Broadcom (NASDAQ:AVGO) has announced its first-quarter fiscal 2024 non-GAAP earnings, reporting $10.99 per share, surpassing the Zacks Consensus Estimate by 7.22% and marking a 6.4% increase compared to the previous year. Net revenues also saw a significant rise, increasing by 34% year over year to $11.96 billion, beating the Zacks Consensus Estimate by 2.06%. The company attributes part of this growth to the inclusion of 10.5 weeks of contribution from VMware.
Semiconductor solutions revenues, comprising 62% of total revenues, amounted to $7.390 billion, a 4% increase from the previous year, driven by strong adoption by hyperscalers. Notably, AI revenues in semiconductors quadrupled year on year, reaching $2.3 billion in the quarter. Networking revenues also surged, totaling $3.3 billion, up 46% year over year, with strong demand observed for custom AI accelerators, networking switches, routers, and Network Interface Card from hyperscale customers.
However, storage connectivity revenues declined by 29% year over year to $887 million, while broadband revenues saw a 23% decrease to $940 million. Wireless revenues stood at $2 billion, down 4% year over year. Industrial resale revenues also experienced a decline of 6% year over year, amounting to $215 million.
Infrastructure software revenues, representing 38% of net revenues, experienced a remarkable 153% year-over-year increase, reaching $4.571 billion. Bookings in the software segment showed significant growth, increasing sequentially from less than $600 million to $1.8 billion in the fiscal first quarter.
Despite the revenue growth, operating margins contracted on a year-over-year basis. The non-GAAP gross margin decreased by 150 basis points to 75%, while research and development expenses increased by 160 basis points and SG&A expenses increased by 370 basis points. Adjusted EBITDA increased by 26% year over year to $7.156 billion, but the adjusted EBITDA margin contracted by 390 basis points to 59.8%. The non-GAAP operating margin also contracted by 380 basis points to 57.1%.
In terms of the balance sheet, as of Feb 4, 2024, Broadcom reported cash and cash equivalents of $11.87 billion, with total debt amounting to $76 billion. The company generated cash flow from operations of $4.815 billion and free cash flow of $4.693 billion in the quarter. Additionally, Broadcom raised its quarterly common stock dividend to $5.25 per share for the first quarter of fiscal 2024 and paid out a cash dividend of $5.25 per share of common stock on Dec 29, 2023.
Looking ahead, Broadcom expects revenues of $50 billion for fiscal 2024, with adjusted EBITDA anticipated to be 60% of projected revenues.
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