Broadcom Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Broadcom reported Q2 FY2020 net revenue of $5.7 billion, in line with guidance. This reflects a 2% sequential decline and a 4% year-over-year increase.
  • Semiconductor Solutions revenue: $4.0 billion, down 2% year-over-year and down 4% sequentially.
  • Infrastructure Software revenue: $1.7 billion, up 21% year-over-year (boosted by the Symantec acquisition) and up 3% sequentially.

Semiconductor Segment Performance

  • Networking revenue grew 11% sequentially due to next‑generation product ramps (Tomahawk 3, Trident 3, Jericho 2). Broadcom noted a strong demand surge continuing into Q3.
  • Server storage connectivity declined 14% sequentially in Q2 but is rebounding strongly with accelerating Q3 demand from enterprise customers and cloud service providers.
  • Broadband revenue was flat sequentially. Q3 expected to see ~10% sequential growth driven by Wi‑Fi 6 adoption, though partially offset by a sharp decline in video products (e.g., satellite set‑top boxes).
  • Wireless declined 14% sequentially due to normal seasonality. The expected Q3 seasonal uplift is delayed to Q4 due to customer product cycle delays.
  • Industrial grew 13% sequentially in Q2 but is expected to see a double‑digit decline in Q3 due to channel inventory reductions despite stable resales.

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Operator: Welcome to Broadcom Inc.’s Second Quarter Fiscal Year 2020 Financial Results Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Beatrice Russotto, Director of Investor Relations of Broadcom Inc. Please go ahead, ma’am. Beatrice Russotto: Thank you, operator, and good afternoon, everyone. Joining me on today’s call are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom. After the market closed, Broadcom distributed a press release and financial tables describing our financial performance for the second quarter of fiscal year 2020. If you did not receive a copy, you may obtain the information from the Investor section of Broadcom’s website at broadcom.com. This conference call is being webcast live and a recording will be available via telephone playback for one week. It will also be archived in the Investor section of our website at broadcom.com. During the prepared comments, Hock and Tom will be providing details of our second quarter fiscal year 2020 results, guidance for our third quarter, as well as commentary regarding the business environment. We’ll take questions after the end of our prepared comments. Please refer to our press release today and our recent filings with the SEC for information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements made on this call. In addition to U.S. GAAP reporting, Broadcom

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