Broadcom (AVGO) Q4 2024 Earnings Call Summary

This article summarizes the earnings call for Broadcom Inc. (AVGO) for the fourth quarter of fiscal year 2024, which ended on September 30, 2024.

The call took place on December 12, 2024, and was hosted by Ji Yoo, the Director of Investor Relations, alongside Hock Tan, the President and CEO, Kirsten Spears, the Chief Financial Officer, and Charlie Kawwas, President of the Semiconductor Solutions Group. The financial results were shared in a press release that highlighted a significant year for the company.

Financial Highlights of Q4 2024

In this transformative year, Broadcom achieved a remarkable 44% increase in consolidated revenue, which reached a record $51.6 billion. Excluding contributions from VMware, organic revenue growth stood at over 9%. Operating profit, excluding transition costs, showed a strong 42% increase year-on-year, while the company returned a record $22 billion to shareholders through dividends and buybacks, marking a 45% rise from the previous year.

The integration of VMware, acquired in early fiscal 2024, has been a key factor in this success. The integration process is largely completed, and VMware’s revenue is on an upward trajectory with operating margins reaching 70% by the end of 2024.

Quarterly Performance Details

For Q4, Broadcom reported consolidated net revenue of $14.1 billion, up 51% from the previous year, with organic growth of 11%. Operating profit for the quarter reached $8.8 billion, translating to a 53% increase year-on-year. The infrastructure software segment brought in $5.8 billion, mainly driven by VMware, which saw substantial growth in annualized booking value.

In the semiconductor sector, revenue surged to $30.1 billion, highlighting AI's significant role with a 220% increase in AI revenue driven by custom AI accelerators and networking solutions.

Future Outlook and Guidance

Looking ahead, Broadcom anticipates revenue growth in infrastructure software to $6.5 billion for Q1 2025, alongside expected growth in semiconductor revenue of around 10% year on year. The company is poised for continued strength in AI, projecting revenue to grow to $3.8 billion in Q1 2025.

Broadcom also provided insights into its long-term opportunities within the semiconductor space, particularly in AI. The market share for AI is expected to rapidly outpace that of non-AI semiconductors, with a projected serviceable addressable market (SAM) of $60 billion to $90 billion by 2027.

Financial Performance Overview

For the fiscal year 2024, Broadcom recorded a total revenue of $51.6 billion, with semiconductor revenue consisting of $30.1 billion. Adjusted EBITDA reached $31.9 billion, showcasing robust financial health and operational efficiency. The company also declared an increase in its quarterly dividend to $0.59 per share, reflecting its commitment to returning value to shareholders.

Conclusion and Key Takeaways

In summary, Broadcom’s Q4 2024 earnings call emphasized a successful year driven by strategic acquisitions and a strong push into AI technologies. The company remains optimistic about its future, with aggressive growth strategies and a focus on expanding its market presence in the semiconductor industry. Investors and stakeholders alike will be keeping a close eye on the company's execution and trajectory in the upcoming fiscal year.

Earnings, Broadcom, Financial