Broadcom: Fiscal 4Q22 Financial Results

(in $ million)	4Q21	4Q22	FY21	FY22
Revenue	7,407	8,930	27,450	33,203
*Growth*		21%		*21%*
Net income (loss)	1,989	3,359	6,736	11,495

Broadcom Inc. reported financial results for its fourth quarter and fiscal year ended October 30, 2022, provided guidance for the first quarter of its fiscal year 2023 and announced its quarterly dividend.

“Broadcom’s FY22 revenue grew 21% Y/Y to a record $33.2 billion, as a result of strong demand from hyperscale, service providers, and enterprise,” said Hock Tan, president and CEO. “This growth was driven by our strong partnerships with customers and accelerated adoption of our next gen technologies. As we look into fiscal 2023, our increased R&D investments during the preceding years position us to extend our leadership in next gen products within the end markets we address.”

“In FY22 we achieved record adjusted EBITDA margin of 63%, generating $16.3 billion in free cash flow or 49% of revenue, demonstrating our stable and focused business model,” said Kirsten Spears, CFO. “Consistent with our commitment to return cash to shareholders, we will resume our authorized share repurchase programs for the remaining $13 billion, and we are increasing our quarterly common stock dividend by 12% to $4.60 per share for FY23. The target FY23 annual common stock dividend of $18.40 per share is a record, and the twelfth consecutive increase in annual dividends since we initiated dividends in FY11.”

Cash and cash equivalents at the end of the fiscal quarter were $12,416 million, compared to $9,977 million at the end of the prior quarter.

During 4FQ22, the company generated $4,583 million in cash from operations and spent $122 million on capital expenditures.

On September 30, 2022, it paid a cash dividend of $4.10 per share of common stock, totaling $1,707 million and a cash dividend of $20.00 per share of mandatory convertible preferred stock, totaling $75 million.

1FQ23 Outlook
• Revenue of approximately $8.9 billion; and
• Adjusted EBITDA of approximately 63% of projected revenue.

Quarterly Dividends
The board of directors has approved a quarterly cash dividend on its common stock of $4.60 per share. The common stock dividend is payable on December 30, 2022 to common stockholders of record at the close of business on December 20, 2022.

Comments

For storage connectivity only, one of its businesses (storage adapters, controllers and ICs, FC networking, PCIe switches and bridges), revenue was a record $1.2 billion or 17% of semiconductor revenue and up 50% Y/Y. It was also a record $1.1 billion or 17% of semiconductor sales in 3FQ22 where the firm expected a growth of about 45% Y/Y in 4FQ22.

As mentioned in previous earnings call, the company is benefiting here from substantial content increases as both cloud and enterprise customers adopt firm's next-gen migrate and storage adapters. This trend will continue in 1FQ23, and the vendor expects server storage connectivity revenue to grow above 50% Y/Y.

In this field, Broadcom is around the 10th highest storage company in the word with sales of $4.24 billion.

Next quarter global sales are expected to be about the same figure: $8.9 billion.

The company is awaiting for the final approvement of the huge acquisition of VMware.