On June 12, 2024, Broadcom Inc (AVGO, Financial) released its 8-K filing announcing its financial results for the second quarter of fiscal year 2024, ended May 5, 2024. Broadcom, the sixth-largest semiconductor company globally, reported significant growth in both revenue and earnings, driven by strong demand for AI products and the integration of VMware.
Company Overview
Broadcom Inc (AVGO, Financial) is a global technology leader that designs, develops, and supplies semiconductor and infrastructure software solutions. The company operates across various markets, including wireless, networking, broadband, storage, and industrial sectors. Broadcom's product portfolio includes 17 core semiconductor product lines and a range of software solutions for large enterprises, financial institutions, and governments.
Q2 2024 Financial Performance
Broadcom Inc (AVGO, Financial) reported revenue of $12,487 million for the second quarter, a 43% increase from the prior year period. This figure exceeded the analyst estimate of $12,027.70 million. The company's GAAP net income for the quarter was $2,121 million, while non-GAAP net income reached $5,394 million. Adjusted EBITDA was $7,429 million, representing 59% of revenue.
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Revenue | $12,487 million | $8,733 million | +43% |
| GAAP Net Income | $2,121 million | $3,481 million | -$1,360 million |
| Non-GAAP Net Income | $5,394 million | $4,489 million | +$905 million |
| GAAP Diluted EPS | $4.42 | $8.15 | -$3.73 |
| Non-GAAP Diluted EPS | $10.96 | $10.32 | +$0.64 |
Key Financial Metrics
Broadcom's cash flow from operations for the second quarter was $4,580 million, with capital expenditures amounting to $132 million. This resulted in a free cash flow of $4,448 million, or 36% of revenue. The company also announced a quarterly common stock dividend of $5.25 per share.
Performance Analysis
The significant growth in revenue and earnings was primarily driven by the increasing demand for AI products, which generated a record $3.1 billion in revenue during the quarter. Additionally, the integration of VMware contributed to the acceleration of infrastructure software revenue as more enterprises adopted VMware's software stack for private cloud solutions.
“Broadcom’s second quarter results were once again driven by AI demand and VMware. Revenue from our AI products was a record $3.1 billion during the quarter. Infrastructure software revenue accelerated as more enterprises adopted the VMware software stack to build their own private clouds,” said Hock Tan, President and CEO of Broadcom Inc.
Future Outlook
Broadcom Inc (AVGO, Financial) has raised its fiscal year 2024 revenue guidance to approximately $51.0 billion, including contributions from VMware, representing a 42% increase from the prior year period. The company also provided an annual Adjusted EBITDA guidance of approximately 61% of projected revenue.
In summary, Broadcom Inc (AVGO, Financial) has demonstrated robust financial performance in Q2 2024, surpassing analyst estimates and showcasing strong growth driven by AI demand and VMware integration. Investors and value seekers may find Broadcom's strategic positioning and financial health appealing for long-term investment opportunities.
Explore the complete 8-K earnings release (here) from Broadcom Inc for further details.
