Broadcom Inc.

Good day, ladies and gentlemen, and welcome to the Q2 2019 Broadcom Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference is being recorded. I would now like to introduce your host for today's call, Ms. Beatrice Rosado. Director, Investor Relations. Ms. Rosado, you may begin.

Thank you, Operator, and good afternoon, everyone. Joining me today are Hop Tan, President and CEO, and Tom Krause, Chief Financial Officer of Broadcom. After the market closed today, Broadcom distributed a press release and financial tables describing our financial performance for the second quarter of fiscal year 2019. 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 section of this call, Hawk and Tom will be providing details of our second quarter fiscal year 2019 results guidance for fiscal year 2019, and 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 measures on a non-GAAP basis A reconciliation between GAAP and non-GAAP measures is included in the tables attached to today's press release. Comments made during today's call will primarily refer to our non-GAAP financial results. So with that, I'll now turn the call over to Hawk.

Thank you, Bea, and thank you, everyone, for joining in today. Let me touch on the second quarter results, after which I will update you on the current environment and our outlook for the second half of the year. Looking at the second quarter just passed, it really went as planned. Networking continued to perform very well and our broadband business started to recover. This was offset by the anticipated sharp decline in wireless and the ongoing softness in storage. On the other hand, The infrastructure software business delivered solid top-line results, benefiting from sustained enterprise demand for mainframe and distributed software, as well as SAN switching products. The integration of CA is progressing well. Just last week, we reached a major milestone with day two. which is the integration of the CA's business processes onto Broadcom's IT platform. We remain confident that we can meet, if not exceed, the long-term revenue and profitability targets that we laid out for CA2U last year. Renewals in our CA business are strong, and the dollar commitments from our core customers continue to grow. Now, let me address the current business environment and our outlook for the remainder of the year. We have, as I indicated, performed very much to plan in the first half of fiscal 19. And in the second half, we had expected a recovery. While enterprise and mainframe software demand remains stable, particularly in North America and Europe, with respect to semiconductors, it is clear that the US-China trade conflict, including the Huawei export ban, is creating economic and political uncertainty and reducing visibility for global OEM customers. As a result, demand volatility has increased and our customers are actively reducing inventory levels to manage risk. This leads us to believe the second half of 2019 will be more in line with the first half as opposed to the previously expected recovery. We now anticipate fiscal 2019 semiconductor solutions segment revenue of $17.5 billion, which translates into a year-over-year decline in the high single digits. CAA software continues to perform above original expectations, while SAN switching is slowing down after a very strong first half. As a result, we are maintaining our fiscal 2019 infrastructure software outlook at $5 billion. While this scenario has been playing out, I should emphasize the fundamentals of our business remains very much intact. We continue to execute on a very rich roadmap for next-generation network switching and routing in the cloud and enterprises, including the leading-edge Trident 4 software-defined network switch just recently announced this week. We've also secured the next two generations of RF front end and a large North American OEM, which positions us very well for the transition into 5G. We continue to win increasing numbers of compute offload accelerators in the hypercloud operators across AI, video transcoding, encryption, and networking. We are pleased with the RAM of our new generation Wi-Fi 802.11ax, otherwise called Wi-Fi 6. in enterprise gateways and carrier access points. All this leaves us confident that we will be able to continue to drive sustained long-term revenue growth and increasing free cash flow. Let me now turn it over to Tom, who will provide you with more color.