Broadcom's chip business also saw a 4% year-on-year increase, bringing in $7.39 billion, driven by strong demand for networking products in AI data centers and custom AI accelerators. However, the company's overall revenue guidance remained at $50 billion, up 40% year-over-year, aided by the addition of VMware. Despite a significant drop in net income to $1.325 billion, operating profit rose by 30% to $7.1 billion. The company also announced a dividend of $5.25 per share, although shares dipped to $1,361 after earlier trading at $1,415.
Key takeaways:
- Broadcom's strategy of forcing VMware customers to buy large software bundles is expected to increase revenue by a double-digit percentage sequentially, quarter over quarter, through the rest of the fiscal year.
- Broadcom's software infrastructure business unit brought in $4.571 billion of revenue in Q1 2024, up from $1.935 billion in the previous quarter, with $2.1 billion of this quarter’s revenue coming from VMware.
- Broadcom has decided not to spin out VMware’s Carbon Black security software business unit, with CEO Hock Tan believing that integrating it will deliver more value to investors.
- Broadcom's chip business brought in $7.39 billion, up four percent year-on-year, with strong demand for networking products in AI data centers and custom AI accelerators from hyperscalers driving growth.