NASDAQ$AVGO

Broadcom Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Broadcom's Q3 2020 financial results were announced, with revenue in line with expectations driven by cloud and telecom demand offsetting wireless reset, and record free cash flow achieved.

Broadcom reported Q3 revenue of $5.821 billion, GAAP net income of $688 million, and non-GAAP diluted EPS of $5.40. The company generated $3.073 billion in free cash flow and provided Q4 revenue guidance of $6.4 billion plus or minus $150 million.

  • Revenue of $5,821 million was reported.
  • GAAP net income reached $688 million.
  • GAAP diluted EPS was $1.45, while non-GAAP diluted EPS was $5.40.
  • Free cash flow from operations amounted to $3,073 million.

Headline financials

Total Revenue

$5.82B

Previous: $5.52B+5.5%
EPS (adj)

$0.54

Previous: $0.52+3.8%
Adjusted EBITDA

$3.34B

Previous: $3.06B+9.1%
Capital Expenditures

-$361M

Previous: -$336M-7.4%
Free Cash Flow

$327M

Previous: $379M-13.7%
Net Income

$688M

Previous: $715M-3.8%
Operating Income

$1.01B

Previous: $865M+16.5%
Gross Profit

$3.32B

Previous: $3.03B+9.3%
Cash & Equivalents

$8.86B

Previous: $5.46B+62.2%
Total Assets

$79.3B

Previous: $69.8B+13.7%
Stock-Based Comp

$465M

Previous: $632M-26.4%

Revenue & EPS history

Broadcom · Revenue · Quarterly

$5.82B

Q3 2020+5.5%vs Q3 2019
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Broadcom · $5.82B total across 2 segments · Q3 2020

  • Semiconductor Solutions
    $4.22B-3.6%
  • Infrastructure Software
    $1.6B+40.5%

Forward guidance

Broadcom anticipates Q4 revenue of $6.4 billion plus or minus $150 million and Adjusted EBITDA of $3.744 billion plus or minus $75 million, representing 58.5% of revenue at the midpoint.

Tailwinds

  • Strong anticipated ramp in wireless.
  • Continuing surge in demand for networking from cloud customers.
  • Continuing surge in demand for networking from telecom customers.
  • Fourth quarter revenue guidance of $6.4 billion plus or minus $150 million
  • Fourth quarter Adjusted EBITDA guidance of $3,744 million plus or minus $75 million, or 58.5% of revenue at the midpoint of guidance.

Headwinds

  • Expected softness in enterprise.
  • The COVID-19 pandemic, which has, and will likely continue to, negatively impact the global economy and disrupt normal business activity, and which may have an adverse effect on our results of operations
  • Any loss of our significant customers and fluctuations in the timing and volume of significant customer demand
  • Global economic conditions and concerns
  • International political and economic conditions

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+2.9%

Avg return

Earnings day

+2.2%

Avg return

5 days after

+2.1%

Avg return

30 days after

69%

38 / 55 earnings

Positive

+22.7%

Q4 2024

Best reaction

-19.2%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026-8.1%-14.2%
Q1 2026+6.1%+7.9%-0.9%
Q4 2025-19.2%-19.8%-15.1%
Q3 2025+9.5%+20.7%+10.5%
Q2 2025+0.0%+1.0%+4.9%
Q1 2025+8.6%+8.2%-18.5%
Q4 2024+22.7%+31.1%+22.4%
Q3 2024-11.1%-3.8%+14.6%
Q2 2024+14.9%+25.2%+16.4%
Q1 2024+4.2%-4.3%-0.8%
Q4 2023+4.5%+18.7%+16.1%
Q3 2023-2.2%-2.3%-6.9%
Q2 2023+0.5%-2.2%+7.4%
Q1 2023+6.6%+5.3%+8.1%
Q4 2022+5.1%+10.1%+13.5%
Q3 2022+0.2%-0.2%-11.0%
Q2 2022+9.7%+9.1%-4.2%
Q1 2022+1.7%-1.7%+7.0%
Q4 2021+7.3%+4.5%+5.2%
Q3 2021+0.9%+0.7%-1.2%
Q2 2021+0.3%-2.2%-1.2%
Q1 2021-2.8%-4.2%+2.8%
Q4 2020-2.5%+0.4%+7.1%
Q3 2020-3.2%-6.5%-4.8%
Q2 2020+2.5%+1.9%+1.9%
Q1 2020-4.8%-18.9%+3.4%
Q4 2019-1.3%+1.3%-6.4%
Q3 2019-2.6%-3.1%-5.7%
Q2 2019-4.9%-0.6%+2.0%
Q1 2019+7.0%+10.4%+16.9%
Q4 2018-1.5%+6.4%+0.5%
Q3 2018+5.1%+5.0%+10.3%
Q2 2018-2.1%-0.8%-6.0%
Q1 2018-2.2%-7.0%-5.2%
Q4 2017+0.8%-0.6%+3.8%
Q3 2017-4.4%-5.9%-6.9%
Q2 2017+6.3%+6.0%-2.7%
Q1 2017+3.0%+3.3%+3.8%
Q4 2016+6.2%+6.5%+4.8%
Q3 2016-1.9%-3.0%-2.2%
Q2 2016+5.0%+6.5%-0.4%
Q1 2016+6.6%
Q4 2015+9.0%
Q3 2015+16.4%
Q2 2015+4.7%
Q1 2015+14.2%
Q4 2014+11.8%
Q3 2014+7.7%
Q2 2014+0.9%
Q1 2014+3.9%
Q4 2013+6.2%
Q3 2013+2.1%
Q2 2013+9.9%
Q1 2013+2.1%
Q4 2012+2.1%

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