Broadcom Inc (1YD.DE) QQ4 2024 Results Analysis: Robust Q4 Profitability, Elevated Free Cash Flow, and Healthy Balance Sheet in a AI Infrastructure Cycle
Executive Summary
Broadcom reported an extremely resilient Q4 2024, underpinned by strong demand in data center and networking applications as AI-related infrastructure continues to scale. Revenue of $14.054 billion produced a gross margin of 64.05%, contributing to an EBITDA of $7.29 billion and net income of $4.324 billion. The quarter showcased meaningful margin expansion and a pronounced improvement in profitability versus prior periods, aided by favorable product mix and pricing power. Free cash flow was exceptionally solid at $5.482 billion, supporting a robust liquidity position with cash and cash equivalents totaling $9.349 billion. Management signaling on the call (when available) typically emphasized sustained AI/data-center capex, ongoing software infrastructure opportunities, and capital returns; however, explicit forward-looking targets for 2025 were not embedded in the supplied data. Looking at capital allocation, Broadcom deployed substantial cash flow to dividends and share repurchases, while acquisitions subdued cash flow from investing activities in the quarter. The balance sheet remains richly valued, with total assets of $165.6 billion and total liabilities of $97.97 billion, including a sizable net debt position of roughly $58.22 billion. Taken together, Broadcom’s QQ4 2024 results reinforce a constructive long-term view driven by high-margin fundamentals, strong cash generation, and a diversified product portfolio, albeit with leverage and cycle sensitivity that investors will monitor.
Key Performance Indicators
Revenue
14.05B
QoQ: 0.00% | YoY:12.55%
Gross Profit
9.00B
64.05% margin
QoQ: 0.00% | YoY:15.77%
Operating Income
4.63B
QoQ: 0.00% | YoY:56.05%
Net Income
4.32B
QoQ: 0.00% | YoY:103.87%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $14.054B, YoY +12.55%, QoQ 0.00%\n- Gross Profit: $9.002B, Gross Margin 64.05%, YoY +15.77%, QoQ 0.00%\n- Operating Income: $4.627B, Operating Margin 32.93%, YoY +56.05%, QoQ 0.00%\n- Net Income: $4.324B, Net Margin 30.77%, YoY +103.87%, QoQ 0.00%\n- EBITDA: $7.29B, EBITDA Margin 51.87% (EBITDARatio 0.5187)\n- Cash from Operations: $5.604B, Free Cash Flow: $5.482B\n- CapEx: $0.122B; R&D: $2.234B (~15.9% of revenue)\n- Dividends Paid: $2.484B; Share Repurchases: $1.204B; Net cash used for financing: $6.076B\n- Cash and Cash Equivalents: $9.349B; Net Debt: $58.218B; Total Debt: $67.566B\n- Balance Sheet: Total Assets $165.645B; Total Liabilities $97.967B; Total Stockholders’ Equity $67.678B
Financial Highlights
- Revenue: $14.054B, YoY +12.55%, QoQ 0.00%\n- Gross Profit: $9.002B, Gross Margin 64.05%, YoY +15.77%, QoQ 0.00%\n- Operating Income: $4.627B, Operating Margin 32.93%, YoY +56.05%, QoQ 0.00%\n- Net Income: $4.324B, Net Margin 30.77%, YoY +103.87%, QoQ 0.00%\n- EBITDA: $7.29B, EBITDA Margin 51.87% (EBITDARatio 0.5187)\n- Cash from Operations: $5.604B, Free Cash Flow: $5.482B\n- CapEx: $0.122B; R&D: $2.234B (~15.9% of revenue)\n- Dividends Paid: $2.484B; Share Repurchases: $1.204B; Net cash used for financing: $6.076B\n- Cash and Cash Equivalents: $9.349B; Net Debt: $58.218B; Total Debt: $67.566B\n- Balance Sheet: Total Assets $165.645B; Total Liabilities $97.967B; Total Stockholders’ Equity $67.678B
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
14.05B
12.55%
0.00%
Gross Profit
9.00B
15.77%
0.00%
Operating Income
4.63B
56.05%
0.00%
Net Income
4.32B
103.87%
0.00%
Key Financial Ratios
currentRatio
1.17
grossProfitMargin
64.1%
operatingProfitMargin
32.9%
netProfitMargin
30.8%
returnOnAssets
2.61%
returnOnEquity
6.39%
debtEquityRatio
1
dividendPayoutRatio
57.4%
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript data was not provided in the input. As a result, no verbatim management quotes or thematic highlights from the earnings call could be included. If you can share the call transcript or key quotes, I can integrate them with the financial data to produce a quotes-driven section.
N/A
— N/A
N/A
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Forward Guidance
There is no explicit forward guidance in the supplied data for Broadcom’s FY2025 outlook. Historically, Broadcom has guided to industry-leading profitability and strong FCF generation, supported by a diversified product mix and long-cycle enterprise demand. In the absence of formal targets, investors should monitor: (1) AI/data-center demand and TAC (total addressable) expansion for networking and storage solutions, (2) cadence of software infrastructure revenue and any monetization of software assets, (3) ongoing capital allocation strategy (buybacks vs. acquisitions vs. dividend policy), (4) currency and macro headwinds affecting semiconductor cycles, and (5) cadence of debt management given a sizable net debt profile. Based on QQ4 2024 results, the near-term outlook appears favorable for continued margin resilience and cash flow strength, provided AI-driven capex remains robust and supply/demand dynamics remain balanced.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1YD.DE Focus
64.05%
32.90%
6.39%
0.00%
QCI.DE
56.40%
25.20%
11.10%
16.46%
TII.DE
57.70%
34.40%
7.13%
35.46%
HDI.DE
32.80%
11.30%
45.10%
34.06%
MTE.DE
35.30%
19.60%
1.97%
29.89%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Medium-to-long-term constructive outlook driven by Broadcom’s high-margin business model and strong FCF generation. The QQ4 2024 results validate the company’s ability to convert revenue into substantial operating profit and free cash flow, underpinning a favorable capital allocation framework (dividends and buybacks) while maintaining optionality for strategic software/infrastructure investments. The key near-term risks relate to macroeconomic softness in enterprise IT spending, AI capex normalization, and leverage sensitivity. Relative to industry benchmarks, Broadcom’s profitability metrics (gross margin ~64%, net margin ~31%, EBITDA margin ~52%) and solid cash generation stand out versus many peers, implying an attractive margin of safety given the balance sheet strength. However, the substantial net debt and relatively modest interest coverage warrant careful monitoring of leverage as the cycle evolves. Investors should watch AI-driven capex momentum, software monetization progress, and any material changes to capital allocation strategy as potential catalysts or headwinds in 2025 and beyond.
Key Investment Factors
Growth Potential
Strong FCF generation supports aggressive shareholder returns and potential strategic software/data-center acquisitions; AI infrastructure demand and 400/800G networking cycles remain a meaningful growth driver; diversified product portfolio across wired/wireless, enterprise storage, and industrial sectors enhances resilience.
Profitability Risk
High leverage and net debt load; semiconductor cyclical exposure; dependence on enterprise data-center spend and AI-related capex cycles; execution risk from large acquisitions or integration efforts; regulatory and geopolitical risks in global supply chains.
Financial Position
Healthy liquidity with $9.349B cash; substantial total assets ($165.6B) and equity ($67.7B); solid profitability with net margin ~30.8% and ROE ~6.39%; debt remains sizable (Total Debt $67.6B; Net Debt $58.2B) with interest coverage ~5.05x; strong FCF supports deleveraging and shareholder returns.
SWOT Analysis
Strengths
Very high gross margin (64.05%) and robust EBITDA margin (~51.9%) indicating pricing power and mix efficiency.