AVGO - Earnings call transcript Q3 2024

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Operator

Welcome to Broadcom Inc.'s Third Quarter Fiscal Year 2024 Financial Results Conference Call.

At this time, for opening remarks and introductions, I would like to turn the call over to Ji Yoo, Head of Investor Relations of Broadcom Inc.

Ji Yoo

Thank you, operator, and good afternoon, everyone.

Joining me on today's call are Hock Tan, President and CEO; Kirsten Spears, Chief Financial Officer; and Charlie Kawwas, President, Semiconductor Solutions Group.

Broadcom distributed a press release and financial tables after the market closed, describing our financial performance for the third quarter of fiscal year 2024.

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

replay the Investors This and of Broadcom's be being is section for of audio accessed through conference can the year webcast X website. call call an live

business providing commentary year XXXX We'll the for results, prepared environment. During be our comments, regarding XXXX, third the our fourth our and Hock of prepared fiscal as guidance as well quarter the will quarter after of questions Kirsten details fiscal take year end comments.

release Please made refer factors to and on this to differ filings our information results specific actual press with for the call. risk on materially our the today SEC from statements recent forward-looking cause could that our the

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

now I Hock. call to over the turn will

Hock Tan

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

In and our up revenue strongly; profit consolidated stabilized. fiscal one, factors: year-on-year. $XX.X semiconductor has revenue continues three VMware grow AI two, XX% continue reflected strong key operating These results was and bookings non-AI XX% three, up revenue QX billion was grow accelerate; of to XXXX, year-on-year, net and to

give let I a on Before segments, two update me you color on give you more quick reporting guidance. our

the and providing Things in final now run process VMware. the Now are annual are of with XXXX. we as stable more of we guidance quarter started the quarterly year updates much integrating we

we guidance QX. for to the instead providing giving revert So now you guidance, of annual quarterly

revenue contribution infrastructure VMware. up software. software billion revenue by driven of with was Starting from $X.X billion in QX, $X.X In year-on-year XXX% segment

of of progress the business VMware well. transformation model to very continues The

all about entire virtualizes a which private full a week, or Foundation, company. promoting last and was VCF, we held stack for center first creates as VMware Conference is on-prem well-attended an combined that Vegas, This data Las Explore enterprises. a our Cloud event fact, environment VMware the In in cloud software

The cores value, from XX representing in of products I performance VCF, We or our over as is CPU into the than the the booking million preceding before, quarter. $X.X of booked during translates QX. we XX% the of ABV more of total quarter. success XX% QX, in during strategy an booked And up this had described reflected annualized billion VMware fiscal

we in the $X.X brought Meanwhile, from in deliver million when was to of $X.X within X acquisition. to EBITDA down VMware, years we our of QX continue VMware We to drive target spending VMware. adjusted in billion, down million costs QX. $X.X And acquired

fiscal are in EBITDA next to even We achieving this the exceeding the goal well or on path 'XX.

of QX Now again to revenue and demand was semiconductors. This turning XX% revenue. networking, XX% from grew $X driven strong networking accelerators. for both billion year-on-year, hyperscalers semiconductor custom AI on AI representing In of by

year-on-year. X.Xx AI our grew up scale continue AI and hyperscale scale As you Custom know, out customers their clusters. to accelerators

second second while shipping the Express PCI switching, three-fold. lasers Ethernet more Xx XXX-gigabit fabric, industry-leading over per grew thin doubled, switches and Tomahawk and JerichoX-AI by than used NICs grew volume DSPs. Meanwhile, optical year-on-year, our In and driven interconnects in XXX-gigabit and X-nanometer, our we're X dies per optical in

not on which you networking our in now are used products me let more color So give AI.

up QX, as indicated bottom believe sequentially quarter, had networking And did down was year-on-year. even QX. XX% was we actually non-AI XX% in we last As it we in

decline moderate to expect and We revenue in sustain XX%. this to QX level year-on-year of to the

expect see year-on-year in to in QX. we over grow the total adding strength continue XX% networking in to AI, So we revenue

recovery in we Across the infrastructure, trend of see storage. same enterprise server

up million, percent X% is Our QX, QX $XXX even mid- to sequentially server high expect down expected grow storage as sequentially revenue XX% down to to year-on-year. we be single-digit revenue In and single-digit year-on-year. storage percent revenue server connectivity was high

to flat grew the reflecting launch of wireless we over in semiconductor it year-on-year, revenue will XX% billion of be X% Moving devices customers, on even revenue. our And QX $X.X representing revenue to sequentially expect actually of wireless. and American wireless QX, next-generation as XX% North grow relatively year-on-year.

in semiconductor broadband. to year-on-year spending. 'XX. in service provider QX XX% expect in represented XX% do Broadband year-on-year, of a expect revenue and begin but continued down declined to X% weak to broadband revenue. On we And recovery that to over QX, we pause million $XXX telco on remains continue be to and

expected Finally, year-on-year. industrial QX XX% XX%. down QX are QX believe QX we bottom industrial resales to declined resales are as recover resales be Year-on-year, still approximately of We will $XXX sequentially. approaching in million

to remains In of strong grow In our AI $X.X the in and markets bottom we summary, here we translate billion. XX% for trends are to demand in $XX non-AI AI seeing $XX revenue we from up over in over will QX. prior we're revenue sequentially are our reached This QX, semiconductors. guidance have expect, 'XX, expecting a AI in aggregate, recovery to billion of billion. fiscal and

it Putting here's our all for with forecast software, together QX.

year-on-year. QX $X expect revenue up semiconductor of We billion, approximately X%

billion. we be software, infrastructure to revenue $X expect For about

revenue is to QX up So consolidated $XX be which we XX% billion, year-on-year. approximately are guiding

revenue. consolidated are revenue adjusted XXXX QX and to We the approximately to $XX.X QX adjusted outlook This year our achieve imply the drive raising XX% of fiscal EBITDA for will would billion also XX.X%. this guidance to for expect we EBITDA

let with call turn And Kirsten. me that, over the to

Kirsten Spears

you, Hock. Thank

financial now performance. me on our Let provide additional QX detail

the for from Consolidated revenue was XX% billion a ago. quarter, up year $XX.X

revenue QX the were the due $X.X and consolidated of year-on-year. from Gross billion, XX.X% X% revenue the $X.X operating VMware, quarter. increased in year-on-year, were up VMware. expenses was consolidation primarily R&D margins of Excluding billion, contribution to

a was and of income margin with billion ago, QX revenue. up was XX% from $X.X operating at operating XX% year

revenue. $X.X $XXX million at operating Adjusted of This billion with was of a transition costs, Excluding revenue. of operating margin excludes depreciation. $X XX% profit EBITDA from up figure XX% or of XX% ago was year billion

of XX% in $X.X represented was of approximately expenses a Revenue XXX starting accelerators. solutions Gross of down were our quarter. year-on-year. the of custom XX% driven resulting revenue This AI year-on-year margins to for Now review X in and basis semiconductor increased for semiconductor segment in Operating semis. mix up margins our by billion XX%, million year-on-year, increased higher points total our with segment P&L R&D, segments, semiconductor primarily a for X% operating was solutions investment XX%. $XXX on the

to Now software the were software. infrastructure quarter, of quarter, and XX% in resulting in VMware software for Revenue was infrastructure XXX% to and contribution Gross in margins XX%. expenses billion, XX% operating $X.X infrastructure billion the operating represented margin up of for of moving $X.X due year-on-year, primarily were on software infrastructure the revenue.

was operating XX%. costs, transition Excluding margin

on cash was flow cash the Free represented XX% Moving quarter billion $X.X to in of flow. and revenues.

up integration of and same year delay million, of billion cash higher mix VMware acquisition cash income expense from Excluding related free declined Section of of from revenue higher were a represented continued cash the $XXX XX% for flows ago due due used U.S. and of cash year-on-year XXX. a interest reenactment and taxes revenue. debt quarter Free to a higher the the has to in to the of cash $X.X XX% and restructuring flow as percentage

third line manage million of up quarter, We Note on Days year XX ended to with spent across the billion, the with continue We that on X% $X.X ago. quarter ecosystem. how expenditures. capital sales were the outstanding we remain days $XXX we inventory in disciplined sequentially. in the inventory

principal $XX and debt. ended $XX.X We of billion of the billion gross third quarter cash with

billion rate $X.X the an $X billion. notes. replaced we of on notes floating to new proceeds hand quarter, to sale end by and the computing from business completed VMware's of with additional fixed user reduce senior KKR During floating the debt used rate cash We

weighted Following years actions, maturity to of $XX maturity average rate X.X% years, X.X billion coupon years years, in is and is and rate average $XX respectively. the weighted these coupon debt and rate respectively. floating our debt our X.X% X.X of to of billion and fixed rate The

billion fixed to QX. notes rate expect due of $X.X repay We in approximately senior

which, Turning adjusted on paid allocation. dividend a cash to quarterly In we represented stock split a common dividends based share. cash per $X.XXX of billion stockholders count, $X.X QX, capital of

$X.XX the dividend are we rounding to share. QX, For up per quarterly cash

with diluted approximately shares. In count withholding QX, resulting due We of In on split-adjusted expect million employee to share vesting in shares. we the paid AVGO of be taxes equity, diluted expectations. billion non-GAAP was X.X $X.X count line billion, QX, X.XX of in non-GAAP the X.XX elimination the share billion

Now guidance. to on

approximately of is and Our EBITDA of $XX guidance XX%. adjusted for consolidated QX for revenue billion

due net margins in For by mix revenue higher semiconductors points cash semiconductors. modeling QX gross restructuring, approximately and mix within higher cash to sequentially costs impacted the on we income basis taxes, product acquisition. XXX expect integration-related and and to be consolidated VMware purposes, the of flows are GAAP down

for integration year and As guidance are fiscal the and XXXX fiscal resuming as has Hock 'XX adjusted quarterly just year we transition discussed, been close. revenue a EBITDA deal VMware following

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

Operator

[Operator from of come question Arya Instructions] will Bank And the of line first America. our Vivek with

Vivek Arya

question. then Just the Hock, and clarification, a

do AI mix? $X.X-ish the line fiscal versus mix you Broadcom silicon AI, realize grow overall $X.X that and of So what of I can And or flattish confidence how was think compute billion of roughly that in AI into visibility? but see is QX, revenue What I Do think 'XX, QX, get industry in than as in kind billion of fiscal terms you're the general better guiding we just in then overall your for networking? sequentially. not the you And 'XX? kind

Kirsten Spears

part, in X/X last 'XX 'XX, we in I this guide to to expect QX AI but Yes. the we fiscal X/X show And of Well, growth on indicated do our second trend. we networking. for quarter, about expect as to continue past strong don't similar no, the and run to earnings fiscal yet we for compute revenue. in And think strong, your talking to kind be answer we're call,

Operator

of And come from Securities. will Stein line the Truist with William that

William Stein

we a up wondered might focused away as challenge on it shift the if you that somewhat the cloud service a enterprise. a market ecosystem cloud from effect a as both think Hock, picked I your if your revenue from in And that, really you're participation one pretty broader or potentially have the end on of view quarter that and is AI, in you towards there contrary view. have I maybe slowing NVIDIA we've outlook that from providers this because in if revenue their wonder seeing customers. suppliers was things well, in heard I the this

Hock Tan

it's enterprise Well, market, we much shift. very well. interesting AI the on in terms focus Okay. as an do not of question But know you see,

call, you on networking on platforms side, just much guys. Our XPU don't on products But much side. some AI largely, as digital on enterprise. natives, and largely, much what also on those AI the with or especially hyperscalers, AI big large very are focused in cloud, We very deal even

So that obviously we see don't trend.

Operator

One moment from and Ross for Deutsche come line our with will the that next question, Seymore Bank. of

Ross Seymore

it Broadcom pivot like, software VMware a the third over software of I great seems side to wanted to things. off. business quarter. the obviously, had It like seems Hock, fiscal fell the classic

talked business? of happened of VMware? on are the the you question classic about volatility? the as that puts $X two-part that And we if we billion reaching growth create so, that of the quarter fourth the guess to Broadcom I is, in kind what So that things look what in and now kind in And side the into rate takes with are future base

Hock Tan

much we convert also been VMware we VCF. license full And stack have as far I And continues perpetual very we those that two ratio successful, in the very of our the indicated, ways, subscription subscription high that QX in given see much very into we subscribers, business as one VCF license 'XX. a the so subscribers as this but and as likely to continuing Well, through trend very achieved. from for well new indicated, customers to of has book very

terms extension, in of 'XX, see than directional directionally, guidance by accelerated accelerated So you and, QX the giving we trend, I'm other growth. to bookings in continue

Operator

our Rasgon that will come question, Stacy next the for of with moment Bernstein One from Research. and line

Stacy Rasgon

semis, On -- back shouldn't why is happens? before running like segment. it businesses XX% each it prior cyclical? on below was going their peaks. Or shouldn't non-AI are way reason more get recovery just also clearly, Is the why is networking Is any other something there one is any off. those below where on? ones, And this the levels to those short there once else two have rolled I than reason

is quarter, for ought falling then just pieces software the we business Brocade the growth was to thinking so side, like the the so look a a quarter from here? And bottomed of well? that Is $X be it's software that back is on go the at non-VMware before. sort level this forward billion-ish off? And that level right $X billion-ish that as as non-VMware we Is about or that to it

Hock Tan

Yes.

On simple. the semi side, the answer is very

receiving. you that but before through customers, adjustment many cycle down cycle the indicator semiconductors. it, have, As work the bookings through ourselves non-AI, as gone we've of it it. have QX indications about bottom. the stages on up referring ecosystem, we fact, in have all possible. And We've In signs non-AI our in in all from down is through typical particularly levels from demand very we of talked an And is XX%. as are we're gone much immune ecosystems, the supply obviously We've insulate through passed your The and of a semiconductor non-AI, bookings in as we to to And best on as many not try the clearly broad know, the I'm in is inventory we as our seen we the times. chain. gone

And so to we on recovery. way the us well that are tells

the Now seeing timing sequentially, fiscal enterprise recovery QX on QX passed of, of QX year. our or But the markets, center, bottom obviously, enterprise terms IT data from we of recovery And cycle. QX the in fact, varies. believe, recovery, largely And this we're 'XX by see as into the in and view, continuing we'll a enterprise, in amount of that recovery spending, indicated, was, the end I somewhat we've bottom.

close here are seeing not that in but it bottom that we the terms the sense used from be. where are as bottom, to we of yet to bookings see in Broadband, again up it

And at are as very, my through keen that a uptick. so thinking cycles, previous And the we sense like us of on will non-AI the will rate broadly, an is gone all And it cycle, we we go. back down all it bookings, to is semiconductors, you, given to whole, at very to why Stacy, There's doesn't. get reason be. level used no the had

I put you digital a across and that permeates need dare to upgrade as your say, even AI natives, enterprises servers. mind, all thought in

need to storage. upgrade You

workloads even the be could ecosystem. cycle, sure, And precisely to could connectivity even the upgrade of be, meet anything need previous amount amount upgrade cycles store, timing manage simply would entire networking, up of come up You we're for out to across the the our but what that not would because to when, of that if headed hardware. else, cycle, manage, bandwidth you we up AI or these need all need, just and surpass refresh an

So that's down this worth headed cycle. from cents' we're on my where two

the lowest belief clearly very part the 'XX reasons my So we the point as it for stating uptake of here. was are

reached and one of On have the up very the clear down, VMware and stability. what level question, we've revenue, largely think no, side, goes it. up the year, how software and we next I I of to level puts think a a years. non-VMware more X.X are Brocade picks looking volatile, reached And towards we stability takes software as your is over on those But on that that's X that of revenue, very

Operator

and One our moment come Ben line Reitzes next for with the will that from Melius of Research. question,

Benjamin Reitzes

in your billion and next mind, Hock, quarter that wondering are Was revenue some to wanted hyperscaler should customers your with expected? quite you the you that was from? comments. could than grow to expectations? And portfolio. Internet growth the any third $X.X AI revenue, was don't to I weaker your then your line $X.X-ish then bit. you semiconductors, clarify anything I of sequential additional AI was about where billion, come just you to if consumer And And within ask said due if expecting just year a you with if

Hock Tan

basis, in our extent, us revenue for what's our AI line AI number step large to was the up in third $XX be. revenue our we QX in Well, the giving quarter for forecast much revenue guidance And a billion. to year is over pretty is expect QX -- full what to to for

to indicate, And in we And place hyperscalers, networking. And again, that and for a and hope all to nothing next have accelerators it's, continue be of also mix AI based largely it's the us, year, trend it cloud, else, growth. largely I natives. will on strong. it's if again, that to the So that and continues digital backlog shows

that, no, beyond have. Beyond not we're the guiding you backlog we

I any shall We I see. have So answer kind do on question customers. your indirectly of more

Operator

next question, that will come BNP from Karl our the moment with One for line and of Paribas. Ackerman

Karl Ackerman

relocation Broadcom hoping is action of down this the investors you billion company if the to that pending Historically, getting to tax Kirsten, I'm asset causing to speak $X.X redomiciled a U.S. as I a sales was the questions to of ahead and any back transaction, IP pay could seeks may has relate from liability. debt.

could you if clarify So be helpful. that, that would

Kirsten Spears

just to to that was it we to when charge. It's and just we offset No, a no, anything relocated do that Yes. that. have is caused deferred do time. the this billion with doesn't timing And it liability. it the $X tax chose of The the IP

So think little noncash, that. impact of that to as cash very

Operator

with line our question, for moment Timothy UBS. come Arcuri that will from the next One and of

Timothy Arcuri

I GPU we're what to the seeing rate the revenue growth your AI side. ask Hock, on versus wanted in about

as Your ramping year. in next a be might they ASIC their that the shift AI year. revenue say back GPUs of purchasing custom the same year customer's some GPU code thought version year, their is to what new grew zip some your next up and would that it And did of But growing. compute this main there's you next

much qualitative great. would AI there, can quantitative to your If revenue grow should you thoughts that year? us compute of think be any or So that track growth still how going next give do is you GPU the approximately

Hock Tan

had Could communication we think repeat I gaps question? the some Tim, you here.

Timothy Arcuri

Yes.

AI And side of you what so year? So this your AI on would the is about year question, happening Hock, as equation next revenue be that GPU GPU of year, versus change next the compute that we're growing materially around question is really anything rate because what rate there growth grew that is GPU same growth the seeing than would revenue is, your different growing. the compute's what the

Hock Tan

market does all. ask I in very that's you Having NVIDIA difficult for it the of to See, That's play see. of answer I the in enterprise obviously, guys they I'm because the comes the that, who ASD. right? at And a In somewhat both should where which part said GPU GPU, parts, question is in on terms and don't me hyperscalers, doing. growth, two totally focused market don't play do merchant

platforms, that workloads lot indirect. But own the of their towards may the thoughtfully their there. So there's few really long take base, long creating And one is no own drive, and suffice will of the huge as connection that to And large actually I'm hyperscalers, accelerators, silicon, term, hyperscalers large for much matter models, as model possible custom on seeing predicated very compute midst of other. That of in language we time. AI which transition, requirements, a are it out large consumer entire happen. a me a say, a saying of time, to years matter platform that's with term, and running with for large have the subscriber few lot

enabling I'm in more path, on path different is custom on their that in I'm of different a of workloads. not doing do accelerators. the guys. enabling the AI different So path. a a to That's trajectory that in path in a own merchant I'm this, and of, enterprises meantime, trajectory, that

a transition are process, guys today, but on. of of the merchant hyperscaler in obviously Some going also obviously, a there's the

large I networking obviously, business the have the we regard. with and other, AI connect the the we in have say occurs, accelerators tailwind transition that really doesn't one of hyperscalers. good a Tim, So centers data as would likely But of in model those providing to

Operator

and from come Sandler. with One will Harsh our of Piper next question, that moment the for Kumar line

Harsh Kumar

things VMware, curious was software greater margins the businesses is Historically, little profitability different. operating your I Hock, than newer a VMware. XX%. and I of had you're know, doing about have

customers see and if you're VMware historically as I you You're kept. after done have keeping curious all profile with was than the software your more everything. businesses cuts But a for similar of the you rest

Hock Tan

operating conclusion, lay was our $X.X margin. as to of but In Well, but I'll you even out it figure of I as revenue operating was $X.X VMware where still Harsh, starts let we'll own trajectory heard. continue is and your revenue QX, to you terms stabilize quickly And and pains out, our you indicated, can the continuing expenses I to we're billion continue QX, expenses at from margin pretty draw billion. grow dropping as headed in and, to reduce. And probably EBITDA

Operator

question, the One of Fitzgerald. will line moment Muse with next for C.J. from our Cantor and that come

Christopher Muse

gross wanted to margin. software on I focus

high So of as closed and ticked how higher from margin gross billion of the that to we XXs low when 'XX, VMware, bit in we get higher for threshold, now we're we you've And fiscal about acquisition $X kind kind software? the you and overall XXs, of of into lower, think July. indicated trajectory kind pushing should curious, a to

Hock Tan

direct, gross actually, Well, for us, margin be not that relevant. to software is

know big unless running You right, SaaS I'm that, time.

of subscription SaaS. our lot products but on they're not a Now are

SaaS products on around XX% are of our but And most not. them at be some We margin have cloud-based, will least. gross

Operator

question, for Research. Wolfe come will moment our next from with that the of Caso line one Chris And and

Christopher Caso

of I the customers other in that you meaningful customer. from the speak year to segment? some wonder largest are from other as start into could perhaps And and to do expect the next ramp? those if that AI contribution custom newer revenue some what of projects aside you the How customers

Hock Tan

thing. the we're Well, I know dancing around

going not customer. not simply trend, on a for that do them an easy deploy used. to meaningful customers Until AI product the get we are customer as them accelerators, customers consider as to of meaningful, we them it's call all out we X we've X with won't otherwise, any indicated, now emerging on, I and shipments As because this criteria really an is

deployed not AI concepts as And volume. production These proof in those of so X of accelerators production all centers do are customers. data we consider

Operator

that our the from with next Susquehanna. moment and will Christopher One come Rolland for question, line of

Christopher Rolland

actually And about you what accelerates what for is whether bought bought your hard actually and assets earlier SoC years? your this of the storage next Can in Hock, My economics on means question business year. in you you disk the company, talk storage. it there, Seagate's few drive over terms

Hock Tan

partnership long Well, more great everything those for a for It don't anything with, And the storage medium storage, eventually, created to so. is transaction, makes Basically, be to we term to of believe has technology, in hyperscalers. I the as sustainable we sustainability interesting Likely, is medium meaningful. this disk think lot go. storage ways which what else. sense. alternative goes in actually a Hard still of than begin a essentially flash. us, that of will hard most drive disk long-term drive

it XX lot A hard XX a and XX, is XX, along disk resides terabytes As drives that technology and even of to the goes from terabytes. going in is of lot XX, where XX, today, way silicon. which

So to and effect, as our that in collaboration, what it and of ambition, we're X eventually engineers, industry we a the Seagate terabytes, able a that's to within towards less. be do map to that intellectual or years purchase goes we're enabling combining our basically vision, property. have and XX also road continue more that's entire anything designers going else, is with obviously, the a structured, designers, than doing, taking But

of very nearline hard that's a over storage, the hard it drives, belief pretty well is. disk years, It's disk statement that what not our X next will if longer. So sustain much drive

Operator

our that with Fargo. for Rakers come Aaron One and next moment Wells question, from will line the of

Aaron Rakers

some NVIDIA's thinking Blackwell or as product for ahead we NVIDIA. to has in optical opportunity that possibly, related from of in curious, deepen participate to I'm deeply that participation to platform to do forward to of that opportunity Blackwell things as in maybe there's the an other look been NVIDIA? general areas see NVIDIA Kind more Hock, Broadcom to of strategically of just cycle DSPs of cycle, prior just product participate side the generations relative kind the you and a indications an

Hock Tan

That's directly product and map road map. question, on out. product, That's simple in in not that the in of an participating way of not answer. road really I've kind coming kind got road of I'm NVIDIA's terms a interesting that market, really NVIDIA in product Blackwell, I'm impressive map. to

Now could you the optical as in on as to directly, be side in course, or are to That's engagement is be to, DSP part as ecosystem, as know. our enable you're far in to of develop, terms of the that even base providing of very of of that. that it happy to clusters as could I and used, said, interconnects side, it what applied, Blackwell be be be not market we that, whether built. We're but we're enable in that useful we part be terms share referring the Blackwell, may on which technology it component happy to of it's to

Operator

and Joe moment will Morgan One Moore question, with Stanley. the come our next that of from for line

Joseph Moore

still on further the software-focused of thoughts wonder, you becoming about talk or road? your be again? to on still interesting could I you would you if And M&A. possibility your Hock, if semiconductors Is any it radar that did, down

Hock Tan

feeling doing it Joe, that's you're way as indicated a model and that expectation, the side. that about a experience. Right when beautiful beyond we of when much running not disappointed. bluntly, great you great in having you're do you're and really pretty it enjoying And you so VMware. It's it doing question. turning, on I'll this my business it, now, tell myself hands full I'm transforming really

getting go transformation be might enterprises X totally in another complete. no, world. So continues it very to cloud accelerate as that I'm make year, the And in on to the it you VMware focused know largest in deployed getting private years what, to

Operator

the moment Harlan our Sur and come for with question, JPMorgan. that will One line next from of

Harlan Sur

you R&D by on the that second acceleration into programs. accelerators and their deployments of HBM to customers, last is talked here their quite and networking given like for in talked XPU accelerate looks AI your Hock, in the next-generation your tight, data they're about quarter, of constraints. trying centers the their follow-on wins an the XPUs, about investments packaging you AI ASIC It and know their We memory colos half supply GPUs, specifically, year. also

than team seen orders demand? to demand is supply is year? half? XPUs the and been supply half I second upside AI demand here for guess other in upside networking the the meet somewhat of in the and Or has here team Have the constrained? able words, So greater the you that in second your

Hock Tan

continue No, to Yes. we see orders.

of They trying customers, upside. are you're you hyperscalers to start data talk power. them pattern found XPU terms in XXX and to the yet, but GPU right AI the these terms in in X there. are talk continue hear how because And many cloud And that. that or they centers. to people capacity don't deploy our gigawatt, more of dreaming going even see We megawatt, in more not of behavior is in

getting getting So we're XXXX. indication as that is upside recently. And expect We're that to been in giving say see We I or we're more you. enabled, expect happen right any you on. we're seeing what to pull-ins, upsides. exactly guidance we've they probably get putting lot a But this do not in as

available getting bit over infrastructure forward them. to We a to related quite probably to We deployed XX deploy next that and getting going that. XPUs rushing months, continue especially see the see of and

Harlan Sur

you or been upside supply by that meet Have constraints? able somewhat limited you to are

Hock Tan

We those upsides. can meet

Operator

Research. come with Edward of and moment that our Equity line the Charter from One question, will for Snyder next

Edward Snyder

a was into segue question. perfect that my Hock,

pointed AI to Are from looks that would go and like away merchant kind that's the that the market. is to still with secondly, guys be the thought it point. deployment you of you factor at out, You've that this opinion of ASICs said power trend move the just way. heading for of as becoming the But other is compute big long-term defining this? And the going trend the past all in calls you

the it a Given takes more for watt of superior to standard of funding, are even moving to AWS, the with of more custom especially shouldn't performance ASICs getting a starts why enterprise of silicon a wouldn't GPUs, this, cetera. time some lot move some it over to we et is applications to per enterprises know But the of that specific are long of I be GPUs, guys as ASIC? a and going the workload. custom takes these like bigger, which see involved some the kind see there across,

So basically, in the in overall AI. trend ASICs

Hock Tan

you to the you or right? there's right trend meant a from XPU beginning general I say did towards Ed, ASIC that at that Okay. hear purpose GPU,

Edward Snyder

Yes.

Hock Tan

and be on no so the I view. to even mostly to or silicon, and there think to silicon, think my software are custom you, right, silicon to far, used one return those merchant It's interest think to there's the good. silicon. none win. do world, these that I the semiconductors You're out the because custom Well, the way, the create destiny for create the the you're silicon day. starting enterprises end in did incapable I correct I language silicon and wherewithal quarter, in to too them rational, flipped those hyperscalers general-purpose because catching much training of the at right expensive nor that, on maybe And X GPUs hyperscalers accelerators win months It's and make I to like it. But it platform that, what just AI so trying for do last actually of different And of at me is they're of on and all to more much too going doing own to do There's GPUs. compute have AI custom rational, by up models important enabling all But their -- creating But them the I'm small maybe, the language XPUs what there at guys, are because resources if X will rates And are history by the much here totally control your accelerators. about and to thing now, to based merchant nor are financial they a large for it to hey, it's are large scale tends your cloud about general point just seeing purpose, how different economically do it workloads of on Seriously, of more more a the And nonetheless, to ago. run markets large pointing their enterprises accelerators. market that's it, it custom and of It's engineers, do. it's the than bringing own financial those few not own especially control, are with times. than part, that's platform. your It's all terms I'm constraint, case, all these important. better it where models Those about to or in GPUs came engines. overemphasize them think. able about

to it years. longer, But them biggest there takes to trying and it of are you'll lot been guy And take I'm all doing there. time. But years. up X lot learning obviously, a saying in a time of takes the what done them, have not Others process had they for the versus are of catch started. have X get it

large think to But already it, But haven't own if them you're language some I for will direction there's for train XPUs, all create totally yes, ASIC those there. step, their they done still Meanwhile, will a get in models. And go step enterprise it right, take be it, still in to accelerated. you'll platform and as call time, we or, custom merchant guys, market by will they silicon. hyperscalers, that on start into silicon. few their

Edward Snyder

whatever, all attractive. the trying beside power, more you basically to suggests everything, the more GPUs you're expense curve Right. and the That something of early call where closer spending part be the that this but ASICs become the not GPU of market money and peak to on for this money the your getting you're to right, and cost you're could just all paying because I'm as

different, going So the curves to are look right?

Hock Tan

accelerating to from an enterprise. hyperscalers happen those than totally of It's it all in the may longer demand want It that we size accelerating rival will curve. take the because definitely the but

Operator

like closing time to we the that Yoo Ji for call have is over session. any question-and-answer turn would our to for I now the And all remarks.

Ji Yoo

Thank you, operator.

This and Technology the XXXX. quarter report of webcast p.m. of XX, after quarter, Wednesday, A will San Broadcom will the Broadcom close Thursday, fiscal Conference its earnings be presenting X at public the on market in conference on fourth September Pacific. call Francisco. plans Broadcom's XXXX year Goldman and Communacopia earnings December XX to follow at currently for Sachs

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

Operator

concludes program. This today's Thank you all for participating.

may disconnect. now You

Broadcom (AVGO) 5 Sep 242024 Q3 Earnings call transcript