8-KRegulation FD

Broadcom Inc. 8-K Report, Regulation FD Disclosure (Jan 23, 2020)

Filed January 23, 2020For Securities:AVGO

Summary

Broadcom Inc. has announced significant multi-year agreements with Apple Inc. for the supply of high-performance wireless components and modules. These new agreements, referred to as the "2020 SOWs," are in addition to an existing agreement from June 2019 (the "2019 SOW"). Collectively, these statements of work are expected to generate approximately $15 billion in aggregate future revenue for Broadcom, based on Apple products launched over a three-and-a-half-year period commencing January 2020. This substantial revenue projection highlights a deepening strategic relationship between Broadcom and Apple, a key customer. Investors should view this as a positive indicator of sustained demand for Broadcom's advanced wireless technology within Apple's ecosystem. However, it's crucial to note the forward-looking nature of this estimate, which is subject to various risks and uncertainties, including Broadcom's ability to meet its contractual obligations and the actual demand for the covered Apple products.

Key Highlights

  • 1Broadcom entered into two new multi-year Statement of Work (SOW) agreements with Apple Inc.
  • 2These new SOWs, along with an existing 2019 SOW, cover the supply of wireless components and modules for Apple products.
  • 3The agreements apply to Apple products launched in the three-and-a-half-year period starting January 2020.
  • 4Broadcom estimates these collective agreements could generate approximately $15 billion in future revenue.
  • 5This revenue projection is based on past experience and subject to Broadcom fulfilling its contractual obligations and market demand.
  • 6The filing includes a cautionary note about forward-looking statements and numerous risk factors that could affect actual results.

Frequently Asked Questions

The primary purpose of this filing is to disclose material information regarding two new multi-year supply agreements (2020 SOWs) that Broadcom Inc. entered into with Apple Inc. for wireless components and modules. It also provides an estimated future revenue impact of these agreements combined with an existing one.

Broadcom estimates that these two new agreements, in conjunction with the existing 2019 SOW, could collectively generate aggregate total future revenue of approximately $15 billion for the company, relating to Apple products launched between January 2020 and mid-2023.

The projected revenue is a forward-looking statement and carries several risks. These include Broadcom's ability to meet its contractual obligations, the actual demand for the 'Covered Products' from Apple, potential fluctuations in customer demand, competition, global economic conditions, and other factors listed in the cautionary note section of the filing.

No, the filing explicitly states that the 2020 SOWs are in addition to the agreement entered into on June 9, 2019 (the '2019 SOW'), which remains in effect. The new agreements, along with the remaining portion of the 2019 SOW, cover a specified period.