Broadcom (AVGO - Free Report) 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.
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.
Guidance
For the fiscal 2024, the company expects revenues of $50 billion.
Adjusted EBITDA is expected to be 60% of projected revenues.
Zacks Rank & Stocks to Consider
Currently, AVGO has a Zacks Rank #4 (Sell).
Kanzhun (BZ - Free Report) , Blink Charging (BLNK - Free Report) and Adobe (ADBE - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
BZ currently sports Zacks Rank #1(Strong Buy), while BLNK and ADBE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kanzhun’s shares have returned 2.3% year to date. BZ is scheduled to release fourth-quarter 2023 results on Mar 12.
Blink Charging’s shares have declined 7.7% year to date. BLNK is set to report its fourth-quarter 2023 results on Mar 14.
Adobe’s shares have dropped 6.6% year to date. ADBE is set to release its fourth-quarter fiscal 2024 results on Mar 14.
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Broadcom (AVGO - Free Report) 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.
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.
Guidance
For the fiscal 2024, the company expects revenues of $50 billion.
Adjusted EBITDA is expected to be 60% of projected revenues.
Zacks Rank & Stocks to Consider
Currently, AVGO has a Zacks Rank #4 (Sell).
Kanzhun (BZ - Free Report) , Blink Charging (BLNK - Free Report) and Adobe (ADBE - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
BZ currently sports Zacks Rank #1(Strong Buy), while BLNK and ADBE carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kanzhun’s shares have returned 2.3% year to date. BZ is scheduled to release fourth-quarter 2023 results on Mar 12.
Blink Charging’s shares have declined 7.7% year to date. BLNK is set to report its fourth-quarter 2023 results on Mar 14.
Adobe’s shares have dropped 6.6% year to date. ADBE is set to release its fourth-quarter fiscal 2024 results on Mar 14.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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