Summary
Broadcom Inc. (AVGO) reported strong performance for the fiscal year ending October 31, 2021, with net revenue reaching $27.45 billion, a 15% increase year-over-year, driven by robust demand in its Semiconductor Solutions segment. The company highlighted an 18% increase in semiconductor revenue, largely attributed to strong wireless product demand and a rebound from a delayed production ramp in the prior year. Profitability also saw significant improvement, with operating income more than doubling to $8.52 billion, resulting in a substantial increase in operating margin to 31% from 17% in the prior year. This growth was supported by lower acquisition-related amortization expenses and a favorable product mix within semiconductors. The company generated $13.76 billion in cash from operations, underscoring its strong financial health. Broadcom also continued to return capital to shareholders, paying $6.21 billion in cash dividends and authorizing a new $10 billion stock repurchase program. Despite strong results, investors should note the continued customer concentration risk, with aggregate sales to its top five end customers accounting for over 35% of net revenue, and Apple Inc. representing approximately 20%. The company also operates in a cyclical semiconductor industry and faces ongoing supply chain challenges exacerbated by global events, though these have been managed to enable record profitability.
Financial Highlights
33 data points| Revenue | $27.45B |
| Cost of Revenue | $10.61B |
| Gross Profit | $16.84B |
| R&D Expenses | $4.85B |
| SG&A Expenses | $1.35B |
| Operating Expenses | $8.32B |
| Operating Income | $8.52B |
| Interest Expense | $1.89B |
| Net Income | $6.74B |
| EPS (Basic) | $1.57 |
| EPS (Diluted) | $1.50 |
| Shares Outstanding (Basic) | 4.10B |
| Shares Outstanding (Diluted) | 4.29B |
Key Highlights
- 1Net revenue increased by 15% to $27.45 billion, driven by an 18% increase in Semiconductor Solutions revenue to $20.38 billion.
- 2Infrastructure Software segment revenue grew 7% to $7.07 billion.
- 3Gross margin improved to 61% from 57% in the prior year, primarily due to lower amortization of acquisition-related intangible assets and favorable semiconductor margins.
- 4Operating income surged to $8.52 billion, representing a 112% increase and an operating margin of 31%, up from 17% in the prior year.
- 5Generated $13.76 billion in cash from operations.
- 6Returned $6.21 billion to shareholders through cash dividends.
- 7Announced a $10 billion stock repurchase program authorized in December 2021, to be executed by December 31, 2022.