Did the VMware acquisition make Broadcom more or less profitable on a pro forma basis?

On a pro forma basis for FY2024, the acquisition modestly increased revenue but reduced operating income, net income, and EPS. Revenue rose about $553M, while operating income fell about $471M and diluted EPS fell from $1.29 to $1.18. The decline mainly reflects higher intangible asset amortization, post-combination stock-based compensation, and added interest expense. The figures exclude expected synergies, so they do not capture the full economic effect of the deal.

How much did Broadcom pay for VMware, and how was it paid?

VMware shareholders could elect $142.50 in cash or 2.520 Broadcom shares per VMware share, subject to proration so that 50% of shares received cash and 50% received stock. In total they received about $30.8 billion in cash and 544 million Broadcom shares, which had a fair value of $53.4 billion at closing. The cash portion was funded with $30.4 billion in unsecured term loans, supplemented by cash on hand.

Does Broadcom still carry the debt used to fund the VMware deal?

No. Broadcom repaid all remaining obligations under the 2023 Term Loans and terminated the related credit agreement on July 11, 2025. Before repayment, the loans bore interest at Term SOFR plus facility-specific margins. The filing notes that the pro forma interest figures do not reflect these subsequent repayments.

Why is this 8-K being filed now, and does it change previously reported results?

The filing provides supplemental pro forma information required under SEC Regulation S-X Article 11 for the acquisition. It does not restate Broadcom's reported financial statements. Broadcom's historical FY2024 results remain as previously reported in its Form 10-K filed December 20, 2024, and the pro forma data is presented for comparison purposes only.

How sensitive is the pro forma interest expense to interest rate changes?

The filing estimates that a 12.5 basis point change in the variable rate on the 2023 Term Loans would change FY2024 pro forma interest expense by about $38 million. Because those loans were repaid in July 2025, this sensitivity is now mainly of historical interest.

AVGO 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed September 10, 2025. Cited figures are marked; the original filing is the authoritative source.

Broadcom filed this 8-K to supplement its prior disclosures on the VMware acquisition, which closed November 22, 2023, with unaudited pro forma condensed combined financial information for the fiscal year ended November 3, 2024.

The filing reflects the transaction as if it had occurred at the start of fiscal 2024. On that basis, pro forma net revenue was $52.13 billion^a, up about $553 million (roughly 1.1%) from Broadcom's reported $51.57 billion. Pro forma operating income fell to $12.99 billion from $13.46 billion, and pro forma net income from continuing operations fell to $5.67 billion from $6.17 billion.

Diluted EPS was $1.18^b pro forma versus $1.29 reported. The main drivers of the decline are higher acquisition-related intangible amortization, stock-based compensation tied to converted VMware awards, and added interest expense on the acquisition debt. The filing also documents the consideration and financing.

VMware shareholders received about $30.8 billion^c in cash and 544 million Broadcom shares valued at $53.4 billion, for total consideration of roughly $84 billion. The cash portion was funded with $30.4 billion of unsecured term loans under an August 2023 credit agreement. Broadcom repaid all remaining term loan obligations and terminated the credit agreement on July 11, 2025, which removes that debt from the balance sheet and reduces future interest expense.

Investors should note that the pro forma figures are informational only. They exclude expected synergies, cost savings, and integration costs, and they do not project future results.

They also reflect VMware's end-user computing business as discontinued operations and use the 18-day VMware stub period as the basis for the comparison. The filing contains no new guidance or forward-looking commitments.

02—Key points

Key Highlights

Pro forma FY2024 net revenue of $52.13B vs. $51.57B reported, an increase of about $553M (~1.1%), mainly from VMware subscription and services revenue.
Pro forma FY2024 operating income of $12.99B, down about $471M (~3.5%) from $13.46B reported, driven by higher amortization of acquired intangibles and stock-based compensation.
Pro forma FY2024 net income from continuing operations of $5.67B vs. $6.17B reported, down about $494M (~8%).
Pro forma diluted EPS of $1.18 vs. $1.29 reported; basic EPS of $1.22 vs. $1.33 reported, reflecting about 34 million additional shares issued to VMware holders.
Total VMware consideration was about $30.8B in cash and 544M Broadcom shares (fair value $53.4B), roughly $84B combined, with the cash funded by $30.4B of term loans.
Broadcom repaid all remaining 2023 Term Loans and terminated the credit agreement on July 11, 2025, eliminating that acquisition-related debt.
Pro forma figures exclude synergies, cost savings, and integration costs, so they are not a forecast of Broadcom's post-acquisition operating results.

03—Questions

Frequently Asked Questions

Did the VMware acquisition make Broadcom more or less profitable on a pro forma basis?
On a pro forma basis for FY2024, the acquisition modestly increased revenue but reduced operating income, net income, and EPS. Revenue rose about $553M, while operating income fell about $471M and diluted EPS fell from $1.29 to $1.18. The decline mainly reflects higher intangible asset amortization, post-combination stock-based compensation, and added interest expense. The figures exclude expected synergies, so they do not capture the full economic effect of the deal.
How much did Broadcom pay for VMware, and how was it paid?
VMware shareholders could elect $142.50 in cash or 2.520 Broadcom shares per VMware share, subject to proration so that 50% of shares received cash and 50% received stock. In total they received about $30.8 billion in cash and 544 million Broadcom shares, which had a fair value of $53.4 billion at closing. The cash portion was funded with $30.4 billion in unsecured term loans, supplemented by cash on hand.
Does Broadcom still carry the debt used to fund the VMware deal?
No. Broadcom repaid all remaining obligations under the 2023 Term Loans and terminated the related credit agreement on July 11, 2025. Before repayment, the loans bore interest at Term SOFR plus facility-specific margins. The filing notes that the pro forma interest figures do not reflect these subsequent repayments.
Why is this 8-K being filed now, and does it change previously reported results?
The filing provides supplemental pro forma information required under SEC Regulation S-X Article 11 for the acquisition. It does not restate Broadcom's reported financial statements. Broadcom's historical FY2024 results remain as previously reported in its Form 10-K filed December 20, 2024, and the pro forma data is presented for comparison purposes only.
How sensitive is the pro forma interest expense to interest rate changes?
The filing estimates that a 12.5 basis point change in the variable rate on the 2023 Term Loans would change FY2024 pro forma interest expense by about $38 million. Because those loans were repaid in July 2025, this sensitivity is now mainly of historical interest.

04—Continue

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