01—Abstract
Summary
Summary of the 10-K filed December 16, 2022. Cited figures are marked; the original filing is the authoritative source.
Broadcom Inc. reported strong financial performance for the fiscal year ended October 30, 2022, with significant growth in net revenue and operating income.
The company's diversified business, spanning semiconductor solutions and infrastructure software, demonstrated resilience and robust demand across key markets, including networking, server storage, broadband, and wireless. The company highlighted its strategic focus on technology leadership and scale, supported by ongoing R&D investments and strategic acquisitions.
A major development during the period was the announcement of Broadcom's pending acquisition of VMware, Inc., a significant move expected to enhance its infrastructure software offerings and expand its market reach. The company also continued its commitment to shareholder returns through substantial stock repurchases and dividend payments, reflecting a healthy financial position and confidence in its future growth prospects.
02—Key points
Key Highlights
- Broadcom Inc. reported a 21% increase in total net revenue, reaching $33.2 billion for the fiscal year ended October 30, 2022, compared to $27.45 billion in the prior year.
- Operating income saw a substantial 67% increase, rising to $14.2 billion from $8.5 billion in the previous year, driven by strong performance in both semiconductor solutions and infrastructure software segments.
- The company generated $16.7 billion in cash from operations, demonstrating strong cash flow generation.
- Broadcom announced a significant agreement to acquire VMware, Inc. for approximately $61 billion, a strategic move aimed at expanding its infrastructure software capabilities.
- Shareholder returns remained a focus, with $7 billion in common stock repurchased and $6.7 billion in cash dividends paid during the fiscal year.
- The company maintains a strong gross margin of 67%, an improvement from 61% in the prior year, primarily due to lower amortization expenses and favorable semiconductor margins.
- Customer concentration remains a significant factor, with aggregate sales to the top five end customers accounting for approximately 35% of net revenue, and Apple Inc. alone representing about 20%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Broadcom kept $0.35.
- Revenue$33.20B100.0%
- Cost of revenue−$11.11B33.5%
- Gross profit$22.09B66.5%
- Operating costs−$7.87B23.7%
- Operating income$14.22B42.8%
- Interest, other & tax−$2.73B8.2%
- Net income$11.49B34.6%
Where FY2022 revenue went
$33.20B- Net income: $11.49B, 35% of revenue
- Cost of revenue: $11.11B, 33% of revenue
- R&D: $4.92B, 15% of revenue
- SG&A: $1.38B, 4.2% of revenue
- Other operating costs: $1.57B, 4.7% of revenue
- Interest, other & tax: $2.73B, 8.2% of revenue
Kept 35% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed December 16, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $33.20B$27.45B | +21.0% |
| Cost of Revenue | $11.11B$10.61B | +4.7% |
| Gross Profit | $22.09B$16.84B | +31.2% |
| R&D Expenses | $4.92B$4.85B | +1.3% |
| SG&A Expenses | $1.38B$1.35B | +2.6% |
| Operating Expenses | $7.87B$8.32B | −5.5% |
| Operating Income | $14.22B$8.52B | +67.0% |
| Interest Expense | $1.74B$1.89B | −7.9% |
| Net Income | $11.49B$6.74B | +70.7% |
| EPS (Basic) | $2.74$1.57 | +74.5% |
| EPS (Diluted) | $2.65$1.50 | +76.7% |
| Shares Outstanding (Basic) | 4.09B4.10B | −0.3% |
| Shares Outstanding (Diluted) | 4.23B4.29B | −1.4% |
05—Questions
Frequently Asked Questions
What was Broadcom's revenue performance in fiscal year 2022?
Broadcom Inc. reported a total net revenue of $33.2 billion for the fiscal year ended October 30, 2022, an increase of 21% compared to $27.45 billion in fiscal year 2021. This growth was driven by strong demand in its semiconductor solutions segment, particularly in networking, server storage, broadband, and wireless products, as well as growth in its infrastructure software segment.
What is the significance of the VMware acquisition announced during the period?
Broadcom announced its intention to acquire VMware, Inc. for approximately $61 billion. This strategic acquisition is expected to significantly expand Broadcom's footprint in the infrastructure software market, complementing its existing offerings and enhancing its ability to serve enterprise customers with a broader range of solutions for cloud and hybrid environments.
How did Broadcom manage its debt and return capital to shareholders?
Broadcom generated $16.7 billion in cash from operations in fiscal year 2022. The company returned capital to shareholders through $7 billion in common stock repurchases and paid $6.7 billion in cash dividends. Despite its substantial debt load of approximately $41.2 billion, the company indicated it had sufficient liquidity and was in compliance with its debt covenants.
What are the key risks identified by Broadcom in its 10-K filing?
Key risks highlighted include significant customer concentration, with a few customers accounting for a large portion of revenue, the cyclical nature of the semiconductor industry, dependence on contract manufacturers and suppliers, potential impacts of global economic conditions and trade tensions, cybersecurity threats, and the successful integration of the pending VMware acquisition.
06—Continue