The News: Broadcom revenue for the third quarter of 2023 reached $8.88 billion, up 5% from $8.5 billion year-over-year (YoY), as the semiconductor and infrastructure software vendor reported its latest earnings figures on August 31. The Q3 revenue total beat analyst estimates of $8.85 billion from Investing.com for the period ending July 30, 2023. Read the full Q3 earnings press release on the Broadcom investor relations webpage.
Broadcom Revenue in Q3 2023 Hits $8.88 Billion, Beating Estimates
Analyst Take: Broadcom’s revenue increase of 5% in Q3, combined with beating analyst estimates for revenue and earnings per share (EPS) in the period, again shows positive progress for this innovative and progressive semiconductor and infrastructure software vendor.
In our minds, Broadcom is run so well that it is almost boring – well, not quite. There is a lot to be excited about with Broadcom, including its steady growth, rising EPS, and its announcement of a $4.60 per share dividend on June 30, which combined have made the company such a darling on Wall Street.
All of this continues to keep Broadcom in a good position even as challenging global macroeconomic conditions remain around the globe. The Q3 results loudly convey a message of ongoing success for Broadcom CEO and President Hock Tan and his executive team.
And as we have said before, these latest results show that Broadcom is in just the right spot to benefit from the networking explosion that the AI and generative AI booms are experiencing within the tech and consumer marketplaces. Meanwhile, Broadcom continues to show increasing demand across its markets for networking, broadband, wireless semiconductor chips, and infrastructure software, which is very positive.
Here are Broadcom’s Q3 fiscal 2023 earnings results by the numbers:
- Q3 FY2023 revenue of $8.88 billion, up 5% from $8.5 billion YoY. The Q3 revenue figure topped analyst consensus estimates of $8.85 billion from Investing.com
- Q3 FY2023 non-GAAP net income of $4.6 billion, up 8% from $4.2 billion YoY
- Q3 FY2023 non-GAAP diluted EPS of $10.54 per share, up from $9.73 per share YoY. The non-GAAP EPS beat analyst consensus estimates of $10.43 per diluted share from Investing.com
- Q3 FY2023 non-GAAP gross margin of $6.67 billion, up 4% from $6.43 billion YoY
- Q3 FY2023 free cash flow (FCF) of $4.6 billion, up 7% from $4.3 billion YoY
Broadcom Revenue by Market Segment in Q3 of 2023
Broadcom’s semiconductor solutions division brought in net revenue of $7 billion in Q3, up 5% from $6.6 billion YoY. That division represented 78% of the company’s revenue in Q3 2023, unchanged YoY.
Broadcom’s infrastructure software division brought in net revenue of $1.9 billion in Q3, up 5% from $1.84 billion YoY. Infrastructure software represented 22% of the company’s revenue in Q3 2023, unchanged YoY.
Broadcom’s broad lines of business-critical chips, switches, and other products serve customers everywhere from AI to generative AI, data centers to networking, enterprise software, broadband, wireless, storage, and industrial uses. The company also offers software for enterprise, mainframes, and cybersecurity, while also focusing on automation, monitoring and security, smartphone components, telecommunications, and factory automation.
Broadcom Revenue Guidance for Q4 FY2023
As part of its Q3 earnings report, Broadcom provided earnings guidance for the fourth quarter of FY2023. Broadcom said it expects Q4 2023 revenue to total about $9.27 billion.
Broadcom Revenue Q3 Overview
So, what is left to prove for Broadcom in 2023?
Well, there is Broadcom’s proposed $61 billion acquisition of VMware, which since being announced in May of 2022 has been continuing to earn approvals from regulators around the world. As we have said before, Hock Tan’s vision to bring in VMware aligns with his acquisition strategy that targets quality software names with good cash flow and efficient operations, which will continue to transform Broadcom from a chipmaker into a diversified technology firm.
Hock Tan says he still expects the acquisition to close by October 30, 2023, so we will have to watch and see how it shakes out. If we were betting, we would not bet against Broadcom and its confident, energetic, and savvy CEO.
We continue to believe in Broadcom’s success in the semiconductor and infrastructure software markets in the future, despite the lingering macroeconomic conditions being experienced by other technology and consumer companies today. We are coming out of this long post-pandemic cycle, but it just takes some time.
For Broadcom, its deep technology roots can be traced back to technology giants like AT&T and Bell Labs, Lucent Technologies, Hewlett-Packard, and Agilent, which are significant chops to celebrate. Over the years, Broadcom has been growing by acquisition, including deals for LSI, Brocade, CA Technologies, and Symantec, giving it a wider footprint in the tech sector that serves a broad range of customer needs.
We will be watching with interest as the rest of FY2023 pans out for Broadcom, especially as it pursues its VMware acquisition and drives its business forward around the world.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed Broadcom’s latest earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
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The Six Five Insider Edition with Ram Velaga, Broadcom
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
