Broadcom (AVGO) 7 Mar 242024 Q1 Earnings call transcript

Hello, and welcome to Broadcom Inc.'s First Quarter Fiscal Year 2024 Financial Results Conference Call. At this time, for opening remarks and introductions, I will turn the call over to Ji Yoo, Head of Investor Relations of Broadcom Inc.

You may begin.

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.

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

information copy, did accessed at website for can the audio conference webcast through may receive replay you being This Investors Investors a X is Broadcom's and If obtain of year not broadcom.com. website. the section be live from call Broadcom's of the section call you of an the

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

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

up In Thank you, billion, for as QX year-on-year fiscal our today. VMware. consolidated included you, XXXX, contribution thank revenue XX.X us from and $XX XX% Ji, joining weeks revenue net was everyone, of

revenue by infrastructure sequential VMware contribution year-on-year $X.X a XX% jump consolidating solutions infrastructure to year-on-year. billion, revenue XXX% Semiconductor increased drove in VMware, to software year-on-year Excluding $X.X to from revenue revenue software, was X% and XXX%. billion. With respect revenue up consolidated grew

quarter, fiscal bookings strong the AI In semiconductors, $X.X than of cyclical slowdown and quadrupled XXXX. expect revenue telcos. offsetting We enterprise rest in billion current at year-on-year VMware during to more the through revenue accelerate the growth will continued

to on included year-on-year sequentially revenue color from than software. revenue billion less starting you our million in XXX% from is with X segment reporting our grow give grew $X.X VMware rest QX quarter-over-quarter VMware. year. This over through strategy Revenue in grow me and more in software of $X.X software QX to double-digit $X.X and from $XXX billion of up billion the is QX. let VMware. Now percentage to result of will was bookings $X simply expected sequentially segments, Consolidated in with the a contribution fiscal billion

platform to of workloads Cloud for branded XXXX complete upselling networking in factors, guidance their on-prem. VCF fiscal without that having particularly to VM and capability software on-prem our growing $XX all their business virtualizes compromise privacy and and AI run -- are wherever enterprises who virtualization reflecting vSphere on VMware Private GPUs. to tools reiterate VMware to data And to we focused and this on enables storage our from customers with Foundation, on-prem entered in their NVIDIA are VCF to complement customers, upgrade self-service fact, control provides Foundation, strong allows run those VMware AI customers' deploy alternative VCF, centers. drive they billion. compute, stack August, integrating This compute data. to data year, these AI seeing And of modernizes the This on public our cloud. And cloud and a models and their seeking customers demand we is do last workloads which for We full revenue Explore already otherwise into software the an a are running called VCF. as partnership for

Turning to semiconductors.

revenue. beyond year-on-year, me at strength hyperscale accelerators. this This representing of was billion extends QX markets. networking our driven end $X.X X assessment overall provide an you more XX% revenue strong accelerators semiconductor customers. This AI demand of by for custom AI give our I largely segment, grew our Before let XX% by color of

Our are well XXXG large-scale data latest Ethernet strong generation Tomahawk hyperscale X components experiencing and switches, AI as as customers at enterprises demand deploying DSPs Thor centers. NICs X refinements, optical

strength For fiscal to annual now AI XXXX, NAND over guidance revenue given year-on-year for working continued to grow of our prior networking expect we demand, XX% compared growth. XX%

$X revenue. to wireless wireless. on sequentially of representing semiconductor QX and declined X% Moving of XX% revenue billion year-on-year, X% decreased

to strategic all fiscal XXXX, of you engagement flat to North year-on-year. and revenue multiyear. with be our by may As previous continues deep, course, guidance helped content a And American know, wireless in for we be reiterate the customer very increases,

was Next, connectivity our year-on-year. of down XX% revenue, storage semiconductor QX XX% revenue server $XXX or million

revenue in are compared million to and prior to seeing declined semiconductor guidance are recovery the We we range represented 'XX second outlook server for revenue in in percentage expect to revising but $XXX first half. the year-on-year broadband, high decline year-on-year revenue. year-on-year. On QX Accordingly, the our percent storage XX% XX% half mid-XX decline weaker of teens fiscal demand for

of are We year storage, year weaken our XX% than with resales In expand to more QX trough broadband until industrial from revising outlook fiscal 'XX be for industrial resales broadband million single down in fiscal $X.X AI And server and year-over-year X% growth year. we semiconductor offsetting grew do stronger-than-expected expect revenue of digits the cyclical continues mid-teens 'XX, the telco finally, high revenue spending year-on-year. not from weakness accordingly, And in continue upon and QX to $XXX to cyclical X% year-on-year be late declined summary, to billion. to for broadband we're a improvement prior in down down seeing this our as year. year-on-year. guidance And

for in revenue our offset representing and revenue. semiconductor fiscal We told high we to of XX% be up percentage more now demand broadband guidance I solutions semiconductor stronger, year storage. expect at billion, year-on-year. our XX% much would weaker-than-expected to AI 'XX. from $XX be know this full over We revenue and revenue service mid- revenue semiconductor single-digit some reiterate than of in to AI to you December, our Turning be from

adjusted we summary, XX%. XXXX. So our reiterate fiscal guidance which be for for growth. XX% consolidated reiterate full to our revenue guidance In of EBITDA And year-on-year $XX year billion, represents we

I turn to this discusses more annual recently this will let just report fourth company's performance sustainability on quarter, that a the of provide published Before me its available who over citizenship Broadcom which ESG Kirsten, financial our highlight call side, corporate initiatives. details

excellence, Broadcom's product this a As recognize committed our we technology mission. Kirsten? remain and global communities. to we leader, Through customers, employees technology our to and responsibility operational and innovation connect

Hock. Thank you,

for Let XX% ago. from XX.X from $XX contribution weeks me quarter, a additional financial and QX included provide XX-week VMware. our the quarter up on year now of revenue detail was billion a which was performance, Consolidated

and up was contribution of the QX primarily of $X.X was VMware, was year-on-year the year-on-year. XX% and income, both to at up XX.X% with Excluding were contribution revenue operating billion, R&D revenue including VMware, billion in expenses from a the from operating $X.X ago, increased year were Gross XX% Operating due revenue. $X.X billion VMware. QX XX% from quarter. margins margin

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

year-on-year for for primarily end our was up was quarter. margins solutions our operating P&L were product XX% our review year-on-year our within total basis segment markets. approximately increased XXX year-on-year. solutions for and million, XX%, represented X% to Operating segments, semiconductor driven by revenue resulting in of mix XX%. billion $XXX points XX-week margins semiconductor a segment X% down quarter Gross semiconductor. $X.X This X semiconductor a expenses of of Now starting the with Revenue the semiconductor reflecting in

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

Excluding transition operating was costs, XX%. margin

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

capital on accounts standard revenue. first payment quarter XX days. fourth sales X% brought $XXX VMware first in $XXX Excluding sequentially. were Broadcom to with cash expenditures. Days integration days of of XX were the terms outstanding on of billion, restructuring free and quarter XX% spent the in inventory days days spend of million XX We million XX due The unlike on VMware higher we acquisition. quarter accounts compared flows ended to has We receivable up the receivable from $X.X the

across We continue ecosystem. to remain we on manage how disciplined inventory the

in years, billion and of weighted our rate The and billion $XX.X $XX $XX.X to X years We debt. average is fixed and maturity coupon weighted our rate X.X% of maturity years respectively. and rate gross first of X.X quarter to the debt is rate debt years, of billion billion ended X.X% and $XX in cash The coupon with respectively. average floating

we $X billion quarter, million $XXX this repaid repaid debt that of rate we debt floating of rate debt, and throughout of we quarterly our came fiscal During maintain intend This to repayment XXXX. fixed week, the due.

expected of executed $X.X Turning of of to with $X.XX as our on weighted and in a $XXX second equity, our AVGO remaining resulting dividend shares. To of diluted $X.X of $X.X on help dividends In of with the due issued million, XX the repurchased billion common QX increase eliminated quarter, effect issued share the million increase non-GAAP stock stock cash complete share in paid to approximately shares we we repurchase the common approximately stockholders allocation. authorization. stock billion QX the for cash to resulted share vesting based the elimination taxes We the $XXX common weighted for VMware sequential billion buyback employee million to capital you plan and to quarterly shares the on per our of quarter. are count, in fully X.X million share count a in acquisition modeling

division Regardless closing reiterate XX%. discontinued $XX guidance Now to transaction we XXXX dynamics division in close has software operations updated divest year discussed, on consolidated of and choose February, the Hock EUC revenue our we and and adjusted definitive in financials. expected With to our QX conditions, of regulatory customary including fiscal guidance. regard agreement subject EBITDA signed classified in XXXX a approvals. The of with for segments billion the to end-user semiconductor as of been VMware, the to computing to our to

impact on retain to form merge Black security decided Carbon revenue is and Black group. not enterprise business The have We Symantec with to profitability Carbon significant. the and the

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

Harsh with Piper first line [Operator Instructions] from question comes Kumar the Our of Sandler.

are and that tremendous again, benefiting tremendous on software. Once guys my from results you but AI, in activity was question

mentioned you think you would it why your that I bookings $X I rise Hock, you quite that guys is XXX% was it correctly, doing this I to strategy Is billion in dramatically almost my software making us correct, if something up, to from XQ. if a simple? are over hoping that XQ. that's something rise happen? you explain XQ is heard Or angle math will in could it

not so of call successful late with We on data November, VMware, focused cloud, As and this centers. now I very early customers on what we and been well, indicated, cloud are private This innings upselling early deal at the solution have on platform selling, on helping on-prem buy but -- acquisition still just I has just or agree. deploy March, very we deal this far. the we private point. closed closed their we're March. And It's virtual the

very the months, been least focus And very be, to initiative on So on results what is at prepared has push successful. launch the but very, of it this cloud, benefit X private very which been have we VCF. expect to we we much and had

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

quarter, last AI compute you Hock, pulls to think, I $X.X it on as from being billion also than the revised your connectivity as this quarter plus networking, well. $XX your PCIe, optical, mentioned, solutions but ASICs, AI greater billion, outlook pulls

increase So ASIC well? understand you importantly, as stronger demand, in seeing in design optical, that networking, help are stronger us pipeline your stronger of is it can et like cetera? AI a forward win ASIC also billion you $X.X more just But acceleration outlook, similar

There's a lot a to me disgorge. you questions, information lot of want of

we? hyperscalers we roughly increase shown X/X is shall have almost time, mentioned And before, AI take XX%-XX% increase, compared components, of which said the one before, accelerators ASIC you custom it's collectively are that as that about billion couple with them Let's accelerators, are have a networking XX-XX, which combination. as components. similar we it's as Yes, other which at AI is or the considered And of a mix. to $X a X/X,

a you engagements? similar And then forward are acceleration design and on win the seeing customer pipeline

rail do I anybody. I at not customer go I as only have have have really count into indicated production that X, a only X this I seriously. don't point.

Our next question.

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

it's kind switching the along AI, for And think switches? the this say, started -- the is is what B number? of side. be then comes over XXT get, later? if upside? $XX do part the that Have were Like per a you upside really increased you there so supply, to see kind from second something for very that is again, already terabit that that supply XX on billion Or you still to you the switching of this of Hock, So supply-constrained is contribution of it? gets to project-driven not benefits on a year? on that mentioned this number, that let's Is could

great going is guns. X Tomahawk our No, Yes.

in bigger XX of surpassing scale-out the Tomahawk going largely you're larger thought. of rate from a cloud they unlike not cases, hyperscalers AI of we data past, Hence, that generative enable driven to the for and clusters the functionality, demand. in is adoption are environment. out building scaling X, bigger your of all is perfect many larger and centers, computing on terabit we it's Tomahawk are pipes. we're Now a X, and previously had AI lot traditional basically, a -- coming solution, and And Tomahawk the This by X in seeing

do solution out have customers focusing where We lead GPUs. And with on, you to a on chain? we not hyperscale So a chain that get AI constraint supply that supply are good a it constraint. accelerators, do connecting our in I is time very enough of is respect think

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

had question business. a the I on software core

almost the for said rest the almost, VMware up math like and my year? Is we be we do in And the have how VMware right? that? the business be? you and we can how just that XX% growth do think billion, so, core like should that $XX was of if software, CA, So business? guess -- the core on the about billion I of X about What's in thinking at was as put $X.X year-over-year. like months VMware Symantec sequentially which through how going there the could in And be the Brocade would or XX% I all go X.X still

Yes, over don't too excited get that.

were but as our especially contracts, in obtained older very think it's I other distributor certain -- platform. old very renewals products, -- strong strong was of it's software we from contracts and the Broadcom contract some in mainframes,

backlog not So on also is this bookings that has show star accelerated, but Star VMware. and that's the of are accumulating this show, accelerating Stacy. we the

Okay.

like So accelerate. that benefit, $XX VMware so running rate is to still billion run billion sounds should that at like an $XX

about. than talked So the more should be $XX for VMware the overall that you billion

at you've a So that like software XX. core onetime. business, model this overall the off kind that could strength of We quarter, kind the was of because got falling the still

Correct.

question line Fargo. next Rakers Our Wells from comes with of the Aaron

channel discussion -- now curious that that had I'm some little to in VMware continuing you've you like acquisitions the how to your getting really engagement, VMware go-to-market been of I'm kind how with know about segmentation on bit. a channel looks done. at of wanted little -- strategy asset of have legacy for kind the VMware thought how is you've a relative What the you prior of while, the software you discussion there's Are past. kind the I customer Yes. of VMware. base the around I ask Hock, of the

go just to of So you've kind of managing how that curious I'm been market.

be choice, Foundation -- have cloud, in very a But -- demand, resilient, we of high we to cloud. Today's which haven't love center it. X to long, the very because but running get is too selling seems applications be to really loosely. customers but future it's some modernized use which make out, centers of go critical process customers seems to would most it mainframe. the have there of engineering we able it stack, is platform to as X hoped not data that to up in they be in our to VCF but things what vital. Then in here they help taking that And low are still offering support on-prem, just the into centers, go are and old VMware can distributed on resembles seem workloads in public -- both at to a a a it is customers data which these is then except cloud. which -- trying data -- had on-prem, the on to and some what and customers. These they legacy these be we looking had what's today environment, work elastic in to start That's resources also because are well on stand very and market it being while very now months months. have in deploy and to improved workloads the it latency, what it Basically, be for and really on-prem it's an and of applications yes, strategic market like that to that they modernizing we X,XXX progressing focus or very are exactly able word handle I Not guys would -- we which highly Many public market, than on-prem. these focusing customers still have significant is they our a say, all is of go replicate Cloud are put have a data -- time to to about I lot where an who at your angles, availability, focusing don't had data the not It's one do of think want largest, center VCF, with hybrid these where situation. our get same of distributed lot out centers more honest. growing,

of -- it over Now the level are last X X seeing in we the are we months generating and but months. bookings

Our next question the from Danely comes Citi. Chris with line of

going the a And existing we then you Hock, like coming much customer new How a going And the customer just perspective. upside to you terms is AI see the to Do of versus how base you think do from in it's customers? broaden? on price. question of how know forward? upside

of you better customers be better these for and there do the get bunch well? products, a as So listening new they're could margins to if call. some pricing not Hopefully,

Chris, sense consumer this to a try question. market, so thanks the perhaps the -- for because Love me how of perhaps generative to it let using we AI think and It's you market, generically give large as let with huge, X speak, AI it subscriber segments. huge new very it hyperscalers, -- well. is really especially base. we see as One very broad loosely segment hyperscalers

buy, those invest quickly. sense continues scale ASICs, ROI clusters, focus run, subscriber the on. a subscribers few for attention who can are, with AI for You need players lot. And people opportunity their better with the and very way investment but we lot here, those we advertising as out, a buy ROI and a because platform of vigorously -- we are obviously, very the through but And generate makes comprising almost the a data. And of have AI They the probably but with seeing to language sell. clients. be not in custom great plenty that's it advertising accelerators It's of guess They infinite segment base, accelerators where with the are custom accelerators, better model that clusters subscriber that a models a parameters. only models very subscribers to few to running, they scale of as that this of those is the amount AI together large networking also models increasing with comparison, and that, comes large -- silicon, using keep through but their foundation to this very huge a value an and getting to base generate large experience able

network size, to Now small we big the segment have. of side, growing, value while working compared percentage That's the it's the the accelerators. one

have, what we call is is The in I smaller, segment other enterprise, enterprise the segment AI. which broadly

of in so buy -- people hype the about our And like do Arista on. Here, networking but we about large, big as savior gets all silicon much companies here, who mentioned. cloud, all and the merchant their If through and large you're other possible. And not AI don't going productivity for even talking the data those market own market. on AI accelerator, public -- -- they're they it their being to we together components it who as these various to routers on-prem. they short sure, beginning networking they large trying for as in on of have. market. components these going with I AI take try are AI that's do they All on-prem, switches, That's a multiple with a to wants that news sense terms initiatives. tie companies, accelerators the centers, but side the different all and have switches have silicon run to XXXX to it But that here, standard run initiatives And

we interesting and both. see mix, So it's an

Our Paribas. with BNP next question comes Karl from the Ackerman line of

understandable our customers storage you begin to perhaps in your broadband, customers sequential you again those your indicate weakness Hock, have what backlog that those in But to second server markets see is speak this through visibility the half calendar and said could year. could season. peers and growth earnings with would markets have given in order the

correct. You're

first We half, the are near trough. This sure, trough. I are -- for 'XX, we as be almost will like the say, year,

But know. don't you -- time have but Second yet. 'XX, we lead know XX-week then half as

to And a we sticking up seeing bookings from that, disciplined based lately bookings very significantly are it. are on We year ago. in

Susquehanna. Our next question with comes Rolland from Christopher of the line

this one's for on you Hock, optical. So

there. checks you're So suggest integrating our vertically that

TIAs. now in You're your drivers, putting own

you to an traction PAM-X networking think DSP. here. this in be of as of center back the appears well. be data on exploding should a had And is in lead that And XXX-gig get early You're of I lasers -- lot kind this to starting AI

So I is then fast this how wondering us the talk market you was for growing also help size if could and about you.

you have been us, may there you in if X/X great. it or of think but for some gave AI kind double can that the perhaps be clues I square number would that click us,

Okay.

Before you as in are And get law small slowdown away, in please, bit and outside [ carried in components, also routers networking PAM-X being those ]. of they environment accelerators, a things categories using all know, other where, like of retimers, optical Jericho networks. the DSPs, traditional those AI an compared you to Tomahawk a is switches also all AI kind enterprise

So different is push a skewed, data thinking AI CPU-based very to compute what it's the much networking line to tends center. content showing in demand And and traditional because an us center AI. very could be it always driven very very to on by data that of is compared -- from biased relative the think that that mix in is a

small. things they compared that overall ratio. And are PCI routers. Think accelerators, AI Express not big So what data content retimers quite I on and in bit and But scheme in lot the all PAM-Xs, even a sell optical of and there's you're get in that guys way. in right, in want don't switches. they -- wrong DSPs, there's you are switches of the to center, a compared of we But still to to components AI

XX% those Those -- entire XX% said, And of And the rest more OEMs, that. integrated optical are you competitive. the that various half not switches unlike else. we those would AI where XX% accelerators; manufacturers we billion this much We As do would in But not like so, components key everything say DSP -- the about. transceiver else, sense XX%, are AI we manufactured other revenue in China, are do transceiver. I of routers. $XX because plus Eoptolink retimer, contract or everything by year, we said, are within don't Innolight, guys the than we're more like typically what provide that talk are the guys more components vertically do and XX%, be I not

So weighting values. when can the kind you look various the you at of understand it of way, the that

of from next line Our question Toshiya comes with Sachs. Hari the Goldman

you address Hock, designs I they on future customer, group last one I who appreciate largest and compute. and capabilities and conflicting picking sort was investor of continues have share, of to there pretty we're the your the asked is that back. at bunch questions. I Asia, question the competitor think you But based in call maintaining, terms we all vocal this adamant in of be custom one quarter and not, confidence in a if we're up have extending some position evidence, getting may hoping of could that your your level there.

talking. can't somebody trash from stop I

way best to the it. It's Okay? describe

that speak deep to do like large here, relationship very way. it terms please, leave to do technology products, critical most strategic things multiyear we And themselves, have, I we a customer. and always it add as in numbers for the tend of our and with Let we

Our Rakesh Mizuho. line question from the comes of with Vijay next

obviously, from silicon only custom talk both? you silicon And peers side, space. dominate hearing custom what's really you you road the the X about mentioned major X on But silicon maps if well, But on you're flip ramping customers side. back holding -- wondering hit some side, custom just that so Just could up guys other customers. their hyperscalers as

lifting one. generative have AI silicon two, you in silicon custom to the of silicon. more to of dominating create Well, X is and takes do really number don't data just have point to hardware just because need a trying than that It's -- AI in number be capabilities than heavy Number or create only at your to second solution -- AI very even market, more it's dominate centers. a for lot those can't this we years. That X. it one, It takes

You have you your in creating on that have that to works silicon custom invest matches. a lot software models

work developing. match models create and optimize custom leads needs silicon place, are first You've to you to your to in model and foundation which the which got the business on then

the So it's we it's customer mentioned for evolving the iterative that even process process, with. constant deal an a last call. I and same in

that well layer years place because to the a to it. All be where because delivering in has translates the firmware, and it reach models it's really able production takes layer hey, -- I'm it and So worthy it, It's silicon basically that work work. bad. you into finally that with with a that understand put to point software the to say foundation customer the doesn't or that, software works is not can

almost like a on in GPUs, accelerators very -- CPUs, is limited basis, still in creating are but AI of are an we early recognized You kind stage. those ecosystem something very well xXX in which entire

And for years. have So to this we of we it to for years point. for customers, have takes With engaged X get them, X X years. our engaged

be everything silicon you even a hope partner that just and have So your something it's just to on it. lines ultimate up or persevere patient, on as developer, very are you dependent customer much because not but more doing you success, be if -- dependent it's

I So so got the only to just guys. got X be patient far.

that And market? on the peers getting into

market? getting Please is to the Who repeat.

custom I well. Like about entering about your talked silicon has NVIDIA of as peers. the been You talking think some market

Yes. that. around thoughts your Just

say in our a Custom people other no going -- do into is be and different made running have philosophy. where comment I it. have All market. I no we have Broadcom, in business, a silicon market have on I to maybe a philosophy interest

Let and my is simple time now which me I've then, clear over and very to every to my philosophy, team which articulated management the Broadcom. whole tell you

something down keep you than just doubling else. you you catch ahead you good you the philosophy. do do keep to things But do will know that job at. And what do you pack. are. do because running if up -- And not than think down better you You of but is somebody keep you're doubling else are nobody can you my much That's else you doing better anybody on you

Matt line comes of Our from next with Ramsay question the Cowen. TD

taking switching routing impact on upfront would at is Kirsten. lower massive stuff business a custom custom I margin leaders no AI The ramped either of the but And higher consider you merchant the if two-part some of payments guys question product second folks custom margin. real networking stuff. in Just Hock, to kind you the end in guess, interested for margin. it? And from custom the a were some thing business in operating for gross you silicon gross this is model around [ sell with ] and already have most a silicon

unpack could just margin approach maybe from the opportunities So philosophy about silicon and way the that a the perspective? guys the just you custom you accounting

business I'll you're take that model. because asking

really crunching. not number You're asking

cash whole particular AI foundation of of configured what a to memory just matrix analysis -- It's reason in compute So point part, the first, very memory. The whether It That's a let not not No, chip needs with a almost It multiplier. accelerator, it AI you to tied has simple an custom run to memory, AI this way just of has almost its do loads accelerator -- an part. -- to comes a a me accelerator. comes try it's the it multiplication, literally matrix to is constitutes of chip, way. to layer short no logic merchant bunch now, An is. lot a multipliers well, a there's it. which X-dimensional access answer it's or attached floating to have come on regression. models

AI super not or building. designing of us in something are good is at Memory accelerators any we --

memory from of about buy So we memory all does you very that. one know specialized Every us high-bandwidth the suppliers. from that, memory, key

AI the what together. combine X X So -- an accelerator you part That's the is.

logic So on part of big way the chip. there's the add-on is compute, the that multipliers, net a even which of kind can very no high-bandwidth of memory, total I on margin apply cost my to I margin corporate silicon get good chip if gross

simple do could not memory, us. we And to a for will an math, so the that could going adding and -- by not IOs justify gross out are you have margin Nobody on brings a accelerator naturally, adding the memory. it that though what consolidated we -- of in, whole away from below there. even we access, that to No silicon kind that AI have product attach create traditional margin entire because

of advanced on command millimeters it. But edge with kind the of cutting So square those to point similar high-density it simple sure, part we margin. that margin. really XXX with of That's develop, we of the the the to gross basis the lower silicon, corporate it, on multipliers brings logic natural kind can content a margin make IP to floating our

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

a First, housekeeping Hock. one if I could,

looked ] it at anybody I You takes that. years iteratively. mentioned the the I TPU guess, but that mean history, work can understands -- custom you also customer, has second -- mentioned of you [

to it you've and that up. before said -- time So ramp it takes

bit us And So your that in a rate, growth fairly the from the question said, into coming could about I but account color then on, number, speaking, revenue silicon Is give custom a much you little phenomenal And or part customer? growth taking had is a second -- low of material your products. generally you maybe VMware. of comparable?

to VMware my -- sorry. because individually, And about first I customer of the on go better You don't customers. tell

Okay.

mind. Never Okay. That's time. a of waste

software, a closing kind now. all focusing X,XXX held strategy get that the sales, Broadcom VCF low-hanging your would on your should in customers say, like X,XXX that's leverage with expect, now? don't that and in first sales thousands share has software into the big marketing, OpEx you to the of from over So had we as of and the, in to selling to customers increase through, fruit so want of changing to mentioned, the I start Why a shift be your of acquisitions because once you hundreds VMware or significant largest especially almost seems product, the

interesting. shift a And have it's here. We

regret. No right. You're

market go have we a more stratify. we VMware. lot because and but They customers, We have are spending on support XXX,XXX, of to

strategic servers. We build it. the VCF, just have customers, to sell, long commercial have good. attempt the They cloud, VCF. compute the we guys. up go vSphere very virtualization upsell don't improved of don't whole smaller we of your the sell productivity versions improve call say to the So what But is we're that fast. My will growing private increase my we and, between you spend, you're scale up, to business. -- But But my CA, it OpEx is be spend costs to growing And adds say, only market services, do did your on this difference and to don't tail this the We of we their support continue increase. acquisition skills, to business support don't have have go right. very it under spend,

X operating leverage growth So over next have through we years. the revenue

Great. If squeeze I in. one could more

there mentioned Black, What and Carbon X you're changed. times kind the and going it. divisions in you quarter ] that's changed? probably divest last see? has quarter, Or that and outlook did you're softened You'd a X it [ and Has including the market integrate? last wait to just several actually strategy get you now were to going change you'd keeping rid of months in said how and curious your you're just I'm of why,

now more generate could shareholders. we you, we Well, find value that to the

than much I'm value to Assume on by value you but it, taking with. this is to are which doing taking our that, big, to would by shareholders our particularly we shareholders -- just generate begin more would one-shot that asset, Symantec, it large kidding, integrating Black, better into Carbon divestiture generate not not and a we

the time, to interest call now remarks. Ladies to Yoo closing back and like would I to of turn for Ji over the gentlemen, due

would of follow Semiconductor Pacific Thank will and President Wednesday, at present meeting earnings all and of March XXXX. fiscal Broadcom the its to highlight June Solutions Charlie Broadcom's Pacific, at on to investors.broadcom.com. Broadcom p.m. Meeting will Operator, replay silicon will webcast for quarter Investor you, X:XX live Broadcom's of will public on Thank currently Infrastructure In available you earnings like the The webcast be conclude we second conference Wednesday, XXXX, merchant call several XX:XX Group closing, our a.m. our AI of investor you today. at call. managers Time. end plans portfolio. Kawwas, Time. That on general joining. operator. may XX, earnings XX, the Enabling in report p.m. Broadcom's 'XX A after close call market for of Eastern X:XX

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

You may now disconnect.