PALO ALTO, Calif. - Broadcom Inc. (NASDAQ:AVGO), a key player in semiconductor and infrastructure software solutions, has released its financial results for the third quarter of fiscal year 2024, which ended on August 4, 2024. The company announced a significant year-over-year revenue increase of 47% to $13.1 billion, including contributions from VMware (NYSE:VMW), and provided an optimistic revenue guidance for the fourth quarter.
The third quarter saw a GAAP net loss of $1.875 billion, primarily due to a one-time non-cash tax provision of $4.5 billion related to an intra-group transfer of intellectual property rights. However, on a non-GAAP basis, net income rose to $6.12 billion, up from $4.596 billion in the same period last year. The non-GAAP diluted earnings per share (EPS) increased to $1.24, a $0.19 improvement year-over-year.
Adjusted EBITDA for the quarter reached $8.223 billion, representing 63% of revenue, and free cash flow was reported at $4.791 billion, or 37% of revenue. Broadcom's cash and cash equivalents stood at $9.952 billion at the end of the quarter.
Broadcom's President and CEO, Hock Tan, highlighted the continued strength in AI semiconductor solutions and VMware integration as key drivers of the company's performance. CFO Kirsten Spears noted the 42% year-over-year increase in adjusted EBITDA and a 14% rise in free cash flow, excluding restructuring and integration.
Looking ahead, Broadcom anticipates fourth-quarter fiscal year 2024 revenue to be approximately $14 billion, marking a 51% increase from the prior year period, with adjusted EBITDA expected to be about 64% of projected revenue.
In addition to financial results, the company announced a quarterly common stock dividend of $0.53 per share, payable on September 30, 2024, to stockholders of record as of September 19, 2024.
These results reflect Broadcom's strategic focus on AI and networking solutions, as well as the successful incorporation of VMware into its business model. The company's strong performance and optimistic outlook underscore its position in the competitive technology sector.
This article is based on a press release statement from Broadcom Inc. and provides an overview of the company's financial performance without offering opinions or recommendations.
In other recent news, Broadcom Inc. has been in the spotlight with significant developments. The company has introduced VMware Tanzu Platform 10 and Tanzu AI Solutions, aiming to simplify cloud-native application development and delivery. This move is expected to enhance operational efficiency and governance for platform engineering teams. Furthermore, Broadcom has launched a new initiative called Catalyst, aimed at enhancing its Accelerate Program by engaging elite Enterprise Security Group partners.
Broadcom's second-quarter earnings outperformed expectations, reporting sales of $12.49 billion and earnings per share of $10.96. The company's AI-related revenue forecast for the current year has been raised to over $11 billion. Wells Fargo maintains an Equal Weight rating on Broadcom shares, anticipating an increase in the company's fiscal year 2024 AI semiconductor revenue target to over $12 billion.
In response to a recent 10-for-1 stock split, several analyst firms have adjusted their price targets for Broadcom. Cantor Fitzgerald maintained an Overweight rating, adjusting its price target to $200, while Oppenheimer kept an Outperform rating, reducing its price target to $200. TD Cowen maintained a Buy rating and raised the price target to $210, and Evercore ISI also set a new target at $201 post-split, maintaining an Outperform rating. These are recent developments that highlight Broadcom's ongoing market position and growth trajectory.
InvestingPro Insights
Broadcom Inc. (NASDAQ:AVGO) has demonstrated robust financial health and growth in the last twelve months, as reflected in its impressive revenue growth. InvestingPro data shows a remarkable 21.62% increase in revenue for the last twelve months as of Q2 2024, with an even more substantial quarterly revenue growth of 42.99% for Q2 2024. This aligns with the company's reported revenue surge in the recent quarterly results and supports the optimistic revenue guidance for the upcoming quarter.
The company's dedication to shareholder returns is evident, with a consistent track record of dividend increases. An InvestingPro Tip highlights that Broadcom has raised its dividend for 14 consecutive years, showcasing a strong commitment to returning value to its shareholders. This is further supported by the company's dividend growth of 14.13% in the last twelve months as of Q2 2024.
InvestingPro data also reveals a high Price / Book ratio of 10.19 as of Q2 2024, indicating that the market values the company's assets highly relative to its book value. This metric, coupled with the company's significant year-over-year revenue increase and the strategic expansion into AI and networking solutions, positions Broadcom as a prominent player in the Semiconductors & Semiconductor Equipment industry—a fact underscored by another InvestingPro Tip.
For investors seeking a deeper analysis, InvestingPro offers additional tips, including insights on sales growth projections for the current year and the company's valuation multiples. In total, there are 14 additional InvestingPro Tips available for Broadcom Inc., which can be found at https://www.investing.com/pro/AVGO.
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