Summary
Broadcom Inc. (AVGO) reported strong top-line growth in its latest 10-Q filing for the period ending May 4, 2024. Total net revenue surged by 43% year-over-year to $12.49 billion for the quarter, driven primarily by a substantial 175% increase in Infrastructure Software revenue, largely attributed to the VMware acquisition. Semiconductor Solutions revenue also saw a healthy 6% increase. Despite the revenue growth, operating income decreased by 26% to $2.97 billion, impacted by higher operating expenses, particularly a significant increase in amortization of acquisition-related intangible assets and stock-based compensation, largely stemming from the VMware integration. The company's balance sheet shows a dramatic increase in total assets to $175.2 billion, up from $72.9 billion at the end of the prior fiscal year, primarily due to the inclusion of VMware's assets and significant goodwill recognized from the acquisition. Long-term debt also saw a substantial rise to $71.6 billion from $37.6 billion. Cash flow from operations remained robust at $9.4 billion for the first two fiscal quarters, but investing activities show a significant outflow of $26.2 billion, dominated by acquisitions. The company reaffirmed its liquidity position, stating that current cash, cash equivalents, and revolving credit facility are sufficient to meet obligations for the next 12 months.
Financial Highlights
56 data points| Revenue | $12.49B |
| Cost of Revenue | $4.71B |
| Gross Profit | $7.78B |
| R&D Expenses | $2.42B |
| SG&A Expenses | $1.28B |
| Operating Expenses | $4.81B |
| Operating Income | $2.96B |
| Interest Expense | $1.05B |
| Net Income | $2.12B |
| EPS (Basic) | $0.46 |
| EPS (Diluted) | $0.44 |
| Shares Outstanding (Basic) | 4.64B |
| Shares Outstanding (Diluted) | 4.80B |
Key Highlights
- 1Total net revenue for the fiscal quarter increased by 43% to $12.49 billion, driven by the VMware acquisition impacting Infrastructure Software revenue significantly.
- 2Infrastructure Software revenue grew by 175% year-over-year to $5.29 billion, largely due to the consolidation of VMware's results.
- 3Semiconductor Solutions revenue increased by 6% to $7.20 billion, supported by demand in networking products, including AI networking.
- 4Operating income decreased by 26% to $2.97 billion, impacted by higher operating expenses, including amortization of acquisition-related intangible assets and stock-based compensation.
- 5Total assets surged to $175.2 billion, largely driven by the acquisition of VMware, which included substantial goodwill and intangible assets.
- 6Long-term debt increased significantly to $71.6 billion, reflecting borrowings associated with the VMware acquisition.
- 7Cash flow from operating activities remained strong at $9.4 billion for the first two fiscal quarters, indicating healthy cash generation from ongoing operations.