PALO ALTO, Calif. - Broadcom Inc. (NASDAQ:AVGO), a prominent player in semiconductor and infrastructure software solutions with a market capitalization of $844 billion and impressive year-to-date returns of 66%, disclosed its financial outcomes for the fourth quarter of fiscal year 2024, ending November 3, 2024. According to InvestingPro analysis, the company currently trades above its Fair Value, reflecting strong investor confidence in its growth trajectory. The company revealed a significant 51% increase in quarterly revenue, reaching $14.054 billion compared to the previous year. This surge was accompanied by a rise in GAAP net income to $4.324 billion and Non-GAAP net income to $6.965 billion for the same period.
The company's adjusted EBITDA stood at $9.089 billion, representing 65% of its quarterly revenue. Additionally, Broadcom announced an 11% hike in its quarterly common stock dividend to $0.59 per share. InvestingPro data reveals that Broadcom has maintained dividend payments for 15 consecutive years, with a 15.2% dividend growth in the last twelve months. The company maintains a "GOOD" overall financial health score, operating with a moderate level of debt. Looking ahead, the company provided revenue guidance for the first quarter of fiscal year 2025, projecting about $14.6 billion, a 22% increase from the prior year.
Broadcom's President and CEO, Hock Tan, attributed the robust fiscal year 2024 revenue growth of 44% to a record $51.6 billion, to the successful integration of VMware (NYSE:VMW) and a significant increase in infrastructure software revenue, which grew to $21.5 billion. The semiconductor segment also experienced record revenue of $30.1 billion, driven by a 220% year-on-year growth in AI revenue, which amounted to $12.2 billion.
The company's CFO, Kirsten Spears, highlighted the adjusted EBITDA increase of 37% year-over-year to a record $31.9 billion and the strong free cash flow excluding restructuring at $21.9 billion. This financial strength has led to the increase in the quarterly dividend.
For the fourth fiscal quarter, Broadcom generated $5.604 billion in cash from operations, with capital expenditures of $122 million resulting in $5.482 billion of free cash flow, equating to 39% of revenue. The company's cash and cash equivalents totaled $9.348 billion at the end of the quarter.
The company's Board of Directors has approved the quarterly cash dividend, payable on December 31, 2024, to stockholders of record as of 5:00 p.m. Eastern Time on December 23, 2024.
These financial results are based on a press release statement and reflect the company's performance and future expectations. InvestingPro subscribers can access 14 additional investment tips and comprehensive analysis for Broadcom, including detailed valuation metrics and growth forecasts. The stock currently has a strong analyst consensus recommendation of 1.47 (where 1 is Strong Buy), with price targets ranging from $155 to $240 per share.
In other recent news, Broadcom Limited has maintained a strong financial performance, with a reported 32.04% revenue growth and a 74.71% gross profit margin in the last twelve months. The company has issued $5 billion in senior notes, aimed at repaying existing debt. Bernstein SocGen Group continues to hold a positive outlook on Broadcom, maintaining its Outperform rating and $195.00 price target. Meanwhile, Mizuho (NYSE:MFG) Securities has raised its price target for Broadcom to $220, reflecting the potential revenue from Broadcom's collaboration with OpenAI on custom AI chips.
Broadcom's recent developments also include the launch of Bitnami Premium, an enterprise version of the popular open-source software catalog Bitnami. The company has also formed a partnership with Arrow Electronics (NYSE:ARW) as the global distributor for the new offering. Furthermore, Broadcom unveiled Sian™2, a 200G/lane PAM-4 DSP PHY designed to enhance data center connectivity for AI applications.
HSBC initiated coverage on Broadcom shares with a Hold rating and a price target of $160.00, while BofA Securities maintained its Buy rating on Broadcom shares, affirming a $215.00 price target. These ratings reflect the analysts' positive outlook on the company's potential growth in the AI sector and its robust financial structure. These are among the recent developments in Broadcom's ongoing activities in the capital markets.
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