AVGO - Earnings call transcript Q4 2019

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Operator

Welcome to Broadcom's Fourth Quarter and 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. 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.

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

information copy, did at website may receive you Investors a If obtain of not broadcom.com. the from Broadcom's the section you

is live, our in archived conference via section recording of available at and the will broadcom.com. be call This playback will for also a be website telephone X being webcast week. It Investors

and filings with SEC on for prepared Tom comments our factors regarding section could this of specific forward-looking information XXXX take Hock the We'll details comments. fiscal this During that the risk refer the questions and on made environment. be our the actual call. the of materially end will call, fourth year press from Please prepared differ providing XXXX fiscal recent commentary and results quarter release business after statements results, the to guidance cause our for of our to today year and

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

call With that, Hock. to the I'll turn over

Hock Tan

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

of growing X% billion, record year-over-year $XX.X concluded challenging we revenue XXXX a environment. year Now with fiscal despite

healthy was from but X% from declined this Our offset and year-over-year, segment segment than business. the infrastructure results semiconductor benefiting by solutions more the integration CA our software

noncore momentum. infrastructure than digits, grew where that's core our continue one product software, clear our semiconductors, drivers renewals accounts. offset attrition year-on-year, double and In down in strong growth existing all with in expected more almost In their the the which networking, lines were accounts exception,

want seen I our view strategic embark businesses the software we our market. our latest there. the headed XXXX, our some including in get update an have of release earnings current and our the towards you we fiscal give that you go XXXX. of latest are you in And Tom our to assessment in today guidance how on as billion on details insight provide revenue also want $XX sure Symantec business, acquisition. on I to I'll into semiconductor let through Now I'm we

over broader But picture. the turn before now I you this let him, to give me

So look increasingly cloud fabless service enterprise we providers when and and our on thinking semiconductor focused segment about consists networking, at storage that infrastructure. as and a business we today, products, are of broadband core it semiconductor connectivity

and This we lot get end turn strategic our and a supply core with with of customers in silicon synergies Here, markets our in technology. sales, R&D efficiencies scale our chain activities. drives across our and

complementary in profitability quite and gives Our a enterprises revenue primarily these businesses, us by on semi our we natural large focus software are, entry growth fact, long to businesses infrastructure enhance sustainable drive that gives can us customers. bringing us This and term. comfort barrier to and core improve closer which end

are much that stand-alone to and semiconductor technology unique have more their businesses characteristics. customers, several core chain valuable nature these Alongside in we semiconductor businesses, due supply

our this have don't of as businesses We kind industrial synergies include wireless same do with we our Now will and the businesses. in this semi our core business.

resources company. optimization terms to and leverage business how and we the assets, manage in we especially choose this balance of financial Increasingly, allocation, capital view more as sheet

cloud across second. portfolio, XXX-gigabit with to assessment extending believe extremely with connectivity current transition semi for enabling our enterprise, an industry-leading are cloud, the We business, we routing. to in data Turning We're and switching per telcos uniquely core center positioned it's and our positive. the

per this by space in We leadership far. our second, also further just XXX-gigabit which announced demonstrates

open in to cellular bring leveraging combination domains. both the are RAN or digital through of and In custom networks we technology across standard ethernet our and analog network access products infrastructure, radio XG Edge the a to

virtualization, for variety transition as computing slow hardware know, service an computing of transcoding. of leading security, in and for workloads, across expanding Moore's in gateways, video as accelerators initially down X. access we today we the momentum as WiFi and with starts to And the enterprise continue And it hypervisors to offload and developing cloud home delivering and encryption Law AI, to to increasing wireless in providers course market are has, gain we to

architectures. an And networking effort silicon with our in integrated next-generation in photonics optics cloud capabilities strong finally, for now we actually switching organic fiber do underway, our have and combining legacy

So businesses investment for industry-leading expected where core in investment, our we of focused scale execution future opportunities, growth ourselves of our breadth plan leverage to summary, in semiconductor our IP. and increase we to position can

a know well. we did in has business But I year over X% if billion put just tough Now around all sales you numbers down with a semiconductor down reasonably X% than XXXX, To was define XXXX. it look it, it, for from been up in our our it semiconductors some as general, approximately has indicated. little I semi which in less as $XX core business, segment at held this

this this And is X% to highlighted business annually. stabilizing. can drivers business just we think over the several believe growth next We years X% actually the given I that grow

business. ago networking a the Symantec, is and leading tools, provider infrastructure switch enterprise leading software which Brocade, to November. in Then closed started acquired of a a We CA, years on few provider with security storage we we independent software. mainframe just area Turning

with was our on right. a after this fairly just predicated switching thesis investment channel leadership was we years that clear market SAN position fiber acquisition for a of now, sustainable And it's was couple Brocade large investment. enterprises could Our that additional view grow and

but market year, the mainframe one our critical innings on growing, bought with It's because we who CA to to of stable enterprises was and, felt run mainframe businesses. compute one rely the just was mainframes for we customers and Similarly, launch still fact, now, their that growing is customers. CA in year target over early

position. mainframes leadership our in are support We investments increasing to

customer double The accounts core growing had accounts noncore with attrite transition we CA as digits while planned. continues

run We we next billion with $X years. revenue expect incremental we start can X the sustainable rate over that annual grow core over billion to Symantec believe to $X.X of

infrastructure is more now Our recurring And contribution predictable with CA billion with infrastructure anticipate Symantec. revenue becoming and $X revenue over fiscal we software also ratable from XXXX. segment software in

through summary, to plan while to software growth and this organic for our core semi our infrastructure scale In accretive therefore, long-term in business acquisitions. company invest in business is highly continuing our disciplined up

turn over Tom. Now call let me the to

Thomas Krause

Hock. you, Thank

billion I'll start fiscal time billion, and the questions. X% the me total a with for XX% fourth XXXX Semiconductor was which Let will year quarter. from results. X% a quarter then of a this was quarter-over-quarter. revenue discussing This open revenue our up after up for some fiscal down net of our revenue solutions we fourth represented outlook increase X% quarter for was Consolidated call spend and and $X.X XXXX, ago. year-on-year review our $X.X

On X a sequential represented the our offset chain remains continues muted for demand in Storage billion switching OEM our basis, the an market CA networking fourth continues the for The perform by for volatility silicon transition. held up. our compress. prepares supply by increased quarter, in XX% as business to by high-capacity driven and wireless sustained up And broadband, software as increased partner of uptick Revenue custom also fiscal in as drives. WiFi especially demand driven to solutions. typical was segment revenue. This infrastructure well. seasonally was is $X.X SAN was

to stabilizing. That market being said, the be for the products these up SAN points, and from looks was the business switching QX low

semi Looking business, the dropped relatively down the P&L shift Gross flat operating in while expenses remained mix sequentially. over at billion. seasonal just wireless margins our $X given to

cash Operating Adjusted of and was would excludes billion net note $X income million primarily $XXX million I revenue. This represented expenses of XX.X% restructuring/integration of from and billion $XXX to of expenses and These are restructuring/integration quarter. represented accrued net continuous payments and we operations the payments revenue. $XXX million depreciation. also $X.X made CA. related in was EBITDA of that XX.X% figure

quarter, revenue to returned expenditures, including common billion. spent represented of cash we million capital of billion $X.X $XX free We $X.X XX% $X.X our dividends. on In or and cash the billion flow stockholders,

the debt As to the in when for $XXX X.X and quarter, stock AVGO shares. invested we of from we million initiated transition repurchase announced the elimination the Symantec we In million buybacks deal, we repayment. previewed QX,

However, offering $XX.X fully and cash, million stock we preferred quarter the for also excess paid and shares diluted our total from of down of million flow. debt, common debt outstanding $X.X with proceeds the cash shares ended $X.X XXX billion We billion billion quarter. with XXX of

let's full the recap fiscal performance Now year for XXXX.

record new growing a $XX.X revenue X% hit year-over-year. solutions of $XX.X down revenue was Semiconductor year-on-year. X% billion, billion, Our

billion, $X.X billion wireless include semiconductor $X.X down As revenue Hock was SAN mainframe from business, was reviewed, software switching. from not enterprise included from which and revenue CA X%. core Brocade our industrial, $X.X billion Infrastructure and does which and

XX%, ago. product drove XX% from for the in margin a the CA the of a semiconductor Gross year record high up margin The mix gross year well sales beneficial as as expansion. addition was

of expanded relative XXXX. by lower addition Additionally, operating the bonus $X.X CA, to billion performance offset with amounts expenses annual to

free Operating billion, represented billion, spent up cash restructuring/integration year-over-year on represented flow income cash year-over-year. $XXX and of from also was year-over-year up million XX% $XXX XX.X% cash XXXX. net continuing operations revenue million $X.X $X.X restructuring/integration and XX.X% of of figure depreciation. was accrued that excludes fiscal we and or expenses $XX.X billion of billion. made XX.X% Adjusted would This XX.X% expenditures, grew $XXX We flow net and in $XX.X revenue. note of Free million EBITDA of I capital payments revenue. represented XX.X%

stockholders, for in of form AVGO billion million to the repurchase dividends For XX.X and elimination our of cash consisting $XX.X common billion billion $X.X and we returned of year, shares. $X.X the the

Okay.

The to look in let's semiconductor In revenue. ahead approximately outlook to we solutions XXXX. achieve business our follows. now segment, the expect So as for $XX fiscal is billion

bit. unpack a me Let this

our represent deliver X% XXXX, revenues core to compared expect business would $XX to in semiconductor approximately which We billion XXXX. growth approximately in

me to large mixed of almost everybody, finally, customers. other signal custom let products, our Our which, wireless businesses combos; consists exclusively we lines: our primary WiFi/Bluetooth one of product smartphone sell RF; and the remind is which is one X

customers was billion represented to fiscal smartphone single grow in in XXXX, new impact given of lower-margin combos, is noncore, completion in low product legacy large digits of our revenues business, billion will ramp of XXXX expected which XXXX X our at away will be this to which is adoption phones. approximately revenues. The $X.X approximately digits. X from down which movement the the single WiFi line's XG high fiscal RF, be by $X.X WiFi/Bluetooth offset expected solutions adversely WiFi initial

investment signal than our focus revenues in reduce reduction primary $XXX here $X.X billion is change expected in our our line, product our a well on and resources to activities XXXX, mixed drop driven sustainable XXXX. as million smartphone engineering our to is custom this more to was at area The profitable fiscal fiscal business. in as Finally, which in less approximately in and architecture semi customer decision in core our by

of primarily stabilize consists to and which a we optoelectronic revenues. power contribute challenging industrial, and 'XX $X in sensing management will XXXX Finally, fiscal recover in approximately business billion product and fiscal after expect lines,

Switching to software the segment.

reviewed, is we to expected Hock the accounting, up approximately approximately to contribute and grow effects CA Symantec business the billion. to expect are As be relatively while including $X expected to to flat of billion, Brocade purchase slightly. $X.X

billion, revenue are $XX fiscal consolidated -- to XXXX. $XX me, So a on plus basis, for $XXX or minus be million billion net forecasting we approximately excuse

forward our our material infrastructure have of We'll semiconductor IP going represented segments housekeeping 'XX, or semi therefore will One included in X property solutions this software. a segment fiscal in amount item, segment be revenue. and reporting given intellectual solutions business

guidance. operating are headwinds. non-GAAP fiscal expected be our a basis, 'XX. XXXX relatively On a margins margins and to EBITDA There of specific Turning are flat adjusted in to number fiscal year

see which As investment we expenses impacts term a accrual. increasing LifeLock. finally, in growth setting of year take with our headwind a Symantec Hock in to We're term be have business And discussed, near bonus tied with transition accounting core XXXX. onetime from of a the and also will place We'll near semi there. purchase effects Norton we in transition target, advantage to we agreement given are our our opportunities services

Looking XXXX. beyond our fiscal to expand margins we organically continue fiscal operating and 'XX, are XX% by expect to targeting

payout after the the Now on free of stockholders flow generated we remain We XX%. in This we to quarterly on that, increase approximately plan With of to throughout cash flow plan $X We in fiscal $X.XX out cash XX% dividends dividends. capital our on this the increasing quarterly in to common starting prior approximately related over items billion our stock are fiscal just based target approval, free committed and in XXXX, to returning quarter pay to maintain dividend $X cash year year, to this billion 'XX. dividend, allocation. form Board of cash dividend means cash per to of constitutes an share. we that which subject M&A

capital allocation reassess 'XX fiscal the this operations our our on with flow policy, Consistent will from based dividend results. time we free year next cash

In fiscal rating. approximately of addition, pay investment-grade in our down we to maintain our billion commitment in $X credit plan part as 'XX debt to

prepared concludes remarks. That Instructions]. questions. open call my up please [Operator Operator, for the

Operator

[Operator Instructions].

Our first with Harlan Sur comes JP question from Morgan.

Harlan Sur

One of in growth data Hock, strong acceleration. XXXX compute mentioned, obviously a center has you for networking which cloud and team been areas and the has been as the driver hyperscale

of pause half to in ASICs this optical and in but Trident, XXXX. to spending You strong the that portfolio. new is it was the of like a looks There year, in and got Tomahawk, starting Jericho, be security first reaccelerate looking bit cloud that, connectivity and compute your acceleration,

also have cycle. the the of start You upgrade XXX-gig

do So of franchise the center another 'XX, your year? strong XXXX? Is to performing to fiscal be for semi how data see you this going relative part

into announced And customers, that silicon they're getting cloud then Cisco, one just market the of for secondarily, networking. merchant your just

and here strong guys merchant views guys, these a potential great this in networking ASIC position helped have It on a and, your competitor. as be fact, get You to on platforms. have now customer would their both

Hock Tan

our spending know. correctly seen the it there cloud these, which provider do with of see and 'XX There's and We've your start see parts see let's Well, half in up, X second course, you guys, how is year, calendar XXX-gigabit you this start each ramping the and XXXX in great will X, first X the And there guys, the product these portfolio, the with for up of more -- as start areas cloud spending of some service of stepping traditional we year, be as, well part guys, for part question, we of storage, in later calendar XXXX the networking. especially as in the because in and more as to will out, to to investment business is of and which cloud spine. especially And XXX-gigabit, of in the networking enterprise. in Tomahawk even to pointed XXXX. Trident on us regard more are in we and

XXXX the into very the 'XX, business, mean as there's to And we especially probably growth clear -- spending. it's a years. of and we've So center slowly -- in into later into thinking, calendar XXXX, welcome clearly pause that's relates of with it because XXXX a Silicon to difference for I in to In possibly, pushing has turning respect it One taken things data for Enterprise validates momentum And us, Router pause that we half second enterprise. in announcement, basically recovering before I we see continuing see coming are of -- when couple 'XX, cloud. our while or one continue been our enterprise, I Silicon on not our we so sure. a that half with recent and merchant One customers for good of the the think yesterday, silicon -- 'XX think

that the software, there the disaggregation One more be it. there more of supports be the more will been and silicon, has be will operating of will is and hardware, from and and more that disaggregation. which There system, chip

that's into has guys. enabling we pushed, disaggregation you all by have path great. the enabled it, that have black As and guys, obviously cloud one. been it's traditionally, and box very as been And a successful know, hypercloud wrapped the we That

has model, Cisco validates pushing. that our the fact the we it, see the it's And trend joined regard. great to in that been in view, that have right So we're

So we'll competition. the welcome

we're to X as One and in I far X that cloud of per Jericho just some we're of enterprise, we're you And also happen. mention the telcos, that very software, them path enterprise, of down our want which who large us enterprises yesterday. to which, in cloud, towards it. we've Silicon telcos, and router add along, only of Europe the using classify -- second. names, with using traditional in bandwidth it's very disaggregation as and and too, and enable And telcos to hardware are talking not large are they're around, but don't Jericho both been year. for has especially seeing XX particularly runs and that pushing of I very very same of router, that enable North shipping -- America today in closely. some need few terabits path very, the to it also been a a that And It's announced those over The

And what earlier the and announced And routing. this week, X.Xx pushing a just now, XX.X-terabit future out. that's per switching where we're second successor of we as performance came

Operator

from question comes Morgan Stanley. next Our Hettenbach Craig with

Craig Hettenbach

the A once you you of the Symantec there's $X.X then business, considering? talk that might drivers Can of think impact you grow around point. Symantec of it getting that any billion question business? you divestitures the level? some are you see comment do What can just if be growth on the about any there in that, starting side the past from And

Thomas Krause

Tom. it's Craig,

rationalize in some Symantec. drive noncore services. also of strategy where and try especially on this We're going the $X.X I original We rate, about billion the past. take a We're going think the of investment which talked enterprise on with combined businesses, run to the and in to to areas around the terms run our accounts the in of is we're we rate going core about CA focus to business. portfolio

start talked some on hundred us core think the to exit year DLP take billion. $X.X of accounting, run grow And obviously continue rate dollars, and when comfortably over the the growing purchase couple we million to about the areas growth should core that. the is we web area. $X allow proxy talked next which lot run to a three rate endpoint will at large we focused can several then on and business well those about X billion. of effects that a market. we're protection, market. as we of three going So We We've a grow the years, It's We've think franchises, a the the over into as about of accounts account a

Operator

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

Vivek Arya

to the X asset sure And 'XX financial what you I into you a aspects fiscal longer Hock, for what shipments guidance dig what, and or classifying core trade kind tensions of in return are the now Huawei of and aspect, actually the has customers. been asset. of to are other as Broadcom. Chinese baking not a wanted the are implications rather And other term for wireless I'm than the of strategic kind

Hock Tan

both not -- franchises short there, of has sets semiconductor And products, powerful highlighting highlight fact it question, portfolio purposes assets gives that still are sure all and we're of To nothing franchises where But hardware eventually for we portfolio there sense because are data like stand-alone term, in stand-alone, a push as and this out we networking, while difference and franchises. this as are large our those at it software core a markets. pull infrastructure we investing it It's it There's -- itself. products, we that of technology can both and companies, review look we are systems, highlighting size answer in cloud costs it's increasingly enterprises and sustains available and the covers are fairly software. covers just they even they It's these differentiated particularly latter those the that and lot you asset. a it's still lot centers, that from misses. and synergies. There's And a of making changed. how -- and of operating a is and

to we show is the in in environment And another in saw a Components, centers, solution, those don't the software, we selling that because marketplace, market difference environment can as to you and And -- systems we providing drop particular, semiconductor to a shot. to good, in difference, customers highlight by as which core of highlight technology we want the much lot be the areas good. is selling that data strong as only it quickly and mid- single in is down some And to interesting the XXXX, be which we year-on-year organically, we're digits allow where expect systems. lead long year-on-year. create lead We to actually market, fairly grow it in that recover is XXXX be it technology, components. applied X%. driven -- fast the high to Very differentiated in thing -- by end technology, between this

the software, is to very systems, a software, final of here. network in franchise. that's that technology, highlight much core as to opposed But support to we That's trying and Selling show a the relationship get really semiconductor key is strength a as difference. to our very what service business, where we're embedded why

Operator

next Our from Deutsche question Seymore come will Bank. with Ross

Ross Seymore

you're talking is talk I earlier other then from like have the, an pronged happening rid why it on question. like guess us core, going of that's little cetera? about the And a I to it X% gotten an down broadband, moving the single can a But the networking you And WiFi/Bluetooth the of what's The growth and you asset, bought of wireless that. et to you a answer people side seem portion bit what thought parts, differentiation, guess seems now digits little combo give you're a within through and you more it. can low you Then sustainability. divested might when business, calling year-over-year? that with color about big question, two really

it Now viewpoints. X between somewhere be it those seems might like

color little helpful. would be a So

Hock Tan

the point. has a cloud allows semiconductor the obviously -- latter we is portfolio, definitely mitigate strong us has in various part areas allows have but of biggest stabilized, in one slowed compute but of been it networking in very offload. a slowed networking down. especially bit various touching merchant enterprise mitigation And these is silicon the and spending That's -- positions first area it networking, business, it, 'XX big the a you've our And when all part recover, starts to so On good slowdown. has the down, have driver. any -- core particularly the -- -- quite the this to balance of to in product and slowdown seen, portfolio that as And we on on

spend. AI this and is mitigation, chips, a AI compute biggest a biggest cloud of Here, year We offload it be shipping very business. these the of to AI. is say, much business for continues segment million for And opportunities, ship area provides now. should And one a this of several growing chips. the dollars real I hundred We're

We clients mix, are we also and call Smart performance move also we're enterprise, starting higher mix, to in hypervisor, in emerge that's And virtualization areas all as helping But other NIC. the see typically is towards few also happen. a And there. starting bandwidth to cloud. or that, in in

So that whole each things Having there's in broadband. half, said a centers other. especially data slew second mitigate XXXX, of in that,

great market, through as X. the this underlying next-generation very WiFi We subscriber mix broadband, year, half deploying approach momentum an of put lot more of their go as home, see this is broadband, are together, 'XX. a to I access in and down we more spending -- PON, a in video the now with cycles slowed a seeing, recovery. fiber in stable, on copper, When we as WiFi, which this The seem in delivery are are push we're big very and WiFi seeing that's as sharp to cable access now telcos the We're recover of the all gateways far area. DSL, line or especially end second in as say, as digital very

creates So that a of little growth. degree

to actually why through center up But that's will increasing that investment a general, But other offset call, broadband growth in of percent it. to a sometimes area. our this data from business the area. intended as networking need in are second. we in of together gen, we And investment revenue, with that switch, we routing that talked the which It's and X from XX-terabit enable foray includes secular our second the that stepping highlight next XX.X-gigabit so area, high investing, photonics, we towards of to that's I example, reason is particular cycles preparing we interconnects integration, about stable, fiber integration goes and silicon level And direction. years is this density, the an and as move the per into on optic want now, as silicon per think we're the

Operator

next Mitch Markets. question from Capital Steves with RBC Our comes

Mitchell Steves

of more the assets wanted margin go fact mix you of into on side? that is it as integration muted going kind guys to like talking operating to your improving the I you is any XX%. the seems why and But guess, side so, I the got given the software equation, are guys about is guess, couldn't it have software well, well there relative reason why that be higher? I

Hock Tan

like I to of is we X XX%, to well more we're And -- from something good. moving I get may you're out XX%, mean pretty believe a that getting one there than And instead figured figured in target way I milestone thought -- on It's years over X. X next XX%. right, land years sounds to we XX% And trajectory. around you are the Well, XX% in. years but we X XX% is to trajectory. nice get is we a what

Operator

Equity Research. question next Charter Edward comes with Snyder Our from

Edward Snyder

I the you it me lot we we and terms an know Should play set done the kind we from some for feel not assets sooner you're models just don't need. you you bit CA revenue different, a up fiscal second -- of that trying for or in flow of accelerate about talked of I'm to should the of -- of other now, that ones? Hock, some with seems see than the side like get guidance. because half be I but your idea downsizing synergies acquisition, just will synergies some be CA. there to out that get how kind Symantec to trying in impact the know of a can seeing too. of little But expect, looking a this for the I'm accelerate, you the expect of in that doing savings quarterly terms up it, show not of of on cash -- get what year. of this I'm before what would the cost have you it's

Hock Tan

difference different we guys the is between of very To actually, And to clear CA, whole a us the sit That's that bought a guys have which to difference. begin CA yet, is a and as end Okay. unlike and but to the by we're way, an carve-out asset. you because getting show there structure not integration restructure, the an to longer CA state, Symantec you there, into -- good company. there closer the deal, question the then to the we -- watch and we Symantec. of with watch get take quite does Symantec

because us there be services expect we we're will months really we -- while will want we it. the term, that's we able But to will end work But expand. quicker get want, to agreements people out to we to to we get had transition in state Norton RemainCo, arrangements the handle short really take services So X you're LifeLock, And we it It -- that. faster. we that. you'll the right. of And the as there before from be then get probably us through only of the transition do where and see assets

Operator

with Our next Cowen. Matt from question comes Ramsay

Matthew Ramsay

higher business, are are with bit in competition are of which revenue the a the just and be that the stack, mix switching routing I highest pieces Hock, bit of and performance of of wonder than what level highest in and there switching business you that. talk your at looks percentage differentiated a that understand like your about some to points? those parts new points about within super the and routing might you might solutions platform your what tiering performance at little which have that if little about talked performance significantly the comments, and Cisco your business

Hock Tan

able separately. be try the happy to. answer take me in broadly, But to question. to the technologist want you delve a to level Would not be let it to I'm

the the down We broad portfolio by But very and to much say And rapidly differentiates switching business. and our from very all in -- would like put have to down spine, people. features beyond, going away. is I are top high-end are are very end, which rank cuts range, between cloud, that across broad the in between architecting from whole segment a differentiation routing, we portfolio. routing all the what way this a the it relatively have the we Jericho one whole Tomahawk are have that range trying confuse and the across routing, campus how to It's the in way, switching, more Trident lower versus the are and other, our is way way entire routing, we and switching it you have campus, line, switching portfolio which terms, a we high simpler. leverage throughputs, each portfolio -- more high chips the end, is strength for pretty routing created high-end are we to of of not very that low-end are that whole very And we to and ability is which products -- the in. range our product which is hyper X operators match even And

Operator

C.J. Our Evercore. with comes question next from Muse

Christopher Muse

you And on like margin us side. side wanted understand down drivers terms and that kind investments to, operating the help Symantec the look of might OpEx flat guide? I increased moving fast to I expect guess to cost speak you to really how of in perhaps what on parts the the revisit could of guess just if

Thomas Krause

C.J., it's that. Tom. I'll take

So hit we pieces. as do call, headwind numbers. performance our we we the I 'XX in outlined in a have we million the target didn't X major couple hundred -- sort dollar on our there's bonus given of annual because accrued under that But think

one, technical it's a one, that's it So matters. but

semiconductor is in a, hundred The business increasing as investment, other well. couple are dollars million the we of

another that's headwind. So

perspective, much We're from day was with of year a business more to we'll a then which hundred obviously EBITDA X going Symantec bought a enter a we million EBITDA And when is the couple this elevated dollars that figure, doing it. think I year. look other another you quarter. some we about But get of restructuring couple you TSA there, dollars through hundred next have to report through have the items, when the on the think elements as that million and you

to I semis, a growth So you driving about organic still think of we're terms lot talked that line. business, over semiconductor we core in in terms years. it and margin the target can advantages X over expansion. That's where delivers in think gross those back how that that of We've next would the our of equal operating get in this scale we you we in X And years core have the the then XX% parts. about the margins and if take then some of the out margin

Operator

final with come Stein question from will And William SunTrust. today's

William Stein

that like growth the to think to to the Can target. pardon handsets. I address infrastructure? But about exposure Great. I XX% talked want growth XG relates me, it of question in the pace and you as say XG. I margin -- XG of your relates you Hock, to pace

Hock Tan

Oh, absolutely. Yes.

very, to base my remarks, term of respect a with in think it. indicated traction. in handset expect are we the be pushing as as is throughput, push far base the end-to-end we'll In improve takes architect, specific latency, line I I can point open as -- a And it station our the station are right station, into which, base the the is base the likely they're a And as of really RAN, to the example. best RF lot getting backhaul, other But opening call much I XX really station. And open of from you increase. to we operators the as Tom that side, And RF lot access discussion where for RAN, under have station. ethernet. words, XG network, we've ethernet is run the much content radio base network. XG division, on base mentioned, possible another the infrastructure, to in you pushing into the to a networks the entire very that which very radios. been been the grow especially edge, because and the to It's a improve to it's as in density we're all on signal to great lot network XX

used the to CPRI, that's which bandwidth higher running routing strength. our radio plays a is, which Even opposed radio is as protocol switching the and the ethernet, in typically up switching to between out being right minimized common is now way, by just and squeezed the -- strength,

So no we the are on those into key and the That's elements station. of very on $XXX engaged semis XG it, in investment in not the side, it. of of Tom within degree, now infrastructure, hard infrastructure push least a big very but a increased our to part testing with which working -- all OEMs indicated at core that developing, is base part of year, in million

Operator

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

may have wonderful day. disconnect, and now a You

Broadcom (AVGO) 12 Dec 192019 Q4 Earnings call transcript