You might also like
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 .
- 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.
- 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.
- 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?
- 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?
- 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?
- 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?
- 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?
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.
Recent developments and announcements about AVGO.
Financial Reporting
-
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 .
Earnings Call
Broadcom has released its earnings call transcript for the fourth quarter and fiscal year 2024. Here are the key points from the call:
This summary provides an overview of Broadcom's financial performance, strategic direction, and responses to analyst inquiries during the earnings call.
Earnings Report
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 .