Broadcom Inc. Reports Strong Q3 2024 Financial Results and Declares Quarterly Dividend
Broadcom Inc., a leading global provider of semiconductor and infrastructure software solutions, has released its financial results for the third quarter of the fiscal year 2024, which concluded on August 4, 2024. The company also shared its business outlook for the fourth quarter and announced its quarterly dividend, highlighting its solid financial performance and ongoing growth in key markets.
Q3 2024 Financial Highlights
In the third quarter, Broadcom achieved a revenue of $13.1 billion, representing a remarkable 47% increase compared to the same period in 2023. This surge was fueled by strong demand for Broadcom’s AI semiconductor solutions and the successful integration of VMware. Even without VMware's contribution, the company still saw a year-over-year revenue growth of 4%, indicating robust organic growth.
Despite this impressive revenue performance, Broadcom reported a GAAP net loss of $1.875 billion for the quarter, primarily due to restructuring and integration costs associated with the VMware acquisition. However, on a non-GAAP basis, the company recorded a net income of $6.12 billion, reflecting the strength of its core operations. Broadcom's adjusted EBITDA reached $8.22 billion, which is 63% of total revenue, showcasing a significant margin driven by efficiencies in both its semiconductor and software divisions.
During the third quarter, Broadcom generated $4.96 billion in cash from operations. After accounting for capital expenditures of $172 million, the company produced $4.79 billion in free cash flow, which represents 37% of its revenue. This strong cash flow highlights Broadcom’s ability to convert revenue into liquidity, enabling continued investment in innovation and growth.
AI and VMware Drive Growth
Hock Tan, Broadcom’s President and CEO, emphasized the ongoing momentum in the company’s AI semiconductor solutions, particularly in Ethernet networking and custom accelerators tailored for AI data centers. AI-related products are anticipated to contribute around $12 billion in revenue for fiscal year 2024, underscoring Broadcom’s pivotal role in delivering essential technologies to the rapidly growing AI market.
Tan also pointed out the successful integration of VMware, which has been a significant factor in Broadcom’s financial success. "The transformation of VMware is progressing very well," Tan stated. "The integration is pushing our adjusted EBITDA margin to 64% of revenue as we exit fiscal year 2024." VMware’s contributions have greatly strengthened Broadcom’s software segment, enhancing overall profitability and positioning the company for long-term success in the enterprise software sector.
Cash Flow and Balance Sheet Strength
CFO Kirsten Spears remarked that Broadcom’s financial health continued to improve throughout the quarter. Free cash flow, excluding restructuring and integration costs, increased by 14% year-over-year, reaching $5.3 billion. This growth reflects the company’s disciplined cost management while seizing revenue growth opportunities in both its semiconductor and software sectors.
By the end of the third quarter, Broadcom’s cash and cash equivalents amounted to $9.95 billion, up from $9.81 billion at the end of the previous quarter. The company also paid $1.35 billion in withholding taxes related to net settled equity awards during the quarter, resulting in the elimination of 8.4 million shares.
On June 28, 2024, Broadcom declared a cash dividend of $0.525 per share, totaling $2.45 billion. Furthermore, the company executed a ten-for-one stock split on July 12, 2024, which retroactively adjusted all share and per-share figures.
Fourth Quarter Fiscal Year 2024 Outlook
Looking forward, Broadcom has provided guidance for the fourth quarter of fiscal 2024, which will conclude on November 3, 2024. The company anticipates generating approximately $14 billion in revenue, reflecting a 51% increase compared to the fourth quarter of the previous year. This forecast includes continued contributions from VMware and sustained demand for Broadcom’s AI-driven solutions.
Broadcom also expects to maintain an adjusted EBITDA margin of around 64% of revenue in the fourth quarter, demonstrating its ability to drive profitability while integrating VMware and expanding its AI-related offerings. The company remains committed to executing its long-term strategy of combining high-performance semiconductor solutions with enterprise software to meet critical needs across various industries.
Quarterly Dividend Announcement
Broadcom’s Board of Directors has approved a quarterly cash dividend of $0.53 per share. This dividend will be payable on September 30, 2024, to stockholders of record as of the close of business on September 19, 2024. This payout reflects Broadcom’s dedication to delivering value to shareholders through consistent dividends, supported by the company’s strong cash flow generation.
Financial Results Conference Call
Broadcom will hold a conference call at 2:00 p.m. Pacific Time to discuss its financial results for the third quarter and its outlook for the fourth quarter and beyond. A live audio webcast of the conference call will be accessible in the Investors section of Broadcom’s website. An archived version will also be available for those who cannot attend the live session.
About Broadcom
Broadcom Inc. is a prominent global technology leader specializing in the design, development, and supply of semiconductor and infrastructure software solutions. The company’s diverse product portfolio caters to critical markets, including cloud data centers, networking, broadband, wireless, storage, industrial, and enterprise software. Broadcom’s offerings address essential customer needs across various areas such as service provider and enterprise networking, mobile device and broadband connectivity, mainframe and cybersecurity solutions, and hybrid cloud infrastructure.
Headquartered in Palo Alto, California, and incorporated in Delaware, Broadcom continues to strengthen its leadership in both the semiconductor and software industries, leveraging innovation to deliver mission-critical solutions that facilitate the digital transformation of businesses worldwide.
Frequently Asked Questions
What were Broadcom's total revenues for Q3 2024?
Broadcom reported total revenues of $13.1 billion for the third quarter of fiscal year 2024.
What factors contributed to Broadcom's revenue growth?
The revenue growth was primarily driven by strong demand for Broadcom’s AI semiconductor solutions and the successful integration of VMware.
How did Broadcom perform on a non-GAAP basis?
On a non-GAAP basis, Broadcom achieved a net income of $6.12 billion, showcasing the strength of its core operations.
What is Broadcom's outlook for Q4 2024?
Broadcom expects to generate approximately $14 billion in revenue for the fourth quarter of fiscal year 2024, reflecting a 51% increase from the previous year’s fourth quarter.
When will the quarterly dividend be paid?
The quarterly cash dividend of $0.53 per share will be payable on September 30, 2024, to stockholders of record as of September 19, 2024.
