Yahoo Finance Broadcom Inc. (AVGO) Reports Solid Q4 and FY 2023 Results; Forecasts Strong FY 2024 Outlook
Q4 revenue increased by 4% year-over-year to $9.3 billion, with a 51% free cash flow margin.
Adjusted EBITDA for Q4 stood at $6.05 billion, representing 65% of revenue.
FY 2023 revenue grew 8% to a record $35.8 billion, with the acquisition of VMware set to drive FY 2024 revenue guidance to approximately $50 billion.
Quarterly dividend increased by 14% to $5.25 per share, marking the thirteenth consecutive annual increase since 2011.
On December 7, 2023, Broadcom Inc (NASDAQ:AVGO) released its 8-K filing, announcing financial results for the fourth quarter and fiscal year ended October 29, 2023. The company reported a 4% increase in Q4 revenue, reaching $9.295 billion, and a significant rise in free cash flow to $4.723 billion, or 51% of revenue. Adjusted EBITDA for the quarter was $6.048 billion, which is 65% of revenue, demonstrating Broadcom's strong profitability and cash generation capabilities.
Fiscal Year 2023 Performance Highlights
Broadcom Inc (NASDAQ:AVGO) concluded the fiscal year 2023 with robust financial results. The company's net revenue for the year stood at $35.819 billion, marking an 8% increase from the previous year. The semiconductor solutions segment contributed significantly with a 9% increase, while the infrastructure software segment saw a 3% rise. The company's net income for the fiscal year was $14.082 billion, up from $11.495 billion in FY 2022, reflecting a substantial increase of $2.587 billion.
Q4 Fiscal Year 2023 Financial Details
In the fourth quarter, Broadcom Inc (NASDAQ:AVGO) achieved a non-GAAP diluted EPS of $11.06 and a GAAP diluted EPS of $8.25. The company's semiconductor solutions segment reported a 3% increase, while the infrastructure software segment grew by 7%. Broadcom's strong cash position was highlighted by an end-of-quarter cash and cash equivalents balance of $14.189 billion, up from $12.055 billion at the end of the prior quarter.
Looking Ahead: Fiscal Year 2024 Outlook
Broadcom Inc (NASDAQ:AVGO) provided an optimistic outlook for fiscal year 2024, with revenue guidance set at approximately $50 billion, including contributions from the recently acquired VMware. This represents a significant 40% increase from the prior year. The company also expects adjusted EBITDA to be around 60% of the projected revenue. The acquisition of VMware is deemed transformational, with Broadcom's CEO Hock Tan stating,
The acquisition of VMware is transformational. In fiscal year 2024 we expect semiconductor to sustain its mid to high single digit revenue growth rate, with the contribution of VMware driving consolidated revenue to $50 billion, and adjusted EBITDA to $30 billion."
Dividend Increase and Shareholder Returns
Reflecting confidence in its financial strength and commitment to shareholder returns, Broadcom Inc (NASDAQ:AVGO) announced a 14% increase in its quarterly common stock dividend to $5.25 per share for fiscal year 2024. CFO Kirsten Spears commented on the company's performance and shareholder returns,
In fiscal year 2023 we achieved record adjusted EBITDA margin of 65%, generating $17.6 billion in free cash flow or 49% of revenue, demonstrating our stable and diversified business model. With this transformational acquisition and expected increase in cash flows, we are increasing our quarterly common stock dividend by 14% to $5.25 per share for fiscal year 2024."
Broadcom Inc (NASDAQ:AVGO) continues to demonstrate a strong financial position and a commitment to delivering value to its shareholders. With the strategic acquisition of VMware and a robust outlook for fiscal year 2024, the company is well-positioned for sustained growth and profitability.
Explore the complete 8-K earnings release (here) from Broadcom Inc for further details.
This article first appeared on GuruFocus.
