Broadcom: Fiscal 3Q20 Financial Results

Broadcom Inc. reported financial results for its third quarter of fiscal year 2020, ended August 2, 2020.

“We delivered third quarter revenue results in-line with our expectations, driven by healthy demand from cloud and telecom customers, which more than offset the expected reset in wireless,” said Hock Tan, President and CEO. “Our outlook for the fourth quarter reflects a strong anticipated ramp in wireless, as well as the continuing surge in demand for networking from cloud and telecom customers, more than offsetting expected softness in enterprise.”

“We generated record free cash flow of over $3 billion, which represented 33% growth on a Y/Y basis, and reduced total debt by $1.9 billion in the quarter,” said Tom Krause, CFO. “Looking ahead, our cash flow outlook remains robust and we plan to pay down an additional $3 billion in debt in the fourth quarter.”

Cash and cash equivalents at the end of 3FQ20 were $8,857 million, compared to $9,207 million at the end of the prior quarter. During this quarter, the company generated $3,178 million in cash from operations and spent $105 million on capital expenditures.

On June 30, 2020, it paid a cash dividend of $3.25 per share of common stock, totaling $1,312 million and a cash dividend of $20.00 per share of mandatory convertible preferred stock, totaling $74 million.

4FQ20 Outlook
• Revenue guidance of $6.4 billion plus or minus $150 million
• Fourth quarter Adjusted EBITDA of $3,744 million plus or minus $75 million, or 58.5% of revenue at the midpoint of guidance

Quarterly Dividends
The board approved a quarterly cash dividend on its common stock of $3.25 per share. The common stock dividend is payable on September 30, 2020 to common stockholders of record at the close of business on September 22, 2020.

The board of also approved a quarterly cash dividend on its 8.00% Mandatory Convertible Preferred Stock, Series A, of $20.00 per share. This dividend is payable on September 30, 2020 to preferred stockholders of record at the close of business on September 15, 2020.