Broadcom Revenue in Q4 Hits $9.3 Billion, Up 4% YoY, Beating Estimates

The News: Broadcom revenue reached $9.3 billion for the fourth quarter (Q4) of 2023, an increase of 4% from $8.9 billion year-over-year (YoY), as the semiconductor and infrastructure software vendor reported its latest earnings figures on December 7. Revenue for the full fiscal year of 2023 (FY 2023) hit $35.8 billion, up 8% from $33.2 billion YoY. The Q4 revenue total beat analyst estimates of $9.28 billion from Investing.com for the period ending October 29. Read the full Q4 earnings press release on the Broadcom investor relations webpage.

Broadcom Revenue in Q4 Hits $9.3 Billion, Up 4% YoY, Beating Estimates

Analyst Take: Broadcom revenue rose in both Q4 of FY 2023 and in the company’s full fiscal year, showing continuing progress as the semiconductor and infrastructure software vendor continues to drive positive momentum and market performance even as the overall tech sector still faces challenges.

The big news for Broadcom is the closing of its acquisition of multi-cloud software and services vendor VMware on November 22, which marks a huge moment for both companies as VMware is brought in to improve cash flow and continue to transform Broadcom from a chipmaker into a diversified technology firm. The proposed acquisition was announced in May 2022 and required approvals from regulators around the world. Having completed the deal in 18 months, we believe that Broadcom achieved its goal and now will be larger, stronger, and more determined than ever to make a bigger impact in the technology marketplace. And with AI, generative AI, and cloud computing leading the way to fresh new technologies and capabilities in the future, Broadcom and VMware and their critical products will be in the thick of it all as we head into 2024 and beyond.

As a semiconductor maker, Broadcom is in an important business segment, and we believe it has continued success because it is a well-run company with effective leadership, excellent products, and leading technologies that are helping to make its customers more successful. For Broadcom, that combination has brought success in the marketplace under the careful watch of Broadcom CEO and President Hock Tan and his executive team. And now that Tan and his team completed the VMware deal, the future is even more intriguing for this growing company.

Here are Broadcom’s Q4 and full FY 2023 earnings results by the numbers:

• Q4 FY 2023 revenue of $9.3 billion, up 4% from $8.9 billion YoY. The Q4 revenue figure topped analyst consensus estimates of $9.28 billion from Investing.com.
• Q4 FY 2023 non-generally accepted accounting principles (non-GAAP) net income of $4.8 billion, up 6% from $4.5 billion YoY.
• Q4 FY 2023 non-GAAP diluted earnings per share (EPS) of $11.06 per share, up from $10.45 per share YoY. The non-GAAP EPS beat analyst consensus estimates of $10.96 per diluted share from Investing.com.
• Q4 FY 2023 non-GAAP gross margin of $6.9 billion, up 4% from $6.7 billion YoY.
• Q4 FY 2023 free cash flow (FCF) of $4.7 billion, up 6% from $4.5 billion YoY.
• Full FY 2023 revenue of $35.8 billion, up 8% from $33.2 billion YoY.
• Full FY 2023 non-GAAP net income of $18.4 billion, up 11% from $16.5 billion YoY.
• Full FY 2023 non-GAAP diluted EPS of $42.25 per share, up from $37.64 per share YoY.
• Full FY 2023 non-GAAP gross margin of $26.8 billion, up 7% from $25 billion YoY.

A great performance by Broadcom for the quarter and the year, beating Q4 revenue and EPS on the top and bottom and clearly demonstrating the company’s mettle in a competitive global marketplace.

Broadcom Revenue by Market Segment in Q4 and for Full FY 2023

In Q4, Broadcom’s semiconductor solutions division brought in net revenue of $7.3 billion, up 3% from $7.1 billion YoY. That division represented 79% of the company’s revenue in Q4 2023, unchanged YoY.

Broadcom’s infrastructure software division brought in net revenue of $1.97 billion in Q4, up 7% from $1.84 billion YoY. Infrastructure software represented 21% of the company’s revenue in Q4 2023, unchanged YoY.

For the full fiscal year, the semiconductor solutions unit brought in $28.2 billion, up 9% from $25.8 billion YoY, while the infrastructure software unit brought in $7.6 billion, up 3% from $7.4 billion YoY.

Broadcom’s broad lines of business-critical chips, switches, and other products serve customers everywhere from AI to generative AI, data centers to networking, enterprise software, broadband, wireless, storage, and industrial uses. The company also offers software for enterprise, mainframes, and cybersecurity, while focusing on automation, monitoring and security, smartphone components, telecommunications, and factory automation.

Broadcom Revenue Guidance for FY 2024

As part of its latest earnings report, Broadcom provided earnings guidance for full fiscal year 2024. Broadcom said it expects FY 2024 revenue to total about $50 billion, including new contributions from its recently acquired VMware business.

Broadcom Revenue Q4 and FY 2023 Overview

As we have said in the past, Broadcom’s latest results provide another proof point that the company is in the right spot to benefit from the networking explosion that the AI and generative AI booms are experiencing within the tech and consumer marketplaces. The acquisition of VMware, we believe, will make the company an even more potent force across its markets for networking, broadband, wireless semiconductor chips, and infrastructure software.

And as global macroeconomic conditions continue to improve, we believe that Broadcom will be on the leading edge of its markets, bringing it further success and sales based on its expanding and valuable technologies and products. We continue to be bullish on Broadcom, and we will be watching with interest as the company heads into 2024.

Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed Broadcom earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other insights from The Futurum Group:

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