Broadcom Limited (NASDAQ:AVGO) Q4 2018 Earnings Conference Call Transcript

Dec 06, 2018 • 05:00 pm ET

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Broadcom Limited (NASDAQ:AVGO) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Welcome to Broadcom Inc.'s Fourth Quarter and Fiscal Year 2018 Financial Results Conference Call. At this time, for opening remarks and introductions I would like to turn the call over to Beatrice Russotto, Director of Investor Relations of Broadcom Inc. Please go ahead, ma'am.

Executive
Beatrice Russotto

Thank you, operator, and good afternoon, everyone. Joining me today are Hock Tan, President and CEO; and Tom Krause, Chief Financial Officer of Broadcom. After the market closed today, Broadcom distributed a press release and financial table describing our financial performance for the fourth quarter and fiscal year 2018. 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 a recording will be available via telephone playback for one week. It will also be archived in the Investors section of our website at broadcom.com. During the prepared comments section of this call, Hock and Tom will be providing details of fiscal year 2018 results, guidance for fiscal year 2019, and some commentary regarding the business environment. We will take questions after the end of the prepared comments.

(Forward-Looking Cautionary Statements)

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.

So, with that, I'll turn the call over to Hock.

Executive
Hock Tan

Well, thank you, Bea, and thank you all for joining us today. Well, as you saw it we closed the fiscal year on a very high note. Consolidated net revenue for the fourth quarter fiscal '18 was $5.45 billion, a 12% increase from a year ago, and EPS came in at $5.85, a 27% increase from a year ago. Importantly, free cash flow was $2.53 billion or 46% of our net revenue.

I would like to provide you more color on the top line today and I have a lot to cover today actually. And please note fourth quarter results do not include any contribution from CA. Starting with wired, on the quarter results starting wired. Revenue was $2.2 billion, growing 3% year-on-year and wired segment represented 41% of our total revenue for this quarter.

Looking deeper though, fourth quarter wired results reflects very strong year-on-year growth for our networking and computing offload businesses, driven by robust demand from the cloud data center market, as well as traditional enterprises. And networking, computing offload represented over two-thirds of our wired segment in the quarter and grew 22% year-on-year in the quarter. This is on the back of growing 10% year-on-year in the third quarter. So this part of the wired segment continues to be very robust.

On the other side, as anticipated, cyclical headwinds in certain parts of our broadband business reflecting weak carrier spending in those areas continue to impact this part of our wired business in the fourth quarter. As a result,