AVGO - Earnings call transcript Q4 2021

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Operator

Hello and welcome to Broadcom’s Inc. Fourth Quarter and Fiscal Year 2021 Financial Results Conference call. At this time for opening remarks and introduction, I would turn the call over to Ji Yoo, Director of Investor Relations of Broadcom Inc.

You may begin.

Ji Yoo

Thank you, Operator, and good afternoon, everyone.

Operating call Financial Tan, Broadcom Officer; and Kawwas, today's Kirsten and Software on Charlie Chief Spears, Tom Chief me are President, Hock CEO; Group; Joining Officer. Croft, President, release Broadcom also closed, our fiscal performance financial financial and after the quarter XXXX. the describing fourth and for year distributed market tables press a

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

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

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

Hock Tan

joining thank for us Ji, and you, Thank today. you, everyone,

Meanwhile, and wireless generation launch core steady the HyperCloud software focus and continues driven be with was rebounded demand today growth OEM. a to year-on-year. in environment business strategic our North smartphones seasonal Service be XX% the QX on continued in So have our American next customers. over enterprise we Provider to by of strong demand strong by sharply

billion customers our was year-on-year inventory XX% and $X.X side, revenue billion and our record in to XX% QX semiconductor revenue and Accordingly year-on-year. infrastructure times solutions revenue in remain growing Consolidated channels remains software supply only to very net a extended with the grew X.X stable, billion. lean. On up $X.X year-on-year X%

color now me provide end more markets. by Let

Networking and with networking. year-on-year merchant growth by was forecasts double-digit was growth for with billion year-on-year represented driven well up campus as our Cisco Double-digit from like start ASICs XX% of HP. our demand in revenue semiconductor solutions X.X strong as switching both through our Let's and from XX% of line revenue. primarily silicon low OEMs,

with DCI. AI as routers experienced XG deployment also the similar in infrastructure cloud, large Jericho growth the within of scale well double-digit We networks and in Qumran as

and first out X as data capability the Our ethernet compute ever-growing hyperscale per world's networks AI their we scaling large to massive to several Tomahawk in the here run unique Trident core need cloud the in customers XX.X they centers, ultra-low of of bandwidth large X, these Meanwhile, begun scale demand cloud. terabit for centers. to have for second data switch latency enables deliver deployment their address

into customized lies delivering has our video virtualization, years fiscal IP silicon with integrates the of in multiple design to silicon AI rapidly enable lead to orchestration, substantial which SOCs AX compute key here billion. continue we cloud, hyperscale security. $X and and over The to offload here in silicon next being a which and transcoding success world-class broad our methodology, revenue. to robust within networking delivers accelerators, manifested growth continued Now for Expect our XX%

to to expect to networking footprint revenue accelerate our TPUs extended at And close now XX% QX, In customers. multiple have on here, all cylinders. beyond cloud networking firing growth year-on-year. We is we

The XXXX and better storage year-on-year, their than sharp first host semiconductor revenue. and in XX% server contrast controllers, adapters robust storage were enterprises, half XX% compute up to spend and from million, the renewed results connectivity demand infrastructure. bus revenue by our expected upgrading driven of by Next, of was for $XXX represented storage

hypercloud start XX storage drives, our in disk Nearline billion terabytes, revenue. hard the saw To annualized put of Additionally, an migration which storage is drove accelerated close and terabyte today, to storage on eight things dollars business to perspective, a our nearline we basis.

and in gain SAS generation server X storage Spending enterprise connectivity this connectivity and expand server to NVMe. we Gen to in to in storage XX% continue we We accelerate year-on-year in growth. will growth PCI approximately continues next Express share as X, our recover for our revenue QX expect leadership

and of XXX Broadband. of to driven was gateways. strong globally by year-on-year providers continued next generation and service the of Moving semiconductor Wi-Fi with million XX% deployment XX% access growth XC grew Revenue represented X PON on by revenue. This in

and We to the end-to-end sustain reliably SOC leading switches DSL, and which all edge industry PON, deliver wired stacks our markets continue critical of is portfolio with a access wireless to solutions Wi-Fi connect are integrated across homes lead data our through Wi-Fi. for campus managed reach encompass with modem cable software integrated differentiate protocols. our access each market uniquely controllers, provider today speeds service to the service X important customers platforms, provider tomorrow. faster is critical call broadband Wi-Fi our from to their in Wi-Fi in Wi-Fi; OEMs the silicon wireless, same switching and and networks networks. And with and can enterprises, data Broadcom it's leadership. bandwidth, through the X digital homes. in In software Having the while Xc more edge campus edge that element from token to platform our the enterprise leading centers also By points both leading and

expect year-on-year the continue, seen to last double-digit we we years. percent in in as broadband growth have for this QX, rate So few

flat launch next QX revenue was Moving on XX% and QX QX up represented demand with up to softer a from year against semiconductor of the of of phone XX% revenue to wireless, which low the into the year-on-year ago. consistent during quarter, $X.X continuing revenue of peak up generation customers will percentage ago. quarter a single billion our and digit be strong drive single-digit, Nevertheless, to a year be and wireless we expect sequentially

up our QX OEMs revenue of XX% electric from approximately grew said million Finally, this, and solutions semiconductor XXX industrial year-over-year $XXX by revenue. Having QX, in industrial strong robotics, factory million X% demand up vehicles, resales for represented driven of healthcare. automation

semiconductor saw to As in a declined levels result, to QX. inventory further to turning a and up strong sequentially. low the And revenue double to again the And channel that summary, will single resales our be was year-on-year. QX, QX growth solutions digits at to be up This implies revenue in be QX, digits expect up semiconductor we expect month. XX% continue to In we QX the in below revenue momentum we year-on-year. continue

X.X enterprise X% the of billion and within year-on-year software QX, represented recovery with Generation this total stem showed quarter, growth strong consistent revenue to revenue of deployment infrastructure our XX% during channel Turning year-on-year, of strong of brocade fiber X grew software next XX% products.

Now X% year-on-year excluding consolidated XXX% grew averaged our dollar rates core brocade contracts. over in software revenue expiring renewal terms,

accounts, contracts the 'XX X.X billion fiscal Software of entire ago, month, on within we from These of Stepping represented strategic customers. subscription renewed let backlog of ARR year, our our of prior at million XX% Total contracts billion years. up $X.X accounts, booking which and and renewal me end including our represented totaled this billion, from was at update strategic an XXX averaged extending duration value. up these from on core year the Day quarters. into portfolio X.X from for approximately in with ago. ARR backlog to last cross-selling XX% represented expiring following strategic $XX.X and to the of billion or X.X XXX% of While of the annual this actually an maintenance. roughly X.X Over the Investor value 'XX products a revenue a software. $XXX translates average or XXX% back comes with annualized which PLAs XX% provide recurring fiscal we recurring consistent year X% of

revenue QX, generating we our we million revenue dollars than annually. XX growth to year, with continue year-over-year. software percentage generating expect digit million With $XX greater such infrastructure over around a the For XXX over mid-single annually in stability sustain booked of contracts over to contracts

in segment growth total continued grew year-on-year. me our revenue So, let segment, XX% steady QX summarize, net in semiconductor strength with the software our and

XX% compared to percentage semiconductor is wireless to excluding revenue QX, digit expected ago. expected a peak is up Wireless to single of to year-on-year. be the year Turning to low flat grow

So from QX $X.X semiconductor revenue consolidated revenue will in and year-on-year is billion total in to XX% is drive grow this year-on-year. QX. expected to in grow again, grow XX% to billion to expected $X.X Sequentially, revenue

one very 'XX markets every are our beyond. well of in in fiscal We and franchise positioned

as the photonics to we routing, and With else significantly We our accelerate to that, call across next anyone to generation Kirsten. our me roadmaps out compute, turn continue market platforms offload gain to over connectivity let wireless silicon share. in switching continue and invest

Kirsten Spears

Hock. you Thank

by Let performance. revenue the me was for points year expenses XX% up year-on-year. margins detail X.X were quarter year-on-year the margin quarter of up now X.X Gross the quarter of Operating a investment driven were provide up up XX% billion up Revenue in revenue. and ago. X% from XXX ago. X.X was excludes was was XX% R&D. Operating X.X XX% Adjusted or of income figure EBITDA XXX billion for billion approximately a of year-on-year. basis revenue depreciation. Operating points million This XXX year XX% from in basis financial our additional approximately on and billion was

segments. growth quarter points approximately been two for our X% continue by wireless segment that X% XX% million generation our semiconductor and Note were Now our solutions This have were margin XXX able total overview mix. the extensive across year-on-year. XXX up represented up expenses P&L Operating year-on-year year-on-year. and semiconductor R&D favorable higher QX mix was of gross driven Gross in our our product despite portfolio. to content to next was quarter. was million semiconductor billion Revenue in basis of the X.X in revenue margins in for for the revenue up up XXX expand segment solutions product XX% products XX% we year-on-year.

planning 'XX, As for semiconductors to a mid-to-high are R&D in single fiscal by increase digit year-on-year. spend side note we percent

are our points investing in heavily products indicated in his franchises. all As maintain year-on-year. generation operating and even increased QX our we XXX XX% across increase Hock next remarks, up our to basis to to leadership margins committed

operating semiconductor XX%, up grew revenue profit while XX%. was So

XX% year-over-year, year-on-year. were and million of operating X% points up basis year-over-year. spending profit up our QX year-over-year million the at XX% the and down year-over-year. to This basis SG&A year-over-year in software Moving for P&L quarter margins XXX expenses revenue. Operating XXX in the was and is in infrastructure is XX% at were XXX margin points software X% XX% XX%. billion XXX represented software was for up Gross million quarter was infrastructure Operating infrastructure segment, R&D X% X.X grew of for XX revenue up

of X.X quarter was ago. expenditures. XX an We QX. of revenue. which in quarter representing ended ended the in XX or days fourth XX XXX of X.X Day and million billion, outstanding compared million flow customer sales million XX% of debt, cash spent cash meet billion end fourth XX% on from of quarter, of in the with We XX.X XX.X free increase preparation short-term. the total of the to year billion fourth with in prior a quarter demand the capital flow, quarter the XXX cash inventory to Moving billion We to were is days

capital to billion X.X In paid of we stockholders allocation. dividends. quarter, cash Turning the

shares. XXX withholding diluted adjusted taxes XXXX with revenue. XXX million XX.X% revenues XXX,XXX on vesting is of trends and resulting quarter business projected for the XXX the X.X elimination employee common We conditions, shares. of shares fiscal ended We first of up on in of of equity, our million outstanding paid AVGO the quarter consolidated in also and for EBITDA million and approximately billion due guidance current Based

recap our Let me XXXX. year for fiscal financial performance

million Symantec. revenue new a year-over-year. down Operating record was semiconductor billion completed year-on-year was Gross up XX% X.X margin hit X% billion flow revenue. for integration up represented XX% free X.X year XX% grew We were up and of XX.X revenue of cash billion was free ago. XX% EBITDA year-on-year. billion, we XXX Operating XX.X Adjusted XXX the XX% software from net or represented year-over-year. depreciation. billion billion operations flow growing capital expenses up year-over-year, XX% and figure This was continuing year-over-year revenue. billion, of XX% spent XX.X income net revenue, a year was revenue Our basis solutions as points XX% represented the XXX up XX% of million expenditures, excludes X% of year-on-year, XX.X of and cash on Infrastructure from XX.X

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

We rate weighted approximately years, have XX.X debt extended our maturity to of interest X.X%. weighted a approximately average average with

year XXXX, increasing billion of fiscal until Consistent the be reflects Directors we million expect to in is we diluted our authorized repurchase flow December with that quarterly quarter. ahead of prepared part of XXXX. $X.XX XX% 'XX XX, ability common our free share the our capital any remarks. confidence Broadcom's QX. form of Note company's returning flow. up has quarterly XX to program. repurchase. in Board approval. share dividend that, to cash the return our approximately under common shareholders, That impact stock fiscal to effective to XXX repurchase dividends. new prior we in Operator, share cash of share, the the committed in to This open stockholders potential stock generate of program from for remain repurchase cash share Looking the are our count XX% to company's authorization to year, cash the dividend quarterly throughout We per about call this announced The questions. sustainable concludes and we target an intend Today, as please prior maintain to increase my strong board excludes that this subject This the to commitment new QX of

Operator

[Operator line from Sachs. is Goldman comes you. Toshiya with question first Thank Hari open. The Our Instructions]

Toshiya Hari

question, as can that was taking But Hi, you're through very continued trends but buckets, side. extent seeing the you strong, on quarter, be be can guide Obviously, next congrats question. bookings helpful. thank within for then solid walk factor be about bookings guys the markets answer of end thinking semiconductor supply, fiscal know there, for Hock, kind you touch us a helpful. results. most I be talk could you you And much on supply 'XX super you. would XX fiscal sort of so you strong semis. the over the That'll been across year you have could how and if or full 'XX what the if about, what I gating don't year, the on Thank months? in the to And hoping of you're your to

Hock Tan

That's a very good, hell a question. of a

big a elevated, spending recovery in very address that, -- parts. of we a to try see, recovery me made demand still in and the be of of of that, Things a enterprise, strong. saying is particularly, demand networking so fairly, tends hypercloud broadband, let course, we're of its lot industrial side. semiconductors to in to enterprise strong. our of and very, most of in, bookings business. to to obviously, drive point strong very now of increasing from we're component in has markets, a translates spending, various And, continuing said our coming to So continue business. I the networking drive our lot part just to in that continuing broadband enterprise we've in are What and spending been continues that the Demand midst the side, see a a 'XX drive strong Having it which server But very which strong part end demand on is storage now the continue to part of resides

And And rates so continue very elevated been week-after-week as 'XX the see and combine this all at now, beyond we're so into be when far. booked and through right to 'XX. booking fairly level we a much you continue even together, pretty a 'XX at all way to of

deliver ensuring planning far too year. at to we're to right discipline guidance we're that's I 'XX. continuing thinking very late give hate lead our approach prepared going we cases see -- If 'XX no our or the one two, partly said, And we timing on. that And many right to time in whole beyond fiscal about that products disappoint XX of a I gone But not it you ready still time, as going the ahead. place. to on goes you, And customers week because And you're into surprise, now even 'XX.

Operator

Thank you.

line next of with from Research. Our question comes the Bernstein Rasgon Stacy

Your open. line is

Stacy Rasgon

to Hock, up wanted question. for on lead follow those times. Thanks I guys. taking Hi, my

You you've parsing said time, like it versus we your time on strong. lead represent if expedite be you bookings terms the talk far what could you about obviously, your actually worries are And demand How same your bit XX be is and in are overall know shipping, in just it's now just is? around if over taking efforts Like been talk I shipments Do your stockpiling doing space, orders, channels At like out? these. That'd that'd week plus sounds feeling whether limit to lean very industrial the if end you was how efforts wondering long even they little actually of those it's you a that could space. meaningful demand like are? helpful. where that with right there? about

Hock Tan

Yes. Well, we as now been this those we've 'XX. weeks for very to doing just delivering since the as of we've can And times. lead much been much beginning XX

-- the we're we that would ways, business So times are to told We're it's build come terms we're making of by to method should things this don't is out what some and to we'd out they keeping like method like think users, guiding so and where allowing in that very reporting, distributors, attempts there I I is well. been believe a guess than and seems communicating they deployed, in need. it's be the growth think I to this future also our us you it working all And lands doing that our will those all in buffer clearly means now, sectors terms inventory rather the very we in their planning and ecosystem shipping particular in we make to ability product, XX%. see end madness, four some stable some and call up attempts to make and customers. of hot. x we but terms our is a know sure our way gently and the reporting this to And XX%, on in now. to And of in strong of overshoot channels I have or lead what excessively working we giving we those it unknown, perspective, in products. particular, ensure like how some sit to are and that where one, very I predictable booking as to day it areas, purposefully some I hot, are some when very truth to programs done land, sectors from -- like be softly. even our but shelf And, sure for shape get take would

some And like service through year-on-year, networking, in to I XX% that so of storage growth XX%, believe to lately, rail end broadband demand.

Stacy Rasgon

it. helpful. Got That's

lines storage quick up for if decline do and within enterprise, trending decline? year-over-year networking those storage just year my and a not? and comp sure I'm not sequentially or gave sequential those those year-over-year along that the networking Especially follow Just to businesses for But you ago numbers, growth the within guidance? or like numbers expect a imply guidance numbers for you on does are things some

Hock Tan

may may also them supplying and may, them are sometimes And when as versus to see lumpy. you It I'm deploy from because quarter, how you numbers one talk shipments another you quarter-by-quarter. we're the shipped go talking then quarter-to-quarter, see trying may what about you to now depending say. sequential market to chose we we And some mathematical and

report networking. out take specific point much lumpiness, some sometimes need why sometimes quarter, it And more I this there networking, on sequentially see sponsors there deploy our one to simply rather because short short-term can discontinuities. where as them a you particular server case, we chose a be because is ship to see verticals our may and to in unintentionally, you of as of of may So view which then because we storage, may our to year-on-year the add, looking basis, might at weakness we in that effects sequential versus is misleading, for term, hotter

Stacy Rasgon

you Thank helpful. That's much. so

Operator

Thank you.

comes the with Our from next question of JPMorgan. line Harlan Sur

open. is line Your

Harlan Sur

Demand the strong Trident are Good as and Tomahawk conservative networking your afternoon. and mean, results in in you sustainability X is the X. your early strong Hock, I execution. congratulations yet, cloud cloud, the hyperscale X-nanometer you've on view on And innings guys on been of and They're growth, strong. ramp. ramping somewhat in business, the but they

in about talked and strong Jericho being You Qumran routing.

cloud And on strong the next the X-nanometer customers benefiting large And enterprise more TPU. firing then OEM ramping mentioned. programs Your as you you year, side, ASIC are enterprise from recovery. customers your their have

double-digits cloud, growth and growth. the of off So with business growth you're But year-over-year be see double-digit And will your the full fiscal year networking to the strong enterprise, all by your you end in year? starting service driven for networking do three markets continuing drive provider?

Hock Tan

guide in up. hypercloud level And into the we they forecasting. right now asked cylinders. but keep and on than not here Harlan we building that. that and I'm as And by mean have that's hell levels. in as lot to today is, firing backlog, oversee just question. they're in and though. right have quite of There appear actually expression of to the I cases. sit a you can not only And But to ago, the We ask use to they few on of articulate backlog I And a if I spending 'XX, all that, seem some working, you're I'm on And are I 'XX be you would of embarking maybe is more they the this going for for me the right way year bad months a doing six the I seen networking them guys, answer you're me be. weird a to believe me time in

enterprise been weakened. are not has year-on-year has their levels, growth enterprise So of not seeing right, seen And in current cloud are we networking at of XX% suffered, broadly. you And of elevated strong. you've rate across the

still are sustaining. We

showing because hypercloud Cloud it's we from as growing, recovering, is as fast growing routing network from But a year-on-year lower it's still obviously, not switching that's a Now, And and of starting a computing and enterprise just enterprise more is growing. point. collectively basis now not simply are TPUs for us orchestration strength applications today. called virtualization AI our better more lead traditional one just is customer single we on, add beyond offload have expression seeing growing from for to in

multiple we're seeing right we've I what 'XX. would moving said, So good direction 'XX. multiple, all the fiscal And of as for for run fiscal levels a possibilities, in seen part today in QX, large

Harlan Sur

for thank you Great, insight, Hock. the

Operator

Thank you.

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

line open. is Your

Vivek Arya

Thank you on the results my the congratulations guidance. for taking and question. strong And

you is Hock, The announcement. question things you is buybacks. on your view? I question. in metaphors But time, your towards didn't the One that's changed the find Because not So word use for commentary. some two interesting. as not buyback my What favorable were

targets, does XX buybacks low in Thank have. makes that sense. sales Is know year I X trend? that that XX It So lack the guidance, math in you business that, of be in the add billion the but about XX math? right, the of that dividends mid and to pay statement cash M&A flow you buybacks? part apply part using consistent a going billion or if you're you more that's billion somewhere free And of X B And question. not announcement, is giving it that are you. and take billion is more will I So in range A the to billion, a next suggests

Hock Tan

those these you're and at Hey, better Yes. good I very shall just judgment you. bow wisdom. numbers. to Thank

Next question.

follow through? You Please. have another

Vivek Arya

Yes. Thank Yes. you.

said you're a about going your thinking into somewhat thinking be there are April the the How for business quarter? most seasonality could in business. Is So you right So you is quarter? wireless, up seasonal way wireless? that January about it

Hock Tan

quota hard quarter forecast. April is consumer. this I mean, to Oh, is

But quarter. forecast to we ago, very flattish begin it. you're less good. even are they're very and for see, demand in this than it's in QX, we we what current then I be as be seasonality suspect peak better I slightly then, the would has regard. been quarter -- customer do year the our measure So this you the and big can't sequentially And up fact is is see, much round, to to and a interestingly January my hence back I QX think for components challenged. even And even which enough, year-on-year that to still from is supposed an all-time correct to normality at

will as QX forecast our exceed Our we today. shipments QX

the verticals yes, that So even the like percentage well, we're compare that holding rest exciting quite as just sounds it be as very but still not nicely. terms year-on-year is doing in may part of up semiconductor that in, it's

Vivek Arya

Thank you.

Operator

you. Thank

question next Seymore comes Our from Deutsche Ross of Bank. the line with

is line Your open.

Ross Seymore

both question. the guess and follow-up. Hi, the I'll the thanks ask me for answers two letting ask for I'll I the questions then and the question listen to

to and it different revisit way. demand the quality may be kind want ask So, Hock, of a I of first,

under-shipping believe or to the You've demand actual talked what are actual because what demand. you can you about ship bookings your

booked, that be you're in OpEx go investment? in the and semiconductor separated trying of customer between side any shipping Kirsten, year delta what second we going color And that of the areas shrinking, basically about the growing, changing, more about change would rising of get then the question on the for the a would mentioned is being any focuses So throughout color forward, you it be OpEx kind any linearity as is is and at to what behavior? one that that

Hock Tan

-- somewhat probably very I we're to verticals anything not add. booking versus between the understand Has trying the answer a clever it can very, it. answer not you by question I'm demand it and that's On what shipping, we're what changed might Ross, to first, because is because I'm has trying rotated

for are what manner. one they is a actually asking they clear now, up urgent for I'm time products what saying So in enterprise I'm very is, waking asking and is example big very, saying products,

And the so strategy basically switching we're those for in enterprise in, and hence particular campus in seeing lot more in storage now support know networking, also by needs seeing because OEMs enterprise, server more as who And in ways, for many a we're campus portion enterprises. ship wireless strength switching and verticals, -- you strength a I all enterprise shipments to switching mentioned the Wi-Fi component.

And the so we're steady Having seeing have as providers, -- more It's steady. to normal And and been have than includes more manifest our strong telcos take into interesting growth really and in service have more seeing but routing super our they and Wi-Fi switching said deployment, cloud gateways pushing now cloud of XXXX. is business mean starting that manner. that, compute programs guys to now. we for offload, really some they The working telcos, steady. in driving and just -- have been so happen access off seen that, different starting cloud that I are in classification we're been enterprise we're on

in learning of machine performance We have some their networks, here massive of of or like of seen areas out those different kind you AI need very a scale networks.

many deployment So to strong is be different -- we AI Jericho my lot networks a Qumrans. goes into highlighted XG through of a being in Difficulty] we've going a those continues happen in and, about cycles be And seen and of going course, kind and that backhaul of I XG into areas. and products ship [Technical remarks hypercloud to of

But view, is we're bookings under-shipment varies. from of take the six from it hasn't from So it level if point months ago, the changed Ross, seeing. which -- you macro of a not

Ross Seymore

Kirsten? OpEx, the For

Kirsten Spears

Hi, Sure. Ross. Ross. Hi,

what would OpEx, the our view look I I'd on company. consolidated the for expect, So comment I'll at way

remember in step-up have see in going taxes we definitely. we QX. You're the pay QX QX, payroll in that to And a then,

step-up I'd model the continuing at I would another that. of in that then year, how QX for So rest the out, we have look and

Ross Seymore

Great. Thank you.

Operator

you. Thank

next Suisse. Our comes from line John Pitzer the with of question Credit

open. line Your is

John Pitzer

guys. Thanks follow-on Yes. question the letting a comments. and me had prepared the on the about ask Hock, Good strong Kirsten in for maybe results. commentary the that Ross's afternoon, congratulations just question R&D to

or R&D, And back is in it the a concern driving go getting not areas bigger And you it it? that, look, opportunity the I of focused that had With you're the an growth unusual do about the if are a not? competition, revenue semiconductor what this set you for that on? is time growth so, outstrip year follow-up. will think lot year, spend what's and and to yet then the having Is expecting have semi the kind increased and

Hock Tan

the have. to franchise on we model been so about about be verticals fairly worry some -- we see R&D consistent franchises much -- basis, simply have not on think are have the various else we underlying continued in in and competition so side as of in we silicon and areas it's to a business in our I other across spending in. but -- is out-invest, out-engineer part that the anybody those verticals we always And, our

as during be, And not moving in we is so as were point of because cycle. fast should and our normal life 'XX of things in now what great, a -- COVID-XX turnovers view, of from hey, a product perhaps cadence as part 'XX, product believe cycle

on. of it a 'XX. generation competition, this So be back should we with take customers you products that who of new in ready to that believe in basically with we you're and it better to latency features, cycle probably deliver may sense, having to terms And 'XX, don't need said And 'XX cadences. right, invest that, better we are in to low until now because bring the -- product that bandwidth, normal it's because willing it's see up not of now, impact jumping where it are now to our

in there So, hiatus XXXX. some absorbed feel of we been but that is technology new

could time is new definitely products for and technology, to as now accelerate 'XX really absorption 'XX. So we of its the in much generation in as new

would it's stepping for logical spending go up are that that. and we up So

John Pitzer

that could year or the semi grow yet? this And faster not statement growth revenue make that to ready is R&D message you're than Hock,

Hock Tan

think don't never We that. I so. tend do to

very are We disciplined. well very behaved,

John Pitzer

That's especially bit And up a set have as the follow-up been dividend, a track episodic, the little but helpful. Hock, you then guys consistent record buybacks strategy. given really M&A around have my more

within confidence that authorization will follow on months, intent that is of XX not do that, an around today Just next give all to just you authorization the component why that investors ASR with today, the the the through buyback? to

Hock Tan

-- But can you we generating cash, we do that guys ton is, do the says still did it, billion, we have we will 'XX. a we in doing has do deal the deal -- still we growth not tons there while and 'XX to of be more somewhat not And follow got 'XX, cash in our actually reason a of debt through lot in and cash a point. the we intend do in a -- cash haven't it piled and actually 'XX, up a as building deal gather did has on we're while somewhat in and a done declined position Good intend may is out. $XX to deal

for cash, continue some we be up you still may in expanding just EBITDA keep to thing, to just us guys we conclusion accumulate grade a and the as when within this you lot a of and just investment grow capacity mind, as call So we it return not sit our debt in you hoarded but it's cash. And it, ways very whole still logical add of to debt have course. expense on

John Pitzer

Perfect.

Kirsten Spears

Kirsten. this is And

We that didn't return we announce to we consistently December. capital M&A have by if shareholders would an said

And will we to executed in is billion on will we what $XX and authorization and thoughtful it. a trading saying do. we'd to what be it's plan so in this we've line plan The through be been and it with pursuant with follow line said

John Pitzer

Great Kristen. color. Thanks, Perfect.

Operator

Thank you.

Pajjuri comes Our next line the Srini from SMBC Nikko. of with question

open. is line Your

Srini Pajjuri

as my about color ASIC XX% just you going it's me called if $X going I'm billion. the to solid could also said your echo us what's I additional some be you think congrats let curious Thank And on roughly said, business it's business, numbers. maybe you to provide the Hock, also out and you. of networking I more of that be in interest in that provide, market you additional helpful? or mean you've trend And would interest think I silicon a in-house historically. been are a hyperscale with seeing color this their the leader developing you a is any going on this could and continuation customers or with on business. what's given

Hock Tan

in is and and much grown tied that lot shoots of -- having said slowly, that's than -- have it's of of not which maybe right, a it I now steadily well we've is SLC half place that overnight or hard and even remain And related still but up And Right. on highlighted larger it's is very roughly, business fairly but ASIC and a networking, XX that, because to to doesn't in clear, in very in $X is highest the guys XX point I go other though, business out I'd said a growing, looking not separately we to your showed business franchise OEM indicated. has the stable can on they by offload addresses know But the that And a difficult as business designers. it's way, make areas and what in much in are done but is it's say that and ago, much can most divisions. it's when there as growing routing, that you them we chip in a switching a it years on own I hypercloud platform system only steady basis. it's they're computing, Thank do is It's big than in that are one the in -- more half much the you grown particular ago other is, many -- long as do much ambition to thing on for would larger Difficulty] it's And -- silicon of is But run it mean like actually ASIC a product networking. the OEMs it do of is a many, it it collectively years part the and under networking right in very to what but that slow. hypercloud lot because architect you even [Technical and we that has designs, transcoding, exponentially something where business our AI, ASIC a a whether a very don't for as their sits that sitting is a or security the for of the you're as actually do, it's This time full-time networking silicon has, of had merchant taken. been define and for chip hypercloud. a its years. opportunities, in networking and is silicon which it whether XX, one virtualization couple ago, you we over them It point that. And on part been chip, well. very businesses billion of call they time

driver for and it's I'm see back and of but we the and these offload next for guys business been working So many, will into starts been more heard four, be we four, about some the revenues going two talk those successful the for been many I I in I you have more and three, and and it have in message ASIC is, and five five ramps computing. nice there then of followed more three, more to for get long ago, them is say, it it has a successful, years but shut starting the there. these bringing believe the me year, continue us among so and say thanks hypercloud mean the growth, up, again, consistently over five slowly to become last our you always with But two with tries, years given if of and translate I many I up, now, trend ago, to more to last years have fits work we've to never hypercloud up just them me years, to of growth would because with years guys. situations want

Srini Pajjuri

then concern tight. couple take Got and healthy up somewhat guess, on year looks demand is if to the it just about And a XG current pretty is it. you But maybe looks obviously supply very I follow like there, peaking. of view out cycle there wireless, of Hock, a

opportunities content years? of think your curious for next especially you. you terms wireless, about couple the So in Thank about how I'm of just

Hock Tan

up -- Wireless glasses it and because well. in definitely is is probably the chug along very I'm roasting holding and good still this to franchise that's great being well, very it's a continues wearing, demand and I'm environment,

our don't just years, of next the over those increasing have various one products, various the you're do see we unit several into for multiple and smartphones. we opportunity products actually unit on never Beyond but is and some to which that to any saying. increase expand content increase year-after-year, have I have in not Difficulty] strengthen know we every multiple, [Technical And we increase. plan all And, on increases one content. never really products, that very gives high-end because to answer content plan, plan what a our product, and us particular really I but,

seen up, don't to I us thinking one we and stop will I fashion the on of phones the decline I in in So worrying have make whether will the number XG as in not next going years guess, from is worry. really much about content -- decline any current or the that as two it

Srini Pajjuri

you. helpful. Thank Very

Operator

you. Thank

Arcuri Our UBS. of the line Timothy with comes question from last

Your open. is line

Timothy Arcuri

two. lot. Hock, a Thanks I had

time any to I'm which and behavior, in guess are and consumption? you and of there? sort question orders you've question around, lead really the if the underlying guess So, of I I of does are seen I your customer are degree seeing sort willing the too. is portion change to product change on is And second the want had or any wondering you customers of you that first pay shipments expedite inform fees, matching to The that inside then a

Hock Tan

have kind them it Not through customers of anyway, I say gone think accordingly. our of because and to plan -- for really. ask, needs I most now done one of all them their have I half, we started we've year, It's think

come those probably for I expedite deliveries look we our the better all we in at doing and through cases it and see they that -- no, and because be and Now in then, to months. and to competition the in, benefit sometimes doesn't they're by their lead they we because are practice that cannot but spot times happen, for we be, in love will happens, will and and their running on commitments my many not where since alternatives we demand. are have situations there can and perfect, misses, in mean, situations large, better they worked it's those But can ask And for get they we planning all But alternatives, within I occasionally getting there that. and that find do like and mean miss still some happens we cannot those -- customer in some are of extent in are perfect change previous pull planning it Is obviously perfect. that. a customers if so and happening. because

to think it I now much least as I with it at customers doing us. are dealing at when comes better said,

Timothy Arcuri

and I have wireless, is 'XX. you much now around Thank last really ended pretty you I your then to going Hock. good December, question how handle for grow on that fiscal is content Got it, a the guess think should, you. you And

XX% a year give I was is Thank is of just say So sense maybe us of you. how this sort growing, it can let's growing say, wondering thing? content of much type you if

Hock Tan

thought very be we what six it XX%, X%, About consistently would months ago.

Timothy Arcuri

Perfect.

you Hock, much. Okay, so thank

Hock Tan

Thanks.

Operator

Yoo to for Ji Thank you. I over remarks. the to now back would like closing call turn

Ji Yoo

you call. Operator, may That Thank operator. today. you, joining. Thank all you will earnings conclude the call our for end

Operator

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

disconnect. now may You

Broadcom (AVGO) 10 Dec 212021 Q4 Earnings call transcript