Financial Data and Key Metrics Changes - Consolidated revenue for fiscal year 2025 grew 24% year-over-year to a record $64 billion, driven by AI semiconductors and VMware [5] - Q4 total revenue reached a record $18 billion, up 28% year-over-year, exceeding guidance due to strong growth in AI semiconductors and Infrastructure Software [6] - Q4 consolidated adjusted EBITDA was a record $12.12 billion, up 34% year-over-year [6] - Gross margin for Q4 was 77.9% of revenue, better than guidance due to higher software revenues and product mix [12] - Free cash flow in Q4 was $7.5 billion, representing 41% of revenue [15] Business Line Data and Key Metrics Changes - Semiconductor revenue for Q4 was $11.1 billion, with year-on-year growth accelerating to 35%, driven by AI semiconductor revenue of $6.5 billion, which was up 74% year-on-year [6][14] - Infrastructure Software revenue for Q4 was $6.9 billion, up 19% year-on-year, with total contract value booked exceeding $10.4 billion [10][14] - Non-AI semiconductor revenue for Q4 was $4.6 billion, up 2% year-on-year, with a forecast of approximately $4.1 billion for Q1, flat from a year ago [9][10] Market Data and Key Metrics Changes - AI revenue backlog exceeds $73 billion, expected to be delivered over the next 18 months, with Q1 fiscal 2026 AI revenue expected to double year-on-year to $8.2 billion [9][11] - Infrastructure Software backlog increased to $73 billion, up from $49 billion a year ago [10] Company Strategy and Development Direction - Company anticipates continued acceleration in AI revenue, driving most of its growth, while non-AI semiconductor revenue is expected to remain stable [11] - Infrastructure Software revenue is projected to grow at a low double-digit percentage, driven by VMware growth [11] - Company is focusing on advanced packaging capabilities in Singapore to address supply chain challenges and enhance delivery security [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted strong customer spending momentum for AI is expected to continue into 2026 [5] - There is a recognition of the competitive landscape, with customers increasingly interested in developing their own custom AI accelerators [25] - Management expressed confidence in handling supply chain challenges and maintaining growth despite potential bottlenecks [75] Other Important Information - The company announced a 10% increase in its quarterly common stock cash dividend to $0.65 per share, marking the 15th consecutive increase since initiating dividends in fiscal 2011 [17] - The company plans to report earnings for Q1 fiscal 2026 on March 4, 2026 [90] Q&A Session Summary Question: Clarification on AI backlog and customer tooling - Management confirmed the $73 billion AI backlog is expected to grow as more orders come in, emphasizing the long-term journey for customers developing custom AI accelerators [22][24] Question: Impact of TPU sales on market dynamics - Management indicated that TPU sales are primarily a substitution for GPUs, while custom accelerators represent a long-term strategic investment for customers [28] Question: Supply chain resiliency and bottlenecks - Management acknowledged challenges in the supply chain but expressed confidence in their ability to manage and mitigate these issues through advanced packaging and existing supplier relationships [75] Question: Expectations for AI revenue growth in fiscal 2026 - Management noted that while Q1 2026 AI revenue is expected to double, the overall growth rate for fiscal 2026 remains dynamic and difficult to pinpoint [50][51] Question: Clarification on OpenAI contract - Management confirmed the $10 billion agreement with OpenAI is a multi-year journey, with significant contributions expected in 2027 to 2029, but minimal impact anticipated in 2026 [55][82]