Broadcom (AVGO) Financial History

•unsubstantiated news reports or other inaccurate publicity regarding us or our business, or that of our significant customers;

•anticipated or actual demand for products used in AI-related solutions, including ASICs such as custom AI accelerators or XPUs;

Risks Related to Owning Our Common Stock

We receive debt ratings from the major credit rating agencies in the U.S., and any downgrade in our credit rating or the ratings of our indebtedness, or adverse conditions in the debt capital markets, could materially…

Our global income is subject to tax in the U.S.

In addition, various jurisdictions have adopted, or are developing, complex and lengthy corporate responsibility-related laws or regulations that may be difficult to comply with and will increase our direct compliance…

Corporate responsibility matters may adversely affect our relationships with customers and investors and increase compliance costs.

From time to time, we may be subject to warranty or product liability claims that may lead to significant expense.

We utilize a significant amount of IP in our business.

•U.S.

•the timing of launches by our customers of new products in which our products are included and changes in end-user demand for our customers’ products or services;

Some of our competitors have longer operating histories, greater name recognition or presence in key markets, a larger installed customer base, larger technical staff, a more comprehensive IP portfolio or better paten…

As part of the natural lifecycle of our software solutions and services, customers are informed when the software or services will be reaching their end of life or end of availability and will no longer be supported o…

Failure to effectively manage our software solutions and services lifecycles could harm our business.

Our contracts signed with the U.S.

Many of our existing software customers have multi-year enterprise software license agreements, some of which involve substantial aggregate fee amounts.

Further, our software solutions interact with a variety of software and hardware developed by third parties, as well as cloud providers.

Many of our software solutions and services are based on data center virtualization and related hybrid-cloud technologies used to manage distributed computing architectures, which form the foundation for private and h…

The growth of our software business depends on demand for our data center virtualization portfolio, as well as customer acceptance of our software, services and business strategy.

A successful cyber-attack, or false reports thereof, involving our software could cause customers and potential customers to believe our software is ineffective or unreliable and result in, among other things, the los…

Although we continually seek to improve our countermeasures to prevent such incidents, we may be unable to anticipate every scenario and, as a result, certain cyber threats or vulnerabilities have in the past been and…

In the past, elements of our proprietary source code have been exposed in an unauthorized manner.

Certain aspects of our software portfolio are intended to manage and secure IT infrastructures and environments, and as a result, we expect these products to be ongoing targets of cyber-attacks.

A prolonged disruption at or shut-down of one or more of our manufacturing or other facilities or those of our CMs, suppliers or customers, including data centers, due to natural- or man-made disasters or other events…

A prolonged disruption of our or our customers’ or suppliers’ facilities or other significant operations could have a material adverse effect on our business, financial condition and results of operations.

increase our overall compliance burden.

U.S.

In addition, certain aspects of effective cybersecurity are dependent upon our employees, contractors and other trusted partners reliably safeguarding secrets (e.g., application credentials) and adhering to our securi…

Cyber-attacks are increasing in number and sophistication, are well-financed, in some cases supported by state actors, and are designed to not only attack, but also to evade detection.

and fulfillment, HR, benefit plan administration, IT network management, and electronic communication and collaboration services.

Our gross margin is dependent on a number of factors, including our product mix, adoption of a new business model, price erosion, level of capacity utilization and commodity prices.

Our manufacturing processes and those of our CMs rely on many materials, including silicon, gallium arsenide and indium phosphide (“InP”) wafers, copper lead frames, precious and rare earth metals, mold compound, cera…

We make significant decisions, including determining the levels of business that we will seek and accept, evolving our business strategy or adopting new business models such as the sale or leasing of AI racks or syste…

During fiscal year 2025, approximately 95% of the wafers manufactured by our CMs were produced by TSMC.

We depend on our CMs to allocate sufficient manufacturing capacity and critical components to meet our needs, to produce products of acceptable quality at acceptable yields and prices, and to deliver those products to…

Dependence on contract manufacturing and suppliers of critical components within our supply chain may adversely affect our ability to bring products to market, damage our reputation and adversely affect our results of…

The industries in which we compete are characterized by rapid technological change, new technological developments such as AI and cloud computing, changes in customer requirements, frequent new product introductions a…

A slow or the unsuccessful return on our investments in research and development, expansion of our business strategy or adoption of new business models could materially adversely affect our business, financial conditi…

When our semiconductor customers agree to purchase specific quantities of products or source an agreed portion of their product needs from us, such arrangements often include pricing schedules or methodologies that ap…

We have historically depended on a small number of end customers, OEMs, their respective contract manufacturers (“CMs”) and certain distributors for a majority of our business and revenue.

A significant reduction in demand from certain customers or loss of one or more of our significant customers may adversely affect our business.

A significant legal risk associated with conducting business internationally is compliance with the various and differing laws and regulations of the many countries in which we do business.

•potential inability to localize our software;

•restrictive or retaliatory governmental actions, such as restrictions on the transfer or repatriation of funds and foreign investments, data privacy regulations, sustainability-related regulations, trade protection m…

Our products and operations are also subject to regulation by U.S.

regulations, orders, tariffs, federal policies and other governmental actions are complex, continue to evolve and change frequently with limited notice and generally become more stringent over time.

Our business is subject to various domestic and international laws and other legal requirements, including antitrust and import/export regulations, such as the U.S.

A general weakening of the economy globally or in a particular region or industry, uncertainty and volatility in financial markets, efforts of governments to stimulate or stabilize the economy or to achieve specific p…

•Corporate responsibility matters may adversely affect our relationships with customers and investors and increase compliance costs.

•Failure to effectively manage our software solutions and services lifecycles could harm our business.

•The growth of our software business depends on demand for our data center virtualization portfolio, as well as customer acceptance of our software, services and business strategy.

•Failure of our software portfolio to manage and secure IT infrastructures and environments and our use of open source software in certain software and services could have a material adverse effect on our business.

•A prolonged disruption of our or our customers’ or suppliers’ facilities or other significant operations could have a material adverse effect on us.

•Cybersecurity threats or other security breaches, or any other impairment of the confidentiality, integrity or availability of our information technology (“IT”) systems, or those of one or more of our corporate infra…

•Dependence on a limited number of contract manufacturers and suppliers of critical materials and components within our supply chain, and potential failure to adjust such manufacturing and supply chain to meet custome…

•A slow or the unsuccessful return on our investments in research and development, expansion of our business strategy or adoption of new business models could adversely affect us.

•A significant reduction in demand or loss of one or more of our significant customers may adversely affect us.

•exposing us to interest rate risk as our 2023 Term Loans bear floating interest rates;

As of November 3, 2024, the aggregate indebtedness was $69,847 million.

As a result of the VMware Merger, we are subject to tax audits in various jurisdictions for the Dell Technologies, Inc.

In addition, an increasing number of OEMs are seeking to source products that do not contain conflict minerals.

We utilize a significant amount of IP in our business.

Our gross margin is highly dependent on product mix, which is susceptible to seasonal and other fluctuations in our markets.

The industries in which we operate are highly competitive and characterized by rapid technological changes, evolving industry standards, changes in customer requirements, often aggressive pricing practices and, in som…

new products.

Failure to adjust our manufacturing and supply chain to accurately meet customer demand could adversely affect our results of operations.

instances, could significantly curtail our research and development efforts in a particular product area or target market, any of which could materially and adversely affect our business.

Winning a product design does not guarantee sales to a customer.

Winning business in the semiconductor solutions industry is subject to a lengthy process that often requires us to incur significant expense, from which we may ultimately generate no revenue.

The semiconductor industry is highly cyclical and is characterized by rapid price erosion, wide fluctuations in product supply and demand, constant and rapid technological change, evolving technical standards, evolvin…

We operate in the highly cyclical semiconductor industry.

may be unable to anticipate these techniques or to implement adequate preventative measures.

Although we expect significant benefits to result from the VMware Merger, if we do not successfully manage the challenges inherent in integrating an acquired business, we may not realize these benefits, and our revenu…

As part of our integration of the VMware business, we are focusing on VMware’s core business of creating private cloud environments on-premises among large enterprises globally and divesting non-core assets.

Failure to realize the benefits expected from the VMware Merger could adversely affect our business and the value of our common stock.

•Our use of open source software in certain products and services could materially adversely affect our business, financial condition and results of operations.

•We purchase a significant amount of the materials used in our products from a limited number of suppliers.

•Winning business in the semiconductor solutions industry is subject to a lengthy process that often requires us to incur significant expense, from which we may ultimately generate no revenue.

•We operate in the highly cyclical semiconductor industry.

•Failure to realize the benefits expected from the VMware Merger could adversely affect our business and the value of our common stock.

The amount, timing and execution of our stock repurchase program may fluctuate based on our priorities for the use of cash for other purposes.

The amount and frequency of our stock repurchases may fluctuate.

From time to time, we require significant expenditures to support our growth and respond to business challenges.

Various adopted or proposed regulations and customer requirements could also adversely affect the sourcing, availability and pricing of minerals and materials used in or for the manufacture of semiconductor products.

Various jurisdictions, investors, customers and other stakeholders continue to focus on corporate responsibility matters.

•market volatility impacting our ability or the cost to fund acquisitions or investments;

•the inability of our customers to pay for our products or services due to their constrained resources or capital;

•the timing and extent of delivery of and payment for our semiconductor and semiconductor-based solutions, including AI racks or systems based on our XPUs;

•the timing and extent to which we enter into and utilize factoring arrangements;

•fluctuations in our financial metrics to execute our current or new business strategies or models;

•the development and availability of AI data centers that could impact our ability to ship our products;

The industries in which we operate are highly competitive and characterized by rapid technological changes, evolving industry standards, changes in customer requirements, often aggressive pricing practices and, in som…

commercial contracts and/or may be complex, as well as audits and investigations.

Failure of our software portfolio to manage and secure IT infrastructures and environments could have a material adverse effect on our business.

Our business depends on a wide variety of complex IT systems and services, including cloud-based and other critical corporate services relating to, among other things, product research and development, financial repor…

Our gross margin is highly dependent on our product mix, as well as the timing and amount of our revenue from our semiconductor solutions, software licensing and other products or solutions.

The timing of design wins is unpredictable and implementing production for a major design win or multiple design wins at the same time, such as our design wins for our custom AI accelerators or XPUs, network switches…

Winning a product design does not guarantee sales to a customer.

Winning business in the semiconductor solutions industry is an unpredictable process that is often lengthy in time and requires us to incur significant expenses, evolve our business strategy or adopt a new business mo…

adopted, if new competitive technologies that we do not support become widely accepted, or if we are unable to successfully execute on new business strategies or models such as the sale or leasing of AI racks or syste…