Analysis of Reportable Segments
Broadcom Inc. operates in 2 segments: Semiconductor solutions and Infrastructure software.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2009
- Total Asset Turnover since 2009
- Price to Sales (P/S) since 2009
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Segment Profit Margin
Broadcom Inc., profit margin by reportable segment
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor solutions | ||||||
| Infrastructure software |
Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).
The profit margin data for the reportable segments presents distinct patterns over the six-year period considered.
- Semiconductor Solutions
- This segment displays a consistent upward trend in profit margin from 2019 to 2023, increasing from 46.72% to 58.5%. The growth trajectory is relatively steady, with notable increments each year except for a slight reduction in the final year, 2024, where the margin declined to 55.69%. Despite this decrease, the margin in 2024 remains substantially higher than at the start of the period. The overall trend indicates strengthening profitability in this segment, albeit with some recent easing.
- Infrastructure Software
- The profit margin here exhibits a more volatile pattern. Starting at a high level of 73.33% in 2019, it decreased sharply in 2020 to 65.9%, then recovered and fluctuated between roughly 69.85% and 73.84% from 2021 to 2023. However, in 2024, the margin experienced a notable decline to 65.08%, the lowest point in the data set since 2020. This variability suggests greater sensitivity to market or operational factors within this segment, with margins not maintaining a consistent growth or decline trend.
In summary, the Semiconductor Solutions segment demonstrates a generally positive profitability trend with a minor recent downturn, whereas the Infrastructure Software segment shows significant variability with a recent downward shift. These patterns may reflect differing market dynamics, operational challenges, or competitive pressures impacting each segment uniquely over time.
Segment Profit Margin: Semiconductor solutions
Broadcom Inc.; Semiconductor solutions; segment profit margin calculation
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).
1 2024 Calculation
Segment profit margin = 100 × Operating income ÷ Net revenue
= 100 × ÷ =
- Net Revenue
- Net revenue exhibited a consistent upward trend over the analyzed periods. Starting at $17,441 million in November 2019, revenue slightly decreased to $17,267 million in November 2020 but subsequently increased each year, reaching $30,096 million by November 2024. This reflects strong growth in the semiconductor solutions segment over the five-year span.
- Operating Income
- Operating income demonstrated a marked increase throughout the period. Beginning at $8,148 million in November 2019, operating income rose steadily, with a significant jump observed from 2021 onwards. By November 2024, operating income reached $16,759 million, effectively doubling the figure from the initial period and indicating improved profitability and operational efficiency.
- Segment Profit Margin
- The segment profit margin showed a generally increasing trend from 46.72% in November 2019 to a peak of 58.5% in October 2023. There was a slight decline to 55.69% in November 2024, but the margin remained substantially higher than in earlier years. This suggests enhanced cost management and pricing power in the segment, although the recent slight margin contraction could warrant monitoring for future profitability implications.
- Overall Insights
- The data indicates robust growth in both net revenue and operating income, underlining the segment's expanding market presence and improving financial performance. The consistent rise in profit margin up to 2023 reinforces the view of increasing operational effectiveness, despite a minor dip in the most recent year. This overall trend signals a solid growth trajectory and efficient cost control within the semiconductor solutions segment.
Segment Profit Margin: Infrastructure software
Broadcom Inc.; Infrastructure software; segment profit margin calculation
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).
1 2024 Calculation
Segment profit margin = 100 × Operating income ÷ Net revenue
= 100 × ÷ =
- Operating Income
- The operating income demonstrated a consistent upward trend from 2019 to 2023, increasing from $3,781 million to $5,639 million. In 2024, there is a notable spike to $13,977 million, indicating a significant jump in profitability within the segment.
- Net Revenue
- Net revenue showed steady growth over the analyzed periods, rising from $5,156 million in 2019 to $7,637 million in 2023. A substantial increase is observed in 2024, with revenue more than doubling to $21,478 million, which aligns with the sharp increase in operating income.
- Segment Profit Margin
- The segment profit margin fluctuated over the years, starting at 73.33% in 2019, dropping to 65.9% in 2020, then gradually increasing and peaking at 73.84% in 2023. However, in 2024, the margin declined to 65.08%, despite the significant growth in revenue and operating income. This suggests increased cost pressures or investments impacting profitability ratios.
Net revenue
Broadcom Inc., net revenue by reportable segment
US$ in millions
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor solutions | ||||||
| Infrastructure software | ||||||
| Total |
Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).
The annual data on net revenue across two primary segments exhibits notable trends and shifts over the periods analyzed.
- Semiconductor Solutions
- This segment shows a consistent upward trajectory. Beginning at $17,441 million, revenue slightly decreased in the following year to $17,267 million but subsequently increased each year, reaching $30,096 million by the final reported period. The growth from the lowest point to the highest reflects a robust expansion, signaling strong demand and possibly effective market positioning or product developments in this area.
- Infrastructure Software
- This segment demonstrates a different pattern, with a moderate and steady rise from $5,156 million to $7,637 million over the first five reported years. However, in the final year, there is a pronounced and substantial increase to $21,478 million. This sharp rise indicates either a major business event such as an acquisition, significant product success, or a strategic shift toward software offerings, dramatically impacting revenue contribution from this segment.
- Total Net Revenue
- The combined revenue from both segments reflects the trends observed individually. There is steady overall growth from $22,597 million to $35,819 million over the first five years, followed by a marked increase to $51,574 million in the last year. This substantial final-period increase is primarily driven by the extraordinary growth in the Infrastructure Software segment, indicating a potentially transformative development within the company’s revenue structure.
In summary, while the Semiconductor Solutions segment maintained consistent growth, the Infrastructure Software segment experienced a significant inflection point toward the end of the period analyzed. The total net revenue growth suggests increasing diversification and an expanded contribution from software-related businesses, which may be critical to the company's future financial performance and strategic planning.
Operating income
Broadcom Inc., operating income by reportable segment
US$ in millions
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor solutions | ||||||
| Infrastructure software | ||||||
| Unallocated expenses | ||||||
| Total |
Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).
The annual operating income data exhibits distinct trends across the reportable segments over the analyzed periods.
- Semiconductor Solutions
- This segment shows a consistent upward trend in operating income from 2019 through 2024. Starting at $8,148 million in 2019, income increased steadily each year, peaking at $16,759 million by 2024. This growth reflects a more than doubling of operating income over the six-year span, indicating a strong and stable expansion in this segment.
- Infrastructure Software
- Operating income for infrastructure software also displays growth from 2019 through 2023, rising from $3,781 million to $5,639 million. However, in 2024, there is a significant and sharp increase to $13,977 million, more than doubling the prior year's figure. This marked jump represents a notable shift in segment performance or possibly a reclassification or acquisition impact during that period.
- Unallocated Expenses
- These expenses, reported as negative values, decrease in magnitude over the initial years, improving from -$8,485 million in 2019 to -$5,918 million in 2023. In 2024, however, there is a substantial increase in unallocated expenses to -$17,273 million. This sudden increase in unallocated expenses offsets some of the gains observed in other segments for that year, suggesting increased overhead, corporate costs, or other non-segment-specific expenses.
- Total Operating Income
- The total operating income reflects the net impact of the segments and unallocated expenses. From 2019 to 2023, total operating income shows robust growth from $3,444 million to $16,207 million, mirroring the growth in the semiconductor and infrastructure software segments. Nevertheless, in 2024, total operating income declines to $13,463 million, despite the individual segment gains. This decline appears largely driven by the sharp rise in unallocated expenses.
Overall, while the core business segments demonstrate sustained and strong operating income growth, the significant increase in unallocated expenses in the latest period results in a reduction of total operating income compared to the previous year. The data suggests that the company's profitability growth is currently facing challenges related to elevated corporate-level expenses or other non-operational costs.