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PALO ALTO, Calif. - Broadcom Inc. (NASDAQ:AVGO), a prominent player in semiconductor and infrastructure software solutions, announced robust financial outcomes for its first quarter of fiscal year 2025, which ended on February 2, 2025. The company reported a significant 25% year-over-year revenue increase to $14.9 billion, with GAAP net income rising to $5.5 billion and non-GAAP net income reaching $7.8 billion. According to InvestingPro data, Broadcom’s market capitalization stands at approximately $849 billion, with the stock currently trading above its Fair Value based on comprehensive analysis.
The company’s adjusted EBITDA soared to $10.1 billion, or 68% of revenue, reflecting a 41% increase from the previous year. This growth was primarily attributed to the expansion in AI semiconductor solutions and infrastructure software revenues, which surged by 77% and 47% respectively. Specifically, AI revenue grew to $4.1 billion, while infrastructure software revenue reached $6.7 billion. The company maintains impressive profitability metrics, with a gross profit margin of 75.2% over the last twelve months.
Broadcom’s free cash flow also exhibited an upward trend, climbing 28% year-over-year to $6 billion, representing 40% of its revenue. The company’s strong financial performance enabled it to declare a quarterly common stock dividend of $0.59 per share. InvestingPro analysis reveals that Broadcom has maintained dividend payments for 15 consecutive years, with an impressive dividend growth rate of 28.26% over the last twelve months.
Looking ahead, Broadcom anticipates continued revenue growth in the second quarter of fiscal year 2025, with projections of approximately $14.9 billion, marking a 19% increase from the same period the previous year. The adjusted EBITDA for the upcoming quarter is expected to be around 66% of the projected revenue.
The company’s cash and cash equivalents stood at $9.3 billion at the end of the first fiscal quarter, slightly down from $9.35 billion at the end of the prior fiscal quarter. During this period, Broadcom generated $6.1 billion in cash from operations and invested $100 million in capital expenditures.
Broadcom’s President and CEO, Hock Tan, commented on the performance, emphasizing the substantial growth in AI semiconductor solutions and infrastructure software. CFO Kirsten Spears highlighted the record revenues and adjusted EBITDA, as well as the increase in free cash flow.
The company’s forward-looking guidance for the second quarter of fiscal year 2025 is based on current business trends and conditions, and it may be subject to change. The information for this article is based on a press release statement from Broadcom Inc.
In other recent news, Broadcom Limited has maintained its Overweight rating with a $300 price target from Cantor Fitzgerald. The firm expects Broadcom to slightly surpass expectations for the January quarter, with guidance for the April quarter aligning with current projections. Analysts anticipate that Broadcom’s strong performance in AI and non-AI networking will balance fluctuations in wireless sales. Meanwhile, Broadcom is also reportedly considering a bid for Intel Corporation’s chip design and marketing business, which includes the x86 product lines. Analysts at Bernstein suggest that Broadcom could benefit from integrating Intel’s product lines into its portfolio, while avoiding Intel’s manufacturing facilities.
In contrast, BofA Securities expressed skepticism about Intel potentially splitting its business amid rumors of interest from Broadcom and Taiwan Semiconductor Manufacturing Co. Challenges such as regulatory approvals and Broadcom’s high debt levels were noted as potential obstacles. Additionally, the European Commission has announced the launch of InvestAI, a €200 billion initiative to boost AI development in Europe. This includes a €20 billion fund for AI gigafactories aimed at establishing Europe as a primary hub for AI. The initiative is designed to foster open, collaborative development of advanced AI models and enhance competitiveness.
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