Broadcom Inc.

Welcome to Broadcom, Inc.' 's third quarter fiscal year 2025 financial results conference call. At this time, for opening remarks and introductions, I would like to turn the call over to Ji Yu, Head of Investor Relations of Broadcom, Inc. Please go ahead.

Thank you, Cherie, and good afternoon, everyone. Joining me on today's call are Hoftan President and CEO, Kirsten Spears, Chief Financial Officer, and Charlie Kawas, President, Semiconductor Solutions Group. Broadcom distributed a press release and financial tables after the market closed, describing our financial performance for the third quarter of fiscal year 2025. 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 an audio replay of the call can be accessed for one year through the investor section of Broadcom's website. During the prepared comments, Hawk and Kirsten will be providing details of our third quarter fiscal year 2025 results, guidance for our fourth quarter of fiscal year 2025, 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 US 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. I will now turn the call over to Hock.

Thank you, Gee, and thank you, everyone, for joining us today. In our fiscal Q3 2025, total revenue was a record $16 billion, up 22% year on year. Now, revenue growth was driven by better than expected strength in AI semiconductors, and our continued growth in VMware. Q3 consolidated adjusted EBITDA was a record $10.7 billion, up 30% year on year. Now, looking beyond what we're just reporting this quarter, with robust demand from AI, bookings were extremely strong. and our current consolidated backlog for the company hit a record $110 billion. Q3 semiconductor revenue was $9.2 billion as year-on-year growth accelerated to 26% year-on-year. This accelerated growth was driven by AI semiconductor revenue of $5.2 billion, which is up 63% year on year, and extend the trajectory of robust growth to 10 consecutive quarters. Now let me give you more color on our XPU business, which accelerated to 65% of our AI revenue this quarter. Demand for custom AI accelerators from our three customers continue to grow as each of them journeys at their own pace towards compute self-sufficiency. And progressively, we continue to gain share with these customers. Now, further to these three customers, as we had previously mentioned, we have been working with other prospects on their own AI accelerators. Last quarter, one of these prospects released production orders to Broadcom. And we have accordingly characterized them as a qualified customer for XP use. And in fact, have secured over $10 billion of orders of AI regs based on our XPUs. And reflecting this, we now expect the outlook for fiscal 2026 AI revenue to improve significantly from what we had indicated last quarter. Turning to AI networking, demand continued to be strong because networking is becoming critical as LLMs continue to evolve in intelligence and compute clusters have to grow bigger. The network is the computer, and our customers are facing challenges as they scale to clusters beyond 100,000 compute nodes. For instance, scale up, which we all know about, is a difficult challenge. when you're trying to create substantial bandwidth to share memory across multiple GPUs or XPUs within a rack. Today's AI rack scales up a mere 72 GPUs at 28.8 terabits per second bandwidth using a proprietary NVLink. On the other hand, earlier this year, We have launched Tomahawk 5 with open ethernet, which can scale up 512 compute nodes for customers using XPUs. Moving on to scaling out across regs, today the current architecture using 51.2 terabit per second requires three tiers of networking switches. In June, we launched Domohawk 6 and our Ethernet-based 102 terabits per second switch, which flattens the network to two tiers, resulting in lower latency, much less power. and when you scale to clusters beyond a single data center footprint you now need to scale computing across data centers and over the past two years we have deployed our Jericho 3 Ethernet router with hyperscale customers to just do this and today we have launched our next generation Jericho 4 Ethernet fabric router with 51.2 terabits per second deep buffering, intelligent congestion control to handle clusters beyond 200,000 compute nodes crossing multiple data centers. We know the biggest challenge to deploying larger clusters of compute for generative AI will be in networking. And for the past 20 years, Broadcom has developed for Ethernet networking is entirely applicable to the challenges of scale up, scale out, and scale across in generative AI. And turning to our forecast, as I mentioned earlier, we continue to make steady progress in growing our AI revenue. For Q4 2025, we forecast AI semiconductor revenue to be approximately $6.2 billion, up 66% year-on-year. Now turning to non-AI semiconductors, demand continues to be slow to recover. and Q3 revenue of $4 billion was flat sequentially. While broadband showed strong sequential growth, enterprise networking and service storage were down sequentially. Wireless and industrial were flat quarter on quarter as we expect. In contrast, in Q4, Driven by seasonality, we forecast non-AI semiconductor revenue to grow low double digits sequentially to approximately $4.6 billion. Broadband, server storage, and wireless are expected to improve, while enterprise networking remains down quarter on quarter. Now let me talk about our infrastructure software segment. Q3 infrastructure software revenue of $6.8 billion was up 17% year-on-year, above our outlook of $6.7 billion as bookings continued to be strong during the quarter. We booked, in fact, total contract value over $8.4 billion during Q3. But here's one I'm most excited about. After two years of engineering development by over 5,000 developers, we delivered on a promise when we acquired VMware. We released VMware Cloud Foundation version 9.0, a fully integrated cloud platform which can be deployed by enterprise customers on-prem or carried to the cloud. It enables enterprises to run any application workload, including AI workloads, on virtual machines and on modern containers. This provides the real alternative to public cloud. In Q4, we expect infrastructure software revenue to be approximately $6.7 billion, up 15% year-on-year. And in summary, continuous strength in AI and VMware will drive our guidance for Q4 consolidated revenue to approximately $17.4 billion, up 24% year-on-year. And we expect Q4 adjusted EBITDA to be 67% of revenue. And with that, let me turn the call over to Kirsten.