AVGO - Earnings call transcript Q3 2019

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Operator

Welcome to Broadcom Incorporated Third Quarter Fiscal Year 2019 Financial Results Conference Call.

At this time, for opening remarks and introductions, I would like to turn the call over to Beatrice Russotto, Director of Investor Relations of Broadcom Incorporated. Please go ahead, ma'am.

Beatrice Russotto

Thank you, operator, and good afternoon everyone.

Joining me today are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom.

today, our a third financial fiscal XXXX. closed financial release quarter market year describing tables performance the Broadcom press distributed and of After for the

section the receive website playback Broadcom's broadcom.com. for our via will a This of being It you If recording section is at a also call one in live did the Investors week. broadcom.com. not may you the at be telephone obtain webcast information conference will from of available Investors copy, website archived and be

During the year and year details third prepared regarding comments this fiscal call, environment. fiscal and XXXX, section of Tom Hock of business XXXX quarter for the providing will guidance commentary results, be our

refer with materially press recent forward-looking could to and on our We factors SEC specific results the today to our differ from of will take questions Please the release filings after information our actual that end this risk the on for cause call. the made comments. our statements prepared

In non-GAAP GAAP reporting, GAAP certain made call refer basis. is a release. reports addition attached today's to on included our press will A between measures non-GAAP today's to and to Comments US the financial financial non-GAAP tables reconciliation results. during measures in primarily Broadcom

call now I'll the over turn Hock. to

Hock Tan

Bea. you, for afternoon you Good today. Thank everyone us joining thank and

year-on-year year third transcoding AI, for shipments video X% consolidated to up custom strong. platforms, as a expected, revenue and strong and of the datacenters Semiconductor ago. billion, perform routing were to well, in down we solutions driven our and merchant cloud from net continued quarter, demand and switching by silicon increase solution X% at $X.X a Looking revenue was quarter-over-quarter. X% $X.X was Networking billion, also SmartNIC,

Revenue These expectations, above CA seeing for $X.X the broadband. enterprise were benefiting seasonal of in tailwinds infrastructure of is demand Wireless partially content. software. increased uptick running and software our and business is our sustained storage billion. typical by and offset The initial for demand was mainframe positive effects weaker of a distributed from course beginning

as these OEM paused has demand in our switching conditions. chain SAN compressed supply partner However, uncertain

address Europe. Enterprise customer Now, continue be the demand inventory Western remain demand North and SAN me while let down environment mainframe another down. and likely being stable, switching are the and particularly continues America to in will OEM quarter, software current in to worked outlook. channels

billion as fiscal it relates not to we conflict we seen semiconductor expect trade XXXX, business, software. although in deterioration globally. to $XX.X $X Accordingly, our semiconductors, US-China $XX.X in China from revenue the have billion and including As well to continue further of both specific continues, infrastructure from as over achieve to billion solutions

Looking stable solid. to very renewals Infrastructure customer base among to year. as is continue software be core our next

visibility continues to limited on However, the side. be semiconductor very

will a that an we we business managing expectation very So, for the with growth to are in uncertain low foreseeable macro future. environment operate continue the

of business remains semiconductor fundamentals the Fortunately, our strong.

from the As in you to in know, core continue things. and and connect insatiable to increasing in distributed world, need underlying is centers, connectivity to IT data office trend to systems, here in benefit memory about central networks, from business edge client CPUs our bandwidth to we devices the for all

accelerating the performance, from cloud second Law interface and CPU. and X constrained takes Legacy have as X In workloads network computing storage Gen PCI to computing. within terabit now the controllers, next are non-optimized XXG intelligent, offload Moore's second and cycles to really cloud the Express just the with XX.X SmartNICs what three switching of limits Gen of generation task replaces we today becoming they Rome say linking on at per today. NICs from the and likes CPU ago call data terabits X.X network pipes as to gone centers, Tomahawk computing, per CPU years GPU expense. In

storage. direct G in gigabit out Even attach flash that’s storage to of XXX Generation And computer area optics next hypercloud to running -- in customers gig as second at moving channel bandwidth XX Generation in XX per progresses arrays its second in X benefit X the gigabit truly are XXX fiber today. replacing channels today all full network, SAN, to Tomahawk with G our per storage fibre copper, connect at XXX year reap centers data to scale enterprise X

few X.X compete over telco Jericho X the routing as networks. move years against today has to represented operators to X.X gigabit next few terabits per by with XG today. years as terabit DOCSIS Call a from X.X router In at networks. to Turning gone need to X X.X at cable cable will DOCSIS modem second our ago gigabit broadband, XX

at we with that gigabit per second in X.X subscriber upshift XXX today inadequate, to with need even seem and we're it mere line, into data launch DSL, GPON so is will may X at So are second digital of you flow xPON. per with mass megabit we gigabit, to a today, poised markets which over XXG G.Fast,

the connectivity course, most has Of too wireless headline. seen

gateways, XXX.XXax, and X, has are we at and in from called new XXX.XXac the cusp otherwise to next generation smartphones. access XG moved radio migrating access the the XG cellular Wi-Fi enterprise in And from of to protocol networks OFDMA communication enable

sustain fundamental us the continue long over to business trends these and confidence our enabling marketplace. in gives semiconductor the that This we grow term. will are We

on, the talk Moving let's CA. first about software,

for we core mentioned, world, grow year fiscal enterprises the of customers infrastructure behind in the through from our is anticipated focus expect fiscal for of of the third rate model tail XX% XXX renewal long over XXXX. Based in is on XXXX, on As our software. the experience quarter this XX%. core to be fiscal group to largest users our for biggest over up customer XXXX the CA business Meanwhile, attrition we to that's business,

exceed business. we in not and non-core targets that core if of two when plus over months, CA we revenue profitability But that from to base excess last trends acquired We attrition to CA growth the year we're the contract, out last customer the but of over the based another that turn you renewal we customer have laid years long-term for nine on the can of these meet confident business

activity operating levels. CA integration to Our target largely expenses approaching support is complete with

Finally, planned let efforts Symantec one build few acquisition of market leading a software the me -- to in about to our Broadcom's minutes talk world's -- business the billion Acquiring take next furthers our infrastructure announced platforms. Broadcom's our adds allow Enterprise more to August. in Symantec addressable to $XXX TAM. strategy, logical It is step technology it infrastructure cybersecurity the and of

to core and core in will $X be to leading of expect Brocade customers wallet that XX There CA we more meaningful also this this solutions portfolio cost cyber enable billion $X this a security among billion in opportunities solutions, share gain with are the of run than will rate within transaction cross-selling gain will excess to We mission-critical a we our of expect franchises add of we of and larger security Broadcom believe sustainable deeply and months embedded customers. in and post with this close. revenue achieve run synergies rate acquisition

well of HSR returns. our opportunity course The us remain conditions. to integration process underway, you this to Japan, European cleared antitrust is transaction as and the objective closing of we financial ongoing Union track -- gives saw, cash first approvals cash to subject as We likely double-digit last and And the on achieve week. planning XXXX close the in as well customary quarter transaction fiscal the in on of importantly,

in broad even today revenue to challenging this a and flows portfolio sum, franchises environment. sustain To has and increasingly increase leadership, cash of technology diversified allowed us market

let to me this Tom. over Now turn call

Thomas Krause

quarter was our on quarter. increase Thank Solutions X% was you, Hock. from This third revenue this was $X.X the comparable billion Consolidated of billion, down XX% for $X.X represented The year X% segment and total year-on-year ago. basis. net a revenue a revenue a Semiconductor

XX% revenue. was Our flow and Infrastructure grew of represented cash of and XX% billion Software revenue X.X% segment $X.XX year-over-year. billion revenue Free or was $X.X

me depreciation. and Let operations Operating Adjusted billion driven of $X.XX income from excludes net continuing This performance. detail our revenue. XX.X% financial further of of $XXX $X.XX XX.X% billion reductions was and CA-related by EBITDA additional million from $X.XX expenses was provide represented activities. Operating figure billion, revenue. now were represented net on

somewhat terms integration an increase integration would from also increase of quarter. million inventory receivables restructuring million note capital, I made In quarter. of $XXX that the we by and prior working expenses, increase was million the of $XXX $XX and our million, $XXX and $XX million of restructuring of payables and cash payments offset accrued of in

$XXX capital Finally, million we spent expenditures. on

and the shares the stockholders, billion of XXX and billion consisting returned the in $XXX for billion of and fully of X.X shares debt, quarter, $X.X million We XXX the with of repurchase ended $XX.X third million the billion total cash shares. million for AVGO quarter million elimination dividends form diluted In outstanding of $X $X.X cash, to quarter. we had

fiscal our guidance. XXXX year Turning to

$XX.X As Solutions maintaining Hock approximately licensing revenue our full-year $X are billion to including IP discussed, of we expected generate from Infrastructure is billion, of a Software. from Semiconductor and billion amount material not revenue. guidance approximately $XX.X

be expected is a to be Net interest other margins and XX%. be be $XXX million. approximately forecasted to expected approximately are expected On be approximately to rate The to expected billion. to approximately CapEx XX.X%. operating basis, Depreciation $X.X non-GAAP is expense approximately tax million. is is $XXX

integration billion, cash $X.X account free charges result, take a $X and does be approximately restructuring is approximately which to expected into As billion. flow projected of

has been finally, third the of expected this billion, generated billion and be average from includes excludes of $XXX quarter, $X.X eliminations. of approximately flow buybacks end XXX restructuring be to QX the to of and compensation share we million as expect charges. and any diluted cash share impact $X.X and count for integration free Note, expense is Stock-based million and

capital Now on allocation. the

you an amount of business of of healthy mainly has technology franchises. cash that model free very flow and diverse infrastructure generates many a across As know, set a increasingly stable Broadcom

few years, policy. to and worked allocation we capital a transparent the Over balanced last more create have

In committed half free each that in cash and have of form essence, flow to cash stockholder decide free flow to best the reinvest we we First AVGO year dividends. of allows XX% shareholders foremost, how of the cash the our to this generate. return

above and in distributed. returns our allows dividend to think that Broadcom remainder M&A reinvest a In well we put return, we reinvest the excess of drive cash strategy the to trust yields. that free cash these us after have effect optimally unique flow flows consistently have, is free the that to the cash as we management will flow struggle Fundamentally,

Over the that to CA us primarily and we Symantec and Software a execute will to come. many few with road on past strategy to around starting have for with Infrastructure continue then Brocade, years now years, map allow developed the

we forward, for make to acquisitions that to use these is down debt and/or our plan going excess pay to So borrowed this cash acquisitions.

an a we Now of We CA at back bought stock stock. over the lot depressed the buy years, following have last to had announcement. prices opportunity

the we dilution to limit end to at from the want average eliminate have $XX.X grant invested We this we year. over through last one-time per earlier million of In shares months of or fiscal a also total all, price approximately share 'XX. the multi-year $XXX did billion our QX an XX.X of the XX repurchase

being lot increase our multiples leverage in So a made we M&A our think of of meaningful and substantially. strategy pursuing decision parallel sense. has capital and in caused leverage dividends summary, pretty buybacks allocation this That maintaining to core while said, us

Especially environment of managing creates seeing more the risks. focused sheet weak very the we're in of light conscious a today, on are and levered risks are we those balance that macro

As the balance following the transition deleveraging to to a started have announcement. Symantec our recent we sheet focus acquisition result,

remarks. prepared my concludes That

to of portion we're for Operator, today's many yourselves up each, as call possible. one analysts Q&A the questions. please to call, as going the question please limit accommodate open During so

Operator

[Operator line Harlan Instructions] JPMorgan. Our of Sur the first question comes from of

is open. line Your

Harlan Sur

the and adoption, with pretty for etcetera. bottoming like off-load networking and half Tomahawk in design for win compute thanks strong business on are X revenue taking Jericho acceleration cloud gig here Hock, networking know question. to year. continue Good pipeline second you XXX of demand Google, seeing and ASICs is my guys hear that afternoon we XXX strong and the see Good to the your security X, gig the Microsoft, also Facebook,

and your your businesses. the that in and year networking, pipeline, Question off-load muted as had design tracking the next earnings to you business win networking full growth growth despite next into is, datacenter you are looking double-digits overall still datacenter do call, looking into in growth compute year the expect Last given you outlook for continued compute well? year, anticipated off-load double-digits

Hock Tan

given quite early we a and on hasn't that the as that fairly markets guess, those this which into in continuing ship [ph] point. has and at silicon, Yes, answer changed bottom line of lot do been materially at well much computing shared our -- to outlook, a is, we improve see on off-load various not otherwise changed ramp networking I difficult as you uncertain fact of with hypercloud all. has gains and buffer deliveries

Harlan Sur

Thank you.

Operator

you. Thank

of question next Vivek from America. Our of Bank comes Arya

is line Your open.

Vivek Arya

mentioning my number guidance little taking just you the per out. year question. next of next year positive then know for I the Thanks wanted Hock, to I you're you and flesh something product se, is so, side, giving you but the environment. just you're saying on on business sound or but outlined a started that cycles cautious about bottoming, bit not

you. So, you And in I us that, was of Huawei next then how of were about some if that part pluses indication kind the curious could of both minuses. you QX near-term year? next also Thank figures how conceptually thinking and as and year, give into

Hock Tan

And and on are change if uncertain you make what seeing we you're me is environment an extended is of that implying next is twists XXXX. my Well, going uncertainty. year, affair conditions, lots question and US-China turns probably see -- is things with that now. you we into very assuming a to actually from correct you trade the assumption which we're in dispute many not which ways, -- And turning answered for

-- But -- broadly, you over least give it saying up seeing and sit clear extent right here we’re calendar we we're right as have few up it staying next or rest the we're at relates here months sit side, and and of bottom. North than and we guidance, as some are now semiconductor now But year, much probably you're probably that three now we have we pops fiscal semiconductor the hit a our every XXXX appears of which right, the that seeing at another ahead to here the large solutions we not of -- of we're ramp right more bottom more before, paying least months is, handsets. with as North little three as another kind other the this we see in as less bottom OEM looking in that, what in year, if to have probably hit American we American but we -- customer at appears then seasonality kind

Operator

you. Thank

Our of comes from next John question Suisse. Credit Pitzer

open. is line Your

John Pitzer

relative to should relative but Semi Hock, you Wi-Fi side prior cycle guidance by of to for the business, away on I Yeah, ask build realize from good you're afternoon how RF when Well, -- a we think curious about year too guys. the of thanks that content you're you've me trying your kind on giving -- X. for letting just is specific the question. side, comment this past gaining that years got line, I'm stay to business there this view wireless

results October at pull the tariff for not you staggering Your -- in to they this think January? is seasonal sort also largest up issues their customer that could some be They've were how you us and they of the as in so the any mid-teens So might we would look look want do this long sequentially just and quarter, what's I color got into of build launch helpful. phone if some year. about builds, is how level, that that kind July give

Hock Tan

and be our by in can as Well, have we fully specific which kind are quarter, it's of is -- in very we’ve we of And in more last seasonality in done we previous of kind we'll see October to of and as of go. this quarter, is quarter fiscal -- in years, what customers uptick July provided program, our that. expect in limited we far year, it even beginning the which as asking visibility the we QX, this always wireless, always about see see how to

see respect. But this and as frankly we And we on customers. because in at typical in major of OEM year, departure that’s not this predictable do that things far year-on-year, any outlook, are end see know from see the this the as you depends quite reset our it kind obviously of do of that; we day

better a will areas as opposite the areas what participate while we we happened terms of said where -- in strength the look continuing probably might in mitigate takes see kind probably there and in offload we puts for of you next see in there But data in wireless and we quarter in today. are know, our broadband, much Semiconductor some as that, and and indicated networking, things multiple other we our computing that are it do will wireless, than more having even weaknesses Solutions, In centers, are go way. but of maybe broad and Company storage some just QX and I in have --

given here which fact saying and But in was very are we on we're -- are in are it is our strong and each strong is we not market, well of which we macro seeing same what fundamentally pretty the saying what that those the we diversity broadly, large areas year. they portfolio are we broad in, as and are where average, represented last semiconductor that time as are

the memory be fiscal the this down more that year bottom of fact is recovery. the QX a not we should there back and down And less so thereabouts, possibly a about is probably on what my we're market excluding our what year-on-year view, we broad far the if this on a think we average -- are look which of 'XX were is that’s course. half you the basis at in QX, in market seeing -- fact or that of fiscal as probably year-to-date, in year-on-year what And X% and data taken down

we certainty yet at is, that there question confident is recovery the That's is The We the why clarity any or not pretty are we know or much sharp are visibility around bottom. we corner. made the statement.

Operator

you. Thank

Our Danely next from of question comes Citigroup. Chris

line open. Your is

Chris Danely

Hey, and you for good you be how as business. much? been timing the as that Hock, ASIC the three When six talk and has the thanks all? forecast pushed especially guys. Hey would ASSP Is about this about of think it Is or it ramp, can expected changed has months you thought your out XG at starts? or ago

Hock Tan

we -- that, on We broad in participate honest do ramp XG be a with that's because of know you, question touched not the level, tough handset we And terms thought will a you at XG the think we thought ramps but radio in most the -- probably on of ramp backhaul, networks. at I that at access believe much touched Well, we radio someone the times. access, we at to each perspective. different them

-- time, our different want our parts a So whether of to dependent see you at how or probably different it's year, different that in network, later until the guess side the the our year. see And different backhaul. in it -- ability the that on is -- fact that particular what any next ramp fact -- ramp point of perception to time, countries this operators in ramp early in at big were in of won't up my it's points probably, part front much is also

far of the is more concerned, we it As numbers. where affects our are which as backhaul

Operator

Rasgon next comes you. of And from Research. Thank your question Stacy Bernstein

Your line open. is

Stacy Rasgon

cycles know, environment. talked I guess, can that my But taking an uncertain for for lot a and I fundamentally company Thanks wanted had guys. semi's a of drive. you mid-single you've also still we're digits, specific product target in drivers Hi about, obviously and question. growth to

digit business environment of I the the guess, of fundamental are and specifically that this had may at mid-single least ballpark semi uncertainty. way, to are compare ramping enough some even be are across even I So maybe different what sort different somewhere could year see Broadcom maybe an a you unique next in long-term to about that's maybe the cycles that and you in of put product of kind those your that with guidance trajectories drivers guess, talk year businesses? we keep growing

Hock Tan

our if of this give I the wasn't is I past see necessarily I do on in examples fundamentals the yeah, I impression, that And lines was I ongoing and of future. and examples, using these product the when our went because semiconductor thinking one ongoing business, apologize, trend. Well, our trends the year. wrong This various recent going quantification and driving really are today, we forward

technology, that, networks, in participate which put data there essence, is what But are in I is it evolution do, especially the we cable then and all the or areas increased we technology, thing we do we -- improved in that's is demand all a in and nice metro as I broadband one in is thing constant performance from bandwidth, semiconductor yeah, of routing centers, see core constant this clear, in for if where products see we do connectivity. -- networking the

growth underpins year, XX mid-single mean in spend what that next keeps And even year, three over years applications, of continue technology, and as mean a a but do to years, the about demand depending I two happen for products, happen I they may forecast right. a reported transition, and spend a -- it one five on for some in or may a three mean necessary think they years, don't and digits. don't a years, that's to And make particular our our long-term some for I sustain because semiconductors us

year-on-year grew organically, we business -- in grew semiconductor XX%, our fiscal, 'XX. XX% organically. about XXXX take XX% out 'XX, another over acquisitions, all from In And

be So frankly across to rate of to we not this do broad business expect rate continue that rate at to able where a double-digit represented area well in that high I pretty growth. have

have and from decline 'XX 'XX, I -- so we we unexpected see to do Not achieve over growth year. digits. Thank -- strong but of taken we probably that every high-single annual compounded that single-digit mid but a as you. rate believe And mid a period multiple we will said, I a -- in years, won't from a

Operator

Thanks.

Deutsche comes of question Ross from next Seymore Your Bank.

open. Your is line

Ross Seymore

finishing flow clear, that on that at you more has a times Thanks. Tom, it's one-time for due you cash charges been one the very had capital past, free subjective I little things. generates XX% return Broadcom dividend the to etc. have, the In the campus, but side classic that of policy

investment how as flow. guys So target opposed we with of leverage math to keep of how shares in you future? there, into think about debt then And to the do restructuring fit should aggressively the they what paying it grade target the repurchasing does charges, want more near free where cash you sort down

Thomas Krause

Yeah, I think targets. in have to synergies. have what get the is of the do do side, on deliver make with and we investments cash flow to fact to somewhat formula, create a we benefits typically Ross, to synergy we And is we've acquisitions because those what do which we're we trying the able the to achieve stockholders are year to do the tried

free we we've be what charges So cash and dividend. operations, the from as it purposes what calculating those which of back the obviously was for look, restructuring said, add flow includes what's done, would

in So we get restructuring, we X dividend. by number get back year and add we use will don't to will the specific year, of initiatives the flow have fact also to end like will charges the the we when large want to calculate that the that that integration campus divide of cash operations, This one-time to things out. take we would to we any back the from

end Board that think of about good should and this fairly the proxy of how a So be recommendation we year. at the dividend for the the

it our reason is I provides that, to investment terms a and and core before, grade principle but I grade, about dividend maintaining strategy. to this discussed we've Mark policy many similar times think It's flexibility I talked the the for pursue been continue In us maximum for always important. here, very of internally it is, think to investment

over we event. so had one-time this time, And

that's following back the dividend. talked more results is as we we're so we about on pushed the We forward based bought stock really the pursued bunch think would. the looking so than in far playbook of normally up but going decision, We a the prepared distribution to back the leverage in to the past and the that remarks, of I right economics was which

because of finance the flow often cash a most on for debt those have lot is cash that, that we flow returns down. based our still of and as But think to best and are where pay acquisitions, money M&A we Now and go optimal. part use that strategy we borrow we then that's

share back I the the and increasing cash diversity to focused and maintaining profitability and much company and playbook that size the and going the So investment scale as be business investment traditional we're flows, part more grade think going very of we're going forward. that a an the of grade given to very the we're on and status

Operator

you. Thank

comes question Blayne next Our of Curtis Barclays. from

is line open. Your

Blayne Curtis

down talk Hey margin that, suggest as question. guidance October, you if annual on the guys, so, sure your coming in how down to just Tom for literally you, tick Thanks. thanks for want OP would make just for take a any October? can into about I be why and to drivers to profitability to

Thomas Krause

a to going the of ramping I mix couple reality as we're on. a when be a in the shift and it's got you year. see conservative good honest, the maybe One We've think on wireless bit half the are Yeah, are seasonally things the half And which point, the some of as in then with we second as Hock discussed, rest high fairly top margin switching back the product. on the back high that, as giving SAN of not portfolio. those is margins side

why thought sense to mix we and that's staying to we're stick that there. given made it number the So

Blayne Curtis

Got you. Thanks.

Operator

you. Thank

question comes of next Our Hari from Sachs. Goldman Toshiya

is open. Your line

Toshiya Hari

period have in hyperscale your Thanks of cloud more environment. guys. your hoping peers you talked signs seeing could you're you of bit are little your question. -- on peers a was what into specific about A are the capacity a of hi extended following into for sentiment in half there? But the customer Thank are and I what few you. recovery the pretty guys Company. back very very taking talk about I that of to Yeah, expansion, Hock, have of spending and couple XXXX potentially terms the drivers appreciate much quite thoughts weakness. a

Hock Tan

areas, much it's from two on as programs or improvement in put lot some see We I business. cloud is generation especially obviously just One We in multiple that interesting specific touching new an lately, a in datacenters out which off-load Okay. question. in pretty is spending in ways. benefit custom our And I our they scaling cloud saying expand in out there are routing common AI very guess people it SmartNIC. of what some of their a Well, in of spending. switching,

lumpy. -- but we all So as know starting these be spending spending like bit is see very and days, telco to a that, we cloud

is What and largest we viewpoint use -- in directly other we've an spending see and opportunity users, the here customers, their continues. users of we end are of see users, on core end our who end enterprises, the enterprises or see especially from end our infrastructure half business the the users bunch to of end

same difference. very to then nicely. Their continue strong hasn't which because is continues to we impacted, pretty sell is then these And that that that's to make our issue. they need business, they're their users, digital into OEMs, budget transformation spending to as why continues and business It's systems sell grow see end not who fairly it IT renewals a and components software an infrastructure when decently we

orders, then of partners we in chain, really could is our is this in uncertainty and is given so their chain speak, reduction the that constraining the as and environment a what everybody that, think demand. And given far constraining action reduction in to compressing supply be appears a to all difference gather simply -- as -- I are supply compressing

interesting So we it. it's see as really

obviously the end unabated. things a through outlook sales numbers side, it's And and when a to seeing different software our showing partners slowdown, reflected in users, continue to fairly are we reflected it constrain, the on large here. is selling direct comes also the But to we to guys. in are same giving it perspective, That components we're are you enterprises that

Operator

Thank you.

Our next question Hettenbach comes from Morgan of Stanley. Craig

line is Your open.

Craig Hettenbach

that in you sales Yes, of thank of the Hock, this software license talk you. CA way? Can around for there portfolio what some you business and kind in to it could efforts the agreements, just gears what efforts years mean you specifically couple try the next the of have switching as over place to side. gear about

Hock Tan

CA over because it is infrastructure less licensing sales I it, been encouraging encouraging last In very or the we and largest to is this call Well, focus business since and why CA. works model it's has the is, XXX, launch November part big we it has a customers it software in soon on my but model think we I successful. is apply be mind, business, we Yes. our year it way point. just we to XXX at arrangements would of we only as -- than as of It took portfolio a the been the very fair, CA a since which

Infrastructure full range These cost have our -- have Software. products large -- that of we those a who and attractive to lot distributed products for the on are broad and to where with with, to that extremely guidance extend we from those effective software of large mainframe beyond portfolio-wide ability is footprints offer go buys capacity enterprises limited towards renewals, signs begin a a large as we licensing decent to arrangement,

done as multiple rental we we engaged be companies. continue multiple So with to renewals very those and have deals

software is by large we have that and consume those on some they to guys of we've customers -- have more focus largest focusing exists my and possibly the footprint sense. to on a my guess focus conclusion largest these tail large I model I ability where part where -- simply of very and reviewing I on key long of these of comments is mentioned at So this makes annually. over earlier as a ability put XX% the mix in what And large of whole because we as this whole on put lot the and non-core portfolio technically we on contracts on with not motion are licensing is sales larger conceptually effectively and model the rate customers those a this commercially customers footprints of agreements and and works

where at gain of where While almost the of we lack revenues later, XX%, overall show up clear revenue year represent believe up to term Keep tail a or a double-digit smaller our from customers attriting of We we'd that -- reached are we business one-year in and step like we three put focus, XX% in only reducing would represent core the contract net probably ends customers long of in -- place. every see XX%. we after one growth. a of because situation XX% non-core this going, our average of over years those

Operator

this participating. Ladies you you. Thank concludes gentlemen, and call. for conference Thank today's

disconnect. may now You

Broadcom (AVGO) 12 Sep 192019 Q3 Earnings call transcript