Broadcom's Q3 Success Overshadowed by Weak Q4 Forecast Amid AI Boom

Broadcom slides as Q4 forecast falls short (AVGO)

Broadcom (NASDAQ:AVGO) shares fell 3% in extended trading on Thursday after the semiconductor and software giant offered up a weaker-than-expected forecast for the fourth quarter. Looking to the fourth-quarter, Broadcom expects revenue to be $14B, below the $14.13B estimate. Adjusted EBITDA is expected to be around 64% of total revenue. "We expect revenue from AI to be $12 billion for fiscal year 2024 driven by Ethernet networking and custom accelerators for AI data centers," said Chief Executive Hock Tan, roughly the same as the company said previously. For the third-quarter ending August 4, Broadcom earned an adjusted $1.24 per share as revenue rose 47% year-over-year to $13.07B. Excluding VMware, revenue rose 4% year-over-year. Semiconductor solutions revenue was $7.27B for the period, while infrastructure revenue was $5.8B. A consensus of analysts expected Broadcom to report adjusted earnings per share of $1.20 on revenue of $12.96B. Broadcom also declared its quarterly dividend of $0.53 per share, payable on September 30, to stockholders of record on September 19. The company will host a conference call at 5 p.m. EST to discuss the results.

Broadcom Stock Falters After Company Reports Loss, Disappointing Revenue Outlook

The company's fiscal fourth-quarter guidance came up just short of analysts' expectations. Broadcom (AVGO) shares fell after the closing bell Thursday, sliding following quarterly results that swung to a loss due to increased merger-related expenses. The semiconductor manufacturing company posted a net loss of $1.875 billion, compared to a profit of $3.3 billion in the year-ago quarter. Adjusting for $1.5 billion in amortization of acquisition-related intangible assets and other restructuring costs, Broadcom's earnings were $1.24 per share. The company projected fiscal fourth-quarter revenue of $14 billion, which fell slightly short of the analyst consensus. CEO Hock Tan said the company expected full-year AI revenue to be $12 billion, "driven by ethernet networking and custom accelerators for AI data centers," Broadcom acquired software firm VMware in November 2023. "Broadcom's third quarter results reflect continued strength in our [artificial intelligence] semiconductor solutions and VMware," said Tan. Shares of Broadcom slipped more than 6% in after-hours trading. They've risen substantially this year, climbing some 40%.

Broadcom Q3 Revenue Soars 47% | The Motley Fool

Broadcom beat analyst expectations on top and bottom lines thanks to growth driven by AI semiconductor solutions and the integration of VMware. Semiconductor and infrastructure software specialist Broadcom (AVGO -9.89%) reported fiscal 2024 third-quarter earnings on Thursday that just exceeded analyst consensus expectations on both top and bottom lines. The company reported a revenue of $13.07 billion for the quarter, up a significant 47% compared to the same period last year. Broadcom's overall quarterly performance reflects its robust growth trajectory, driven by AI semiconductor solutions and the successful integration of VMware, which contributed significantly to its revenue spike. Source: Broadcom. Note: Analysts consensus forecast provided by FactSet. Broadcom is a key player in the semiconductor and infrastructure software sectors. The company's product portfolio includes solutions for data center networking, artificial intelligence (AI), broadband access, and mobile connectivity. Broadcom's recent results are largely driven by its AI semiconductor solutions and strategic acquisitions. These elements underline Broadcom's focus on technological leadership and strategic growth through acquisitions. During the third quarter, Broadcom posted adjusted EBITDA margin of 63%, topping management expectations of 61% and highlighting strong operational efficiency. Strategic acquisitions played a crucial role, particularly VMware, contributing $2.7 billion to the quarterly revenue. The integration of VMware is anticipated to drive further operational efficiencies, with adjusted EBITDA margins expected to reach 64% by the end of the fiscal year. Customer concentration and relationships with major tech firms like Apple (AAPL -0.66%) continue to be vital for sustained growth. These partnerships have enabled Broadcom to tailor products for specific applications, ensuring customer retention and loyalty. Global supply chain management presents challenges but has been effectively managed through partnerships with third-party foundries like Taiwan Semiconductor Manufacturing (TSM -3.89%). Managing this complex supply chain is essential to meet market demands and avoid disruptions. From a financial perspective, Broadcom reported a GAAP net loss of $1.9 billion due to a one-time discrete non-cash tax provision of $4.5 billion. However, its non-GAAP net income was solid at $6.1 billion, showcasing core operational profitability. Free cash flow stood at $4.8 billion, constituting 37% of revenue, highlighting strong cash profitability to support ongoing investments. Other significant developments and achievements: Looking ahead, Broadcom provided fourth-quarter revenue guidance of approximately $14 billion. The adjusted EBITDA margin is expected to remain strong at around 64%. This optimistic outlook is largely driven by anticipated growth in AI revenue, expected to exceed $11 billion for the fiscal year. In addition, the company predicts a modest recovery in non-AI semiconductor revenue in the second half of the fiscal year. Strategic investments and product development in next-generation technology signal a continued focus on maintaining a competitive edge in key markets.

Broadcom Q3 Earnings: Revenue Beat, EPS Beat, Continued Strength In AI Solutions And VMware, 2024 AI Guidance And More - Broadcom (NASDAQ:AVGO)

Broadcom reports second-quarter earnings of $1.24 per share, beating analyst estimates of $1.20 per share. Broadcom Inc AVGO reported third-quarter financial results after the market close on Thursday. Here's a look at the key metrics from the quarter. Q3 Earnings: Broadcom reported second-quarter revenue of $13.072 billion, beating analyst estimates of $12.96 billion, according to Benzinga Pro. The semiconductor company reported second-quarter earnings of $1.24 per share, beating analyst estimates of $1.20 per share. Total revenue was up 42% on a year-over-year basis. Broadcom generated $4.963 billion in cash from operations and $4.791 billion in free cash flow during the quarter. The company ended the quarter with $9.952 billion in cash and cash equivalents. "Broadcom's third-quarter results reflect continued strength in our AI semiconductor solutions and VMware. We expect revenue from AI to be $12 billion for fiscal year 2024 driven by Ethernet networking and custom accelerators for AI data centers," said Hock Tan, president and CEO of Broadcom. See Also: S&P 500 Falls Below 5,500 Points On Cooling Jobs Data, Tesla Leads Tech Gains, Natural Gas Spikes: What's Driving Markets Thursday? Broadcom's board approved a quarterly cash dividend of 53 cents per share, payable on Sept. 30 to shareholders of record as of Sept. 19. What's Next: Broadcom expects fourth-quarter revenue of approximately $14 billion. The company anticipates fourth-quarter adjusted EBITDA of approximately 64% of projected revenue. Broadcom management will hold a conference call to discuss the company's quarterly results at 5 p.m. ET. AVGO Price Action: Broadcom shares were down 3.97% after hours, trading at $146.75 at the time of publication Thursday, according to Benzinga Pro. Read Next: Biden's Expected Veto Of US Steel Deal Is Hunt For 'Labor Union Votes,' Says Top Japan Official Photo: Shutterstock. Market News and Data brought to you by Benzinga APIs

Broadcom fourth-quarter revenue falls short of expectations despite AI revenue rise

Broadcom just declared lower-than-anticipated projections for next-quarter revenue, estimating income of $14 billion compared with previous Wall Street predictions of $14.04 billion. However, that's not a bad thing, because if Broadcom does manage to draw in $14 billion in revenue, it would mark a 51% increase compared with the same period last year. It would also represent greater growth than the quarter just closed, which saw a 47% year-over-year increase in revenue, which stood at $13.07 billion. Company CEO Hock Tan commented: "Broadcom's third quarter results reflect continued strength in our AI semiconductor solutions and VMware." The company expects around $12 billion of its fiscal year revenue to come from AI, accounting for nearly a quarter of the company's revenue. This estimation marks a $1 billion increase compared with previous predictions. Despite the positive outlook, the company continues to struggle with figures elsewhere. It reported a $1.88 billion net loss for the most recent three-month period. Speaking about the company's growth, Summit Insight senior research analyst Kinngai Chan stated (via Reuters): "We believe it's unreasonable for investors to expect Broadcom to post Nvidia-type results and outlook." Broadcom shares are up 75.2% over the past 12 months, however recent months have seen turbulence in its figures, not least due to some uncertainty surrounding the changes it has made to VMware. Tan added: "The transformation of VMware continues to progress very well." Moreover, a post-earnings conference call confirmed strong performance in the AI department, but considerable dips in other areas like broadband and non-AI networking.

Why Broadcom Stock Slumped Today | The Motley Fool

Investors were unimpressed with the chip giant's latest report. Shares of Broadcom (AVGO -9.84%) were heading lower on Friday after the semiconductor and software giant posted good-but-not-good-enough results in its fiscal third-quarter earnings report and guidance was weaker than expected. As of 3:10 p.m. ET, the stock was down 9.7% on the news. Broadcom's quarterly results were solid, edging past estimates, but the stock has already soared this year on high hopes for the AI boom, and the results didn't seem to live up to those heightened expectations. Revenue in the quarter jumped 47% to $13.07 billion, aided by its acquisition of virtualization software specialist VMare late last year. That result essentially matched the analyst consensus at $13.03 billion. Revenue from semiconductor solutions, the side of the business unaffected by the VMware deal, rose just 5% to $7.27 billion, but the company said demand for custom accelerators for AI data centers and ethernet networking switches would help drive AI revenue to $12 billion for the year. Broadcom continued to generate strong margins on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis, with adjusted EBITDA of $8.22 billion, or 63% of revenue. On the bottom line, it reported adjusted earnings per share of $1.24, up from $1.05 in the quarter a year ago, and slightly ahead of estimates at $1.22. Looking ahead to the current quarter, Broadcom expects revenue around $14 billion, up 51% from a year ago, though that was slightly below the consensus at $14.13 billion. It also forecast an adjusted EBITDA margin of 64%. There wasn't anything alarming in the report to cause investors to sell the stock or change their thesis on it. Additionally, the broader sell-off in tech stocks on a weak employment report could have pushed Broadcom stock lower than it would have otherwise gone. Overall, the VMware integration seems to be going smoothly and the company is well positioned for the growth of generative AI.