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AVGO Stock Price Increases From Q1 Earnings Beat, Y/Y Revenue Rise
AVGOBroadcom(AVGO) ZACKS·2025-03-07 17:46

Core Insights - Broadcom (AVGO) reported first-quarter fiscal 2025 non-GAAP earnings of 1.60pershare,exceedingtheZacksConsensusEstimateby6.671.60 per share, exceeding the Zacks Consensus Estimate by 6.67% and marking a 45.5% year-over-year increase [1] - The company achieved net revenues of 14.9 billion, a 25% year-over-year increase, surpassing the Zacks Consensus Estimate by 2.03% [2] - AVGO shares rose over 12.82% in after-hours trading to 202.45followingpositivesecond−quarterfiscal2025guidance[3]RevenueBreakdown−Semiconductorsolutionsrevenues,accountingfor55202.45 following positive second-quarter fiscal 2025 guidance [3] Revenue Breakdown - Semiconductor solutions revenues, accounting for 55% of net revenues, reached 8.2 billion, an 11% year-over-year increase, beating the Zacks Consensus Estimate by 0.56% [4] - AI-related revenues surged 77% year over year to 4.1billion,significantlycontributingtooverallrevenuegrowthdrivenbyincreasedshipmentstohyperscalersforAIapplications[4]−Infrastructuresoftwarerevenues,makingup454.1 billion, significantly contributing to overall revenue growth driven by increased shipments to hyperscalers for AI applications [4] - Infrastructure software revenues, making up 45% of net revenues, rose 47% year over year to 6.7 billion, supported by the VMware acquisition and strong demand for infrastructure solutions [6] Operating Performance - Non-GAAP gross margin expanded to 79.1%, a 370 basis points increase year over year [7] - Adjusted EBITDA increased 40.9% year over year to 10.1billion,withanadjustedEBITDAmarginof67.610.1 billion, with an adjusted EBITDA margin of 67.6%, up 780 basis points [7] - Non-GAAP operating margin grew 880 basis points year over year to 65.9% [7] Balance Sheet and Cash Flow - As of February 2, 2025, cash and cash equivalents were 9.31 billion, slightly down from 9.35billionasofNovember3,2024[8]−Totaldebtwas9.35 billion as of November 3, 2024 [8] - Total debt was 66.58 billion, down from 67.57billionasofNovember3,2024[9]−Thecompanygenerated67.57 billion as of November 3, 2024 [9] - The company generated 6.11 billion in cash flow from operations, compared to 5.60billioninthepreviousquarter,withfreecashflowat5.60 billion in the previous quarter, with free cash flow at 6.01 billion [9] Future Guidance - For the second quarter of fiscal 2025, Broadcom expects revenues of 14.9billion,indicatinga1914.9 billion, indicating a 19% increase year over year [10] - AI semiconductor revenues are projected to grow 44% year over year to 4.4 billion, while non-AI semiconductor revenues are expected to reach 4billion[10]−Infrastructuresoftwarerevenuesareanticipatedtogrow234 billion [10] - Infrastructure software revenues are anticipated to grow 23% year over year to 6.5 billion [10]