Broadcom: Fiscal 4Q21 Financial Results

Broadcom Inc. announces fourth quarter and fiscal year 2021 financial results and quarterly dividends

– Revenue of $7,407 million for 4Q21, up 15% from the prior year period
– GAAP net income of $1,989 milliFon for 4Q21; Adjusted EBITDA of $4,547 million for 4Q21
– GAAP diluted EPS of $4.45 for 4Q21; Non-GAAP diluted EPS of $7.81 for 4Q21
– $3,453 million of free cash flow from operations for 4FQ21, defined as cash from operations of $3,541 million less capital expenditures of $88 million
– 1FQ22 revenue guidance of approximately $7.6 billion, an expected increase of 14% from 4FQ21
– 1FQ22 Adjusted EBITDA guidance of approximately 61.5% of projected revenue(1)
– Quarterly common stock dividend increased by 14% to $4.10 per share from 4Q21
– New share repurchase program authorized for repurchase of up to $10 billion of common stock

“Broadcom concluded the year with record 4FQ21 results driven by a rebound in enterprise, and continued strength from cloud and service provider demand. Our infrastructure software growth continues to be steady with our focus on strategic customers,” said Hock Tan, president and CEO. “With the strength and breadth of our IP portfolio, we continue to be able to uniquely deliver leading edge, best-in-class semiconductor solutions, and extend our leadership in our franchise markets.“

“In FY21, we achieved record adjusted EBITDA margin of 60%, generating $13.3 billion of free cash flow, or 49% of revenue,” said Kirsten Spears, CFO. “Consistent with our commitment to return excess cash to shareholders, we are increasing our target quarterly common stock dividend by 14% to $4.10 per share per quarter for FY22, and announcing a new $10 billion share repurchase program.”

Cash and cash equivalents at the end of 4FQ21 were $12,163 million, compared to $11,105 million at the end of the prior quarter.

During 4FQ21, the company generated $3,541 million in cash from operations and spent $88 million on capital expenditures.

On September 30, 2021, it paid a cash dividend of $3.60 per share of common stock, totaling $1,486 million and a cash dividend of $20.00 per share of mandatory convertible preferred stock, totaling $75 million.

1FQ22 outlook
• Revenue guidance of approximately $7.6 billion; and
• Adjusted EBITDA guidance of approximately 61.5% of projected revenue.

Quarterly dividends
The board of directors has approved a quarterly cash dividend on its common stock of $4.10 per share. The common stock dividend is payable on December 31, 2021 to common stockholders of record at the close of business on December 22, 2021.

The board has 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 December 31, 2021 to preferred stockholders of record at the close of business on December 15, 2021.

Share repurchase authorization
The board authorized the repurchase of up to $10 billion of its common stock under a new share repurchase program. The authorization is effective until December 31, 2022.  Repurchases under the new share repurchase program may be made through a variety of methods, including open market or privately negotiated purchases. The timing and amount of shares repurchased will depend on the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities and other factors. The firm is not obligated to repurchase any specific amount of shares of common stock, and the share repurchase program may be suspended or terminated at any time.