Broadcom AVGO reported first-quarter fiscal 2024 non-GAAP earnings of $10.99 per share, beating the Zacks Consensus Estimate by 7.22% and increasing 6.4% year over year.

Net revenues increased 34% year over year to $11.96 billion, surpassing the Zacks Consensus Estimate by 2.06%. The upside can be partly attributed to the inclusion of 10.5 weeks of contribution from VMware.

Top-Line Details

Semiconductor solutions revenues (62% of revenues) totaled $7.390 billion, up 4% year over year, driven by the strong adoption by hyperscalers.

AI revenues in semiconductors quadrupled year on year to reach $2.3 billion in the quarter.

Broadcom Inc. Price, Consensus and EPS Surprise

 

Broadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. Quote

Networking revenues were $3.3 billion, up 46% year over year and contributing 45% to Broadcom’s semiconductor revenues. The company witnessed strong demand for its custom AI accelerators, networking switches, routers and Network Interface Card from hyperscale customers.

Storage connectivity revenues were $887 million, contributing 12% to semiconductor revenues and down 29% year over year.

Broadband revenues declined 23% year over year to $940 million and contributed 13% to semiconductor revenues. Wireless revenues of $2 billion contributed 27% to semiconductor revenues and were down 4% year over year.

Industrial resale revenues of $215 million declined 6% year over year.

Infrastructure software revenues (38% of net revenues) increased 153% year over year to $4.571 billion.

Bookings in the software segment grew sequentially from less than $600 million to $1.8 billion in the fiscal first quarter.

 

Operating Details

The non-GAAP gross margin contracted 150 basis points (bps) on a year-over-year basis to 75%.

Research and development, as a percentage of net revenues, increased 160 bps on a year-over-year basis to 12.1%. SG&A expenses increased 370 bps on a year-over-year basis to 6.2%.

Adjusted EBITDA increased 26% year over year to $7.156 billion. The adjusted EBITDA margin contracted 390 bps on a year-over-year basis to 59.8%.

The non-GAAP operating margin contracted 380 bps on a year-over-year basis to 57.1%.

Balance Sheet & Cash Flow

As of Feb 4, 2024, cash and cash equivalents were $11.87 billion compared with $14.19 billion reported as of Oct 29, 2023.

Total debt (including the current portion of $2.433 billion) was $76 billion as of Feb 4, 2024, compared with $39.29 billion as of Oct 29, 2023.

Broadcom generated cash flow from operations of $4.815 billion compared with $4.828 billion in the previous quarter. The free cash flow in the quarter was $4.693 billion compared with $4.723 billion in the prior quarter.

Broadcom raised a quarterly common stock dividend of $5.25 per share for the first quarter of fiscal 2024.

On Dec 29, 2023, the company paid out a cash dividend of $5.25 per share of common stock, totaling $2.435 billion.