AVGO Q2 2021 Earnings

Call Details

• Call Title: Broadcom Q2 2021 Earnings Call
• Date: June 3, 2021 at 9:00 PM UTC
• Management Team:
  • Hock Tan (Chief Executive Officer)
  • Kirsten Spears (Chief Financial Officer)
  • Tom Krause (President, Infrastructure Software Group)
  • Charlie Kawas (Chief Operating Officer)
  • Ji Yu (Head of Investor Relations)

Call Summary

Financial Performance

• Consolidated net revenue was $6.6B in Q2, up 15% year-on-year on a primarily non-GAAP basis.
• Semiconductor Solutions revenue was $4.8B in Q2, up 20% year-on-year and represented 73% of total revenue.
• Infrastructure Software revenue was $1.8B in Q2, up 4% year-on-year and represented 27% of total revenue.
• Gross margin reached a record 75% of revenue in the quarter, improving approximately 180 basis points year-on-year on the reported (non-GAAP) figures.
• Operating income was $3.8B, up 25% year-on-year, and operating margin was 58% of revenue, up approximately 470 basis points year-on-year.
• Adjusted EBITDA was $4.0B or 60% of revenue, and free cash flow was $3.4B or 52% of revenue for the quarter.

Guidance

• Total revenue guidance for Q3 is $6.75B, which represents growth of 16% year-on-year on a consolidated basis.
• Adjusted EBITDA guidance for Q3 is approximately 60% of projected revenue on a non-GAAP basis.
• Hock expects semiconductor solutions to sustain roughly similar year-on-year growth in Q3 as Q2, consistent with commentary of sustained momentum.
• Broadband is expected to sustain double-digit year-on-year revenue growth into Q3 according to the prepared commentary.
• Networking revenue is expected to maintain low double-digit year-on-year growth in Q3 driven by hypercloud and service providers.
• Enterprise server storage connectivity is expected to be down high single digits year-on-year in Q3 after a Q2 decline of 16% year-on-year.