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The semiconductor solutions segment of Broadcom saw a 3.3% annual increase, hitting $7.326 billion in revenue, buoyed by heightened demand from hyperscalers. Additionally, the generative AI segments contributed significantly to the top line, pulling in $1.5 billion primarily through sales of Ethernet solutions and custom AI accelerators.
Networking revenue was another area of strength for Broadcom, climbing 23% year over year to $3.1 billion. This surge was attributed to robust demand for networking hardware from hyperscalers, which offset declines noted in both storage connectivity and broadband sectors.
Infrastructure software continued to be a solid performer with a 7.1% annual increase in revenue, approaching the $2 billion mark. This was supported by strong renewal rates across its portfolios. Although there was a slight contraction in non-GAAP gross margin, adjusted EBITDA margin saw significant improvement.
Broadcom’s financial health remains sturdy with over $14 billion in cash reserves as of the end of October 2023, while total debt showed a marginal decrease from the end of July figures. Research & Development (R&D) spending fell slightly as a percentage of net revenues year-over-year to 10.1%, and Selling, General & Administrative (SG&A) expenses also dropped to 2.4%. The company’s free cash flow remained strong for the quarter at approximately $4.723 billion.
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