Broadcom: Fiscal 2Q22 Financial Results

Business highlights:
• Revenue of $8,103 million for 2FQ22, up 23% from 1FQ22
• GAAP net income of $2,590 million for 2FQ22; Adjusted EBITDA of $5,111 million for 2FQ22
• GAAP diluted EPS of $5.93 for 2FQ22; Non-GAAP diluted EPS of $9.07 for 2FQ22
• $4,158 million of free cash flow from operations for 2FQ22, defined as cash from operations of $4,243 million less capital expenditures of $85 million
• Quarterly common stock dividend of $4.10 per share
• Repurchased and eliminated 5.6 million shares for $3,290 million
• 3FQ22 revenue guidance of approximately $8.4 billion, an expected increase of 24 percent from 2FQ21
• 3FQ22 adjusted EBITDA guidance of approximately 63.5% of projected revenue
• New share repurchase program authorized up to $10 billion of common stock, incremental to $3 billion remaining under the current authorization to date

Broadcom Inc. reported financial results for 2FQ22, ended May 1, 2022, provided guidance for 3FQ22 of its FY22 and announced its quarterly dividends.

“Broadcom’s second quarter revenue accelerated sequentially, and was driven by strength in networking and server storage,” said Hock Tan, President and CEO. “We expect this momentum to continue into the third quarter.“

“Consolidated revenue grew 23% Y/Y to a record $8.1 billion and operating profit increased 30%,” said Kirsten Spears, CFO. “We generated $4.2 billion in free cash flow and are expecting free cash flow to remain strong in the third quarter. Consistent with our commitment to return excess cash to shareholders, we returned $4.5 billion to shareholders in the quarter including $1.7 billion of cash dividends and $2.8 billion of share repurchases.”

Cash and cash equivalents at the end of the fiscal quarter were $9,005 million, compared to $10,219 million at the end of the prior quarter.

During 2FQ22, the company generated $4,243 million in cash from operations and spent $85 million on capital expenditures. It spent $3,290 million on share repurchases and eliminations, consisting of $2,776 million in repurchases of 4.7 million shares and $514 million of withholding tax payments related to net settled equity awards that vested in the quarter (representing approximately 0.9 million shares withheld).

On March 31, 2022, it paid a cash dividend of $4.10 per share of common stock, totaling $1,676 million and a cash dividend of $20.00 per share of mandatory convertible preferred stock, totaling $74 million.

3FQ22 business outlook
• revenue guidance of approximately $8.4 billion; and
• adjusted EBITDA guidance of approximately 63.5% of projected revenue.