AVGO Q3 2019 Earnings

Call Details

• Call Title: Broadcom Q3 2019 Earnings Call
• Date: September 12, 2019 at 9:00 PM UTC
• Management Team:
  • Beatrice Rosado (Director of Investor Relations)
  • Hock Tan (President and Chief Executive Officer)
  • Tom Krause (Chief Financial Officer)

Call Summary

Financial Performance

• Consolidated net revenue for the third quarter was $5.5 billion, a 9% increase from a year ago.
• Semiconductor solution revenue was $4.4 billion, down 5% year-on-year and up 6% quarter-over-quarter.
• Infrastructure software revenue was $1.1 billion and represented 21% of total revenue for the quarter.
• Pre-cash flow was 42% of revenue, or $2.31 billion, and grew 8.5% year over year.
• Operating income from continuing operations was $2.91 billion and represented 52.8% of net revenue.
• Adjusted EBITDA was $3.06 billion and represented 55.6% of net revenue, excluding $141 million of depreciation.
• The quarter included a $110 million accrual for restructuring and integration expenses and $164 million of cash restructuring and integration payments.

Guidance

• Full year revenue guidance for fiscal 2019 was maintained at over $22.5 billion, including approximately $17.5 billion from semiconductor solutions and approximately $5 billion from infrastructure software.
• On a non-GAAP basis, operating margins are expected to be approximately 52.5% for fiscal 2019.
• Net interest expense and other is expected to be approximately $1.3 billion for fiscal 2019.
• The effective tax rate is forecasted to be approximately 11% and depreciation is expected to be approximately $600 million.
• CapEx is expected to be approximately $500 million and free cash flow is expected to be approximately $9 billion in fiscal 2019.
• Projected restructuring and integration charges of approximately $1.1 billion are included in the free cash flow expectations for fiscal 2019.