Broadcom Inc. (NASDAQ:AVGO)

Goodwill

Goodwill showed a steady increase from 36,714 million USD in 2019 to 43,653 million USD in 2023, followed by a significant surge to 97,873 million USD in 2024. This sharp rise in the latest period suggests substantial acquisitions or asset revaluations.

Purchased Technology

Purchased technology values increased from 20,935 million USD in 2019 to a peak of 24,119 million USD in 2020, then gradually declined to 12,938 million USD by 2023. However, it rebounded sharply to 35,467 million USD in 2024, indicating renewed investment or acquisition activity in technology assets.

Customer Contracts and Related Relationships

This asset category grew from 5,978 million USD in 2019 to 8,389 million USD in 2020, remained relatively stable through 2021 and 2022, then slightly declined to 7,059 million USD in 2023. A notable increase occurred in 2024, reaching 16,186 million USD, reflecting an expansion in contractual customer assets.

Trade Names

Trade names increased modestly from 712 million USD in 2019 to 797 million USD in 2020, followed by a gradual decrease to 649 million USD in 2023. In 2024, trade names surged to 1,720 million USD, indicating strengthened brand-related intangible assets.

Other Intangible Assets

The “Other” category remained relatively stable around the 2,800 million USD range in 2019 through 2021, sharply dropped to 658 million USD in 2022, further decreased to 177 million USD in 2023, and slightly decreased again to 166 million USD in 2024. This trend reflects significant reductions or disposals in this asset group.

Intangible Assets Subject to Amortization, Gross Carrying Amount

The gross carrying amount started at 30,435 million USD in 2019, increasing to a high of 36,136 million USD in 2020, then declined yearly to 20,823 million USD in 2023 before nearly doubling to 53,539 million USD in 2024. This pattern parallels the increase in purchased technology and customer contracts, indicating fresh acquisitions or revaluations.

Accumulated Amortization

Accumulated amortization steadily increased in magnitude (more negative) from -13,144 million USD in 2019 to -24,546 million USD in 2021. Thereafter, the absolute amount decreased to -15,296 million USD by 2024, suggesting slower amortization expense recognition or revaluation of amortizable assets.

Intangible Assets Subject to Amortization, Net Book Value

Net book value declined consistently from 17,291 million USD in 2019 to 3,857 million USD in 2023, then rose sharply to 38,243 million USD in 2024. This significant increase clearly reflects recent additions or acquisitions of amortizable intangible assets.

In-Process Research and Development (IPR&D)

IPR&D decreased from 263 million USD in 2019 to as low as 10 million USD in 2023. In 2024, IPR&D jumped markedly to 2,340 million USD, indicating renewed investment in research and development projects currently in progress.

Total Intangible Assets

Total intangible assets declined steadily from 17,554 million USD in 2019 to 3,867 million USD in 2023, then greatly increased to 40,583 million USD in 2024, reflecting the combined effects of additions in amortizable assets and IPR&D.

Goodwill and Intangible Assets Combined

The overall balance of goodwill and intangible assets increased from 54,268 million USD in 2019 to a peak of 60,229 million USD in 2020, followed by a gradual decline to 47,520 million USD in 2023. In 2024, the total surged dramatically to 138,456 million USD, signaling major acquisitions or revaluations during that year contributing to a substantial increase in recorded intangible assets.

Analysis of the financial trends indicates significant variations between reported and adjusted figures over the six-year span.

Total Assets

The reported total assets show a general stability from 2019 through 2023, fluctuating slightly between approximately 67.5 billion and 73.9 billion US dollars, with a notable sharp increase to 165.6 billion in 2024. In contrast, the adjusted total assets present a downward trend from about 30.8 billion in 2019 to approximately 29.2 billion in 2023, followed by a substantial rise to 67.8 billion in 2024. The divergence between reported and adjusted assets suggests significant goodwill or intangible asset considerations impacting the adjustments.

Stockholders’ Equity

Reported stockholders’ equity remains relatively stable through 2019 to 2023, ranging from around 22.7 billion to 25 billion US dollars, before dramatically increasing to 67.7 billion in 2024. Conversely, the adjusted equity figures are negative throughout the entire period and demonstrate persistent deepening deficits, moving from -11.8 billion in 2019 to -19.7 billion in 2023, and further deteriorating to -30.2 billion in 2024. This sustained negative adjusted equity, contrasted with positive reported equity, highlights the significant impact of asset write-downs or goodwill impairments in the adjusted framework.

Interpretation

The striking increase in both reported total assets and equity in 2024 may indicate a major acquisition or restructuring event affecting the balance sheet composition. Meanwhile, the negative adjusted equity throughout the years signals underlying asset valuation concerns that are masked in the reported figures. The adjustments appear to exclude certain intangible assets, revealing a less favorable equity position when those are considered absent. Overall, the data suggests cautious interpretation of reported equity and assets, emphasizing the importance of considering adjusted figures for a more conservative assessment of financial health.

The financial data shows varying trends in key performance indicators over the six-year period analyzed. The reported total asset turnover begins at 0.33 in 2019, slightly declines to 0.31 in 2020, then experiences a steady rise reaching its peak at 0.49 in 2023 before declining sharply to 0.31 in 2024. The adjusted total asset turnover, which excludes the impact of goodwill, exhibits a stronger upward momentum from 0.73 in 2019 to 1.23 in 2023, indicating improved efficiency in asset utilization, before falling to 0.76 in 2024.

Reported financial leverage fluctuates moderately, starting at 2.71 in 2019, peaking at 3.23 in 2022, and declining to 2.45 in 2024. No adjusted financial leverage data is available for comparison. This pattern suggests some variability in the reliance on debt financing or financial structure changes over the years.

Reported return on equity (ROE) shows a notable increase from 10.92% in 2019 to a high of 58.7% in 2023, followed by a significant drop to 8.71% in 2024. This sharp decline in the latest year is noteworthy and may reflect operational or market challenges. Return on assets (ROA) follows a similar trajectory, starting at 4.04% in 2019, rising steadily to 19.33% in 2023, and then decreasing to 3.56% in 2024.

The adjusted ROA, which accounts for goodwill adjustment, indicates substantially higher returns, nearly doubling the reported ROA across most years and showing a peak of 48.21% in 2023. This suggests that goodwill distorts the asset base, and when excluded, the company's asset profitability appears considerably stronger. The adjusted ROA then declines to 8.7% in 2024, reflecting the overall downturn seen in reported figures.

Asset Turnover Trends

Both reported and adjusted total asset turnover values reveal improvements from 2019 through 2023, illustrating enhanced operational efficiency, with adjusted values consistently higher due to goodwill exclusion. The decline in 2024 indicates a reversal of this efficiency.

Financial Leverage Trends

Reported financial leverage exhibits moderate fluctuations, with a peak in 2022 and a subsequent decrease in 2024, suggesting changing financing strategies or debt levels. The absence of adjusted leverage data limits deeper analysis.

Profitability Metrics (ROE and ROA)

Reported ROE and ROA demonstrate strong growth through 2023, reflecting significantly enhanced profitability and capital utilization. The adjusted ROA, consistently higher than the reported counterpart, points to the meaningful impact of goodwill on asset valuations. The sharp declines in 2024 for all profitability measures indicate potential operational pressures or external factors affecting profitability.

Impact of Goodwill Adjustments

The adjusted metrics, where available, present a more favorable view of asset utilization and profitability by removing the effect of goodwill, highlighting the company's underlying operational performance separate from intangible asset impairments or valuations.

The data reveals notable fluctuations and trends in the total assets and asset turnover ratios over the reported periods.

Total Assets

The reported total assets exhibit a gradual increase from 67,493 million USD in late 2019 to approximately 72,861 million USD by late 2023, indicating a relatively stable asset base over these years. However, there is a significant jump to 165,645 million USD in 2024, suggesting either a substantial acquisition, revaluation, or other major balance sheet event significantly increasing the asset base.

In contrast, the adjusted total assets, which exclude goodwill, show a declining trend from 30,779 million USD in 2019 down to 29,208 million USD by late 2023, indicating a subtle contraction or disposals of non-goodwill assets. Similar to reported assets, adjusted assets nearly double to 67,772 million USD in 2024, aligning with the scale of increase in reported assets but at a smaller magnitude.

Total Asset Turnover Ratios

The reported total asset turnover ratio initially declines slightly from 0.33 in 2019 to 0.31 in 2020, before recovering and rising steadily to 0.49 by 2023, pointing to improved efficiency in generating revenue from assets during this period. However, a sharp decline to 0.31 occurs in 2024, potentially driven by the substantial increase in the asset base not yet matched by corresponding revenue growth.

Adjusted total asset turnover ratios display a consistently higher level compared to the reported figures, ranging from 0.73 to a peak of 1.23 in 2023. This indicates that excluding goodwill offers an improved view of asset efficiency. The ratio rises steadily through 2023, signifying increasing operational efficiency, before it falls back to 0.76 in 2024, mirroring the pattern observed in the reported turnover and likely reflecting the recent asset base expansion.

Overall, the 2024 data suggests a major shift in the company’s asset structure, dramatically increasing both reported and adjusted assets. Despite prior improvements in asset turnover ratios, the efficiency ratios decline in 2024, implying that revenue performance has yet to adjust proportionately to the expanded asset base. This may warrant further investigation into the nature of the asset growth and its impact on operational performance.

The financial data reveals distinct trends in both reported and goodwill adjusted figures over the observed periods. Total assets reported showed moderate fluctuations from 2019 to 2023, peaking at US$75,933 million in 2020 and then slightly declining to US$72,861 million by 2023. However, in 2024, reported total assets experienced a significant increase, more than doubling to US$165,645 million. In contrast, the adjusted total assets, which exclude goodwill, exhibited a gradual decline from US$30,779 million in 2019 to US$29,208 million in 2023, followed by a sharp rise to US$67,772 million in 2024. This suggests a substantial event or acquisition in the latest period affecting the asset base.

Stockholders' equity presented a fluctuating pattern when reported figures are considered. After starting at US$24,941 million in 2019, equity slightly decreased and increased over the years, ending at US$23,988 million in 2023, before surging to US$67,678 million in 2024. The adjusted stockholders’ equity values, which are negative throughout all periods, show an increasing deficit from -US$11,773 million in 2019 to -US$19,665 million in 2023, worsening further to -US$30,195 million in 2024. This consistent negative adjusted equity suggests that goodwill and other intangible assets have a significant impact on the equity position, and the worsening deficit highlights potential concerns regarding asset quality or valuation adjustments.

Reported financial leverage, defined as the ratio of total assets to equity, fluctuated modestly between 2.71 and 3.23 over most of the periods, indicating relatively stable leverage within this range. A notable decrease to 2.45 was observed in 2024, which coincides with the large increase in equity, suggesting a reduction in leverage exposure relative to the company's capital base. No data was provided for adjusted financial leverage, limiting analysis in that regard.

Overall, the data indicates a relatively stable financial profile until 2023, after which there is evidence of a significant capital restructuring or acquisition reflected in elevated assets and equity. The persistent negative adjusted equity highlights the impact of goodwill and intangible asset adjustments on the company’s net worth, signaling the importance of considering these adjustments for a comprehensive assessment of financial health.

The financial data reveals several notable trends regarding the reported and adjusted stockholders' equity and return on equity (ROE) over the periods from 2019 to 2024.

Reported Stockholders’ Equity

The reported stockholders' equity shows relative stability between 2019 and 2023, fluctuating moderately around the range of approximately $22.7 billion to $25 billion. Specifically, it decreased slightly from $24.9 billion in 2019 to $22.7 billion in 2022, followed by a modest increase to $24 billion in 2023. However, there is a dramatic increase in 2024 reaching approximately $67.7 billion, which is nearly threefold the levels observed in previous years. This substantial jump may indicate a significant balance sheet event such as an equity issuance, revaluation, or another extraordinary transaction.

Adjusted Stockholders’ Equity

Adjusted stockholders' equity, which likely accounts for goodwill and other intangible adjustments, is consistently negative throughout the observed period. It shows a worsening trend from -$11.8 billion in 2019 to roughly -$20.9 billion in 2022, indicating increasing goodwill or intangible asset deductions relative to reported equity. Although a slight improvement is noted in 2023 with -$19.7 billion, the metric deteriorates again sharply to -$30.2 billion in 2024. The persistent negative values and growing magnitude suggest ongoing challenges in asset quality or the accounting impact of acquisitions and intangible write-downs.

Reported Return on Equity (ROE)

Reported ROE exhibits significant volatility and a striking upward trend from 2019 to 2023. Beginning at 10.92% in 2019, it rises steadily to 12.4% in 2020 and then leaps to 26.99% in 2021. The upward momentum accelerates further with ROE surging to 50.62% in 2022 and reaching its peak at 58.7% in 2023. Such robust increases may be indicative of improved profitability, substantial earnings growth relative to equity, or the influence of decreased equity levels on the ratio. However, in 2024, there is a notable contraction to 8.71%, aligning more closely with the initial years, which could reflect the large increase in reported equity diluting the ROE or potential earnings normalization.

Adjusted Return on Equity (ROE)

No data is provided for adjusted ROE, preventing analysis of performance measures after goodwill adjustments. Consequently, the impact of intangible asset adjustments on profitability ratios cannot be assessed.

In summary, the reported stockholders’ equity remained relatively stable before a substantial surge in 2024, while the adjusted equity remained negative and generally worsened over time. The reported ROE showed strong growth with a peak in 2023, but dropped markedly in 2024, potentially influenced by the large increase in equity. The absence of adjusted ROE data limits the understanding of profitability excluding goodwill considerations.

The financial data indicates several notable trends in both reported and goodwill adjusted metrics over the observed periods.

Total Assets

The reported total assets exhibit a gradual increase from 67,493 million USD in 2019 to 75,933 million USD in 2020, followed by a slight decline over the next three years, reaching 72,861 million USD in 2023. There is a significant surge in 2024, where the reported total assets more than double to 165,645 million USD.

Adjusted total assets, which exclude goodwill, follow a similar yet more subdued pattern. Starting at 30,779 million USD in 2019, adjusted assets increase marginally to 32,486 million USD in 2020, then decline steadily through to 29,208 million USD in 2023. By 2024, adjusted assets also show a substantial increase to 67,772 million USD, more than doubling from the previous year.

Return on Assets (ROA)

The reported ROA figures show a fluctuating and ultimately steep upward trend from 4.04% in 2019 to 19.33% in 2023, peaking notably in 2022 at 15.69% and 2023 at 19.33%. However, in 2024, reported ROA declines sharply to 3.56%, marking a reversal from the prior positive trend.

Adjusted ROA, reflecting performance excluding goodwill, presents a consistently higher yield compared to the reported ROA. It starts at 8.85% in 2019 and exhibits a strong upward trajectory, reaching a peak of 48.21% in 2023. Similar to the reported ROA, adjusted ROA falls significantly in 2024, settling at 8.7%, though it remains higher than the reported ROA for the same year.

Overall, the data reveals that the company experienced strong growth in profitability, especially when excluding goodwill effects, through 2023. Both total assets and adjusted assets saw a marked increase in 2024, likely reflecting a material transaction or change in asset recognition. Despite this asset increase, profitability as measured by ROA dropped substantially in 2024, indicating possible integration costs, asset revaluation impacts, or other factors affecting earnings. The disparity between reported and adjusted ROA over time emphasizes the significant influence of goodwill on the company's financial performance metrics.