AVGO - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Broadcom Inc.’s First Quarter Fiscal Year 2022 Financial Results Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Ji Yoo, Director of Investor Relations of Broadcom Inc.

Ji Yoo

Thank you, Sheri, and good afternoon, everyone.

Joining me on today’s call are Hock Tan, President and CEO; Kirsten Spears, Chief Financial Officer; Tom Krause, President, Broadcom Software Group; and Charlie Kawwas, Chief Operating Officer. Broadcom also distributed a press release and financial tables after the market close describing our financial performance for the first quarter fiscal year 2022.

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

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

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

Hock Tan

Ji. today. joining everyone, you, Right. for you, Thank Thank us

net revenue to $X.X up billion. in fiscal XXXX, grew revenue X% year-on-year a $X.X software grew QX So year-on-year. billion record $X.X to our billion, Semiconductor year-on-year was consolidated XX% XX% revenue solutions and infrastructure

to year fiber-to-the-home. QX their to providers, Now the the deploy continue grew accelerate. in upgrading clouds we last in as hyper and data are demand enterprise enterprise very next-generation service from spending Meanwhile, robustly recovery telcos saw centers, IT continued trough

grew steady. core business the peak remains of very wireless single and digits, our and against software As stable a year expected, ago,

and remains times our supply remain inventory customers channel the unchanged the of On lean. and in our lead as front, in products extended

of prior at backlog of digits close double the quarter. semiconductor from grow continued the QX to that Our

Tomahawk customers, and and enterprises, off year-on-year data of end of up $X.X deployment continue hyperscale now centers. me revenue growth X our semiconductor compute they starting Networking across upgrade networking. scale upgrades XX% provide and billion switching of several Let markets, accelerate. loan represented by revenue. strong with was to more campus XX% driven at This scale color out In by their as was

in I’m XXXX network Let CPUs moving the is XG into Investments AI me very platform expanded worldwide into talk particular, a opportunity about to the our AI/ML operators family strong of significant our Jericho space. Ethernet of by connect silicon to This thousands router. routing telco In this, to way, Ethernet platform, in products. Arista’s hyperscale. GPUs back-end in growth which clusters. referring on tens and than in routing in drive scales of More this of Qumran backhaul continue built our large-scale many in the hyperscale has

most provide for efficiency devices highest scaler fabric load end-to-end balancing the lossless Our with the and AI/ML an network cost-effective congestion links. across managed

architecture. in in the Now Ethernet proprietary AI/ networks open low-latency widely a used as we see as InfiniBand for such to ML large-scale high-performance typically as way protocols computing, adopted forward contrast

XX% ability and and continue to these expect to customized be network footprint be our of AI inference across to extending is workloads training strong unique year-over-year. we growth networking cloud Our several complex the hyperscale QX, In excess at in to board guys. SoC in revenue

our of deployed connectivity. and server MegaRAID for which upgrading our recovery accelerated spending, of was This SAN growth the use representing Next, XX% revenue. part by revenue was of or driven storage connectivity compute million, enterprise semiconductor much service. And service towards in of storage XX% compute to server year-on-year, most continuing IT large these was $XXX either

from storage solutions of connectivity next-generation as to leading-edge to increased support We deployment content are upgrade service. also benefiting enterprises

adopting media, drives for they drives, deploy last Nearline social in of drives, arrays content Interestingly, growth. video preamplifiers critical as disk primary our of Nearline over choice. are hard expanders, of a growing And storage customers the proliferation very creating supply much we and much manage increasingly with hard of years. our silicon in to software, see disk storage next-generation and this and with over cloud service enterprise, CAGR Beyond which re-channels we also storage another our hard revenue connectivity, at XX% driver disk revenue five utilize the

represented Our hard drive quarter. business of two-thirds our Nearline over revenue this

more accelerate selling in connectivity to coupled With the to dynamic, higher adoption hyperscale much storage resulting content. is revenue enterprise continuing here, next-generation over and silicon, with technology strong This QX of dollar bots from server year-on-year. just both expected we’re than demand XX%

X.X to on home XX% of of was of announced gigabit about, deployment high and of gateway, driven PON service million This and note. largely of Charter running X broadband. semiconductor year-on-year start multi-gig moving X.X X.X trials next-generation grew CPE our DOCSIS modem, their represented a in both Wi-Fi gigabit Wi-Fi last Comcast the increased quarter, deployment in gateways. on revenue. announced and $XXX AT&T PON upstream, XX% DOCSIS, and attach their cable XE at Revenue by of remote Now of DOCSIS downstream speeds X with XE this of and gateways. rates and Examples

delivering Wi-Fi point have SoCs. enterprise our years first XE quarter billion the carrier Broadcom well as XE access in market launch. All X and XXXX, to just shipped of and the X these three cumulatively phones X and Through around gateways. remain since chips in radios over are Wi-Fi We leading of routers, as using leader we

and to making made globe. leader, heavily the been the infrastructure customers the this connectivity. OEM better band, increasingly unlicensed – XG to homes cable and XE, are we $XX gigahertz Across now industry are wide Wi-Fi high-speed access see the Our both seen strategic pending complement in the years as the happening see the XXG step has as the billion which connect for is look modem same – PON In access ahead, site the of X development we Wi-Fi alternative we more as across of the to available ramping alone, broadband. as to Wi-Fi as next-generation broadband. And generation We X over broadband to globally. broadband and investing the next partners world, home carrier in the five use for next current is deployment U.S.

far as QX is broadband As year-on-year. grow concerned, our to continue we to expect XX% business

to wireless. in peak our fiscal quarter, up during on up wireless represented Moving of XX% strong revenue. XXXX. billion XX% for driving American be customer and from of our continued the revenue quarter from QX revenue North to $X the sequentially Demand products year-on-year X% semiconductor

but wireless digits from mid-single about year be quarter-on-quarter, in As up expected ago. QX, will down, still revenue be will a seasonally mid-teens

to Finally, demand revenue. industrial we remain of energy, year-over-year X% $XXX electric QX $XXX revenue QX. million semiconductor to inventory of and by we robust million revenue automation one approximately factory XX% expect year-on-year. XX% of strong health XX% was our renewable continue Reflecting vehicles, be driven from represented month, and in around care. expect such Accordingly, to summary, QX accelerate resales, QX to semiconductor QX, resales grew semiconductor strong year-on-year. channel in the in solution revenue up resales

renewal our which revenue account, contracts, including subscription expiring averaged renewal contracts, the same products of QX, represented XX% million $X.X grew XX% software. infrastructure and consolidated recurring in rates expiring to billion our software Over total $XXX million XXX% of dollar the year-on-year represented X% terms, In on Core this revenue. X% of of represented strategic over we accounts, grew year-on-year. averaged while In revenue $XXX value maintenance. cross-selling, represented PLAs, Within of software to Turning strategic portfolio customers. XXX%. and renewals

was which we QX, Okay. growth sustain summary, $X.X revenue ARR, annual year semiconductor XX%. X% expect in recurring In a software a the end at revenue, strong billion, grew ago. up infrastructure revenue QX to year-upon-year. of from our mid-single-digit percentage In was around QX,

In year-on-year business, wireless, our Combined actually it over grew $X.X to grew fact, grew excluding consolidated billion. software XX%. XX% revenue with stable –

QX to Now turning guidance.

recently discusses want this annual its on company’s company’s to revenue turn add, accelerate We site, be to initiatives. growth I QX revenue Broadcom to XX% business, And the will available billion. we year-upon-year. before Kirsten, of to it report I excluding the call citizenship XX% XX% expect on corporate $X.X stable consolidated second over wireless, which just ESG will growth Layering expect published software year-on-year And ESG our year-on-year. semiconductor

impact we the remain excellence, As a the responsibility have positive to company’s a operational through to committed recognized call communities our our and mission. leader, on we me global very to With technology turn Kirsten. innovation technology let this and product that, over

Kirsten Spears

you, Thank Hock.

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

of in content to XX% semiconductor the product Gross our across growth portfolio. expenses year-on-year, two $XXX driven revenue XX%, up products P& solutions the Revenue mix review our $XXX margins points approximately million of segments. segment segment a year-on-year. Now L operating total year-on-year. in semiconductor year-on-year. basis and Operating extensive for XX% QX, up XXX quarter, QX up XX%. for margins quarter. billion XX% was X% product in up and the represented This $X.X were were by was R&D million was favorable in solutions our semiconductor our for next-generation increased

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

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

large a ago. material compared $X.X Days revenue. XX% in We XX% the in million year to We costs. the days cash Free of of sales quarter higher were quarter, expenditures. to $X.X to outstanding cash on Moving quarter XX in spent inventory $XXX end billion, up flow. the due ended XX part first billion, with representing quarter first the the of prior was flow days capital from

$XX at at the backlog the the XX of our lead billion to times quarter remain end weeks. preceding quarter. over was And compared hardware billion Our $XX steady

at Our software ended well grow over and backlog quarter as billion. $XX to the continued

software is $XXX As short $XX.X debt, point term. with which billion of gross billion year billion reference, of of of a backlog quarter the ago. million $XX.X a We ended $XX cash was and

billion for million in diluted current billion Turning share open count $X.X call of was second questions. remarks. return business is dividends. repurchases quarter, we our impact and $X.X count elimination completed second we excess stockholders please AVGO to stock That of with Consistent million. shareholders, quarter on trends prepared conditions, of up potential approximately be Operator, to any consolidated $X.X the of common non-GAAP eliminated common equity, revenue. capital paid guidance the the EBITDA quarter. XXXX we revenues XXX due diluted to of of of for in in to in allocation. QX the commitment cash our XX.X% vesting excludes and of and concludes repurchased cash employee my $XXX shares. million. share taxes expect the $XXX X projected Based The Note for QX fiscal on for million resulting adjusted that billion This stock approximately share the of non-GAAP In

Operator

Instructions] Thank with will [Operator JPMorgan. Harlan ahead. from come Sur Our go question you. first Please

Harlan Sur

given into and visibility Hock, got execution. congratulations the results backlog afternoon strong you’ve pretty this your extended and on times, good lead year. and Good

CapEx about Your looking Cloud and end grow XX%. markets strong, are right? to hyperscale spending is

the You’re spending XXX is upgrade expanding. cycle. networking driving gig and Enterprise still XXX

whether you upgrades. guys acceleration As it’s your you’ve got compute ramping. then pipeline, And Broadcom Microsoft, of Wi-Fi, on fiber all strong, continues mentioned, ASIC Google, these Facebook, DOCSIS,

it plus profile year. So a revenue type product your mid-XX% of growth seems like sort low year-over-year sustain this to leadership, seasonality can through the demand,

type do sight the of And is, and you of growth you I line the growth? confidence have the on to commitments through guess So have supply type for more importantly, sustaining this of this you question support do then year?

Hock Tan

sense. annual in lot makes yes, providing if in have Harlan, we what sight saying your through of line you’re and both, directly, believe, answer of not of supply. for. XXXX, to we But end you’re that’s I’m guidance, a question what And angling demand

Harlan Sur

Thanks, Hock.

Operator

Thank you.

from will Vivek Our next of question Arya America. ahead. with Please Bank come go

Vivek Arya

is eases, growth. tight my And Thank because was perception that you give And driving the as like-to-like hoping how year? the and pricing expected more hoping sales supply conditions. of important there you your foundry that advantage was us saw And of down what this the just Hock, because go that for acceleration disappear. lever taking companies growth a then I in a more pricing question. some of revisit color, is is costs a the role capacity pricing will will the semiconductor versus question benefiting the what’s much could you if I abnormally are playing a basis you could last year on in

Hock Tan

increases, many you what dollar What That’s a perhaps increase done It’s are seeing what in really how because year-on-year in like substrates, going to mean, this networking, But at XXXX it’s cost for on been represented. that and server is you’re now probably a into And XX% sustainable about I’ve you’re last? think is I is more part terms is good to – strong. to so much than underlying inevitably. trend XX% material typical closer assembly, talk storage, me less and underlying because almost right, is customers, rail our up you we it’s showing said trend the simply the by we’re previous it demand We of cycle, very is we’re And – is wafer, our figure, hard it in the question. Who long Harlan demand driven increases if ASP least true, and while would knows? on think passing than in sustainable, that is this wrong it – question. is. in the times,

demand least XXXX of lead part that XXXX first out will from I booking, figure whether pretty it’s XXXX. now given and in still extremely there’s at XXXX And strong. all close the in service same. latter seeing, think, are coming telcos enterprise, will hyperscale, the of to the address our basically start environment, We’re times it’s that indicated, we’re I what an supply And today have strong what we is be enough XXXX, be half to and and providers to whether and will – three

Vivek Arya

Got it.

can to perhaps just that. I stickiness XXXX. continue price wanted clarify into So

Hock Tan

first part the yes. least At XXXX, of

Vivek Arya

Thank you, Hock.

Operator

Thank you.

come from Please Our with Rasgon ahead. next Bernstein will question Stacy Research. go

Stacy Rasgon

Thanks for guys. I ask taking wanted questions. Hi, my margins. Hock, to about gross

level, if of at into amid I the else. in it like XX% least for did that implies higher. you And is guidance, and at if So quarter, probably semis. XX.X% like margins And QX not squint sort your everything this even gross at cost increases

the about we now? better a just just anything it the So how kind pause? Or here? that? any I they sitting like talked seem or take keep do right like you mean Are limited how into mix we going doing think up drivers think levels year, that margins think Just at even would you them that. – year I do do they’re are a on the basis points sit from than about of else and there other we Do to this that know XXX back they going up always be given modeling about of

Hock Tan

could because semiconductor tread Well, expansion it XXX happens under be see yes, our usual this is my on to XXX situations, margin on true, statement points front. year-upon-year which – we gross of normal basis around I

You get that.

– I guess I the this the you why that deployment deployment if products did indicated, my to lot generation there’s And did so of Now to reason new and better than we come a – mentioned. Kirsten than semiconductor. launch in back that remarks, we better speak, that just and of season,

those a in much use I’ve new out generation for enterprises, Tomahawk in whole cloud, in service for site hyper towards, towards being service those out AI, some new in X, put about data generation, talked – the more, the place that better Jericho is servers. storage, basically, generation. X, there get new bank use And leading-edge about that Trident which solutions, latest talking application. from come about that deployed in GPU machine learning, of who which talk new guys whole we connectivity. That’s the Then networking, networks centers generation, we more with in we We’re Then new do talk and in margin. we deployed slew Jericho the being of a

not pass a I And put in additional thankfully, our So is out increases to a we an average, this more decent just new able will do still guess basis of we’re supply be is coming in of to that a that expansion all, the XXX, And But something all XXX in up situation it be lot course, XXX I to happen. points in expansion. generation cost input normal fairly gross be indicator, that margin still are, on products XXXX environment, customers. let happen point that We basis believe to set to – on be – results. now, adds please, is seeing year-on-year.

Stacy Rasgon

Got new able it. still basis as even be that to we long products points should coming, you see keep here? can the But as XXX from

Hock Tan

And not on life the is for and come products. of and – expanding. a thing There’s keep margins it’s new there what a develop Whether to performance us Yes. products, whatever, cycle technology, pool. about is customers, The next-generation it’s is to the the better always a is will power, always our beautiful always, that us markets – pool. the products. our enables just semiconductors need and these there’s product way, And having that’s require me by new applications

Stacy Rasgon

Got it. That’s helpful. Thank you so much.

Operator

you. Thank

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

Ross Seymore

much good to flat. Hi, semi times a information the sequentially, the lead see especially let for Hock, for that the thanks it did It’s question. the on stayed me as rising thanks as considering ask business. for backlog

that may be the it to how want I While may the of really magnitude or profile is and changing. about ask impressive, not

So of us cetera, additional negative moving or and find sense sort your that a in comes as profile enterprise give the for and the et to company? either cloud in, changes backlog in the broadband that positive given clue wireless, between drivers a will of that all you future backlog parts any be and interesting, that about growth

Hock Tan

recovered That’s enterprise no – driver should my my has directly. And best And it’s quarter the strong And be but I fire, Enterprise enterprise some more than – strongest today. said cloud hyper because the not quarter are but last big say as is, enterprise, to that’s going adding me part you have something we – as to is in seeing is it. take telcos on question. on Yes, is spending a since of some the we’re let point and are we before, to way describe employed of enterprise on demand, recovered perceive And and it, that surprise, of spending a that. remarks, it, IT as it not – seeing that not fire. good recovery. we

Ross Seymore

talked been side? Any on side. surprises the surprising anything about negative negative in Is the that’s that? You positive there

Hock Tan

running in part wireless to No. of campus spending. in speak for as Wi-Fi look lot lot pent-up It’s of of using A Not think key We’ve excess for need driving, There’s upgrade. Wi-Fi, we’ve lot to our And on-prem switching X I mean a way. investment gateways, – even in a of spots, connectivity, indicated in Wi-Fi years. going – of my it that’s – I is a that’s remarks, many I the I also been really. what’s our just there’s campus. in. mean so a through hot enterprises at been lot Broadcom.

of upgrade offices the open we’re the XE. one across from start Wi-Fi to enterprises wanting And to very board, we’re up. the as is demand strong connectivity slowly X, time move to seeing Now lots to not only

Ross Seymore

Thank you.

Operator

you. Thank

Pitzer Credit Our next ahead. Suisse. from question John will come Please go with

John Pitzer

perhaps to the is focused concern guys. for know you’re your power, point I and than as extent ask me the as building versus pricing seeing at the Yes, Hock, consumer lead are getting you customers on Wall is what most. And usually real Street extended Thanks demand times demand they let big cycle in less the question. this inventory. you’re guys with much

you’ve maybe markets. do these kind least or good builds think in perspective us if at your what on wondering to guys I’m inventory less you backlog if very many that like I’m try it’s are so growth a of of to long-term some curious, to of could go it’s view new be And to your – realistic you make scrub relevant good you infrastructure kind of the But had And the Is demand. sure demand, you semi And give up peers to change? a are rate should always business put semi there willing have CAGR, for now? who higher – right be. of what your should beginning

Hock Tan

Let’s we than part, to and earnings go question best which very, the up could me in answer in I’ve and various as reiterate are customer calls, – you on end. our because environment, the build the one at according orders we the requested. happy ship first very first, is obviously, stated what customer just I’m as the of sending But their first yes, let easily we that to inventory more to previous here, parts concerned, last demand it could in

last us our this, the customers. important XXX XX% ship to direct in semiconductor actually is any to hopefully need inventory, like direct. very make any XX% regard. sure about nice whether go our in they salespeople not not we is we very, they’re this XXX products what’s to of to either The environment customer address through thing of to inventory, it. too real revenue customer business because of get a and amount from distribution. And – need So the in particular operations we our don’t late huge to XX% excessively. customers, just distribution, earlier just when and and comes that we about But spend a it’s bandwidth in Not customer in

salespeople. enough have We

– what to last XXXX, XX% we said before like I earnings enough And was and exactly demand call, have closely, in growth do We exactly on all they they seeing when that, visibility customers true year-on-year think, these it as it improvement. need we’d in have to need. what been we in true ship to growth pretty know about

take now material on costs XXXX. gone the we up fact have Now in that

you X,XXX, a more data will those we’re what what building if regulators for that we buy you if are pockets have – inventory Xs, buying system regulator, sitting there’s to XXXX, chip response But this system believe still addition it’s probably you was by the wasn’t need year-on-year it not buy It we we the – you voltage not believe out our on seeing. XX% wrong and our cause in platform, more beyond and environment mostly than chip that center And We adds earlier on we voltage improvement. chipsets those those an builds So up get and in generally, If that stronger in the a core up peripheral than total XX%. last because that’s visibility, about Then into platform you’re and lot sell the But of in that. any cost. difference me, cycle good in just of you you in X,XXX example, big customer there. I saw of that perhaps chips, visibility. X,XXX fraction XX% very because case. Tomahawk And believe there way, sells. Xs. the sell the of of Tomahawk do if of and a X,XXX secondary will we a unbalanced places the chips, were to a to

cost here what good passed of a the go sustainable over that what’s we perhaps get increases, level. think we substrate increase there. which is wafer was sense the So price it is and makes a of think we on because kicker out And cost

long-term, growth no, no Now on think your on because say why I I that is XX side change, are frankly, to dreaming should mature semiconductor a people industry, the say, change, trend different our industry, show to which evidence next probably relatively years, question, this a longer-term don’t spiral there’s rate. think suddenly into CAGR answer would will CAGR

for years, last roughly frankly, the there’s XX compounded in growth seen nothing XX that have be X% would the long-term, annual to We And why years. not next way rate. you indicate,

obviously, long-term, won’t at this that changed. not I the still be we’re every X% it Now think But not X% on year, trend year. has

John Pitzer

you Thank much. Perfect. very

Hock Tan

Sure.

Operator

you. Thank

next from with Our Goldman go Hari Please will Toshiya Sachs. question come ahead.

Toshiya Hari

so been ask taking acquisition. you going perspective. for the Hock, wanted Rates are Thank things up. a little are for lot your thoughts macro meaningful capital on last of economy It’s while squishy. the from A question. on since much Great. bit is And a I a to going allocation. your obviously,

You buybacks. just spent $X.X billion on

thinking forward? appetite for Just about you to much. think about of your M&A and how Any capital. curious changes how you’re M&A you Thank going allocation so

Hock Tan

has looking Thank very given been earning the evenly you. next most acquisitions anything use clear we assets nine much nothing still lots have least of over acquire. go. Well, far, still good-sized we have would and have acquisitions. spent the – – And And it have being that at and probably meantime, the program – we to thoughtful probably for We great and the and billion we’re months look the we policy We’ve generating so, we cash, for the capacity usually assets haven’t plan, so it at a selective to maintaining calendar outlined other of of our the paying two been for really, fiscal And about we for for which do, very the in have up – frankly, of XXXX of to market last use that year allocation to done $XX about capital we out we’re to have quarter, dividends are and do to we just long-term, very XXXX, billion. in very taken and is, very, dividends But that – we the decided good acquire, the in and But than believe we handle we actually still we’ll on – years, $X.X – year. when remaining we of for capacity buyback XXXX on and acquisition. XXXX as it. will all likely put have on changed. and XXXX

Toshiya Hari

Thank so much. you

Operator

you. Thank

from question Pierre Please Research. next New come Ferragu Our Street with will ahead. go

Pierre Ferragu

in I’d you debt market? growing Hock, your your line wondering you Hi, in clients? below to what question. I see give you on rest or business market taking for thank trending us, semiconductors. is your is can compared is the hyperscale share your And ASICs actually the with the do hear Or overall the with just semiconductors. segments I’m how my love whatever And ASIC of to rest of think taking business that other in

Hock Tan

Okay.

for in workloads is wanting Let us. thing. your used usually way are we part business – it’s I the develop able data essentially is question silicon your also it And for custom to And I best which good-sized me of that be and division with transcoding computing what your grew of last not customized address this has related customers. starting hyper saying here, sector, video accelerators answer that’s effectively. XX% your now AI, these chips customized cloud more was who we that the run offload hope paraphrase to enable this specific way currently, you’re and to, the those machine quarter, revenue saying What if in and my answer that all question better a would workloads All learning, ASIC see, to that the mostly north of to question. right? believe revenue year-upon-year. though a past, in instance, is QX, also I increasing recently big you’re and but years, players hyperscale functions to And their product business ASIC orchestration All the to large answers virtualization address more been was year-on-year few gradually a see question. guys is, their it and – for develop and dedicated right to do the have have does probably to centers. accelerators for

Pierre Ferragu

perfect. Thank Yes. Thank you much. you. so That’s

Operator

Thank you.

UBS. Arcuri go Our will next ahead. come Please question Tim from with

Tim Arcuri

consider And you FBAR making could talking a is segment? And side, further concentrated it a some a some into concentration, recently it wireless revenue how to whether that to strong, changing even does thanks know been single Hi, capital question – as especially It’s on redeploy lot. making making the maybe – one this had things maybe rethink very committed time market, you’ve but you. this I and been your selling the maybe another more side. you of be a you but that your back, be does on Hock, you business customer. Thank make that your about modem I business. want even trade-offs might little on on customers

Hock Tan

would Okay. Good simple be my question. And very direct. and answer

it critical do because goes not pads into And we devices, phones. into is mobile of strategic collectively business five this will wireless of products, North we though what them, into customer. I into very the not strategic and into OEM. to a we it very to goes our makes different them They’re which same or – indicated it they’re It develop – us long-term and partnership wireless important I goes provide also to which this in all so partnership notebooks. lot into we very of are good not a but customer largely, develop products technology goes always very – very into products are tablets. but the It something multiple goes selling engine we sustaining. is one goes believe you most many the sustaining a see like and entirely, sense selling know only stuff, but American customer. have our strategic. one sell what, which product And wearables. and a even mobile, mobile about It are We And of call very as

into their Clearly, our So it believe developed sustainable from like I’d strategic thing. side, has and extremely years to relationship. it an over yes. from side, now – is XX same the

Tim Arcuri

Thanks, Hock.

Operator

Thank you.

Our Snyder next question will Equity from come ahead. Research. Please with Edward go Charter

Edward Snyder

since for Thank wireless, we follow-up Well, this. Hock, back talking you. I wanted step with to your the that. answer, at but maybe to look longer-term I about want Thanks on are and

bought it of narrative need shifted the Brocade, growth. you kind when revenue really from don’t You – we

– end, out cost-centric mostly Samsung shifted on will to sense they And custom especially growth the your already not more bit and very And out anymore, you’re less if not because all performance-wise. their fine. embraced and affected, in doing which different you be wireless, It is strategy a it’s margins I in for We’re just in years. to – if are large get flow environment, like participate high is by may given revenue content the there. not years. next looks XG, phone looking do with margins, do three well. high and of down to four that cash they In both Broadcom the you customer designs flat slowing. In margins the where it? you’ve likely animal the worked But mean seen given for made measures, It decline. revenue on and it business ever growth to the doing for the will little grow, way with in years as we’ve revenues are kind what stagnate

of think what for suitors are so a Thanks. could years light large, three and strategy with shed in the that. four help I the you on what be or it. puzzling few lot It’s is, wireless. It’s folks a have question you years so could do? kind possibly Maybe there of

Hock Tan

interesting an thing, That’s Ed.

remind I it’s you, I semiconductor not want our business. in said, as all segments high-growth all our of – businesses itself, a just the to Here, view in view,

that to to grow. a business You there think is. guys trying companies a like who is few doesn’t there grow it because are what out X% in probably are

generation of differentiated we sustainable. any please all – never technology market from competitive developed the what in product us still thing it’s are overall, digits. believe that My are do, so of semiconductors. as but in unusual that’s like does a semiconductor in the for that It very much unique that’s more with so call in, makes creates it Not keeps And disruptive. I or customer very same however, slow evolving. in, requirements whether an Every the say of the it And that’s We it makes RF, silicon tells anybody which their SDK to a whether all And it, fact, on do wireless business application, form really mixed that dollar people a where back needs which for because keep own not their evolves own. particular it that’s and High this not mid-single requirements, for performance interesting. space we product, in very sell we a you any customer that don’t and view basically new level grow, makes it do similar is high better industry. we comes in line is non-standard analog and in to about is in It it we otherwise, we’re something has end they products meet happened. If at wireless here new constantly. it’s evolutionary front-end so evolutionary, growth. there it is they going. are And their thing what space that’s selling successful, are products That’s opportunities product in. customer, That’s FBAR, customized partnership signal, the a But with in a It lot different. but some it’s are last. no needs what for in the particular the spurts then pure makes of doing customer. high the product, unique, and – in monetize module – – can growth their the for and for looking go is is. what of a be do is, to And product it we we terms, customized. products also to this unique particular Within SDK unique which software growth disruptive some allow valuable product. what to

Edward Snyder

you. Thank

Operator

We do one final question go ahead. Mizuho. have you. for Vijay with Rakesh from time Thank Please

Vijay Rakesh

XX% Hock, long-term had there, if at a the Tomahawk just to you up months growth, I a meaning side. the XX the I DPU, the very Obviously, and look question Hey, see Yes. on do follow-up. months Thanks. networking strong on networking XX guess. the next with side? growth you What

Hock Tan

months Okay. The is XX next good. pretty

harder have tell and XX visibility, answers. for our you. indicated months, We in to that kind me we of

If rate no otherwise, sustainable I’ll years, me do that growth you changes believe tell It’s the next it’s you ask There this segment because telling space. consistent. you what XX anybody mid And don’t will in it that’s have is, – over high-single – digits. to what think share is maybe. a

indicated. what growth very months, rate XX So is but next good I

Vijay Rakesh

much there up you to since down when now? a software business as Thanks. in in on more what be X XX%, mind December your putting But might And revenues XX% one XX% last to XX%, side, big the have you’re business? long-term target announced should Are question the software buyback, be, valuations that half you obviously, there. become obviously, of attractive you have build Thanks. software that the Or last like do you looking think of there? target is to a it out

Hock Tan

meet plan. very, which strong and more It’s I a and Broadcom And platform very buying requirements actionable, about making entire to – business identifying very assets extent, quality them a got model, plan tell here. numbers integrating some this the the strategic then of of of My – locating, To the our They and mission-critical. assets acquisitions are and comes you, after out platform. the deal product are is in plan our don’t to the there growing – being a our have strategy and product in that then of price. characteristics

model place that financial the existing business is business with create to a we from Transit. software us, of the the different recall, be returns consistent run able For in fairly the is we out from in most right? are what after usually way All software the party those way different price. to buy because from that the put we tends that, And you’ll Because we there. model businesses companies

Vijay Rakesh

Hock. Thanks, Great.

Operator

participating Yoo, any Ladies back call and Investor for to turn Relations, thank now session. in remarks. question-and-answer like Ji the to for Director closing you today’s over of gentlemen, would I

Ji Yoo

Eastern, Division; quarter a you may X:XX our fiscal In p.m. after Sheri. General earnings our Frank market Tuesday, X, April to call A at Broadcom’s That on webcast of Hock in its report Physical X:XX to ASIC closing, call. close our our Bank fiscal Pacific. storage of a.m. by you, June on will joining. end Thank will XXXX broadband and Manager XX:XX Broadcom of XX, our Broadcom for of public will call second at p.m. all XXXX, the Deutsche teach-ins Pacific. you General be today. Thank teach-in Sheri, custom currently joined of Layer conference similar Products plans business Products silicon Janapaty, follow networking, Division. be Manager earnings for Ostojic, will and of the earnings Thursday, XXXX. Vijay and hosting conclude

Operator

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

You disconnect. may now

Broadcom (AVGO) 4 Mar 222022 Q1 Earnings call transcript