Broadcom Inc. announces fourth quarter and fiscal year 2023 financial results

Via Broadcom

Dec 8, 2023

  • Revenue of $9,295 million for the fourth quarter, up 4 percent from the prior year period
  • Cash from operations of $4,828 million for the fourth quarter, less capital expenditures of $105 million, resulted in $4,723 million of free cash flow, or 51 percent of revenue
  • Quarterly common stock dividend increased by 14 percent from the prior quarter to $5.25
  • Adjusted EBITDA of $6,048 million for the fourth quarter, or 65 percent of revenue
  • Non-GAAP diluted EPS of $11.06 for the fourth quarter; GAAP diluted EPS of $8.25 for the fourth quarter
  • Fiscal 2024 annual revenue guidance of approximately $50.0 billion including contribution from VMware, an increase of 40 percent from the prior year period
  • Fiscal 2024 annual Adjusted EBITDA guidance of approximately 60 percent of projected revenue (1)

PALO ALTO, California – Broadcom Inc. (Nasdaq: AVGO), a global technology leader that designs, develops and supplies semiconductor and infrastructure software solutions, today reported financial results for its fourth quarter and fiscal year ended October 29, 2023, provided guidance for its fiscal year 2024 and announced its quarterly dividend.

"Broadcom's fiscal year 2023 revenue grew 8% year-over-year to a record $35.8 billion, driven by investments in accelerators and network connectivity for AI by hyperscalers," said Hock Tan, President and CEO of Broadcom Inc. "The acquisition of VMware is transformational. In fiscal year 2024 we expect semiconductor to sustain its mid to high single digit revenue growth rate, with the contribution of VMware driving consolidated revenue to $50 billion, and adjusted EBITDA to $30 billion."

"In fiscal year 2023 we achieved record adjusted EBITDA margin of 65%, generating $17.6 billion in free cash flow or 49% of revenue, demonstrating our stable and diversified business model," said Kirsten Spears, CFO of Broadcom Inc. "With this transformational acquisition and expected increase in cash flows, we are increasing our quarterly common stock dividend by 14% to $5.25 per share for fiscal year 2024. The target fiscal 2024 annual common stock dividend of $21.00 per share is a record, and the thirteenth consecutive increase in annual dividends since we initiated dividends in fiscal 2011."

Fourth Quarter Fiscal Year 2023 Financial Highlights    

   

GAAP

 

Non-GAAP

(Dollars in millions, except per share data)

 

Q4 23

 

Q4 22

 

Change 

   

Q4 23

 

Q4 22

 

Change 

Net revenue

 

$

9,295

 

$

8,930

 

+

4

%

$

9,295

 

$

8,930

 

+

4

%

Net income

 

$

3,524

 

$

3,359

 

+$

165

   

$

4,810

 

$

4,544

 

+$

266

 

Earnings per common share - diluted

 

$

8.25

 

$

7.83

 

+$

0.42

   

$

11.06

 

$

10.45

 

+$

0.61

 
 

(Dollars in millions)

                                                                                                                   

Q4 23

 

Q4 22

 

Change  

Cash flow from operations

                                                                                                                   

$

4,828

 

$

4,583

 

+$

245

Adjusted EBITDA

                                                                                                                   

$

6,048

 

$

5,722

 

+$

326

Free cash flow

                                                                                                                   

$

4,723

 

$

4,461

 

+$

262

 

Net revenue by segment

                                                                                                                             

(Dollars in millions)

                                                                                                 

Q4 23

 

Q4 22

 

Change   

Semiconductor solutions

                                                                                                 

$

7,326

 

79

%

$

7,092

 

79

%

+3

%

Infrastructure software

                                                                                                   

1,969

 

21

     

1,838

 

21

   

+7

%

Total net revenue

                                                                                                 

$

9,295

 

100

%

 

$

8,930

 

100

%

     
 

The Company's cash and cash equivalents at the end of the fiscal quarter were $14,189 million, compared to $12,055 million at the end of the prior quarter.

During the fourth fiscal quarter, the Company generated $4,828 million in cash from operations and spent $105 million on capital expenditures.

On September 29, 2023, the Company paid a cash dividend of $4.60 per share, totaling $1,904 million.

The differences between the Company's GAAP and non-GAAP results are described generally under "Non-GAAP Financial Measures" below, and presented in detail in the financial reconciliation tables attached to this release.

Fiscal Year 2023 Financial Highlights  

   

GAAP

 

Non-GAAP

(Dollars in millions, except per share data)

 

FY 23

 

FY 22

 

Change

 

FY 23

 

FY 22

 

Change 

Net revenue

 

$

35,819

 

$

33,203

 

+

8

%

 

$

35,819

 

$

33,203

 

+

8

%

Net income

 

$

14,082

 

$

11,495

 

+$

2,587

   

$

18,378

 

$

16,526

 

+$

1,852

 

Earnings per common share - diluted

 

$

32.98

 

$

26.53

 

+$

6.45

   

$

42.25

 

$

37.64

 

+$

4.61

 
 

(Dollars in millions)

                                                                                                                   

FY 23

   

FY 22

 

 Change  

Cash flow from operations

                                                                                                                 

$

18,085

 

$

16,736

 

+$

1,349

Adjusted EBITDA

                                                                                                                 

$

23,213

 

$

21,029

 

+$

2,184

Free cash flow

                                                                                                                 

$

17,633

 

$

16,312

 

+$

1,321

 

Net revenue by segment

                                                                                                                             

(Dollars in millions)

                                                                                                 

FY 23

 

FY 22

 

Change   

Semiconductor solutions

                                                                                                 

$

28,182

 

79

%

$

25,818

 

78

%

+9

%

Infrastructure software

                                                                                                   

7,637

 

21

     

7,385

 

22

   

+3

%

Total net revenue

                                                                                                 

$

35,819

 

100

%

 

$

33,203

 

100

%

     
 

Fiscal Year 2024 Business Outlook

Based on current business trends and conditions, the outlook for continuing operations for fiscal year 2024, ending November 3, 2024, including contributions from VMware, is expected to be as follows: 

  • Fiscal year 2024 revenue guidance of approximately $50.0 billion; and
  • Fiscal year 2024 adjusted EBITDA guidance of approximately 60 percent of projected revenue.

The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. The Company is not readily able to provide a reconciliation of projected Adjusted EBITDA to projected net income without unreasonable effort. Actual results will vary from the guidance and the variations may be material. The Company undertakes no intent or obligation to publicly update or revise any of these projections, whether as a result of new information, future events or otherwise, except as required by law.

Quarterly Dividends

The Company's Board of Directors has approved a quarterly cash dividend of $5.25 per share. The dividend is payable on December 29, 2023 to stockholders of record at the close of business (5:00 p.m. Eastern Time) on December 20, 2023.

Financial Results Conference Call

Broadcom Inc. will host a conference call to review its financial results for the fourth quarter fiscal year 2023 and to discuss the business outlook, today at 2:00 p.m. Pacific Time.

To Listen via Internet: The conference call can be accessed live online in the Investors section of the Broadcom website at https://investors.broadcom.com/.

To Listen via Telephone: Preregistration is required by the conference call operator. Please preregister at https://register.vevent.com/register/BIacd438722e7946a58b1c10d35c792d79. Upon registering, you will be emailed a link to the dial-in number and unique PIN.

Replay: An audio replay of the conference call can be accessed for one year through the Investors section of Broadcom's website at https://investors.broadcom.com/.

Non-GAAP Financial Measures

The non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release. Broadcom believes non-GAAP financial information provides additional insight into the Company's on-going performance. Therefore, Broadcom provides this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company's on-going operations and enable more meaningful period to period comparisons. 

In addition to GAAP reporting, Broadcom provides investors with net income, operating income, gross margin, operating expenses, cash flow and other data on a non-GAAP basis. This non-GAAP information excludes amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring and other charges, acquisition-related costs, including integration costs, non-GAAP tax reconciling adjustments, and other adjustments. Management does not believe that these items are reflective of the Company's underlying performance. Internally, these non-GAAP measures are significant measures used by management for purposes of evaluating the core operating performance of the Company, establishing internal budgets, calculating return on investment for development programs and growth initiatives, comparing performance with internal forecasts and targeted business models, strategic planning, evaluating and valuing potential acquisition candidates and how their operations compare to the Company's operations, and benchmarking performance externally against the Company's competitors. The exclusion of these and other similar items from Broadcom's non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent or unusual.

Free cash flow measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures. Investors should not consider presentation of free cash flow measures as implying that stockholders have any right to such cash. Broadcom's free cash flow may not be calculated in a manner comparable to similarly named measures used by other companies.

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