Marvell Technology, Inc. Reports First Quarter of Fiscal Year 2025 Financial Results
Marvell Technology reported its Q1 FY2025 financial results, showing a net revenue of $1.161 billion, a 12% year-on-year decline. The company's GAAP net loss was $215.6 million, or $(0.25) per diluted share, while non-GAAP net income reached $206.7 million, or $0.24 per diluted share. Gross margins stood at 45.5% GAAP and 62.4% non-GAAP. Cash flow from operations was $324.5 million. The company’s data center revenue grew 87% year-over-year, driven by custom AI programs. Marvell anticipates a sequential revenue increase of 8% for Q2 FY2025, projecting net revenue of $1.250 billion +/- 5%.
- Q1 FY2025 net revenue of $1.161 billion, $11 million above guidance mid-point.
- Non-GAAP net income of $206.7 million or $0.24 per diluted share.
- Cash flow from operations at $324.5 million.
- Data center revenue grew 87% year-over-year.
- Q2 FY2025 revenue guidance shows an 8% sequential increase.
- Net revenue declined 12% year-on-year.
- GAAP net loss of $215.6 million or $(0.25) per diluted share.
- GAAP gross margin is lower at 45.5%.
Insights
Marvell Technology's Q1 financial results show both challenges and opportunities. Despite a
The net loss of
For retail investors, understanding both GAAP and non-GAAP results helps in assessing the actual financial health. While non-GAAP measures can offer insight into core operations, the substantial adjustments seen here warrant cautious interpretation.
The AI-driven demand surge is a key aspect of Marvell's earnings. The
Investors should monitor whether the anticipated recovery in these segments materializes and if AI-driven revenues can sustain current momentum. The company’s ability to diversify its revenue base will be critical in reducing potential volatility linked to any single sector's performance.
- Q1 Net Revenue:
$1.16 1 billion - Q1 Gross Margin:
45.5% GAAP gross margin;62.4% non-GAAP gross margin - Q1 Diluted income (loss) per share:
$(0.25) $0.24
Net revenue for the first quarter of fiscal 2025 was
"Marvell delivered first quarter fiscal 2025 revenue of
Second Quarter of Fiscal 2025 Financial Outlook
- Net revenue is expected to be
$1.25 0 billion5% . - GAAP gross margin is expected to be approximately
46.2% . - Non-GAAP gross margin is expected to be approximately
62.0% . - GAAP operating expenses are expected to be approximately
$688 million - Non-GAAP operating expenses are expected to be approximately
$455 million - Basic weighted-average shares outstanding are expected to be 867 million.
- Diluted weighted-average shares outstanding are expected to be 877 million.
- GAAP diluted loss per share is expected to be
$(0.20) $0.05 - Non-GAAP diluted income per share is expected to be
$0.29 $0.05
GAAP diluted EPS is calculated using basic weighted-average shares outstanding when there is a GAAP net loss, and calculated using diluted weighted-average shares outstanding when there is a GAAP net income. Non-GAAP diluted EPS is calculated using diluted weighted-average shares outstanding.
Conference Call
Marvell will conduct a conference call on Thursday, May 30, 2024 at 1:45 p.m. Pacific Time to discuss results for the first quarter of fiscal year 2025. Interested parties may join the conference call without operator assistance by registering and entering their phone number at https://emportal.ink/4dgLjlZ to receive an instant automated call back. To join the call with operator assistance, please dial 1-800-836-8184 or 1-646-357-8785. The call will be webcast and can be accessed at the Marvell Investor Relations website at http://investor.marvell.com/. A replay of the call can be accessed by dialing 1-888-660-6345 or 1-646-517-4150, passcode 60615# until Thursday, June 6, 2024.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of the inventory fair value adjustment associated with acquisitions, amortization of acquired intangible assets, acquisition and divestiture-related costs, restructuring and other related charges (including, but not limited to, asset impairment charges, employee severance costs, and facilities related charges), resolution of legal matters, and certain expenses and benefits that are driven primarily by discrete events that management does not consider to be directly related to Marvell's core business. Although Marvell excludes the amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and that such amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of intangible assets contributed to Marvell's revenues earned during the periods presented and are expected to contribute to Marvell's future period revenues as well.
Marvell uses a non-GAAP tax rate to compute the non-GAAP tax provision. This non-GAAP tax rate is based on Marvell's estimated annual GAAP income tax forecast, adjusted to account for items excluded from Marvell's non-GAAP income, as well as the effects of significant non-recurring and period specific tax items which vary in size and frequency, and excludes tax deductions and benefits from acquired tax loss and credit carryforwards and changes in valuation allowance on acquired deferred tax assets. Marvell's non-GAAP tax rate is determined on an annual basis and may be adjusted during the year to take into account events that may materially affect the non-GAAP tax rate such as tax law changes; acquisitions; significant changes in Marvell's geographic mix of revenue and expenses; or changes to Marvell's corporate structure. For the first quarter of fiscal 2025, a non-GAAP tax rate of
Marvell believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Marvell's financial condition and results of operations. While Marvell uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Marvell does not consider these measures to be a substitute for, or superior to, financial measures calculated in accordance with GAAP. Consistent with this approach, Marvell believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance.
Externally, management believes that investors may find Marvell's non-GAAP financial measures useful in their assessment of Marvell's operating performance and the valuation of Marvell. Internally, Marvell's non-GAAP financial measures are used in the following areas:
- Management's evaluation of Marvell's operating performance;
- Management's establishment of internal operating budgets;
- Management's performance comparisons with internal forecasts and targeted business models; and
- Management's determination of the achievement and measurement of certain performance-based equity awards (adjustments may vary from award to award).
Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of Marvell's business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Marvell's results as reported under GAAP. The exclusion of the above items from our GAAP financial metrics does not necessarily mean that these costs are unusual or infrequent.
Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the "safe harbor" created by those sections. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," "forecasts," "targets," "may," "can," "will," "would" and similar expressions identify such forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to, the statements describing our financial outlook and future period revenues. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties, including, but not limited to: risks related to changes in general macroeconomic conditions, or expectations of such conditions, such as high or rising interest rates, macroeconomic slowdowns, recessions, inflation, and stagflation; risks related to our ability to estimate customer demand and future sales accurately; our ability to define, design, develop and market products for the Cloud, 5G markets, and Artificial Intelligence (AI) markets; risks related to higher inventory levels; risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; our dependence on a small number of customers;the risk of downturns in the semiconductor industry or our customer end markets; the impact of international conflict (such as the current armed conflicts in the
About Marvell
To deliver the data infrastructure technology that connects the world, we're building solutions on the most powerful foundation: our partnerships with our customers. Trusted by the world's leading technology companies for over 25 years, we move, store, process and secure the world's data with semiconductor solutions designed for our customers' current needs and future ambitions. Through a process of deep collaboration and transparency, we're ultimately changing the way tomorrow's enterprise, cloud, automotive, and carrier architectures transform—for the better.
Marvell® and the Marvell logo are registered trademarks of Marvell and/or its affiliates.
Marvell Technology, Inc. | ||||||
Three Months Ended | ||||||
May 4, | February 3, | April 29, | ||||
Net revenue | $ 1,160.9 | $ 1,426.5 | $ 1,321.7 | |||
Cost of goods sold | 633.1 | 762.4 | 764.5 | |||
Gross profit | 527.8 | 664.1 | 557.2 | |||
Operating expenses: | ||||||
Research and development | 476.1 | 459.6 | 480.7 | |||
Selling, general and administrative | 199.9 | 212.0 | 199.0 | |||
Restructuring related charges | 4.1 | 25.8 | 59.9 | |||
Total operating expenses | 680.1 | 697.4 | 739.6 | |||
Operating loss | (152.3) | (33.3) | (182.4) | |||
Interest expense | (48.8) | (52.6) | (52.7) | |||
Interest income and other, net | 3.3 | (1.4) | 2.8 | |||
Interest and other loss, net | (45.5) | (54.0) | (49.9) | |||
Loss before income taxes | (197.8) | (87.3) | (232.3) | |||
Provision (benefit) for income taxes | 17.8 | 305.4 | (63.4) | |||
Net loss | $ (215.6) | $ (392.7) | $ (168.9) | |||
Net loss per share — basic | $ (0.25) | $ (0.45) | $ (0.20) | |||
Net loss per share — diluted | $ (0.25) | $ (0.45) | $ (0.20) | |||
Weighted-average shares: | ||||||
Basic | 865.0 | 864.7 | 856.7 | |||
Diluted | 865.0 | 864.7 | 856.7 | |||
Marvell Technology, Inc. | ||||
May 4, | February 3, | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 847.7 | $ 950.8 | ||
Accounts receivable, net | 881.9 | 1,121.6 | ||
Inventories | 826.4 | 864.4 | ||
Prepaid expenses and other current assets | 91.7 | 125.9 | ||
Total current assets | 2,647.7 | 3,062.7 | ||
Property and equipment, net | 758.0 | 756.0 | ||
Goodwill | 11,586.9 | 11,586.9 | ||
Acquired intangible assets, net | 3,739.2 | 4,004.1 | ||
Deferred tax assets | 327.0 | 311.9 | ||
Other non-current assets | 1,432.2 | 1,506.9 | ||
Total assets | $ 20,491.0 | $ 21,228.5 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 320.9 | $ 411.3 | ||
Accrued liabilities | 861.0 | 1,032.9 | ||
Accrued employee compensation | 167.5 | 262.7 | ||
Short-term debt | 118.3 | 107.3 | ||
Total current liabilities | 1,467.7 | 1,814.2 | ||
Long-term debt | 4,027.6 | 4,058.6 | ||
Other non-current liabilities | 517.0 | 524.3 | ||
Total liabilities | 6,012.3 | 6,397.1 | ||
Stockholders' equity: | ||||
Common stock | 1.7 | 1.7 | ||
Additional paid-in capital | 14,760.7 | 14,845.3 | ||
Accumulated other comprehensive income | 0.4 | 1.1 | ||
Accumulated deficit | (284.1) | (16.7) | ||
Total stockholders' equity | 14,478.7 | 14,831.4 | ||
Total liabilities and stockholders' equity | $ 20,491.0 | $ 21,228.5 | ||
Marvell Technology, Inc. | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||
(In millions) | ||||
Three Months Ended | ||||
May 4, | April 29, | |||
Cash flows from operating activities: | ||||
Net loss | $ (215.6) | $ (168.9) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 72.6 | 78.4 | ||
Stock-based compensation | 136.5 | 143.2 | ||
Amortization of acquired intangible assets | 264.9 | 270.0 | ||
Restructuring related impairment charges | 0.7 | 10.1 | ||
Deferred income taxes | (22.2) | (139.1) | ||
Other expense, net | 21.8 | 12.8 | ||
Changes in assets and liabilities: | ||||
Accounts receivable | 239.7 | 191.3 | ||
Prepaid expenses and other assets | 85.8 | 7.9 | ||
Inventories | 38.8 | 41.2 | ||
Accounts payable | (58.3) | (104.8) | ||
Accrued employee compensation | (92.2) | (60.1) | ||
Accrued liabilities and other non-current liabilities | (148.0) | (73.6) | ||
Net cash provided by operating activities | 324.5 | 208.4 | ||
Cash flows from investing activities: | ||||
Purchases of technology licenses | (0.5) | (2.8) | ||
Purchases of property and equipment | (91.5) | (99.8) | ||
Other, net | (9.9) | (0.1) | ||
Net cash used in investing activities | (101.9) | (102.7) | ||
Cash flows from financing activities: | ||||
Repurchases of common stock | (150.0) | — | ||
Proceeds from employee stock plans | 2.3 | 7.5 | ||
Tax withholding paid on behalf of employees for net share settlement | (74.1) | (72.6) | ||
Dividend payments to stockholders | (51.8) | (51.4) | ||
Payments on technology license obligations | (30.2) | (50.0) | ||
Proceeds from borrowings | — | 200.0 | ||
Principal payments of debt | (21.9) | (21.9) | ||
Net cash provided by (used in) financing activities | (325.7) | 11.6 | ||
Net increase (decrease) in cash and cash equivalents | (103.1) | 117.3 | ||
Cash and cash equivalents at beginning of period | 950.8 | 911.0 | ||
Cash and cash equivalents at end of period | $ 847.7 | $ 1,028.3 | ||
Marvell Technology, Inc. | ||||||
Reconciliations from GAAP to Non-GAAP (Unaudited) | ||||||
(In millions, except per share amounts) | ||||||
Three Months Ended | ||||||
May 4, | February 3, | April 29, | ||||
GAAP gross profit | $ 527.8 | $ 664.1 | $ 557.2 | |||
Special items: | ||||||
Stock-based compensation | 9.7 | 10.4 | 12.0 | |||
Amortization of acquired intangible assets | 180.5 | 194.3 | 183.7 | |||
Other cost of goods sold (a) | 6.0 | 42.3 | 39.6 | |||
Total special items | 196.2 | 247.0 | 235.3 | |||
Non-GAAP gross profit | $ 724.0 | $ 911.1 | $ 792.5 | |||
GAAP gross margin | 45.5 % | 46.6 % | 42.2 % | |||
Stock-based compensation | 0.8 % | 0.7 % | 0.9 % | |||
Amortization of acquired intangible assets | 15.5 % | 13.6 % | 13.9 % | |||
Other cost of goods sold (a) | 0.6 % | 3.0 % | 3.0 % | |||
Non-GAAP gross margin | 62.4 % | 63.9 % | 60.0 % | |||
Total GAAP operating expenses | $ 680.1 | $ 697.4 | $ 739.6 | |||
Special items: | ||||||
Stock-based compensation | (126.8) | (144.9) | (131.2) | |||
Restructuring related charges (b) | (4.1) | (25.8) | (59.9) | |||
Amortization of acquired intangible assets | (84.4) | (92.0) | (86.3) | |||
Other (c) | (11.0) | (6.2) | (3.6) | |||
Total special items | (226.3) | (268.9) | (281.0) | |||
Total non-GAAP operating expenses | $ 453.8 | $ 428.5 | $ 458.6 | |||
GAAP operating margin | (13.1) % | (2.3) % | (13.8) % | |||
Other cost of goods sold (a) | 0.5 % | 3.0 % | 3.0 % | |||
Stock-based compensation | 11.8 % | 10.9 % | 10.8 % | |||
Restructuring related charges (b) | 0.4 % | 1.8 % | 4.5 % | |||
Amortization of acquired intangible assets | 22.8 % | 20.1 % | 20.4 % | |||
Other (c) | 0.9 % | 0.3 % | 0.3 % | |||
Non-GAAP operating margin | 23.3 % | 33.8 % | 25.2 % | |||
GAAP interest and other loss, net | $ (45.5) | $ (54.0) | $ (49.9) | |||
Special items: | ||||||
Other (c) | (2.4) | (1.3) | 0.1 | |||
Total special items | (2.4) | (1.3) | 0.1 | |||
Total non-GAAP interest and other loss, net | $ (47.9) | $ (55.3) | $ (49.8) | |||
GAAP net loss | $ (215.6) | $ (392.7) | $ (168.9) | |||
Special items: | ||||||
Other cost of goods sold (a) | 6.0 | 42.3 | 39.6 | |||
Stock-based compensation | 136.5 | 155.3 | 143.2 | |||
Restructuring related charges (b) | 4.1 | 25.8 | 59.9 | |||
Amortization of acquired intangible assets | 264.9 | 286.3 | 270.0 | |||
Other (c) | 8.6 | 4.9 | 3.7 | |||
Pre-tax total special items | 420.1 | 514.6 | 516.4 | |||
Other income tax effects and adjustments (d) | 2.2 | 279.7 | (83.3) | |||
Non-GAAP net income | $ 206.7 | $ 401.6 | $ 264.2 | |||
GAAP weighted-average shares — basic | 865.0 | 864.7 | 856.7 | |||
GAAP weighted-average shares — diluted | 865.0 | 864.7 | 856.7 | |||
Non-GAAP weighted-average shares — diluted (e) | 876.0 | 873.9 | 861.2 | |||
GAAP diluted net loss per share | $ (0.25) | $ (0.45) | $ (0.20) | |||
Non-GAAP diluted net income per share | $ 0.24 | $ 0.46 | $ 0.31 | |||
(a) | Other cost of goods sold includes charges for an intellectual property licensing claim, product claim related |
(b) | Restructuring and other related items include employee severance costs, asset impairment charges, |
(c) | Other costs included in operating expenses and other income, net include charges for an intellectual |
(d) | Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of |
(e) | Non-GAAP diluted weighted-average shares differs from GAAP diluted weighted-average shares due to |
Marvell Technology, Inc. | |
Outlook for the Second Quarter of Fiscal Year 2025 | |
Reconciliations from GAAP to Non-GAAP (Unaudited) | |
(In millions, except per share amounts) | |
Outlook for Three Months Ended August 3, 2024 | |
GAAP net revenue | |
Special items: | — |
Non-GAAP net revenue | |
GAAP gross margin | ~ |
Special items: | |
Stock-based compensation | 0.8 % |
Amortization of acquired intangible assets | 15.0 % |
Non-GAAP gross margin | ~ |
Total GAAP operating expenses | ~ |
Special items: | |
Stock-based compensation | 149 |
Amortization of acquired intangible assets | 84 |
Total non-GAAP operating expenses | ~ |
GAAP diluted loss per share | |
Special items: | |
Stock-based compensation | 0.18 |
Amortization of acquired intangible assets | 0.31 |
Non-GAAP diluted net income per share | |
Quarterly Revenue Trend (Unaudited)
Our product solutions serve five large end markets where our technology is essential: (i) data center, (ii) enterprise networking, (iii) carrier infrastructure, (iv) consumer, and (v) automotive/industrial. These markets and their corresponding customer products and applications are noted in the table below:
End market | Customer products and applications |
Data center | • Cloud and on-premise Artificial intelligence (AI) systems • Cloud and on-premise ethernet switching • Cloud and on-premise network-attached storage (NAS) • Cloud and on-premise AI servers • Cloud and on-premise general-purpose servers • Cloud and on-premise storage area networks • Cloud and on-premise storage systems • Data center interconnect (DCI) |
Enterprise networking | • Campus and small medium enterprise routers • Campus and small medium enterprise ethernet switches • Campus and small medium enterprise wireless access points (WAPs) • Network appliances (firewalls, and load balancers) • Workstations |
Carrier infrastructure | • Broadband access systems • Ethernet switches • Optical transport systems • Routers • Wireless radio access network (RAN) systems |
Consumer | • Broadband gateways and routers • Gaming consoles • Home data storage • Home wireless access points (WAPs) • Personal Computers (PCs) • Printers • Set-top boxes |
Automotive/industrial | • Advanced driver-assistance systems (ADAS) • Autonomous vehicles (AV) • In-vehicle networking • Industrial ethernet switches • • Video surveillance |
Quarterly Revenue Trend (Unaudited) (Continued) | |||||||||
Three Months Ended | % Change | ||||||||
Revenue by End Market (In millions) | May 4, | February 3, | April 29, | YoY | QoQ | ||||
Data center | $ 816.4 | $ 765.3 | $ 435.8 | 87 % | 7 % | ||||
Enterprise networking | 153.1 | 265.0 | 364.6 | (58) % | (42) % | ||||
Carrier infrastructure | 71.8 | 170.0 | 289.9 | (75) % | (58) % | ||||
Consumer | 42.0 | 143.9 | 142.1 | (70) % | (71) % | ||||
Automotive/industrial | 77.6 | 82.3 | 89.3 | (13) % | (6) % | ||||
Total Net Revenue | $ 1,160.9 | $ 1,426.5 | $ 1,321.7 | (12) % | (19) % | ||||
Three Months Ended | |||||||||
Revenue by End Market % of Total | May 4, | February 3, | April 29, | ||||||
Data center | 70 % | 54 % | 33 % | ||||||
Enterprise networking | 13 % | 19 % | 27 % | ||||||
Carrier infrastructure | 6 % | 12 % | 22 % | ||||||
Consumer | 4 % | 10 % | 11 % | ||||||
Automotive/industrial | 7 % | 5 % | 7 % | ||||||
Total Net Revenue | 100 % | 100 % | 100 % | ||||||
For further information, contact:
Ashish Saran
Senior Vice President, Investor Relations
408-222-0777
ir@marvell.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/marvell-technology-inc-reports-first-quarter-of-fiscal-year-2025-financial-results-302159874.html
SOURCE Marvell
FAQ
What was Marvell Technology's Q1 FY2025 net revenue?
How much did Marvell Technology's net revenue decline year-on-year in Q1 FY2025?
What is Marvell Technology's GAAP net loss for Q1 FY2025?
What is the non-GAAP net income per share for Marvell Technology in Q1 FY2025?
What was Marvell Technology's cash flow from operations in Q1 FY2025?
How much did Marvell Technology's data center revenue grow in Q1 FY2025?
What is Marvell Technology's revenue guidance for Q2 FY2025?
