Broadcom Inc. (AVGO) Bundle
A Brief History of Broadcom Inc.
Company Overview
Broadcom Inc. (NASDAQ: AVGO) is a global technology company specializing in semiconductor and infrastructure software solutions. As of 2024, Broadcom has established itself as a leader in the production of a wide range of products catering to various sectors, including data centers, networking, broadband, wireless communications, and enterprise software.
Recent Acquisitions
In a significant move, Broadcom acquired VMware in a deal valued at approximately $61 billion, completed in November 2023. This acquisition has expanded Broadcom's footprint in the software market and enhanced its capabilities in enterprise software solutions.
Financial Performance
For the fiscal quarter ended August 4, 2024, Broadcom reported total net revenue of $13.072 billion, a substantial increase of 47% compared to $8.876 billion in the same quarter of the previous year. The revenue breakdown by segment is as follows:
| Segment | Net Revenue (Q3 2024) | Net Revenue (Q3 2023) | $ Change | % Change |
|---|---|---|---|---|
| Semiconductor Solutions | $7.274 billion | $6.941 billion | $333 million | 5% |
| Infrastructure Software | $5.798 billion | $1.935 billion | $3.863 billion | 200% |
Operating Income and Expenses
The operating income for the fiscal quarter was reported at $3.788 billion, slightly down from $3.856 billion in the previous year, reflecting a 2% decrease. The unallocated expenses surged by 148% year-over-year, primarily due to higher amortization costs related to the VMware acquisition.
Stock Performance
On July 12, 2024, Broadcom executed a ten-for-one forward stock split, increasing its authorized shares from 2.9 billion to 29 billion. The stock price as of August 4, 2024, was approximately $600 per share, reflecting strong investor confidence post-acquisition.
Dividends
Broadcom declared a cash dividend of $0.525 per share for the fiscal quarter ended August 4, 2024, compared to $0.460 in the previous year, marking a 14% increase. Total dividends paid during the quarter amounted to $2.452 billion.
Research and Development
Research and development expenses increased significantly, totaling $877 million for the quarter, up from $444 million a year earlier, which reflects a 73% increase as Broadcom invests heavily in innovation and product development.
Debt and Liquidity
As of August 4, 2024, Broadcom's total debt stood at $72.319 billion, with scheduled principal payments as follows:
| Fiscal Year | Scheduled Principal Payments (in millions) |
|---|---|
| 2024 (remainder) | $1,872 |
| 2025 | $1,245 |
| 2026 | $3,152 |
| 2027 | $17,332 |
| 2028 | $3,395 |
| Thereafter | $45,323 |
Conclusion
Broadcom's strategic acquisitions, strong revenue growth, and commitment to research and development underscore its position as a formidable player in the semiconductor and software industries as of 2024.
A Who Owns Broadcom Inc. (AVGO)
Ownership Structure
As of 2024, Broadcom Inc. (AVGO) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. The largest shareholders include major asset management firms and pension funds.
| Shareholder Type | Percentage Ownership | Notable Shareholders |
|---|---|---|
| Institutional Investors | 85.6% | Vanguard Group, BlackRock, State Street Corporation |
| Mutual Funds | 7.4% | Fidelity Investments, T. Rowe Price |
| Insider Ownership | 1.5% | CEO Hock Tan, Board Members |
| Retail Investors | 5.5% | Individual Shareholders |
Institutional Ownership
Institutional investors play a critical role in Broadcom's ownership. As of early 2024, the largest institutional shareholders include:
| Institution | Shares Owned (millions) | Percentage of Total Shares |
|---|---|---|
| Vanguard Group | 90.2 | 8.1% |
| BlackRock | 89.4 | 7.9% |
| State Street Corporation | 56.1 | 5.0% |
| Fidelity Investments | 45.2 | 4.1% |
| T. Rowe Price | 30.3 | 2.7% |
Insider Ownership
Insider ownership remains relatively modest yet significant. Key insiders include:
- Hock Tan (CEO) - 1.1 million shares
- Board Members - collectively 0.4 million shares
Recent Changes in Ownership
In November 2023, Broadcom completed the acquisition of VMware, resulting in the issuance of approximately 544 million shares of Broadcom common stock as part of the transaction. This move significantly impacted the shareholder distribution.
| Event | Details |
|---|---|
| VMware Acquisition | 544 million shares issued |
| Cash Paid | $30.8 billion to VMware shareholders |
Stock Performance and Market Trends
In 2024, Broadcom's stock performance has been influenced by several factors, including the integration of VMware and market dynamics in the semiconductor industry. The stock price as of August 4, 2024, is approximately $850.00, reflecting a robust market position.
Dividend Policy and Share Repurchases
Broadcom has a strong dividend policy, declaring a quarterly cash dividend of $0.53 per share on September 4, 2024. The company has also engaged in significant share repurchase programs, buying back approximately $7.2 billion of its stock in the first two quarters of 2024.
| Year | Dividends Paid (millions) | Share Repurchases (millions) |
|---|---|---|
| 2024 | $7,330 | $20,000 |
Market Capitalization
As of August 4, 2024, Broadcom's market capitalization stands at approximately $400 billion, positioning it among the top technology firms globally.
Future Outlook
The ownership structure and significant institutional backing suggest a stable future for Broadcom. The strategic acquisitions and ongoing focus on innovation are expected to drive long-term growth, maintaining investor confidence and market competitiveness.
Broadcom Inc. (AVGO) Mission Statement
Company Overview
Broadcom Inc. is a global technology leader that designs, develops, and supplies a broad range of semiconductor and infrastructure software solutions. The company operates through two main segments: semiconductor solutions and infrastructure software.
Mission Statement
As of 2024, Broadcom's mission is to deliver the essential technologies that power the world’s digital transformation. The company aims to provide high-performance semiconductor solutions that enable its customers to innovate and excel in their respective markets.
Financial Performance
Broadcom reported significant financial metrics for the fiscal quarter ending August 4, 2024. The total net revenue reached $13,072 million, marking an increase from $8,876 million in the same quarter of the previous year. This revenue was driven by:
- Products: $7,439 million
- Subscriptions and services: $5,633 million
Quarterly Highlights
Key financial highlights for the quarter include:
- Gross margin: $8,356 million (64% of net revenue)
- Operating income: $3,788 million
- Net income (loss): $(1,875) million
- Cash from operations: $4,963 million
- Dividends paid: $2,452 million
Acquisitions and Divestitures
In 2024, Broadcom completed several significant transactions:
- Acquisition of VMware, Inc. for a total consideration of $86,290 million, funded with cash and stock.
- Sale of the end-user computing (EUC) business to KKR & Co. Inc. for $3.5 billion.
- Acquisition of Seagate's SoC Operations for $600 million.
Debt and Equity
As of August 4, 2024, Broadcom's total liabilities amounted to $102,315 million, with long-term debt accounting for $66,798 million. The company also completed a ten-for-one forward stock split on July 12, 2024, increasing the number of authorized shares from 2.9 billion to 29 billion.
Stockholder Information
As of August 4, 2024, Broadcom had approximately 4,671 million shares issued and outstanding. The additional paid-in capital stood at $67,313 million, while retained earnings showed a deficit of $(1,875) million.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Net Revenue | $13,072 million | $8,876 million |
| Gross Margin | $8,356 million | $6,164 million |
| Operating Income | $3,788 million | $3,856 million |
| Net Income (Loss) | $(1,875) million | $3,303 million |
| Cash from Operations | $4,963 million | N/A |
| Dividends Paid | $2,452 million | $1,901 million |
| Total Liabilities | $102,315 million | $48,873 million |
| Long-term Debt | $66,798 million | $37,621 million |
| Shares Outstanding | 4,671 million | 4,139 million |
| Additional Paid-in Capital | $67,313 million | $21,095 million |
| Retained Earnings | $(1,875) million | $2,682 million |
Conclusion
Broadcom continues to position itself as a leader in the semiconductor and infrastructure software markets, leveraging strategic acquisitions and strong financial performance to drive growth and innovation.
How Broadcom Inc. (AVGO) Works
Overview of Broadcom Inc.
Broadcom Inc. operates primarily through two segments: semiconductor solutions and infrastructure software. The company provides a wide range of semiconductor and software solutions for various applications, including data centers, networking, and enterprise solutions.
Recent Financial Performance
As of August 4, 2024, Broadcom reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Three Fiscal Quarters Ended August 4, 2024 | Three Fiscal Quarters Ended July 30, 2023 |
|---|---|---|---|---|
| Net Revenue | $13,072 million | $8,876 million | $37,520 million | $26,524 million |
| Net Income (Loss) | $(1,875) million | $3,303 million | $1,571 million | $10,558 million |
| Operating Income | $3,788 million | $3,856 million | $8,836 million | $11,967 million |
| Gross Margin | $8,356 million | $6,164 million | $23,507 million | $18,283 million |
| Earnings Per Share (EPS) | $(0.40) | $0.80 | $0.34 | $2.54 |
Revenue Breakdown by Segment
Revenue is generated from two primary segments: semiconductor solutions and infrastructure software. The breakdown for the fiscal quarter ended August 4, 2024, is as follows:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Semiconductor Solutions | $7,274 million | $6,941 million |
| Infrastructure Software | $5,798 million | $1,935 million |
Operating Expenses
Broadcom's operating expenses have increased significantly due to various factors, including the acquisition of VMware:
| Expense Type | Q3 2024 | Q3 2023 | Three Fiscal Quarters Ended August 4, 2024 | Three Fiscal Quarters Ended July 30, 2023 |
|---|---|---|---|---|
| Research and Development | $2,353 million | $1,358 million | $7,076 million | $3,865 million |
| Selling, General and Administrative | $1,100 million | $388 million | $3,949 million | $1,174 million |
| Amortization of Acquisition-Related Intangible Assets | $812 million | $350 million | $2,431 million | $1,046 million | Total Operating Expenses | $4,568 million | $2,308 million | $14,671 million | $6,316 million |
Cash Flows
Cash flows from operating activities for the fiscal quarter ended August 4, 2024, were reported as follows:
| Cash Flow Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $14,358 million | $13,257 million |
| Net Cash Used in Investing Activities | $(22,938) million | $(565) million |
| Net Cash Provided by Financing Activities | $4,343 million | $(13,053) million |
Acquisitions and Divestitures
Broadcom completed several significant transactions:
- Acquisition of VMware, Inc. for approximately $84.2 billion, consisting of $30.8 billion in cash and 544 million shares of Broadcom stock valued at $53.4 billion, completed on November 22, 2023.
- Divestiture of the End-User Computing (EUC) business to KKR & Co. Inc. for $3.5 billion, completed on July 1, 2024.
- Acquisition of Seagate's System-on-Chip (SoC) operations for $600 million on April 23, 2024.
Debt Obligations
As of August 4, 2024, Broadcom's future principal payments of debt were as follows:
| Fiscal Year | Future Scheduled Principal Payments (in millions) |
|---|---|
| 2024 (remainder) | $1,872 |
| 2025 | $1,245 |
| 2026 | $3,152 |
| 2027 | $17,332 |
| 2028 | $3,395 |
| Thereafter | $45,323 |
| Total | $72,319 |
Stockholder Returns
Broadcom has a history of returning capital to shareholders through dividends and stock repurchase programs:
| Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Dividends Paid | $2,452 million | $1,901 million |
| Repurchase of Common Stock | $7,176 million | $5,701 million |
How Broadcom Inc. (AVGO) Makes Money
Business Segments
Broadcom Inc. operates primarily through two reportable segments: Semiconductor Solutions and Infrastructure Software.
Revenue Breakdown
The following table outlines the net revenue by segment for the fiscal quarter and three fiscal quarters ended August 4, 2024, compared to the same periods in the previous year:
| Segment | Fiscal Quarter Ended August 4, 2024 (in millions) | Fiscal Quarter Ended July 30, 2023 (in millions) | $ Change | % Change | Three Fiscal Quarters Ended August 4, 2024 (in millions) | Three Fiscal Quarters Ended July 30, 2023 (in millions) | $ Change | % Change |
|---|---|---|---|---|---|---|---|---|
| Semiconductor Solutions | $7,274 | $6,941 | $333 | 5% | $21,866 | $20,856 | $1,010 | 5% |
| Infrastructure Software | $5,798 | $1,935 | $3,863 | 200% | $15,654 | $5,668 | $9,986 | 176% |
| Total Net Revenue | $13,072 | $8,876 | $4,196 | 47% | $37,520 | $26,524 | $10,996 | 41% |
Revenue Sources
Broadcom generates revenue from the following sources:
- Product Sales: Representing $7,439 million for the fiscal quarter ended August 4, 2024.
- Subscriptions and Services: Contributing $5,633 million for the same period.
Cost of Revenue
The total cost of revenue for the fiscal quarter ended August 4, 2024, was $4,716 million, with detailed costs as follows:
| Cost Type | Amount (in millions) |
|---|---|
| Cost of Products Sold | $2,434 |
| Cost of Subscriptions and Services | $699 |
| Amortization of Acquisition-Related Intangible Assets | $1,525 |
| Restructuring Charges | $58 |
| Total Cost of Revenue | $4,716 |
Operating Income
Broadcom reported an operating income of $3,788 million for the fiscal quarter ended August 4, 2024, down from $3,856 million in the prior year. The operating income for the three fiscal quarters ended August 4, 2024, was $8,836 million, compared to $11,967 million in the previous year.
Gross Margin
The gross margin for the fiscal quarter ended August 4, 2024, was $8,356 million, representing a margin of 64% of net revenue.
Research and Development Expenses
Research and development expenses increased significantly, totaling $7,076 million for the three fiscal quarters ended August 4, 2024, compared to $3,865 million for the same period last year.
Dividends and Stock Repurchases
For the fiscal quarter ended August 4, 2024, Broadcom paid cash dividends of $2,452 million and repurchased common stock worth $7,176 million.
Key Financial Figures
The following table summarizes key financial figures for Broadcom as of August 4, 2024:
| Financial Metric | Amount (in millions) |
|---|---|
| Net Income (Loss) | $(1,875) |
| Basic Earnings (Loss) per Share | $(0.40) |
| Diluted Earnings (Loss) per Share | $(0.40) |
| Cash and Cash Equivalents | $9,952 |
| Total Assets | $108,000 |
| Total Liabilities | $72,319 |
Customer Concentration
A significant portion of Broadcom's revenue comes from a small number of customers. For the fiscal quarter ended August 4, 2024, aggregate sales to the top five customers accounted for approximately 40% of net revenue.
Recent Acquisitions
Broadcom completed the acquisition of VMware, Inc. on November 22, 2023, with a cash and stock transaction valued at approximately $84.2 billion. This acquisition is expected to enhance Broadcom's infrastructure software segment significantly.
Debt and Financing Activities
As of August 4, 2024, Broadcom had outstanding debt of approximately $72,319 million, which includes long-term borrowings used to finance acquisitions and operations.
Market Position and Outlook
Broadcom's diverse product portfolio and strategic acquisitions position it well within the semiconductor and software industries, with a focus on high-growth areas such as AI and cloud computing.
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