10-QPeriod: Q3 FY2023

Broadcom Inc. Quarterly Report for Q3 Ended Jul 30, 2023

Filed September 6, 2023For Securities:AVGO

Summary

Broadcom Inc. reported strong financial results for the third quarter of fiscal year 2023, with total net revenue reaching $8.876 billion, an increase of 4.9% year-over-year. This growth was driven by both the Semiconductor Solutions and Infrastructure Software segments, which saw revenue increases of 4.9% and 5.2% respectively. Net income attributable to common stock was $3.303 billion, or $7.74 per diluted share, demonstrating robust profitability. The company also generated substantial operating cash flow of $13.257 billion for the first three quarters of fiscal 2023. A significant event impacting the company's future is the pending acquisition of VMware, Inc., valued at approximately $61 billion, with an expected closing date of October 30, 2023. This acquisition, alongside ongoing capital return programs including significant dividend payments and stock repurchases, highlights Broadcom's strategic focus on growth and shareholder value. The company maintains a strong liquidity position, with $12.055 billion in cash and cash equivalents.

Financial Highlights

56 data points
Beta

Revenue

$8.88B

69.4% Gross Margin

Net Income

$3.30B

37.2% Net Margin

EPS (Diluted)

$0.77

Total Assets

$71.59B

Cash & Equivalents

$12.05B

Free Cash Flow

$4.60B

Financial Statements
Beta
Revenue$8.88B
Cost of Revenue$2.71B
Gross Profit$6.16B
R&D Expenses$1.36B
SG&A Expenses$388.00M
Operating Expenses$2.31B
Operating Income$3.86B
Interest Expense$406.00M
Net Income$3.30B
EPS (Basic)$0.80
EPS (Diluted)$0.77
Shares Outstanding (Basic)4.13B
Shares Outstanding (Diluted)4.27B

Key Highlights

  • 1Total net revenue for Q3 FY2023 increased by 4.9% year-over-year to $8.876 billion.
  • 2Semiconductor Solutions segment revenue grew 4.9% YoY to $6.941 billion, driven by strong demand in networking products.
  • 3Infrastructure Software segment revenue increased 5.2% YoY to $1.935 billion, primarily due to growth in mainframe solutions.
  • 4Net income attributable to common stock was $3.303 billion, or $7.74 per diluted share.
  • 5Operating income increased by 3.2% YoY to $3.856 billion for the quarter.
  • 6The acquisition of VMware, Inc. is expected to close on October 30, 2023.
  • 7Broadcom returned $1.901 billion to shareholders via dividends and repurchased $1.707 billion of common stock in the quarter.

Frequently Asked Questions

Broadcom expects the acquisition of VMware, Inc. to be completed on October 30, 2023, subject to satisfaction or waiver of customary closing conditions.

The Semiconductor Solutions segment revenue grew 4.9% year-over-year to $6.941 billion, driven primarily by strong product demand for networking products. The Infrastructure Software segment revenue increased 5.2% year-over-year to $1.935 billion, mainly due to higher sales from mainframe solutions products.

As of July 30, 2023, Broadcom had $12.055 billion in cash and cash equivalents. The company believes its cash on hand, expected cash flows from operations, and available capacity under its revolving credit facility will provide sufficient liquidity for at least the next 12 months, including funding the VMware merger with proceeds from its 2023 Credit Agreement.

In the fiscal quarter ended July 30, 2023, Broadcom paid $1.901 billion in cash dividends to common stockholders and repurchased $1.707 billion of its common stock.