12/12/2024
Broadcom (AVGO) reported good results and exceeded guidance for Q1-FY2025
Revenue $14.05Bn for Q4-FY2024, up 51% YoY (It acquired VMWare) in line with expectations. Without the VMWare acquisition, organic revenue growth was 11%.
GAAP net income of $4.3Bn; Non-GAAP net income of $ 6.9Bn, slightly higher than estimated.
Adjusted EBITDA of $9.1Bn or 65 percent of revenue – Adjusted margins are high because of the non-cash adjustment of charges for the merger with VMWare.
GAAP diluted EPS of $0.90 for the fourth quarter; Non-GAAP diluted EPS of $1.42 for the fourth quarter – Slightly higher than estimates.
Solid Cash Generation: Cash from operations of $5.6Bn for the fourth quarter, less capital expenditures of $122Mn, resulted in $5.5Bn of free cash flow, or 39 percent of revenue.
First quarter fiscal year 2025 revenue guidance of approximately $14.6Bn, an increase of 22 percent from the prior year period – Slightly higher than estimates of $14.5Bn.
First quarter fiscal year 2025 Adjusted EBITDA guidance of approximately 66 percent of projected revenue.
Surging AI revenues: It exceeded its earlier projection of $11.5Bn AI revenues with $ 12.2Bn, mainly with sales of ASICs to Google, besides selling ethernet solutions to other AI data center clients.
“Broadcom’s fiscal year 2024 revenue grew 44% year-over-year to a record $51.6 billion, as infrastructure software revenue grew to $21.5 billion, on the successful integration of VMware,” said Hock Tan, President and CEO of Broadcom Inc. (AVGO) “Semiconductor revenue was a record $30.1 billion driven by AI revenue of $12.2 billion. AI revenue which grew 220 percent year-on-year was driven by our leading AI XPUs and Ethernet networking portfolio.“
Should the proposed development of semis for Apple go through as planned, they’d be an even stronger contender in AI data center infrastructure.
I own Broadcom and continue to accumulate and plan to hold for at least 3-5 years. The VMWare integration is also going according to plan and will be a source of sustainable and recurring revenue.