Broadcom Inc (NASDAQ:AVGO) stock fell 4.19% (As on March 8, 11:16:49 AM UTC-4, Source: Google Finance) after the company reported fiscal first-quarter results that topped Wall Street estimates on AI-led chip demand and growth in its software business was bolstered the acquisition of VMware. Semiconductor solutions, its core business, rose 4% to $7.39B, underpinned by “strong” demand for the company’s networking products in AI data centers, and custom AI accelerators from hyperscalers. The infrastructure software unit saw revenue climb 153% to $4.57B amid a boost from the acquisition of VMware, which closed in November last year. This growth is particularly significant as it includes contributions from VMware, which has accelerated revenue in the infrastructure software segment. The semiconductor solutions segment also saw a 4% increase, demonstrating strong demand for Broadcom’s networking products and custom AI accelerators. Despite the positive revenue growth, the company’s GAAP net income saw a decrease to $1.33 billion from $3.77 billion in the prior year period. This decline is primarily due to higher operating expenses, including costs associated with the VMware acquisition. The Company’s cash and cash equivalents at the end of the fiscal quarter were $11,864 million, compared to $14,189 million at the end of the prior quarter.
Moreover, the company has started to pay down debt, beginning with $3 billion to date in 2024, and expects to continue to pay down debt in fiscal year 2024.
During the first fiscal quarter, the Company generated $4,815 million in cash from operations and spent $122 million on capital expenditures. The Company spent $8,290 million on share repurchases and eliminations, consisting of $7,176 million in repurchases of 6.7 million shares and $1,114 million of withholding tax payments related to net settled equity awards that vested in the quarter (representing approximately 1.0 million shares withheld). On December 29, 2023, the Company paid a cash dividend of $5.25 per share, totaling $2,435 million.
AVGO in the first quarter of FY 24 has reported the adjusted earnings per share of $10.99, beating the analysts’ estimates for the adjusted earnings per share of $10.40. The company had reported the adjusted revenue growth of 34 percent to $11.96 billion in the first quarter of FY 24, beating the analysts’ estimates for revenue of $11.79 billion. Adjusted EBITDA increased 26% year-over-year to $7.2 billion.
Looking further ahead, the company reiterated annual fiscal 2024 annual revenue guidance of approximately $50.0 billion and fiscal year 2024 Adjusted EBITDA guidance of approximately 60 percent of projected revenue.