Broadcom’s cash and cash equivalents dropped significantly in Q1 2024 because the company made several large cash outlays during the quarter. **Key factors** include the **VMware merger**, which cost **$32,058 million** (offset partly by **$29,076 million** in net proceeds from borrowings), **stock repurchases** costing **$7,176 million**, **dividend payments** of **$2,435 million**, and **employee withholding taxes** of **$1,114 million**. Although the company generated **$4,815 million** from operating activities, these major cash outflows collectively resulted in a net decrease in cash reserves from **$14,189 million** to **$11,864 million**.  **[0001730168-24-000023_avgo-20240204.htm:33]** **[0001730168-24-000012_avgo-02042024x8kxex99.htm:10]** 

Why did cash and cash equivalents drop so much in Q1 2024?

The sharp surge in total assets in Q1 2024 was primarily driven by **Broadcom’s acquisition of VMware**. This acquisition led to a significant increase in key asset categories, including **goodwill** (rising from **$43,653 million to $97,586 million**), **intangible assets, net** (rising from **$3,867 million to $47,185 million**), and **other current assets** (increasing from **$1,606 million to $8,439 million**), which collectively contributed to the marked rise in total assets.  **[0001730168-24-000012_avgo-02042024x8kxex99.htm:9]** **[0001730168-24-000023_avgo-20240204.htm:1]** 

What caused the sharp surge in Total assets in Q1 2024?

The significant increase in **long-term debt** in Q1 2024 was primarily due to financing the **VMware merger**. Broadcom borrowed **$30,390 million** in 2023 Term Loans and assumed **$8,250 million** from VMware's outstanding senior unsecured notes as part of the acquisition, with a slight offset from **$934 million** in debt repayments during the quarter.  **[0001730168-24-000023_avgo-20240204.htm:69]** **[0001730168-24-000023_avgo-20240204.htm:33]** 

What drove the significant increase in Long-term debt in Q1 2024?

9e8d554563768b39c8ddbfb0820f62ffc55ce3dab8e3aeeb42be486f8c768233

Broadcom Inc.'s **operating income** was significantly lower in Q1 2024 due to a combination of factors. **Operating expenses** increased substantially—from **$1,901 million** in Q1 2023 to **$5,292 million** in Q1 2024—driven by higher stock-based compensation, acquisition-related costs, and an expanded headcount following the VMware merger. Additionally, there was a **$444 million** increase in the amortization of acquisition-related intangible assets and **$620 million** in restructuring and other charges, largely tied to employee termination costs from the merger. These factors collectively resulted in the marked decrease in operating income for Q1 2024.  **[0001730168-24-000023_avgo-20240204.htm:2]** **[0001730168-24-000012_avgo-02042024x8kxex99.htm:5]** **[0001730168-24-000023_avgo-20240204.htm:28]** 

Why was Operating Income so low in Q1 2024?

The **tax spike in Q3 2024** was driven by the impact of an **intra-group transfer of certain IP rights to the United States** as part of a supply chain realignment. This transfer resulted in a shift in the jurisdictional mix of income and the establishment of a **deferred tax liability** due to book and tax basis differences on the transferred IP rights. Additionally, a **discrete tax provision of $4,522 million** was recognized during the quarter, which was partially offset by excess tax benefits from stock-based awards.  **[0001730168-24-000099_avgo-20240804.htm:23]** **[0001730168-24-000099_avgo-20240804.htm:35]** **[20240905NY98548:0]** 

What drove the tax spike in Q3 2024?

The **net loss in Q3 2024** was primarily caused by a **one-time discrete non-cash tax provision of $4.5 billion** that resulted from an intra-group transfer of certain intellectual property rights to the United States as part of a supply chain realignment. This one-time tax adjustment significantly impacted the GAAP net income for the quarter, turning what was previously a profitable period into a net loss.  **[20240905NY98548:1]** **[0001730168-24-000095_avgo-08042024x8kxex99.htm:1]** **[0001730168-24-000095_avgo-08042024x8kxex99.htm:0]** **[20240905NY98548:0]** 

What caused the net loss in Q3 2024?

The **significant jump** in subscription revenue in **Q1 2024** was primarily driven by the **VMware acquisition**, which boosted the **Infrastructure Software segment** through products like VMware Cloud Foundation, a notable contributor to subscriptions and services revenue.  **[0001730168-24-000023_avgo-20240204.htm:6]** **[0001730168-24-000023_avgo-20240204.htm:28]**  Additionally, there was a **shift in the revenue mix**; the Infrastructure Software segment's contribution to total revenue increased from **20% in Q1 2023** to **38% in Q1 2024**.  **[0001730168-24-000012_avgo-02042024x8kxex99.htm:1]** **[0001730168-24-000023_avgo-20240204.htm:28]**  Finally, **increased customer demand for cloud and AI solutions**, particularly for networking products in AI data centers and custom AI accelerators bundled with software solutions, also played a significant role.  **[0001730168-24-000012_avgo-02042024x8kxex99.htm:0]** 

What drove the significant jump in subscription revenue in Q1 2024?

The surge in **restructuring and other charges** for Q1 2024 was caused by restructuring activities related to the VMware merger. The charges were incurred as Broadcom worked to integrate the acquired business, align its workforce, and improve operational efficiencies, with **$712 million** recognized primarily for employee termination costs.  **[0001730168-24-000023_avgo-20240204.htm:23]** 

What caused the surge in restructuring and other charges in Q1 2024?

bfa93bdacb8e4cdda948306c57e557f15cc94c3d490a3654bf2e802ec9573b08

The **Operating Cash Flow** jumped in Q1 2024 due to a combination of factors. **Contributions from VMware** significantly bolstered cash provided by operations.  **[0001730168-24-000023_avgo-20240204.htm:34]** **[0001730168-24-000080_avgo-20240505.htm:39]**  Additionally, there were **higher non-cash adjustments**—notably, **amortization of intangible assets increased** from **$905 million** to **$2,206 million** and **stock-based compensation surged** from **$391 million** to **$1,582 million**.  **[0001730168-24-000023_avgo-20240204.htm:3]** **[0001730168-24-000012_avgo-02042024x8kxex99.htm:1]**  Finally, changes in working capital, with an improvement in **trade accounts receivable** (a positive shift of **$2,032 million**) despite partially offsetting negatives from other current assets and liabilities, also played a role.  **[0001730168-24-000023_avgo-20240204.htm:3]** **[0001730168-24-000023_avgo-20240204.htm:33]** 

Why did Operating Cash Flow jump in Q1 2024?

The documents indicate that **capital expenditures in Q3 2024** increased significantly, with **Purchases of Property, Plant and Equipment** reaching **$172 million** compared to **$122 million** in Q3 2023. However, the documents do not provide specific reasons or analysis for this spike in capital expenditures in Q3 2024.  **[20240905NY98548:9]** 

What drove the spike in capital expenditures in Q3 2024?

During Q1 2024, the dramatic surge in business acquisitions was driven primarily by Broadcom's acquisition of **VMware, Inc.** The transaction involved a significant cash component of approximately **$30.8 billion** along with an equity component of **54.4 million shares** of Broadcom common stock valued at **$53.4 billion**. The large cash outlay was the main factor behind the substantial increase in acquisitions during the quarter.  **[0001730168-24-000012_avgo-02042024x8kxex99.htm:10]** **[0001730168-24-000023_avgo-20240204.htm:25]** 

What led to the dramatic surge in business acquisitions in Q1 2024?

The sharp increase in long-term borrowing proceeds in Q1 2024 was primarily due to financing activities related to the **VMware acquisition**. **Broadcom secured 2023 Term Loans with floating interest rates to fund the acquisition, which contributed to the large inflow of cash from long-term borrowings during the quarter**.  **[0001730168-24-000023_avgo-20240204.htm:3]** **[0001730168-24-000023_avgo-20240204.htm:34]** **[0001730168-24-000023_avgo-20240204.htm:15]** 

What caused the sharp increase in long-term borrowing proceeds in Q1 2024?

f14669e506239e47f166dbafbf06bc32ae033c044e421309586196e06bc93bac

Cash and cash equivalents (USD, millions)

Trade accounts receivable, net (USD, millions)

Inventory (USD, millions)

Other current assets (USD, millions)

Total current assets (USD, millions)

Property, plant and equipment, net (USD, millions)

Goodwill (USD, millions)

Intangible assets, net (USD, millions)

Other long-term assets (USD, millions)

Total assets (USD, millions)

Accounts payable (USD, millions)

Employee compensation and benefits (USD, millions)

Current portion of long-term debt (USD, millions)

Other current liabilities (USD, millions)

Total current liabilities (USD, millions)

Long-term debt (USD, millions)

Other long-term liabilities (USD, millions)

Total liabilities (USD, millions)

Common stock (USD, millions)

Additional paid-in capital (USD, millions)

Retained earnings (USD, millions)

Accumulated other comprehensive income (USD, millions)

Total stockholders’ equity (USD, millions)

Total liabilities and equity (USD, millions)

ac0d59cfa07350d7970c59fbd70fdb438b4a5a27c62b49723d7f5d6e2b284f8b

Net Income (USD, millions)

Amortization of Intangible and Right-of-Use Assets (USD, millions)

Depreciation (USD, millions)

Stock-Based Compensation (USD, millions)

Deferred Taxes and Other Non-Cash Taxes (USD, millions)

Loss on Debt Extinguishment (USD, millions)

Non-Cash Interest Expense (USD, millions)

Other Adjustments (USD, millions)

Net Cash Provided by Operating Activities (USD, millions)

Acquisitions of Businesses, Net of Cash Acquired (USD, millions)

Purchases of Property, Plant and Equipment (USD, millions)

Purchases of Investments (USD, millions)

Sales of Investments (USD, millions)

Other Investing Activities (USD, millions)

Net Cash Used in Investing Activities (USD, millions)

Proceeds from Long-Term Borrowings (USD, millions)

Payments on Debt Obligations (USD, millions)

Payments of Dividends (USD, millions)

Repurchases of Common Stock - Repurchase Program (USD, millions)

Shares Repurchased for Tax Withholdings on Vesting of Equity Awards (USD, millions)

Other Financing Activities (USD, millions)

Net Cash Used in Financing Activities (USD, millions)

Net Change in Cash and Cash Equivalents (USD, millions)

Cash and Cash Equivalents at Beginning of Period (USD, millions)

Cash and Cash Equivalents at End of Period (USD, millions)

4c4640b0997ffac9ec4c23857eba1b8f77b8cf9168e75f0eb9351f4dfcecf5a8

Total Net Revenue (USD, millions)

Cost of Revenue - Amortization of Acquisition-Related Intangible Assets (USD, millions)

Cost of Revenue - Restructuring Charges (USD, millions)

Total Cost of Revenue (USD, millions)

Gross Margin (USD, millions)

Research and Development (USD, millions)

Selling, General and Administrative (USD, millions)

Operating Expenses - Amortization of Acquisition-Related Intangible Assets (USD, millions)

Operating Expenses - Restructuring and Other Charges (USD, millions)

Total Operating Expenses (USD, millions)

Operating Income (USD, millions)

Interest Expense (USD, millions)

Other Income (Expense), Net (USD, millions)

Income from Continuing Operations Before Income Taxes (USD, millions)

Provision for Income Taxes (USD, millions)

Income from Continuing Operations (USD, millions)

Loss from Discontinued Operations, Net of Income Taxes (USD, millions)

239e40e19664d13b1f243694d2f282a9050ec6e159b9f5e5047113b31da75614

Adjustments for Non-Cash Items (USD, M)

Stock-Based Compensation (USD, M)

Changes in Working Capital (USD, M)

Capital Expenditures (CapEx) (USD, M)

Proceeds from Debt (USD, M)

Repayments of Debt (USD, M)

Share Repurchases (USD, M)

Dividend Payments (USD, M)

Net Change in Cash (USD, M)

e3d5fa74ba0126fb0080489c26a27b2be7077d3719ccfc5c5ed302be3ff08e1f

Total Revenue (USD, millions)

Cost of Goods Sold (COGS) (USD, millions)

Selling, General, and Administrative Expenses (USD, millions)

Research and Development (R&D) (USD, millions)

Depreciation and Amortization (D&A) (USD, millions)

Operating Income (EBIT) (USD, millions)

Earnings Per Share (EPS) - Basic (USD)

Earnings Per Share (EPS) - Diluted (USD)

ff3728cf356d91d7e45842eba91832961364fffc3f49c41d7438d30e66445307

8ed818793d8fd0f9a2da795492d3d860cbd7fe8abca21f694d3bf0f72c974c1e

Americas

Asia Pacific

Europe, Middle East, Africa

- United States

- China (including Hong Kong)

- Singapore

- Other Foreign Countries

Other

Total Revenue

cc629f39051273e787d38765f078a2e8232472b4ac5c36fa437d7bece34d9fd2

Wired Infrastructure

Wireless Communications

Enterprise Storage

Industrial & Other

Semiconductor Solutions

Infrastructure Software

IP Licensing

Products

Subscriptions and Services

5b7a4f01df4f0ae331f44a7b3da65adc6f187f29303b21a38eaf4a0c9e13fcaa

Broadcom (AVGO)

Financials