The company is predicting full-year revenues of $50 billion
Broadcom has reported that its Q1 revenues were close to $12 billion (€10.97 billion) for the period up to 4 February. This is an increase on 34% on the same period last year.
VMWare was a major contributor to this bump, but Broadcom’s own sales grew by 11%. Broadcom acquired VMWare last November for $61 billion after a protracted approvals process involving many regulators.
Broadcom’s CEO Hock Tan, said, “Our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation”. He put Broadcom’s rising silicon sales down to “strong demand for our networking products in AI datacentres, as well as custom AI accelerators from hyperscalers.”
Stellar software
On the earnings call with analysts, Harsh Kumar from Piper Sandler asked Tan to explain why he was predicting software sales to almost double in Q2. Tan replied, “With the acquisition of VMware we’re very focused on selling, upselling and helping customers, not just buy but deploy this private cloud what we call virtual private cloud solution or platform on their on-prem data centres.”
He pointed out that as the deal only closed in November, Q1 earnings had only just over 10 weeks’ contribution from VMware, adding, “but we have been very prepared to launch and focus on this push initiative on private cloud, VCF [Virtual Cloud Foundation]. And the results has been very much what we expect it to be, which is very, very successful.
Positive outlook
Broadcom says it is on course to generate full revenues of $50 billion this tax year with an adjusted EBITDA of $30 billion.
Broadcom’s share price more than 28% this calendar year, although the acquisition of VMWare by Broadcom has received criticism from many sides. As recently as January, The Wall Street Journal fan an article that included fears about the damage Broadcom could do as a renowned cost cutter with a focus on short-term profits. Or as Forbes put it, strive to dominate the on-prem cloud sector rather than invest in VMware’s tech.