and Chief Accounting Officer at Broadcom Inc. since December 2020. She was the Principal Accounting Officer from March 2016 to December 2020 .
    Mark D. BrazealChief Legal and Corporate Affairs OfficerDecember 2021Mark D. Brazeal has served as the Chief Legal and Corporate Affairs Officer at Broadcom Inc. since December 2021. He was previously the Chief Legal Officer from March 2017 to December 2021 .
    Charlie B. Kawwas, Ph.D.President, Semiconductor Solutions GroupJuly 2022Charlie B. Kawwas, Ph.D., has been the President of the Semiconductor Solutions Group at Broadcom since July 2022. He was the Chief Operating Officer from December 2020 to July 2022 .
    Kenneth Y. HaoIndependent Director2024Kenneth Y. Hao has been serving as an Independent Director at Broadcom Inc. since 2024. He is also the Chairman and Managing Partner of Silver Lake, a global technology investment firm, since December 2019 .
    1. With cloud hyperscalers increasingly developing their own custom AI accelerators (XPUs), potentially reducing reliance on merchant silicon, how does Broadcom plan to adapt its semiconductor strategy to address this shift?
    2. The relocation of IP back to the U.S. has resulted in a $4.5 billion tax liability; can you elaborate on the strategic rationale behind this move and its anticipated impact on cash flow and future tax rates?
    3. Given the surge in demand for AI-related XPUs and networking products, have you encountered any supply chain constraints that could limit your ability to meet this upside demand, and how are you addressing them?
    4. As the industry shifts towards flash storage solutions, how does Broadcom's investment in hard disk drive technology through the acquisition of Seagate's HDD SoC assets align with market trends, and what risks do you foresee?
    5. Non-AI semiconductor revenues and certain software segments appear significantly below prior peak levels; what specific strategies are you implementing to drive recovery and growth in these areas, and how confident are you in returning to previous performance levels?
    Program DetailsProgram 1Program 2
    Approval DateDecember 2021 May 2022
    End Date/DurationDecember 31, 2023 December 31, 2023
    Total additional amount$10 billion $10 billion
    Remaining authorization$0 $0
    DetailsFully utilized by expiration Fully utilized by expiration
    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    20251,245 Current Portion of Long-Term Debt3.125 1.8% = (1,245 / 69,847) * 100
    20263,152 SOFR + 1.125% Term LoanSOFR + 1.125 4.5% = (3,152 / 69,847) * 100
    202711,732 5.050% Senior Notes5.050 16.8% = (11,732 / 69,847) * 100
    20284,270 4.150% Senior Notes4.150 6.1% = (4,270 / 69,847) * 100
    202912,655 4.750% Senior Notes4.750 18.1% = (12,655 / 69,847) * 100
    Thereafter36,793 Various Senior NotesVarious 52.7% = (36,793 / 69,847) * 100

    Competitors mentioned in the company's latest 10K filing.

    • Advanced Micro Devices, Inc.
    • Amlogic Inc.
    • Analog Devices, Inc.
    • Cisco Systems, Inc.
    • GlobalFoundries Inc.
    • Hamamatsu Photonics K.K.
    • Heidenhain Corporation
    • iC-Haus GmbH
    • Intel Corporation
    • Lumentum Holdings Inc.
    • MACOM Technology Solutions Holdings, Inc.
    • Marvell Technology, Inc.
    • MaxLinear, Inc.
    • MediaTek Inc.
    • Microchip Technology Incorporated
    • Mitsubishi Electric Corporation
    • Murata Manufacturing Co., Ltd.
    • NVIDIA Corporation
    • NXP Semiconductors N.V.
    • ON Semiconductor Corporation
    • OSRAM Licht AG
    • Qorvo, Inc.
    • Qualcomm Inc.
    • Realtek Semiconductor Corp.
    • Renesas Electronics Corporation
    • Skyworks Solutions, Inc.
    • STMicroelectronics N.V.
    • Sumitomo Corporation
    • Synaptics Incorporated
    • Texas Instruments, Inc.
    • TDK-EPC Corporation
    • Toshiba Corporation
    • Wolfspeed, Inc. (f/k/a Cree, Inc.)
    • II-VI Incorporated
    • Atlassian Corporation, Plc
    • BeyondTrust Corporation
    • BMC Software Inc.
    • CrowdStrike Holdings, Inc.
    • CyberArk Software, Ltd.
    • Dino-Software Corporation
    • International Business Machines Corporation
    • Microsoft Corporation
    • New Relic, Inc.
    • OpenText Corporation
    • Oracle Corporation
    • Proofpoint, Inc.
    • Rocket Software, Inc.
    • SailPoint Technologies Holdings, Inc.
    • Salesforce.com, Inc.
    • ServiceNow, Inc.
    • SolarWinds Corporation
    • Splunk, Inc.
    • Zscaler, Inc.
    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP2006 PresentCurrent auditor

    Recent developments and announcements about AVGO.

    Financial Reporting

      Earnings Call

      ·
      Dec 13, 2024, 10:02 AM

      Broadcom has released its earnings call transcript for the fourth quarter and fiscal year 2024. Here are the key points from the call:

      • Revenue and Profit Performance: Broadcom reported a 44% year-over-year increase in consolidated revenue, reaching a record $51.6 billion for fiscal year 2024. Excluding VMware, the revenue grew over 9% organically. The operating profit, excluding transition costs, grew 42% year-over-year. In the fourth quarter, consolidated net revenue was $14.1 billion, up 51% year-on-year, with an operating profit of $8.8 billion, up 53% year-on-year .

      • Management’s Forward Guidance: For the first quarter of fiscal year 2025, Broadcom expects semiconductor revenue to grow approximately 10% year-on-year to $8.1 billion, with AI revenue expected to grow 65% year-on-year to $3.8 billion. The company is guiding consolidated Q1 revenue to be approximately $14.6 billion, up 22% year-on-year .

      • Market Conditions and Strategic Initiatives: The acquisition of VMware was a significant driver of growth, with the integration largely complete and VMware's operating margin reaching 70% by the end of 2024. AI was another major growth area, with AI revenue growing 220% from $3.8 billion in fiscal '23 to $12.2 billion in fiscal '24, representing 41% of semiconductor revenue .

      • Analyst Questions and Management Responses: Analysts inquired about the AI revenue growth and its impact on semiconductor gross margins. Hock Tan, Broadcom's CEO, explained that while gross margins in semiconductors might dilute due to AI growth, the operating margin is expected to improve due to revenue leverage . Another question addressed the potential for M&A activity, to which Tan responded that Broadcom remains open to acquiring assets that meet their criteria .

      • Significant Comments on Market Conditions: Broadcom highlighted the transformative impact of AI on its business, with AI networking revenue representing 76% of networking revenue in Q4. The company is on track to ship next-generation XPUs in 3 nanometers to hyperscale customers in the second half of fiscal '25 .

      • Strategic Initiatives: Broadcom is focusing on reducing debt and interest expenses following the VMware acquisition. The company plans to use part of its free cash flow to pay down debt .

      This summary provides an overview of Broadcom's financial performance, strategic direction, and responses to analyst inquiries during the earnings call.

      Earnings Report

      ·
      Dec 12, 2024, 9:53 PM

      Broadcom Inc. has released its financial results for the fourth quarter and fiscal year 2024. Revenue for the fourth quarter was $14,054 million, marking a 51% increase from the prior year period. The GAAP net income for the quarter was $4,324 million, while the Non-GAAP net income was $6,965 million. The Adjusted EBITDA for the quarter was $9,089 million, which is 65% of the revenue. The company also reported a GAAP diluted EPS of $0.90 and a Non-GAAP diluted EPS of $1.42. Broadcom generated $5,604 million in cash from operations, resulting in a free cash flow of $5,482 million, or 39% of revenue .

      For the fiscal year 2024, Broadcom's revenue grew 44% year-over-year to a record $51.6 billion. This growth was driven by infrastructure software revenue, which increased to $21.5 billion, and semiconductor revenue, which reached a record $30.1 billion. Notably, AI revenue grew 220% year-on-year to $12.2 billion .

      Looking ahead, Broadcom has provided guidance for the first quarter of fiscal year 2025, expecting revenue of approximately $14.6 billion, which represents a 22% increase from the prior year period. The company also anticipates an Adjusted EBITDA of approximately 66% of projected revenue .

      Additionally, Broadcom announced an 11% increase in its quarterly common stock dividend to $0.59 per share for fiscal year 2025, with a target annual dividend of $2.36 per share, marking the fourteenth consecutive annual increase since 2011 .