Broadcom Inc. Common Stock

Data and privacy · Data protection and privacy laws

We collect, use, store, or otherwise process personal information, which subjects us to privacy and data security laws and contractual commitments. The cost of complying with and implementing these privacy-related and data governance measures could be significant.

Tax and financial reporting · Tax compliance and changes in tax law

Changes in tax legislation or policies could materially impact our financial position and results of operations. After the enactment of the U.S. Tax Cuts and Jobs Act, most of our income is taxable in the U.S. with a significant portion taxable under the Global Intangible Low-Taxed Income regime.

Legal and litigation · Product liability and warranty claims

We are subject to warranty claims, product recalls and product liability. Our customer contracts typically contain warranty and indemnification provisions, and in certain cases may also contain liquidated damages provisions, relating to product quality issues.

Core operations · Quality control and product defects

Highly complex products, such as those we offer, may contain defects and bugs when they are first introduced. If any of our products contain defects or bugs, or have reliability, quality or compatibility problems, we may not be able to successfully design workarounds.

Core operations · Capacity utilization and efficiency

We depend on our CMs to allocate sufficient manufacturing capacity to meet our needs, to produce products of acceptable quality at acceptable yields, and to deliver those products to us on a timely basis. TSMC, one of our CMs, manufactured approximately 90% of the wafers manufactured by our CMs during fiscal year 2023.

Core operations · Operational disruption and business continuity

A prolonged disruption of our manufacturing facilities, research and development facilities, warehouses or other significant operations, or those of our suppliers, could have a material adverse effect on our business, financial condition and results of operations.

Supply chain and procurement · Supplier operation and dependance

We purchase a significant amount of the materials used in our products from a limited number of suppliers. During fiscal year 2023, we purchased approximately two-thirds of our manufacturing materials from five materials providers, some of which are single source suppliers.

Project and contract management · Large contract concentration

Failure to enter into software license agreements on a satisfactory basis could adversely affect us. Many of our existing customers have multi-year enterprise software license agreements, some of which involve substantial aggregate fee amounts.

International and currency · Foreign exchange and currency exposure

We operate global businesses and our consolidated financial results are reported in U.S. dollars. However, some of the revenue and expenses of our foreign subsidiaries are denominated in local currencies. Fluctuations in foreign exchange rates could result in substantial changes in reported revenues and operating results.

International and currency · Transfer pricing and taxation

We have adopted transfer pricing policies that call for the provision of services, the sale of products, the arrangement of financing and the grant of licenses from one affiliate to another at prices that we believe are negotiated on an arm's length basis. Transfer pricing challenges by tax authorities could result in adjustments for prior or future years.

Capital structure and performance · Credit rating and cost of capital

We receive debt ratings from the major credit rating agencies in the U.S. While we are focused on maintaining investment grade ratings from these agencies, we may be unable to do so. Any downgrade in our credit rating could adversely affect the trading price of our debt securities.

Credit and liquidity · Debt service and covenant compliance

The instruments governing our indebtedness contain certain covenants imposing restrictions on our business. These restrictions may affect our ability to operate our business, to plan for, or react to, changes in the market conditions or our capital needs.

Capital structure and performance · Dividend policy and capital allocation

There can be no assurance that we will continue to declare cash dividends. Our Board of Directors has adopted a dividend policy pursuant to which we currently pay a cash dividend on our common stock on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time.

Market position and competition · Competitive pressure and market share loss

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. Some of our competitors have longer operating histories, greater name recognition, a larger installed customer base, larger technical staffs.

Strategic execution · Merger acquisition and divestiture risks

Although we expect significant benefits to result from the VMware Merger, there can be no assurance that we will actually realize these benefits. Achieving these benefits will depend, in part, on our ability to integrate VMware's business successfully and efficiently.

Innovation and product development · Intellectual property protection and infringement

We utilize a significant amount of IP in our business. If we are unable or fail to protect our IP, our business could be adversely affected. Third parties assert against us and our customers and distributors their IP rights to technologies that are important to our business.

Innovation and product development · Product development and randd investment risks

We make substantial investments in research and development and unsuccessful investments could materially adversely affect our business, financial condition and results of operations. If we fail to develop new and enhanced products and technologies, if we focus on technologies that do not become widely adopted, or if new competitive technologies that we do not support become widely accepted, demand for our products may be reduced.

Market position and competition · Competitive pressure and market share loss

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. Some of our competitors have longer operating histories, greater name recognition, a larger installed customer base, larger technical staffs, more established relationships with vendors or suppliers, or greater manufacturing, distribution, financial, research and development, technical and marketing resources than us.

Digital transformation and innovation · Technology obsolescence and evolution

If our software products do not remain compatible with ever-changing operating environments, platforms, or third-party products, demand for our products and services could decrease. We must continually address the challenges of dynamic and accelerating market trends.

Economic and market conditions · Economic recession and downturns

A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity.