Earnings Call: Q1 2020

Mar 12, 2020

Welcome to Broadcom Inc. 1st Quarter Fiscal Year 2020 Financial Results 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. Thank you, operator, and thanks everyone for dialing in today. Joining me on today's call are Hock Tan, President and CEO and Tom Krause, Chief Financial Officer of Broadcom. After the market closed, Broadcom distributed a press release and financial tables describing our financial performance for the Q1 of fiscal year 2020. If you did not receive a copy, you may obtain the information from the Investors section of Broadcom's Web atbroadcom.com. This conference call is being webcast live and a recording will be available via telephone playback for 1 week. It will also be archived in the Investors section of our website atbroadcom.com. During the prepared comments, Hakan Tom will be providing details of our Q1 fiscal year 2020 results, guidance for our Q2 fiscal year 2020 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. I'll now turn the call over to Hock. Well, thank you, Bea, and thank you, everyone, for joining today. Well, it certainly was the best of times. It is now the worst of times and we certainly live in very interesting times. So let me start by reviewing our Q1 results, after which I will provide an update on the current environment and outlook. Consolidated net revenue for Q1 was $5,900,000,000 a 1% increase from a year ago. Semiconductor Solutions revenue was $4,200,000,000 declining 4% year over year. But collectively, demand for our networking, broadband and storage products continue to recover, growing 6% year over year. However, as expected, wireless products were down sharply year on year due to their architectural change in touch sensing, as we explained. Our Infrastructure Software segment performed largely as expected. Brocade recovered from the bottom of 2019 and continued to stabilize very well. CA had a record quarter under Broadcom, delivering approximately $880,000,000 of revenue or a 5% growth year over year. Finally, in this Q1 of integrating Symantec onto our platform and taking into account the impact of purchase accounting, step up as the year progresses. Note, step up as the year progresses. Note, these first quarter results also exclude the managed Security Services business, which we are divesting to Accenture. Now let me turn to our current thinking on the full year. Let me begin by putting into context how we initially came to our prior full year 2020 guidance. It was based on 2 primary drivers. On the infrastructure software side, we added Symantec, which in the 1st year we expect to do $1,800,000,000 Combined with Brocade, which is on its way back to a normalized run rate and CA, which is growing, we felt good about $7,000,000,000 from the software segment in 2020. Now in semiconductors, 2018 was a strong year, up high single digits. However, with softening demand industry wide, 2019 became challenging and was down high single digits, bottoming out in the second half of the year. So when we gave our 2020 guidance last quarter, it reflected a projected recovery from that bottom. We expect that the recovery would be more gradual in the first half of twenty twenty, which we have been seeing, and then accelerate in the second half of twenty twenty. Our confidence in that acceleration was driven by the anticipated launch of 5 gs phones late in the year and expected strong data center spending from enterprise and hypercloud customers. So now let's talk about the impact of COVID-nineteen on that outlook. As I sit here today, I have not yet seen a meaningful impact on bookings, and certainly, the fundamentals of the business remain very much intact. However, there is no doubt COVID-nineteen has created a high level of uncertainty, which we can't help, but think is going to have an impact on our semiconductor business, in particular in the second half of the fiscal year. But frankly, visibility is bad and confidence continues to erode. So as a result, we believe it is only prudent that we withdraw our annual guidance until such time that visibility returns to pre COVID-nineteen levels. One more point though before I move on. Keep in mind, through all this cyclicality and uncertainty, given the high degree of recurring revenue based on multiyear contracts, any uncertainty around infrastructure software revenue is likely to be very much more muted. Also in light of the unique environment we are in, we thought it makes sense at this time to provide more color on near term expectations, which we have better visibility. We expect our 2nd quarter revenue to be $5,700,000,000 which reflects a typical sequential drop, slight drop in wireless seasonality. Importantly, on a year on year basis, we expect our semiconductor business this Q2 overall to be virtually flat from a year ago, this after year on year reduction over the last four quarters. On infrastructure software revenues, we expect that to sustain on a sequential basis as we focus on as we continue to focus on completing the Symantec integration process. So to put it in perspective, shipments to date in addition to orders on hand give us the confidence in our ability to achieve this forecast. So finally, before I turn the call over to Tom, let me address our wireless business, especially given all the speculation in the press following our last quarterly call. After careful consideration, we have come to the conclusion that continuing to invest in and operate our wireless assets will create the most value for our business and for our shareholders. We're now more closely and strategically aligned with our largest smartphone customer as a result of our recent multiyear supply agreements and look forward to the continued success of our wireless franchises. Now let me turn the call over to Tom. Thank you, Hock. Consolidated net revenue for the Q1 was $5,900,000,000 a 1% increase from a year ago. Semiconductor Solutions revenue was $4,200,000,000 and represented 72% of our total revenue this quarter. This was down 4% year on year and down 8% quarter over quarter. Revenue for the Infrastructure Software segment was $1,700,000,000 and represented 28% of revenue. This was up 19% year over year and up 39% quarter over quarter. Let me now provide additional detail on our financial performance. Operating expenses were $1,190,000,000 and include approximately 80,000,000 dollars of Symantec related expenses that we expect to go away over the course of the year. Operating income from continuing operations was $3,080,000,000 and represented 52.6 percent of net revenue. Adjusted EBITDA was $3,270,000,000 and represented 55.7 percent of net revenue. This figure excludes $146,000,000 of depreciation. I would also note that we accrued $248,000,000 of restructuring and integration expenses and made $131,000,000 of cash restructuring and integration payments in the quarter. We spent $108,000,000 on capital expenditures and free cash flow represented 37.8 percent of revenue or $2,210,000,000 In the quarter, we returned $1,500,000,000 to our common stockholders, including $1,300,000,000 of cash dividends. We paid 100 and $69,000,000 in withholding taxes due on vesting of employment equity resulting in the elimination of 500,000 APGO shares. Finally, we ended the quarter with $6,400,000,000 of cash, dollars 44,700,000,000 of total debt, $399,000,000 outstanding common shares and $451,000,000 fully diluted shares for the quarter. Now let me turn to our non GAAP guidance for the Q2 of fiscal year 2020. As Hock discussed, we expect net revenue to be $5,700,000,000 plus or minus $150,000,000 Adjusted EBITDA is expected to be approximately $3,135,000,000 or 55 percent of net revenue, with a slight drop in revenue partially offset by the lower operating expense. As you would expect us to do, we run various downside recessionary scenarios with respect to our cash flow outlook and ability to maintain our liquidity, service our debt and return capital to our shareholders. Given our high gross margin profile and our somewhat variable operating expense structure, we believe we are able to maintain EBITDA margins comfortably north of 50% even in these downside scenarios. With this as a backdrop, we are quite comfortable with the current and our ability to generate excess cash beyond the dividend throughout the fiscal year. As a result, our capital allocation plan for the year remains unchanged. We plan to pay out approximately $5,500,000,000 in cash dividend to common and preferred shareholders and expect to pay down $4,000,000,000 of debt. Given the high level of uncertainty today, we are currently focused on maintaining higher than normal levels of liquidity and currently plan to do the debt pay down in the second half of the year or once visibility starts to improve. That concludes my prepared remarks. During the Q and A portion of today's call, please limit yourselves to 1 question each, so we can accommodate as many analysts as possible. Operator, please open up the call for questions. Thank you. Our first question will come from Craig Hettenbach with Morgan Stanley. Yes, thank you. Hap, just a question on the wireless business, if you can add some more context in terms of your commentary around further alignment with your largest customer and kind of the strategic nature of the business? We're pretty much under NDA. So I'm obviously very limited in what how much I will disclose to you. But suffice it to say, and we put that out in our in a press release when right after we signed the agreement with our customer that basically, it's a long term a 3 year, in fact, agreement that aligns that requires us to provide technology and roadmap alignment in essentially RF components for the next 3 generation of 5 gs phones. It's very close engagement and it perpetuates the strong products and franchise we have in this space. Thank you. Our next question will come from Ross Seymore with Deutsche Bank. Hi, Hock. Thanks for all your color. I know times are very uncertain. Is there any either end market or geographic color you can give on kind of the supply versus demand disruptions you're seeing? I know you said that bookings haven't really changed at all, but it's clearly the uncertainty levels are high. So any sort of color would be helpful. Well, it's very interesting what you just said because you're right. I mean, as we sit here right now and obviously, we're trying not to be disingenuous about how we answer this question. But we haven't seen any significant or meaningful impact, but that could reflect the fact that most of all our businesses are related to enterprises and infrastructure as opposed to consumer base. And as we know, the pandemic of COVID-nineteen is obviously hitting the people, the individual, the consumer. So we have that level of buffer before we see it and we recognize that. We also recognize the fact that probably some areas would behave differently from other areas in the sense that we see it as part of social distancing that more and more people, a lot of people work from home, which basically implies they not only work from home, they stay home and play from home, which means consumption of Internet cloud increases. So hypercloud spending, I would see to probably not be pulled back or scaled back, possibly might even improve or surge. On the other side, over time, as consumer spending drops, as we all expect to at least over on a temporary basis, confidence level among businesses, enterprises might erode, as I indicated in my notes, which might basically delay or push out spending by enterprises, while cloud spending goes up. So there's puts and takes. But again, this is all speculation, and I want to put it down this way because we have not seen either thing either scenarios happen as yet. Thank you. Our next question comes from Vivek Arya with Bank of America. Thanks for taking my question. And Hock, I understand the visibility is limited, but should we assume second half can still be better than the first half? Because when I go back to Tom's, I think cash flow remarks, if I got them right, I think Tom you said $5,500,000,000 in dividend payment and $4,000,000,000 in debt pay down. So that's $9,500,000,000 of cash usage, which I think is higher than the $9,000,000,000 free cash flow that you had outlined in the last call for fiscal 2020. So that definitely suggests strong free cash flow generation for this year. So I'm just trying to look at those data points and see what are the assumptions you have for the second half of this year, both from a sales and a free cash flow generation perspective? Thank you. Well, let's start with top line, as you said, right, because then the bottom line falls through with us very, very easily. That's your question. As Tom indicated, as we look at the full year, we could draw up various possibilities, various scenarios. We could. And our current guidance, I'm not suggesting for a second, might even show up or close to it show up. Problem is, frankly, as I indicated, we don't know. We don't know because we don't we're trying to understand the impact of COVID-nineteen on our ecosystem. And that this is still a very early stage in the whole process. But what we've seen so far is what happened in China, Asia, obviously. And that hit badly big. But so it could come from 2 parts: demand and supply chain. What we saw in the supply chain was not much impact, partly because a lot of supply chain, contract manufacturing and all that was not in China. Part of it was but there was also inventory in the pipeline pre COVID-nineteen. So that kept supply chain going. So our supply chain has not been impacted to any meaningful level. On the demand side, there was slowdown. There has also been some level of recovery since then in China as the pandemic in China starts to subside somewhat. Now having said that, we're looking over at the U. S, Europe now, and we're seeing that going into its full blown glory. Can we extrapolate what we've seen China over here? To be honest, we don't know. And so if you want to look at one possible downside, and we've done plenty of it, you could say the revenues could drop, say, 10% 5% to 10% from our $25,000,000,000 original forecast. And as Tom indicated, and I'll let Tom elaborate a bit more, what we're seeing is because of a high margin products and revenues and to some extent, our variable OpEx operating expense level, we expect our EBITDA percentage of revenue to still be comfortably over 50%. And that's good to add on that. I think if you look at the Q2 levels, it's seasonally down quarter traditionally. And if we work off of that as a baseline, you're right. We all would have expected revenues to seasonally be up in the second half. There's some one time drivers associated with that, but there's also generally an uptick in the back half. We run a lot of different scenarios as you would expect we would. Even if you assume depressed levels where were flattish off of the Q2 number, I mean keep in mind in Q2 we're going to generate on the order of $2,500,000,000 of free cash flow. Interest rates have come down dramatically. We have a lot of floating rate debt. That's helping us. We have a variable compensation structure here as Hock was articulating. That helps us. And so if you want to paint that kind of scenario, those are things we have to do, especially given our capital structure. We're still going to generate on order the amount of free cash flow that you were just describing. We haven't guided a specific number because I think the visibility continues to get worse and we don't want to get out in front of what could be obviously a very challenging environment. But needless to say, we're paying $5,500,000,000 in the form of dividends including the preferred. It gives us a tremendous amount of headroom. I think it's only prudent, as I said, to keep ample amount of liquidity, as we sit here today. But at least our expectation, especially if we're going to be running at these levels, let alone show any improvement that we would continue on and continue to pay down the debt we said we were going to in the second half. So we'll continue to watch it. And as visibility improves, we'll act accordingly. Thank you. Our next question comes from Harlan Sur with JPMorgan. Good afternoon. Just want to start off with a quick housekeeping item. Just given the strong design win pipeline that's unfolding in your compute offload or cloud ASIC business, is that now annualizing greater than $500,000,000 per year because we're just hearing that the demand pull here is strong? And then for my main question, on the uncertainties on the prior full year outlook, your infrastructure business is all mission critical. Your large customers will spend here typically in good times and in bad. And just as important, I believe that your infrastructure software business is 80% to 85% ratable revenue. So fairly predictable annuity like revenues over multiple quarters. Is that what is driving the confidence on the sustainability on the software business in the second half? Absolutely. As I indicated earlier, this infrastructure software is all largely, as you say correctly, mission critical applications, running the processes, running the transactions of the largest 500 companies in the world. We have to keep doing business. And these are multiyear contracts with fixed committed payment revenue structures. So yes, that's a nice in a way, that's a very nice thing about having this slug of infrastructure software within our product portfolio. Thank you. Our next question comes from John Pitzer with Credit Suisse. Yes. Good afternoon, guys. Thanks for letting me ask the question. Hock, appreciate the uncertainty from COVID-nineteen being the rationale for pulling the full fiscal year guide. It sounds like for fiscal 2Q though, you're characterizing that as a somewhat normal seasonal quarter. So I'm just kind of curious if you're putting any cushion in for the fiscal 2Q guide. And are you all at all worried that your customers are perhaps not pulling orders from you because they're concerned about your ability to supply and that we end up having some excess inventory in 90 days? Interesting question. As I indicated in my remarks, we're pretty much for Q2 and we are just about almost halfway through Q2 fiscal 2020 as you know. Q2 will end end of April for us. We pretty much have line of sight. In other words, we have backlog. And we have clear visibility on how we're going to produce those parts and who are going to take those parts. So that's pretty much the basis of our forecast and, as you call it, our confidence. Our next question comes from Stacy Rasgon with Bernstein Research. Hi, guys. Thanks for taking my question. I wanted to know what kind of leverage level you need to maintain your investment grade rating, potentially if EBITDA maybe coming down? And how are you thinking about the dividend next year if free cash flow is say down year over year in 2020 given you it's a 12 month 12 month free cash flow formula that goes into it? Hey, Stacy, it's Tom. I think on the leverage levels, what we had gone into the year looking at was maintaining roughly 3 to 3.5 times levels on a pro form a basis with Symantec. That included the pro form a contribution from an EBITDA perspective over $1,000,000,000 from Symantec as well as some debt pay downs by the end of the year. So that largely is intact, frankly. I think you'll also know we came off of a cyclical downturn in semis last year and at least through the first half. As we discussed, we're frankly, we're flat to if anything on the semi side and CA actually is up. So from an EBITDA standpoint, it would take quite a bit of a drop in the organic business, very meaningful drop actually where EBITDA would actually be down year over year, especially given the Symantec contribution. So I think from a leverage level standpoint and as it relates to our rating profile, we feel pretty comfortable. On the dividend, I think it's premature. Obviously, we talked about the cash flows. We've discussed sort of where cash flows are in the first half. They're running near $5,000,000,000 second half even in some downside scenarios we think are going to hold up reasonably well. And so when you look at the cash flow performance even on a relative basis to last year when you include restructuring costs, we're actually going to be up as well in that downside scenario. So things would have to get a lot worse where we'd be looking at changing our dividend policy. In fact, I think what I would tell you is we usually look at the fundamentals of the business. And are any of these businesses changing meaningfully relative to the fundamentals? We don't see that, of course. And so we're pretty committed to the dividend as you can expect, and the cash flows are there to support that. Another way of putting that, Stacy, is to sum it as simply. In a way, we've got 2 tailwinds here. 1 is 2020, we are integrating and improving contribution of Cementor to our EBITDA, and that's adding on for sure. On revenue of close to $1,800,000,000 EBITDA is adding on. And the second thing in our semiconductors, we begin 2020 with no set of numbers anyway in terms of a downturn in the cycle that we're emerging from. So it's that too helps the fact that we will have an opportunity to offset any impact from COVID-nineteen. Our next question will come from Blayne Curtis with Barclays. Curious by end market, if you can maybe comment on, obviously, enterprise went through some inventory correction. It seems like it's getting a bit better from a supply chain perspective. Then data center is quite strong. So I was wondering if you could just comment what you're seeing in those 2 end markets across your business? I would love to answer that question actually before COVID-nineteen. At this point now, it might seem fairly I call it delusional. But let me tell you, but since you asked, I'll answer before, this the impact of what we're seeing today from COVID-nineteen, you're right. The business the semiconductor business, as I pointed out, has been nicely recovering. Still, in some ways, if you look at numbers Q1 and Q2, as we say, it reflects that. It is recovering. In fact, Q4 last year, if you take the Semiconductor Solutions segment, year on year was down 7%, Q4 'nineteen. Q1 just passed or 'twenty was down 4%, and our guidance now for Q2 'twenty is virtually flat from a year ago. You see that recovery now. It's still gradual, and we had hoped the second half to be accelerated for the reasons you mentioned about, which is data center spending, which had been more muted before starting to accelerate. And you would say that, that should have limited should be impacted on a more limited indirect basis by COVID-nineteen. The only thing I'll turn to you is we don't know for sure. Hence, our I would say we put in a very prudent position. We don't know. What you would think is the consumer that gets hit less the infrastructure, data centers. But the things that are going on was still very unclear. Visibility on how people behave, enterprises or cloud guys would change their spending behavior, still not very clear. But pre COVID-nineteen, you're right, there is a clear distinct recovery from the bottom of 2019. Our next question comes from Toshiya Hari with Sachs. Hock, you mentioned that after careful consideration, you guys decided to keep the RF business and invest in the business long term. I was hoping you could provide a little more color in terms of what went into the thought process. Was it basically that long term agreement with your largest customer that sort of pinned down your decision? Or were there any other changes in terms of how you think about the market long term or your competitive position long term, the profitability of that business? Or did it have more to do with evaluation, the price that others were perhaps willing to pay? Thank you. Very good point. You hit on most of the reasons, except the last couple, which are not it's not the case. But yes, we did after don't forget, we may have called it in the last earnings call as financial assets. We didn't say non core. We call them financial assets. Doesn't change the fact these have been, continues to be franchises. These are product franchises the way we define it. That means strong technology. We are by far in the lead and we have a good position. And we continue to be in that position. And the market, especially with 5 gs phones coming in, with the plethora of difficult spectral bands that require our filters, our unique filters, that all drives towards sustainability of the franchise. And what really, I guess, come to terms with changing our mind to a large extent is the fact that there is now clarity and certainty of a long term roadmap and a very strong market position with respect to high end next generation 5 gs phones. So all that relates to it. But it has less or nothing to do with fact what value we can achieve out of it. I can't say more, but it definitely was not the last part. Thank you. Our next question will come from Edward Snyder with Charter Equity. Thanks a lot. Between your move to annual from annual to quarterly guidance and your comments about the larger impact of the coronavirus on retail and infrastructure, does that imply that most of your uncertainty in the second half of the year has more to do with wireless than say with your networking, because certainly infrastructure software and mostly about maybe timing given that's got such a big impact on your wireless business? And then Tom, given the steep decline in valuations, especially in the software sector here, is it have you studied the accretive trade off between shifting more of your resources maybe to acquisitions sooner than you might have expected, given that you could see a bigger boost on the other side? Or is it just steady as you go until you build a big enough cash pile to feel more comfortable with it? Thanks. Let me take the first part, which is, hey, in this environment, given where everything is, we're focused on running the business, we're focused on liquidity, we're focused on our capital returns. I think at least for the time being, M and A is off the table until visibility improves. That's all I'll say there. And on the second, you know the answer as well as I do. So I won't I don't need to expand or comment on it. Okay. Our next question will come from Aaron Rakers with Wells Fargo. Yes. Thanks for taking the question. I guess I wanted to ask on the Symantec contribution and your expectations going forward. You mentioned that you would expect to see the revenue kind of trajectory ramp through the course of this year. Can you help us understand how that ramp might look from here relative to the $400,000,000 And where do you stand on kind of just the integration efforts? What's been done? Or more importantly, what's still in front of us? And how do we think about that from an operating expense perspective? Sure, Aaron. It's Tom. Things that are progressing well, it's a unique deal with an asset purchase. We took the decision to drive integration quickly. We're well ahead from an operating expense standpoint. So I think by and large, we're off to a decent start. On the revenue side, relative to CA, Symantec had a bit more in the form of perpetual licenses when we brought the business over, we did take a purchase accounting haircut, which is reflected in the numbers. We also successfully sold the managed services business. We're getting set to close that with Accenture. So that's a good thing. And so what I think you'll see is as bookings continue to come online and we move into not only the second quarter, but in the second half, it will continue to progress toward the 1.8 run rate that we articulated last quarter. Thank you. Our next question will come from Harsh Kumar with Piper Sandler. Yes. So question on your software Hock. You're building the software complex of companies that are targeting top enterprise customers. These businesses under previous managements didn't grow very much. They were flat, maybe 1% growth at best. How fast do you think these businesses can grow under your umbrella? Outside of being better managers, what are you guys bringing to the table to enable this better growth? Well, yes, we have some limited data to that we have been able to achieve. That, of course, doesn't mean this is something we'll go to forever, but it's pretty in line with what we set out to achieve. And that was we have over 1 year of operation of CA under our belt today. CA comprises, as you know, the mainframe software and various distributed software and distributed software as it relates to DevOps automation and business operation together. And we reported Q1 this past Q1 CA having hitting revenues of $880,000,000 in that 1 quarter, revenues for that. And this is ratable revenue. That's how we measure these revenues. None of this perpetual 606 acceleration, flat revenues, $880,000,000 And that's a 5% increase from a year ago. And to us, that's the kind of level we hope to sustain going forward, that we grow this very, very embedded infrastructure software business at a rate in the mid single digits. And we're very pleased that we're able to do that in a for CA now. We expect to be able to put the same business model, financial model into the Symantec business and do the same. And one way we see is that this $7,000,000,000 a year of infrastructure software, that includes Brocade, of course, will over long term grow in the mid single digits and be extremely profitable for us. Thank you. Our next question will come from William Stein with SunTrust. Hock, you said earlier in the call in your prepared remarks that there has been no change to bookings you said, orders. I think they're essentially the same thing. But in years, certainly in decades past, that would have been quite a meaningful statement, given what's been going on with COVID in the last couple of weeks. I wonder if something has changed in the way your customers manage the supply chain that would make this maybe not as meaningful. In other words, how much optimism should we as analysts or investors draw from that comment as it relates to sort of beyond just the next few weeks, but like medium term outlook? Don't forget, there's just a limited horizon on the way those bookings are. So you're looking at a very limited horizon and limited visibility because the bookings are only of a certain period of time. We're not talking of bookings that run out to the end of this calendar year. No, we don't book that far ahead. So on that limited horizon of bookings, we're seeing in a sense is what is not discernible, another way of my phrasing it, is any significant change in the way the pattern of booking we have been seeing over the past couple of months or so. That has not changed. Neither have we seen any cancellations. It definitely mean on the orders that have put on any of the backlog that's been placed on us on our books today. That's as much as I would put it at this point. Beyond that horizon, we're not making any guesses or making and giving you any direct information as to what might happen. But what we have on our books, we have not seen cancellations. Whatever we have seen on the level of bookings and the pattern of bookings, we have not seen any dramatic change. Thank you. Our next question will come from Mitch Steves with RBC Capital Markets. Hey, guys. Thanks for taking my question. I hate to circle back to kind of the COVID-nineteen impact. But you guys kind of mentioned you're talking about maybe a 10% 5% to 10% decline. I don't expect a number from this, but how do we think about the business lines and in terms of what business line do you guys think will be most impacted if this doesn't get solved quickly? And maybe some sort of view, I guess, on the handset shipments you guys expected for the full year? And how you're thinking about that changing given what we know now? Yes, Amit, this is Tom. I think in order of most impacted to least impacted, it's probably pretty self explanatory. But the consumer and consumer discretionary related end markets like phones, I think are going to be the most impacted potentially. And certainly with the expected 5 gs ramp as Ak was talking about, any push outs there would have some meaningful impact on the second half of the year, particularly Q4. Less so, on the infrastructure side, we've talked a lot about the cloud and how spending likely should hang in there. In fact, you could paint a picture that some of the COVID-nineteen activity in terms of social distancing would actually suggest that could improve. Broadband certainly could improve as well for that matter. And then of course on the software side, it's a high level of recurring revenue. These companies, whether it be CA or now Symantec, it's 100% recurring. It's 3 year ratable contracts almost exclusively. And so we have a lot of visibility on that front. And so we'll see how it plays out. But I would say the only area where you could probably be most concerned would be more on the consumer related items at this point. Ladies and gentlemen, that concludes today's question and answer session as well as today's conference call. Thank you for your participation. You may now disconnect and have a wonderful day.