Welcome to Broadcom Inc.'s VMware Transaction and Second Quarter Fiscal Year 2022 Financial Results conference call. At this time, for opening remarks and introduction, I would like to turn the call over to Ji Yoo, Director of Investor Relations of Broadcom Inc. Thank you, operator, and good morning, everyone. Joining me on today's call are Hock Tan, President and CEO, Kirsten Spears, Chief Financial Officer, Tom Krause, President Broadcom Software Group, and Charlie Kawwas, Chief Operating Officer. This morning, Broadcom issued a press release and presentation regarding our announced agreement to acquire VMware. We also distributed our fiscal second quarter 2022 results and financial tables. 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 remarks, Hock, Tom, and Kirsten will be providing details regarding our announced acquisition of VMware and Broadcom's second quarter fiscal year 2022 results, guidance for our third quarter, 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 and presentation 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'll now turn the call over to Hock. Thank you, Ji, and thank you everyone for joining today. If you could indulge me, let me start off by reviewing our fiscal Q2 results and our outlook on Q3 and the broader markets, of course, we play in. In fiscal Q2 2022, consolidated net revenue was a record $8.1 billion, up 23% year-on-year. Semiconductor Solutions revenue growth accelerated to 29% year-on-year to $6.2 billion, and Infrastructure Software revenue grew 5% year-on-year to $1.9 billion. Demand, as referenced by consolidated bookings, continue to be strong, even as our lead times remain unchanged but extended. In hardware, backlog at the end of Q2 was over $29 billion compared to $25 billion the preceding quarter, and $21 billion a year ago. In software, backlog grew as well and ended the quarter at over $15 billion compared to $14 billion a year ago. Let me provide more color by end markets. Starting with networking revenue was a record $2.2 billion, with growth accelerating to 44% year-over-year. There were two major drivers. We saw substantial deployment by hyperscalers of their AI engines and networks using our silicon during this quarter. More importantly, we saw adoption of our next-generation merchant switching and routing continuing to accelerate in hyperscale enterprises and service providers at the expense of proprietary solutions. This fundamental transition to merchant silicon based on Broadcom's platform will continue in Q3. As a result, we expect in excess of 25% year-over-year growth in networking. Next, our server storage connectivity revenue was $939 million, and as we guided, accelerated to 66% year-on-year growth. While server storage spending in enterprise was strong, our content increase in next-generation MegaRAID drove a substantial portion of this growth. Additionally, hyperscalers are aggressively adopting our next-generation server storage solutions to scale their massive consumption of nearline hard disk drive arrays. In Q3, we expect these same drivers to continue with revenue to grow over 60% year on year. Now moving on to broadband. Q2 revenue of $1.1 billion grew 24% year on year. Deployment during the quarter of next-generation PON and cable modem DOCSIS with high attach rate of Wi-Fi 6 and 6E continued to be good among major service providers globally. Just as a reminder, however, expansion in broadband investments arising particularly from COVID-19 pandemic lockdowns is a multi-year phenomenon. Investments are measured, and we are still in the early innings. Accordingly, in Q3, we do expect broadband revenue to sustain a growth rate around 20% year-on-year. On wireless, Q2 revenue of $1.7 billion was up 6% from a year ago and we have guided a seasonal 14% decline quarter-on-quarter. In Q3, we expect wireless revenue to be flat to slightly down quarter-on-quarter, but up mid-teens percentage from a year ago, reflecting an increase in content. Finally, in industrial, Q2 resales of $254 million grew 14% year-over-year, driven by strong demand from electric vehicles, renewable energy, factory automation, and healthcare. Reflecting this, such strong resales, our inventory in the channel continued to be very lean at around one month. In Q3, we expect industrial resales to remain stable and inventory levels to continue to be lean. In summary, Q2 Semiconductor Solutions revenue was up 29% year-over-year, step up from the 20% year-over-year growth the preceding quarter. As I highlighted above, content increase in server storage and the fundamental shift to merchant silicon in switching and routing drove this accelerated growth. This will continue in Q3, and accordingly, we expect semiconductor revenue in Q3 to grow 31% year-over-year. Now turning to software. In Q2, Infrastructure Software revenue of $1.9 billion grew 5% year-on-year and represented 23% of total revenue. Core software revenue grew 5% year-on-year. In dollar terms, consolidated renewal rates averaged 120% over expiring contracts, while in strategic accounts we averaged 136%. Within our strategic accounts, $641 million represented renewals and expiring contracts, of which $117 million represented cross-selling, including PLAs of our portfolio products to these same customers. Over 90% of the renewal value represented recurring subscription and maintenance. ARR at the end of Q2 was $5.4 billion, which was up 4% from a year ago. In Q3, we expect our infrastructure software revenue to sustain and meet single-digit% year-over-year growth. In summary, our outlook for Q3, semiconductor revenue growth will continue to be strong, up 31% year-over-year. Layering on our stable software business, we expect Q3 consolidated revenue growth of 24% year-over-year to $8.4 billion. Well, that concludes my discussion of our second quarter results. I will now turn to what perhaps you all have been waiting to hear more about. Now, please refer to our accompanying slides regarding our agreement to acquire VMware. As you know, we never embark on an acquisition unless we feel our core is very strong and solid. Irrespective of what you might think of where we are in the semiconductor cycle today, I do want to reassure you the fundamentals of our business, both in semiconductors and in software, have never been stronger. We have just reviewed how solidly grounded these businesses are. Let me discuss now what we believe is a very unique opportunity to take our company and its business to the next level. Starting with slide number four. By adding VMware, we will bring significant scale to Broadcom's software business and reinforce our position as a premier provider of mission-critical platform solutions to enterprises globally. VMware is an iconic company providing core cloud infrastructure that powers modern enterprises. The company began as the virtualization pioneer, bringing revolutionary levels of efficiency to on-premise data centers. VMware extended its platform to the private cloud, giving enterprise customers unmatched levels of security, performance, and control over their applications and underlying infrastructure. Most exciting, today, VMware is now powering solutions for multi-cloud, hybrid cloud future, where it will be possible for enterprises to develop and run their apps anywhere, everywhere with no trade-offs in a truly cloud neutral fashion. One of the reasons we became very interested in VMware was because of its world-class team, engineering centric culture, and strong customer and partner relationships. As shown in slide five, VMware importantly aligns incredibly well with the Broadcom strategy, and it has all the attributes we seek in the platforms we operate. VMware is the leader in big, growing, and global markets. The company is an indispensable provider of mission critical platform technology with a blue chip customer base and an incredible innovation engine. As Tom will discuss next in more detail, together with Broadcom's existing software portfolio, we are positioned to create a uniquely powerful value proposition for enterprises, enabling them to develop, deploy, and manage their application securely, seamlessly across every type of cloud, and to accelerate the application life cycle for their workloads. In addition to adding new dimensions of value for customers, VMware also has an ideal profile that will enable us, Broadcom, to create compelling value for our shareholders. As part of Broadcom, our target is for VMware to contribute approximately $8.5 billion of EBITDA once we have fully integrated the company onto our platform. Slide six shows that with more than $40 billion of pro forma revenue, and this is pro forma on fiscal 2021, we are creating one of the world's largest infrastructure technology companies. Our semiconductor business is one of the largest semiconductor businesses globally with 17 key franchises. It is highly profitable, and as I just reviewed, continues to post very strong organic growth. Revenues have grown from $15.6 billion, 2017 following the acquisition of classic Broadcom to $20.4 billion in fiscal 2021. All this growth being organic. With the addition of VMware, our software business will now represent close to half of our total pro forma revenue with approximately $20 billion of software revenue for fiscal 2021. With this type of scale and a continuing commitment to R&D and innovation, we will be able to significantly invest and fund new innovative solutions that will support our customer base. To now dive deeper into the VMware market opportunity and products, I'll hand the call over to Tom. Thanks, Hock. Now turning to slide seven. As Hock previewed, VMware sits at the nexus of the largest opportunity in enterprise infrastructure today. In essence, VMware is a foundational platform that enables enterprises to drive competitive advantage with technology by leveraging two operational modes to develop and run their applications. First, VMware serves many of the same types of customers that we have worked with at Broadcom, large multinational organizations with complex IT challenges. These enterprises wanna move fast and innovate, but also mitigate risk by retaining control of their underlying infrastructure and data. To do this, enterprises are deploying applications in their own data centers, but need software to enable them to develop and run these applications in a flexible, agile, and cost-effective fashion. This private cloud market is very large, and workload growth in the private cloud continues to grow. Beyond the private cloud, as we all know, public cloud workloads are growing rapidly. The public cloud brings unprecedented scalability and cost benefits and also enables enterprises to leverage cutting-edge technologies to drive their business forward. We think it is clear that both of these modes, private cloud and public cloud, are going to be important for enterprises going forward. Turning to slide 8. VMware is a truly foundational infrastructure software platform that is critical for enterprises to leverage the benefits of both the private and public clouds. We have tremendous respect for the leading platform VMware has built, supported by an incredible team of R&D talent. By bringing our teams together, we will deliver even more innovation to our customers. As we think about it, VMware's platform really consists of three pillars. First, within the core private cloud infrastructure pillar is the category defining vSphere server virtualization platform, vSAN data storage virtualization solution, vRealize cloud management platform that provides automation, analytics, and lifecycle management for private cloud workloads, and NSX, which enables enterprises to manage their entire physical network as a single entity from a single pane of glass. Next, VMware's Tanzu platform provides an end-to-end modern application management platform for building, deploying, securing, and operating applications in private, hybrid, or public cloud environments. Finally, VMware has a robust portfolio of end user and security solutions that enable employees to securely work from anywhere, anytime, and with seamless employee experiences. On slide nine, let me double-click on the first pillar, as this makes up the bulk of VMware's revenue contribution today and is positioned to continue to grow well going forward. VMware pioneered the concept of virtualization, and today this technology is foundational to the development and computing operations of basically all enterprises in the world. Over time, VMware has evolved its value proposition from core server virtualization to enabling one to virtualize the underlying compute resources of the entire data center, which is the private cloud. They further extended this value proposition with NSX and vSAN by enabling software-defined networks and storage. With vRealize, VMware made it extremely easy to manage and operate the entire data center infrastructure. With these products, VMware offers a complete platform that delivers the scalability, flexibility, and cost benefits of virtualizing the underlying infrastructure across servers, networking, and storage. In concert with this private cloud capability, VMware also offers a seamless way to evolve the enterprise infrastructure to embrace the benefits of the public cloud with VMware Cloud Foundation. VMware Cloud Foundation gives the same operating environment for developers, letting them write the code once and deploy it anywhere they want, whether it's in the private cloud, in AWS, Azure, GCP, or even across clouds. This simplicity is unique to VMware in ushering in the coming age of mass cloud adoption. Stepping back on slide 10 and thinking about our existing software portfolio, we are incredibly excited about the opportunity to marry our products with the VMware platform to deliver more end-to-end capabilities to our enterprise customers. As we all know, enterprises need to manage a constantly changing portfolio of thousands of applications that reside on a wide variety of underlying infrastructures, from mainframe, to client server, to hybrid and public cloud. All of these applications are operating in different stages of their life cycle. We think together, Broadcom's software assets for the distributed enterprise can seamlessly complement and augment VMware's multi-cloud offerings in the areas of operations management, value stream and DevOps management, and security to address the entire application life cycle. Starting with application development, we bring significant value to help accelerate the development of applications through VMware's Tanzu products and our value stream management products like Rally and Clarity. Once developed, VMware's vSphere and Cloud Foundation can deploy these apps across a wide variety of environments. We can secure these applications with the combined capabilities of Symantec's leading security portfolio, along with Carbon Black's cloud-native endpoint security products. Now, given the hybrid working environment we're all in today, it's critical for enterprise to be able to enable seamless, highly performant, and ubiquitous access to these applications, and VMware has a leading set of products to enable this. Finally, to optimize and monitor these apps, Broadcom's existing portfolio of AIOps observability, enterprise automation, and continuous delivery can ensure these applications are running well. Since these applications are constantly changing, it's exciting to be able to close the loop and feed any runtime operational issues right back into the application development step. What's exciting is that when you put the two portfolios together, we're delivering an end-to-end solution that enables enterprises to support the three major types of application paradigms, including applications that run critical business functions that will remain in private cloud data centers, applications that are being ported to run in the public cloud, and new generation applications that are written natively for one or several of the public cloud providers. We do this across the entire application life cycle, and we can support any underlying IT infrastructure. That's unique to us, and we think this adds massive value to enterprise customers. Moving to the next slide. When I think about this deal, it reminds me of when, as Avago, we acquired classic Broadcom. This really transformed at the time and modernized our semiconductor business. Ultimately, this is why we renamed ourselves Broadcom. As we come together with VMware, this represents the same level of transformation for our software business, and we stand to benefit from VMware's unparalleled brand, trusted apps, and longstanding position as an iconic software platform within a robust, vibrant ecosystem of hyperscalers, solutions, and cloud providers, and channel partners, among others. We're excited to announce that following the closing of the transaction, Broadcom Software Group will rebrand and operate as VMware, incorporating Broadcom's existing infrastructure and security software solutions into the VMware platform. Together, we will deliver the broadest range of platforms and tools to accelerate our combined customers' digital transformation. Turning to slide 12. Together, Broadcom and VMware cover all major industry verticals and sell to all enterprises globally. With this transaction, we are focused on serving all customers via a combination of our collective direct sales organizations as well as through our important channel partners. When we look at the majority of our revenues, they are derived from the largest global multinationals, and they fit six key attributes. These customers are usually highly regulated and risk-averse with large and expanding IT budgets. They also have complex and heterogeneous environments that are built around hybrid and multi-cloud strategies. While many of these companies want to explore moving more workloads to the public cloud, they are held back by many factors, including the number of applications that they have, the unfavorable economics of the public cloud for certain workload types, the sensitive data they handle, and/or regulation. As a result, these companies will have to keep complex operating environments containing a private cloud, and over time, to increasingly leverage the benefits of the public cloud as well. The amount of operational complexity created here is a challenge that we are uniquely qualified to partner with our customers to solve. In summary, together with VMware, we are best positioned to help the world's largest enterprises to embrace a hybrid and multi-cloud environment. As shown on slide 13, we have a proven track record of creating shareholder value by applying Broadcom's disciplined business model built on significant R&D investment and customer focus. Applying this same model to VMware, we are targeting to increase VMware's standalone EBITDA of approximately $4.7 billion to approximately $8.5 billion in pro forma run rate EBITDA within three years of closing. Driving this are some material tailwinds to revenue growth and multiple knobs that we can turn on profitability. Some of these opportunities include focusing on research and development to support efforts where we can uniquely deliver customer value, driving sales and marketing efficiency gains by focusing on our installed base, and eliminating duplicative general and administrative functions. We envision a long-term model for software where we can grow our top-line revenues at mid-single digits percentage on a recurring basis, if not faster, while driving EBITDA margins in the mid-60s%. Given our scale, this will allow us to reinvest very significant dollars back into the business, both via R&D as well as sales and marketing. Now on slide 14, let's talk about the deal structure. We are acquiring all of VMware's outstanding shares for approximately $61 billion in a 50% cash, 50% stock transaction. Additionally, we are assuming VMware's $8 billion of net debt. VMware shareholders will have the option to elect between receiving $142.50 in cash or 0.252 shares of Broadcom common stock for each of their shares. We expect VMware shareholders to own approximately 12% of the pro forma company at close. The transaction will be financed with $32 billion in new, fully committed debt financing from a consortium of banks. We are committed to a strong balance sheet, and we remain steadfastly committed to our investment-grade rating. The acquisition is subject to regulatory approvals and other customary closing conditions, including approval of VMware shareholders. Michael Dell and Silver Lake have agreed to vote in favor of the transaction, and we expect the transaction to close in our fiscal 2023. The merger agreement does include a 40-day go-shop provision. I'll hand it over to Kirsten, who's gonna go through the financial results of the quarter and provide an update on our capital allocation policy. Thank you, Tom. Let me now provide additional detail on our financial performance. Revenue was $8.1 billion for the quarter, up 23% from a year ago. Gross margin was 76% of revenue in the quarter and up 145 basis points year-over-year. Operating expenses were $1.2 billion, up 8% year-over-year, driven by investment in R&D. Operating income for the quarter was $4.9 billion and was up 30% from a year ago. Operating margin was 61% of revenue, up approximately 345 basis points year-over-year. Adjusted EBITDA was $5.1 billion or 63.1% of revenue. This figure excludes $135 million of depreciation. Now a review of the P&L for our two segments. Revenue for our Semiconductor Solutions segment was $6.2 billion and represented 77% of total revenue. This was up 29% year-on-year. Gross margin for our Semiconductor Solutions segment was approximately 72%, up 290 basis points year-on-year, driven by favorable product mix and content growth in next-generation products across our extensive product portfolio. Operating expenses were $873 million in Q2, up 10% year-on-year. R&D was $772 million in the quarter, up 10% year-on-year. Q2 semiconductor operating margins increased to 58%. While semiconductor revenue was up 29%, operating profit grew 42%. Moving to the P&L for our Infrastructure Software segment. Revenue for Infrastructure Software was $1.9 billion and represented 23% of revenue. This was up 5% year-on-year. Gross margin for Infrastructure Software was 90% in the quarter, up 10 basis points year-over-year. Operating expenses were $374 million in the quarter, up 5% year-over-year. Infrastructure Software operating margin was 70% in Q2, and operating profit grew 5%. Moving to cash flow. Free cash flow in the quarter was $4.2 billion, representing 51% of revenue. We spent $85 million on capital expenditures. Day sales outstanding were 35 days in the second quarter, and we ended the second quarter with inventory of $1.7 billion. We also ended the second quarter with $9 billion of cash and $39.5 billion of gross debt, of which $302 million is short-term. With liability management activities during the quarter, we were able to extend our weighted average debt maturity from 10.4 to 10.9 years, with the weighted average interest rate relatively unchanged at 3.6%. Turning to capital allocation. In the quarter, we paid stockholders $1.8 billion of cash dividends. Consistent with our commitment to return excess cash to shareholders, we repurchased $2.8 billion in common stock and eliminated $514 million of common stock for taxes due on vesting of employee equity, resulting in the elimination of approximately 6 million AVGO shares. The non-GAAP diluted share count in Q2 was 441 million. Based on current business trends and conditions, our guidance for the third quarter of fiscal 2022 is for consolidated revenues of $8.4 billion and adjusted EBITDA of approximately 63.5% of projected revenue. Note that we expect Q3 non-GAAP diluted share count to be 439 million. With the acquisition of VMware, let me now share our thinking on capital allocation policy going forward. Historically, over the last six years, we have grown free cash flow to increase at a 41% CAGR organically and through acquisitions. With the acquisition of VMware, we expect to enhance our already strong organic earnings and free cash flow growth. The board of directors has approved a third quarter cash dividend on our common stock of $4.10 per share. Following the acquisition of VMware, we remain committed to our dividend policy of returning 50% of prior year's free cash flows as dividends. We are also committed to maintaining our investment-grade rating and plan to rapidly de-lever from approximately 3.5x gross debt to EBITDA at closing to normalized leverage ratios of less than 2.5x gross debt to EBITDA within approximately two years post deal close. Between now and deal close, we expect to generate considerable free cash flow. As it relates to the buyback, we have $3 billion remaining under the current authorization to date. In addition, we are announcing today an incremental $10 billion authorization to buy back shares through the end of December of 2023. That concludes my prepared remarks. Operator, please open up the call for questions. Thank you. As a reminder, to ask a question, you will need to press star and then one on your telephone. To withdraw your question, please press the pound key. Our first question comes from Ross Seymore from Deutsche Bank. Your line is open. Hey, everyone. Thanks for letting me ask a question and congratulations on the deal and the results. Tom, I wanted to ask a question on the VMware side of things. You gave a bit of a long-term model, mid-single-digit% revenue growth, and then mid-60s% EBITDA. Can you talk a little bit about the revenue growth side of that equation? It seems like the VMware asset, according to the street, is growing a little bit faster than that. What are you doing and assuming as far as the growth rate of that piece? And then on the EBITDA side of things, out of the levers you showed on, I think it's slide 13, can you just give us an idea of how those all fall in to get you to that mid-60s% level overall? Sure, Ross, and thanks for the question. Let me start, and then I'll let Hock embellish. When we think about the top line, a number of things going on. Fundamentally, and this is actually back on slide seven for anyone who has the deck, it's all about workload growth. I mean, if you think about private cloud growing, you know, mid- to high-single digits, you look at public cloud growing high-double digits, that's what's really gonna drive the top line fundamentally, and that's actually what got us comfortable with the business case here. I think in addition to that, we are gonna focus on going through a transition and a rapid transition from perpetual licensing to subscription. As you know, with the software business, we've been totally focused on pretty much 100% recurring revenue, and we see ARR growth being able to sustain at 5%, if not faster, when we think about the combined business. When you think about EBITDA, there are multiple knobs. We covered that, and you can look at slide 13. In terms of R&D, we're gonna reinvest back in the core business, the core franchises. If you think about the three different pillars of this business, and I went through it, but it's really the core infrastructure business, vSAN, vSphere, vRealize. These are the businesses that are core to driving the bulk of the revenues, and that's where the reinvestment's gonna occur. We're gonna focus on our common customers. We have a significant go-to-market engine here at Broadcom Software. Obviously, so does VMware in their own regard, actually much more significant than ours. We have a direct sales force. We're gonna leverage the fact that we have common coverage in both of those areas and take advantage of getting synergies there. But beyond that, we also see a very valuable channel. I think there's some things we've learned relative to the CA and the Symantec acquisitions in terms of the value of the channel, and we wanna continue to support that channel. That's gonna allow us to support a lot more revenues in a cost-effective way, so we see some real opportunity to leverage that. Of course, you know, as you all know, you know, we run G&A at, you know, 1% of revenue. We've been integrating companies for a long time. We have tremendous scale. This is gonna give us even more significant scale going forward, and we think there's a lot of opportunity there to drive synergies from the redundancies we see. Hock, anything you wanna add to that? Thanks, Tom. Now, well done on that, on explaining it. Ross, to answer your question pointedly directly on the revenue side, you can hear the two dynamics going on. One is how we make the investment, where we do the spending. The other top line is you can see that VMware has a perpetual model a lot of their on-prem licenses. They have a substantial $3 billion perpetual, and we are converting that to, over time, over the next couple of years, a subscription. That will likely take, from a reporting point of view, a slight dip, but within three years, a recovery, and a recovery back to a run rate that probably, as Tom indicated, is probably much higher than mid-single digits. We are structuring ourselves to go through that. Now from an economics point of view, whether it's perpetual or subscription, frankly is the same. We want to make it very consistent with the way we run the model. Based on this, we are, in a sense, restructuring the contracts perpetual to subscription. That's why, depending on where you see it, you'll see a slower growth at the beginning, if any, followed by more rapid growth as we convert more to subscription. Great. Thanks, guys. Thank you. Our next question comes from Ambrish Srivastava from BMO. Your line is open. Hi, thank you very much. Excuse me, Tom. Just getting back to, following up on what Ross was asking. This asset is very different than the other two, in terms of, growth rate, growth trajectory. It doesn't seem like you would need to divest, pieces of the business like you had to in the other two. Can you just, talk us through, the synergies that you see, in combining these businesses? And if these businesses, in parts have had partnerships in the past, and how would you change that on a go-forward basis? Getting back to Hock's comment, longer term, this could be a faster-growing software business than what you're laying out today. Thank you. Yeah, no, certainly. I mean, if you think about it from a go-to-market standpoint, that's where software companies spend the bulk of their dollars. The fact that we're gonna go from $5+ billion of software revenue to much closer to $20 billion is a big deal. The fact that we can leverage the combined go-to-market engine at that scale gives us huge economies. I think what we're gonna be able to do is marry effectively a direct sales force, which covers the largest couple thousand customers. These are large multinationals across all the key verticals, primarily focused in North America and Europe, but also in parts of Asia, with a very significant channel partner arrangement. I think one thing we've learned is there's an opportunity to embrace the channel, the two-tier distribution model with distribution partners and key value-added resellers. There's also a big GSI opportunity. We work significantly with GSIs on our side, so does VMware. When I look at that in its totality, what we can't do today, given our scale, we can definitely take advantage of with the newfound scale between the two companies. You know, beyond that, when you think about the R&D side of the equation, you know, to dig deeper into it and follow up what we talked about with Ross. You know, when you think about what supports the development of software, there's a lot of what we refer to sometimes in the Symantec side as central engineering. Software business operations. This is the continuous delivery, continuous testing, capability, the ability to continuously develop applications on a consistent basis, that's expensive. It requires having your own private data centers or working with cloud providers, and having the scale to be able to drive that kind of R&D investment over a much larger portfolio is also gonna drive significant benefits. Hopefully that helps answer your question. Hock, do you wanna add anything to that? Well, again, we're dancing around the central issue, which is, and we have seen this, we invest in R&D and hardware, we do a lot of that if we have to. It's all, at the end of the day, is that this is a great franchise. In terms of monetization, it's all about execution, and that's in a nutshell what we're saying here. We believe we will execute much, much different, hopefully better than what we have been seeing so far. That's a good bottom line. Thank you. Thank you. Our next question comes from Stacy Rasgon from Bernstein Research. Your line is open. Hi, guys. Thanks for taking my question. Tom, I found your comments on leveraging the new channel differently to be interesting because I guess I'm gonna oversimplify, but your prior strategy was sort of to focus on the largest customers and kind of let the long tail sort of wither. Am I right in sort of thinking that you are sort of changing that now? You're gonna be going after that long tail a little harder because now you actually have the channel to do it? Sounds like it'd be feeding into the other businesses as well. I guess maybe could you talk a little bit more about how that business model is changing, especially in that like tail of smaller customers. What does that actually mean for the degree of cost synergies and everything that can come out of this relative to what you've seen before? It doesn't sound like you're seeing that driving upside to the growth rate. You're still talking about mid-single digits percentage, although again, maybe there's some conservatism in that number. Anything you could give us on maybe some of that change in the business model, especially around the long tail of customers would be helpful. Yeah. No, you're picking up on it, Stacy. I think a lot of it's because of the portfolio, and the fact and that we had partners on the line. Yeah. Stacy, a lot of it's based on the portfolio and the breadth of capability that VMware has relative to where we sit today. You're right. When we bought CA, mainframe made up at least half the revenues. Today's mainframe is still about 50% of the overall software business at Broadcom. That's very much levered toward, you know, about 500 accounts in what we call our strategic account area, which is a direct sales motion. That's also where we saw a lot of opportunity to drive customer synergy with Symantec, and particularly around some of the Blue Coat and DLP activities that we were driving. That was the business model that made sense. That, of course, meant, you know, we could drive operating margins frankly, slightly north of 70%, because we didn't have to invest as much in our go-to-market motion. I think with VMware, when we look at it and we look at the fact that vSphere, you know, going back to the core, you know, serves over 300,000 customers, and we look at the growth and that the company is driving with their more modern applications, you know, whether it be for private cloud or public cloud, you know, we see a much bigger opportunity. To support that opportunity, we need to invest in sales and marketing. When you think about the, you know, sixties EBITDA margins that I was discussing, and I think I said mid-sixties, you know, that's on a much bigger scale, but at the lower EBITDA margin profile than we're running today. All of that variance is going back into the sales and marketing investment. We think from learning about, you know, how we experienced CA and Symantec, and frankly, you know, some of the revenues that we gave up, we think we can actually go back and reinvest in the channel and continue to drive revenue growth profitably. We don't wanna walk away from the channel. We actually want to embrace it. Okay. That's helpful. Thank you. Thank you. Our next question comes from Vivek Arya from Bank of America Securities. Your line is open. Thanks. I had a question on the process and then on the accretion side. On the process side, which jurisdictions will you need approvals from? You know, do you see any product overlap that any regulator could push back against? Why is there a go-shop provision? Then on the accretion side, will this be accretive in year one? I think, Tom, you said mid-60s EBITDA margin. Is that for VMware only, or is that for your entire software business? Because the rest of the software business is running closer to 70%, I believe. Just any thoughts on the process and the accretion would be very helpful. Thank you. Yeah, sure. This will be accretive out of the gate, and it'll get very accretive as we get through you know, our integration process. You know, as you look at you know, the aggregate value here, and then you look at the EBITDA expectations, you know, we expect to drive double-digit cash-on-cash returns. That's always been our criteria, and we think that's gonna create a lot of value for shareholders. In jurisdictions, we're gonna file in a number of areas. You know, you'll see that in the filings when we run the merger agreement and everything else. Nothing unordinary there. You know, I won't comment much on the go-shop other than to say it was a highly negotiated deal, and there is a go-shop for 40 days. Yeah. To clarify, the mid-60s% refer to VMware standalone, where we're driving it. Just to make it clear on handling where the long tail is, I think our strategy of focusing, as Tom indicated very clearly, on selling new products, on supporting the largest enterprises in the world create their private cloud, and beyond that, having a hybrid cloud structure, will probably extend our, as Tom indicated today, core 600 strategic accounts to a larger group of 1,500 accounts. This is what is enabling us to do with VMware. That will be direct focus and a lot of attention and support to get to drive revenue growth and adoption of the various new products and software stacks that VMware has, especially in the realm of private cloud and software-defined networks. In terms of the longer tail of 300,000 customers, as we perhaps had looked at before, we are looking at it very, very positively too, in the sense that we will make sure these are well supported. This continues to be a business base that will grow, but we will go through it. We will handle these guys through partners, as Tom indicated. Distributors, resellers, GSI partners. This will be handled simplifying our business model. We will now have a larger core group of global 1,500, and we call it that, where VMware and its scale will now enable us to focus as we had focused on the last 600 before. Thank you. Thank you. Our next question comes from Harsh Kumar from Piper Sandler. Your line is open. Yeah. Hey, guys. First of all, congratulations on the deal. It sounds like an amazing deal. Hock, for a change, I've got a question on some of your business commentary related to organic Broadcom. You mentioned that in the networking business, you are seeing proprietary solutions from your customers losing out to merchant solutions and silicon that you guys sell. I was curious if is there anything happened recently which is driving this shift over to your solutions? Or was this just something in the making a long time and it's just now happening? And also if you can talk about supply concerns, you don't seem to be seeing any supply issues, whereas the other guys are. I'd be curious about color on that. Okay. Well, a very, very interesting question on networking side. It has been a trend, obviously, that has been happening for over five years, which is, for us in networking, switching and routing, merchant silicon has been taking share over proprietary solutions, black boxes, so to speak. Merchant solutions enable disaggregation of hardware and software, and that always offers more resiliency, more flexibility for customers. Starts with hyperscale. We're now talking about service providers and enterprise. What perhaps may be triggering an acceleration, which I indicated, it may be, is probably related to the fact that we're all, enterprises in particular, are now all in reinvesting, upgrading, after a hiatus probably from 2019 cutting through to the pandemic timeframe. They're now investing in new data centers, and they're now investing in basically modernizing their data centers, and they're going for next generation. That, we figure, is what's triggering it. We're seeing acceleration in our Tomahawk threes and fours. We're seeing acceleration, the leading edge product and the Trident versions correspondingly. We're seeing acceleration in Jericho2c and the latest one at the edge Qumran. All these are the big drivers, and it's almost a faster, larger adoption than we would perceive under normal growth patterns. I'll put it bluntly, we're gaining market share in merchant silicon over proprietary solution. It's an acceleration of a trend that's been going on over five years. That's what's very clear. In terms of supply chain question, I always get this question, and of course, I'll answer that point blank from over the past 12 months or so. We are challenged on making sure we meet demand on a timely basis in just what they want. If you look at it that way, we do not see a challenge necessarily in supply. We rather see it as a demand, constant demand challenge in the sense that we have to push through our backlog carefully, and as I indicated, in the last 3 months, we just bump up our backlog substantially in spite of lead times being unchanged. I mean, extended and unchanged. There is demand out there that keeps coming in for our products. Now it's particularly so in a couple of areas. It's not necessarily across the board. It's in a couple of areas. We happen to be very lucky to be in those areas that are still strong, largely related to infrastructure. We're seeing in networking that includes both hyperscale, telcos, service providers, as well as enterprise. Particularly in enterprise, we're seeing it excel a lot, I might add, by content increase in server storage connectivity, where we're now selling in the newer generation, as I indicated in the last earnings call, subsystems, where our customers prefer to buy subsystems from us rather than just a chip. That step up content dramatically, and couple that with still continuing strong demand in these two spaces, we continue to see not just revenue accelerating, but bookings accelerating. These are real demand. We have, of course, the supply to meet those critical needs as we see it. Fantastic. Congratulations, guys. Thank you. Thank you. Thank you. We'll take our last question from Toshiya Hari from Goldman Sachs. Your line is open. Hi, good morning. Thank you so much for squeezing me in. Hock, so after the acquisition, you know, your business is gonna be roughly 50% semis and 50% software. I was hoping you could remind us, you know, some of the pros and cons for running these two businesses under one umbrella. Assuming, you know, the deal successfully closes, would you ever consider splitting up the two businesses, particularly if you feel like you're not getting the valuation that you deserve? Thank you. To answer right to the bottom line, we see a lot of benefits in putting all these various franchises we have, hardware and software, under one umbrella. Think of it this way, Toshiya. It's like what merchant silicon is driving that trend. You know, the old model is you sell a black box hardware and software system to a customer in the IT department, to JPMorgan IT department. That's what you do in the past. If something goes wrong, hell, you ask for support, you scream for help, and because you don't know what's going on inside the thing. We are creating a model of disaggregation between hardware and software. We may still not know much about systems, but we sure know the technology that enables systems, whether they are switches, routers, compute storage. This is Broadcom is a model of disaggregating hardware and software. Combined, I think we are stronger than divided. I hope that answers your question. Thank you. Thank you. That does conclude our question and answer session for today's conference. I'd now like to turn the call back over to Ji Yoo for any closing remarks. Thank you, operator. As we have released the results of Broadcom's second quarter of fiscal 2022 today, we will no longer hold a conference call previously scheduled for Thursday, June 2. Broadcom currently plans to report its earnings for the third quarter of fiscal 2022 after close of market on Thursday, September 1, 2022. A public webcast of Broadcom's earnings conference call will follow at 2:00 P.M. Pacific Time. That will conclude our earnings call and call today. Thank you all for joining. Operator, you may end the call. Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect. Everyone, have a wonderful day.