Broadcom Inc. Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q2 revenue was $8.7B, up 8% year-over-year (YoY), reflecting continued momentum across semiconductor and infrastructure software segments.
  • Semiconductor Solutions revenue was $6.8B, up 9% YoY, driven by networking and broadband strength.
  • Infrastructure Software revenue was $1.9B, up 3% YoY, with strong core renewals offsetting Brocade softness.
  • Q3 FY23 revenue guidance: $8.85B, up 5% YoY.

AI-Related Growth

  • AI revenues currently represent ~15% of Broadcom’s semiconductor business, up from 10% in FY22.
  • Management expects AI-driven semiconductor revenues to exceed 25% of the segment in FY24.
  • Q3 FY23 AI revenue is expected to exceed $1B for the quarter.
  • AI growth is driven primarily by networking components (Tomahawk, Jericho, PCIe switches) rather than compute offload ASICs, which remain tied largely to one major customer.
  • FY23 AI-related revenue forecast remains $3.8B; management did not revise this mid-year.

Semiconductor Segment Details

  • Wireless:
    • Revenue: $1.6B (23% of segment), down 24% QoQ and down 9% YoY due to seasonality.
    • Multiyear collaboration extension signed with a major North American OEM covering 5G and wireless connectivity products.
    • Q3 outlook: low single-digit sequential growth, flat YoY.

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Operator: Welcome to Broadcom Inc.’s Second Quarter Fiscal Year 2023 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 second quarter fiscal year 2023. If you did not receive a copy, you may obtain the information from the Investors section of Broadcom’s website at broadcom.com. This conference call is being webcast live and an audio replay of the call can be accessed for one year through the Investors section of Broadcom’s website. During the prepared comments, Hock and Kirsten will be providing details of our second quarter fiscal year 2023 results, guidance for our third quarter, as well as commentary regarding the business environment. We will 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 reports certain financial measure

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