Broadcom: Fiscal 4Q23 Financial Results

Broadcom Inc., deeply occupied to integrate VMware and already firing 1,800 people of the company acquired for $61 billion, reported financial results for its fourth quarter of fiscal year 2023, ended October, 2023.

Consolidated revenue for 4FQ23 grew 5% Y/Y to $9,295 million, up 4% from 4FQ22.

FY23 revenue grew 8% Y/Y to a record $35.8 billion, driven by investments in accelerators and network connectivity for AI by hyperscalers.

One of its business is server storage connectivity with storage adapters, controllers, and ICs, Brocade FC networking, and PCIe switches and bridges

In this segment, Broadcom recorded 4FQ23 revenue of $1 billion or 14% of semiconductor revenue and down 17% Y/Y.

In FY23, it was $4.5 billion, up 11% Y/Y. And going to FY24, it expects revenue to decline mid- to high-teens percentage Y/Y, driven by the cyclical weakness that began late 2023.

Revenue for storage connectivity
(in $million)

Earnings call transcript

These fiscal year earnings are aligned with the recent final confirmation of VMware acquisition that really shakes the market by its amount but above all by the IT infrastructure role of VMware.

Several users don’t really know the future pricing model and product strategy thought by Broadcom. We already saw the reorganization of VMware in 4 entities – VMware Cloud Foundation, VMware Tanzu, Application Networking (Load Balancing) and Advanced Security services and Software-Defined Edge for telco and enterprise edges – and the stop of several products in favor of the current Broadcom’s portfolio offerings. VMware CEO Raghu Raghuram will step down and advice Hock Tan.

Thus some questions arise on customers’ lips, is there an opportunity for competitors? Will vSphere be replaced by something else? More easy to say than realize, so it appears that large corporations are more locked than small ones who can migrate to alternatives. What about Red Hat, KVM based offerings and even Nutanix for small/medium configs? Is it also a new moment for open source alternatives?

Also, Broadcom has jumped into the CXL opportunity with the recent Elastics.cloud acquisition and we’re watching carefully that angle as the company will announce something very soon and potentially acquire other players in that area.