Broadcom Inc. reported third-quarter revenue of $13.1 billion for fiscal year 2024, representing a 47% increase year-over-year, largely driven by the company’s semiconductor solutions and VMware contributions. Excluding VMware, revenue rose 4%. Despite strong revenue growth, Broadcom posted a GAAP net loss of $1.875 billion due to a one-time non-cash tax provision tied to an intra-group transfer of intellectual property.
The company’s semiconductor solutions division generated $7.3 billion in revenue, up 5% from the previous year. Infrastructure software, including VMware, saw significant growth, with revenue hitting $5.8 billion, up 200%. Non-GAAP net income reached $6.12 billion, while adjusted EBITDA was $8.22 billion, or 63% of total revenue. Broadcom’s free cash flow for the quarter was $4.79 billion, with a cash balance of nearly $10 billion by quarter-end.
Looking ahead, Broadcom expects Q4 revenue to reach approximately $14 billion, with adjusted EBITDA forecasted at 64% of revenue. The company also declared a quarterly dividend of $0.53 per share, payable at the end of September 2024.
• Q3 FY 2024 revenue: $13.1 billion, up 47% year-over-year
• GAAP net loss: $1.875 billion due to a one-time tax charge
• Semiconductor revenue: $7.3 billion (+5% year-over-year)
• Infrastructure software revenue: $5.8 billion (+200% year-over-year)
• Non-GAAP net income: $6.12 billion
• Free cash flow: $4.79 billion
• Q4 revenue guidance: ~$14 billion
“Broadcom’s third-quarter results reflect continued strength in our AI semiconductor solutions and VMware,” said Hock Tan, CEO of Broadcom Inc.
Some key topics covered by Hock Tan, CEO of Broadcom, during the Q3 investor call:
- Total networking revenue, including AI, is expected to grow over 40% year-over-year in Q4.
- Non-AI networking revenue was up 17% sequentially in Q3, even though it was down 41% year-over-year.
- Non-AI networking revenue is expected to stabilize in Q4, with the year-over-year decline moderating to 30%.
- Infrastructure software revenue in Q3 reached $5.8 billion, up 200% year-over-year, primarily due to $3.8 billion in contributions from VMware (VMW).
- VMware transformation is progressing well, with a strong focus on VMware Cloud Foundation (VCF) at the VMware Explore conference.
- Q3 saw over 80% of VMware bookings from VCF-related products, with an annual booking value (ABB) of $2.5 billion, up 32% from Q2.
- VMware spending was reduced to $1.3 billion in Q3 from $1.6 billion in Q2, with expectations to achieve or exceed the adjusted EBITDA goal of $8.5 billion by FY 2025.
- Semiconductor networking revenue in Q3 was $4 billion, up 3% year-over-year, driven by demand from hyperscalers for AI networking and custom AI accelerators.
- Custom AI accelerators grew 3.5 times year-over-year, while Ethernet switching for AI grew four times year-over-year.
- Optical lasers and related products saw a 3-4x increase, and PCI Express switches more than doubled.
- The company is shipping 5nm 400Gbps NICs and 800Gbps DSPs in volume.
