Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2025 Financial Results

Rhea-AI Summary

Marvell Technology (NASDAQ: MRVL) reported its Q2 FY2025 financial results, with net revenue of $1.273 billion, a 5% year-over-year decline but $23 million above guidance. The company posted a GAAP net loss of $(193.3) million, or $(0.22) per diluted share, while non-GAAP net income was $266.2 million, or $0.30 per diluted share. Q2 saw 10% sequential growth, driven by strong AI demand. For Q3 FY2025, Marvell expects revenue of $1.450 billion ±5% and non-GAAP diluted EPS of $0.40 ±$0.05. The company anticipates growth across all end markets, with data center acceleration and a return to growth in enterprise networking and carrier markets.

Positive

• Q2 revenue of $1.273 billion exceeded guidance by $23 million
• 10% sequential revenue growth driven by strong AI demand
• Q3 guidance projects 14% sequential revenue growth to $1.450 billion
• Expected growth across all end markets in Q3
• Non-GAAP gross margin of 61.9% in Q2

Negative

• 5% year-over-year revenue decline in Q2
• GAAP net loss of $(193.3) million in Q2
• GAAP diluted loss per share of $(0.22) in Q2
• Projected GAAP diluted loss per share of $(0.09) ±$0.05 for Q3

Insights

Financial Analyst

Marvell's Q2 results show mixed signals. While revenue of $1.273 billion beat guidance, it still declined 5% year-over-year. The $0.30 non-GAAP EPS beat expectations, but GAAP loss of $0.22 per share is concerning. The 61.9% non-GAAP gross margin is solid, indicating good cost management.

The company's focus on AI is paying off, with strong growth in electro-optics and custom AI programs. The projected 14% sequential revenue growth for Q3 is impressive, suggesting accelerating momentum. However, investors should watch the GAAP to non-GAAP discrepancies and monitor if the AI-driven growth can offset weaknesses in other segments.

Tech Industry Expert

Marvell's pivot towards AI infrastructure is timely and showing results. The growth in electro-optics and custom AI programs indicates they're well-positioned in the booming AI chip market. The expected return to growth in enterprise networking and carrier markets is also promising, suggesting a broader recovery.

However, the 5% year-over-year revenue decline highlights ongoing challenges in the semiconductor industry. The projected acceleration in data center growth is crucial, as this segment is often a bellwether for tech spending. Investors should closely monitor Marvell's ability to execute on its AI strategy while managing the transition in its traditional markets.

Market Research Analyst

Marvell's Q2 results reflect the broader semiconductor industry trends. The AI-driven growth aligns with the sector's shift towards high-performance computing. The projected 14% sequential growth for Q3 outpaces many peers, potentially indicating market share gains.

The return to growth in enterprise and carrier markets is a positive sign for overall tech spending. However, the year-over-year revenue decline suggests Marvell isn't immune to industry headwinds. The strong non-GAAP margins and increasing operating leverage are positive, but investors should watch for sustained GAAP profitability. Marvell's performance in the coming quarters could be a key indicator of the semiconductor industry's recovery trajectory.

• Q2 Net Revenue: $1.273 billion, declined by (5)% year-on-year
• Q2 Gross Margin: 46.2% GAAP gross margin; 61.9% non-GAAP gross margin
• Q2 Diluted income (loss) per share: $(0.22) GAAP diluted loss per share; $0.30 non-GAAP diluted income per share

SANTA CLARA, Calif., Aug. 29, 2024 /PRNewswire/ -- Marvell Technology, Inc. (NASDAQ: MRVL), a leader in data infrastructure semiconductor solutions, today reported financial results for the second quarter of fiscal year 2025.

Net revenue for the second quarter of fiscal 2025 was $1.273 billion, $23.0 million above the mid-point of the Company's guidance provided on May 30, 2024. GAAP net loss for the second quarter of fiscal 2025 was $(193.3) million, or $(0.22) per diluted share. Non-GAAP net income for the second quarter of fiscal 2025 was $266.2 million, or $0.30 per diluted share. Cash flow from operations for the second quarter was $306.4 million.

"Marvell's second quarter revenue grew 10% sequentially, above the mid-point of guidance driven by strong demand from AI. We saw strong growth from our electro-optics products and our custom AI programs began to ramp," said Matt Murphy, Marvell's Chairman and CEO. "Next quarter, we expect our combined enterprise networking and carrier end markets to return to growth, while our data center end market growth accelerates. As a result, for the third quarter of fiscal 2025, we expect all our end markets to grow sequentially, with consolidated revenue forecasted to grow 14% sequentially at the mid-point, accompanied by a significant increase in operating leverage."

Third Quarter of Fiscal 2025 Financial Outlook

• Net revenue is expected to be $1.450 billion +/- 5%.
• GAAP gross margin is expected to be approximately 47.2%.
• Non-GAAP gross margin is expected to be approximately 61%.
• GAAP operating expenses are expected to be approximately $693 million.
• Non-GAAP operating expenses are expected to be approximately $465 million.
• Basic weighted-average shares outstanding are expected to be 867 million.
• Diluted weighted-average shares outstanding are expected to be 875 million.
• GAAP diluted loss per share is expected to be $(0.09) +/- $0.05 per share.
• Non-GAAP diluted income per share is expected to be $0.40 +/- $0.05 per share.

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, August 29, 2024 at 1:45 p.m. Pacific Time to discuss results for the second 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/4bYingS 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 45397# until Thursday, September 5, 2024.

Discussion of Non-GAAP Financial Measures 

Non-GAAP financial measures exclude the effect of stock-based compensation expense, 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 second quarter of fiscal 2025, a non-GAAP tax rate of 7.0% has been applied to the non-GAAP financial results.

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 Ukraine and in Israel and the Gaza Strip) and economic volatility in either domestic or foreign markets including risks related to trade conflicts or tensions, regulations, and tariffs, including but not limited to, trade restrictions imposed on our Chinese customers; our ability to retain and hire key personnel; our ability to limit costs related to defective products; risks related to our debt obligations; risks related to the rapid growth of the Company; delays or increased costs related to completing the design, development, production and introduction of our new products due to a variety of issues, including supply chain cross-dependencies, dependencies on EDA and similar tools, dependencies on the use of third-party, business partner or customer intellectual property, collaboration and synchronization requirements with business partners and customers, requirements to establish new manufacturing, testing, assembly and packing processes, and other issues; our reliance on our manufacturing partners for the manufacture, assembly, testing and packaging of our products; risks related to the ASIC business model which requires us to use third-party IP including the risk that we may lose business or experience reputational harm if third parties, including customers, lose confidence in our ability to protect their IP rights; the risks associated with manufacturing and selling products and customers' products outside of the United States; our ability to secure design wins from our customers and prospective customers; our ability to complete and realize the anticipated benefits of any acquisitions, divestitures and investments; decreases in gross margin and results of operations in the future due to a number of factors, including high or increasing interest rates and volatility in foreign exchange rates; severe financial hardship or bankruptcy of one or more of our major customers; our ability to realize the expected benefits from restructuring activities; the effects of transitioning to smaller geometry process technologies; risks related to use of a hybrid work model; the impact of any change in the income tax laws in jurisdictions where we operate and the loss of any beneficial tax treatment that we currently enjoy; the outcome of pending or future litigation and legal and regulatory proceedings; risk related to our Sustainability program; the impact and costs associated with changes in international financial and regulatory conditions; our ability and the ability of our customers to successfully compete in the markets in which we serve; our ability and our customers' ability to develop new and enhanced products and the adoption of those products in the market; supply chain disruptions or component shortages that may impact the production of our products including our kitting process or may impact the price of components which in turn may impact our margins on any impacted products and any constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers; our ability to scale our operations in response to changes in demand for existing or new products and services; risks associated with acquisition and consolidation activity in the semiconductor industry, including any consolidation of our manufacturing partners; our ability to protect our intellectual property; risks related to the impact of the COVID-19 pandemic (or future pandemics) which have impacted, and for which lingering effects may continue to impact our business, employees and operations, the transportation and manufacturing of our products, and the operations of our customers, distributors, vendors, suppliers, and partners; our maintenance of an effective system of internal controls; financial institution instability; and other risks detailed in our SEC filings from time to time. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect our business described in the "Risk Factors" section of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by us from time to time with the SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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.  Condensed Consolidated Statements of Operations (Unaudited)  (In millions, except per share amounts)
		Three Months Ended						Six Months Ended
		August 3, 2024		May 4, 2024		July 29, 2023		August 3, 2024		July 29, 2023
Net revenue		$      1,272.9		$      1,160.9		$      1,340.9		$      2,433.8		$      2,662.6
Cost of goods sold		685.3		633.1		819.8		1,318.4		1,584.3
Gross profit		587.6		527.8		521.1		1,115.4		1,078.3
Operating expenses:
Research and development		486.7		476.1		474.8		962.8		955.5
Selling, general and administrative		197.3		199.9		210.0		397.2		409.0
Restructuring related charges		4.0		4.1		42.0		8.1		101.9
Total operating expenses		688.0		680.1		726.8		1,368.1		1,466.4
Operating loss		(100.4)		(152.3)		(205.7)		(252.7)		(388.1)
Interest expense		(48.4)		(48.8)		(53.8)		(97.2)		(106.5)
Interest income and other, net		2.6		3.3		7.9		5.9		10.7
Interest and other loss, net		(45.8)		(45.5)		(45.9)		(91.3)		(95.8)
Loss before income taxes		(146.2)		(197.8)		(251.6)		(344.0)		(483.9)
Provision (benefit) for income taxes		47.1		17.8		(44.1)		64.9		(107.5)
Net loss		$       (193.3)		$       (215.6)		$       (207.5)		$       (408.9)		$       (376.4)
Net loss per share — basic		$         (0.22)		$         (0.25)		$         (0.24)		$         (0.47)		$         (0.44)
Net loss per share — diluted		$         (0.22)		$         (0.25)		$         (0.24)		$         (0.47)		$         (0.44)
Weighted-average shares:
Basic		865.7		865.0		860.9		865.4		858.8
Diluted		865.7		865.0		860.9		865.4		858.8

 

Marvell Technology, Inc.  Condensed Consolidated Balance Sheets (Unaudited)  (In millions)
		August 3, 2024		February 3, 2024
Assets
Current assets:
Cash and cash equivalents		$              808.7		$              950.8
Accounts receivable, net		1,060.1		1,121.6
Inventories		817.8		864.4
Prepaid expenses and other current assets		77.3		125.9
Total current assets		2,763.9		3,062.7
Property and equipment, net		781.5		756.0
Goodwill		11,586.9		11,586.9
Acquired intangible assets, net		3,463.4		4,004.1
Deferred tax assets		347.5		311.9
Other non-current assets		1,350.2		1,506.9
Total assets		$        20,293.4		$        21,228.5
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$              453.4		$              411.3
Accrued liabilities		763.8		1,032.9
Accrued employee compensation		200.0		262.7
Short-term debt		129.3		107.3
Total current liabilities		1,546.5		1,814.2
Long-term debt		3,996.5		4,058.6
Other non-current liabilities		545.5		524.3
Total liabilities		6,088.5		6,397.1
Stockholders' equity:
Common stock		1.7		1.7
Additional paid-in capital		14,732.9		14,845.3
Accumulated other comprehensive income (loss)		(0.4)		1.1
Accumulated deficit		(529.3)		(16.7)
Total stockholders' equity		14,204.9		14,831.4
Total liabilities and stockholders' equity		$        20,293.4		$        21,228.5

 

Marvell Technology, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
		Three Months Ended				Six Months Ended
		August 3, 2024		July 29, 2023		August 3, 2024		July 29, 2023
Cash flows from operating activities:
Net loss		$            (193.3)		$            (207.5)		$        (408.9)		$        (376.4)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		76.3		75.5		148.9		153.9
Stock-based compensation		154.9		152.8		291.4		296.0
Amortization of acquired intangible assets		275.7		271.8		540.6		541.8
Restructuring related impairment charges		1.6		21.3		2.3		31.4
Deferred income taxes		(36.1)		(87.6)		(58.3)		(226.7)
Other expense, net		11.3		8.9		33.1		21.7
Changes in assets and liabilities:
Accounts receivable		(178.2)		(208.2)		61.5		(16.9)
Prepaid expenses and other assets		135.9		(47.2)		221.7		(39.3)
Inventories		9.2		11.3		48.0		52.5
Accounts payable		93.1		18.0		34.8		(86.8)
Accrued employee compensation		33.0		1.1		(59.2)		(59.0)
Accrued liabilities and other non-current liabilities		(77.0)		102.3		(225.0)		28.7
Net cash provided by operating activities		306.4		112.5		630.9		320.9
Cash flows from investing activities:
Purchases of technology licenses		(5.2)		(0.2)		(5.7)		(3.0)
Purchases of property and equipment		(48.2)		(111.1)		(139.7)		(210.9)
Acquisitions, net of cash acquired		(0.6)		(5.5)		(10.4)		(5.5)
Other, net		1.0		(0.2)		0.9		(0.3)
Net cash used in investing activities		(53.0)		(117.0)		(154.9)		(219.7)
Cash flows from financing activities:
Repurchases of common stock		(175.0)		—		(325.0)		—
Proceeds from employee stock plans		49.3		52.9		51.6		60.4
Tax withholding paid on behalf of employees for net share settlement		(57.6)		(51.2)		(131.7)		(123.8)
Dividend payments to stockholders		(51.9)		(51.7)		(103.7)		(103.1)
Payments on technology license obligations		(35.3)		(28.6)		(65.5)		(78.6)
Proceeds from borrowings		—		50.0		—		250.0
Principal payments of debt		(21.9)		(571.8)		(43.8)		(593.7)
Net cash used in financing activities		(292.4)		(600.4)		(618.1)		(588.8)
Net decrease in cash and cash equivalents		(39.0)		(604.9)		(142.1)		(487.6)
Cash and cash equivalents at beginning of period		847.7		1,028.3		950.8		911.0
Cash and cash equivalents at end of period		$              808.7		$              423.4		$          808.7		$          423.4

 

Marvell Technology, Inc.
Reconciliations from GAAP to Non-GAAP (Unaudited)
(In millions, except per share amounts)
		Three Months Ended						Six Months Ended
		August 3, 2024		May 4, 2024		July 29, 2023		August 3, 2024		July 29, 2023
GAAP gross profit		$     587.6		$     527.8		$     521.1		$  1,115.4		$  1,078.3
Special items:
Stock-based compensation		11.2		9.7		11.0		20.9		23.0
Amortization of acquired intangible assets		191.3		180.5		185.8		371.8		369.5
Other cost of goods sold (a)		(2.6)		6.0		90.2		3.4		129.8
Total special items		199.9		196.2		287.0		396.1		522.3
Non-GAAP gross profit		$     787.5		$     724.0		$     808.1		$  1,511.5		$  1,600.6
GAAP gross margin		46.2 %		45.5 %		38.9 %		45.8 %		40.5 %
Stock-based compensation		0.9 %		0.8 %		0.8 %		0.9 %		0.9 %
Amortization of acquired intangible assets		15.0 %		15.5 %		13.9 %		15.3 %		13.9 %
Other cost of goods sold (a)		(0.2) %		0.6 %		6.7 %		0.1 %		4.8 %
Non-GAAP gross margin		61.9 %		62.4 %		60.3 %		62.1 %		60.1 %
Total GAAP operating expenses		$     688.0		$     680.1		$     726.8		$  1,368.1		$  1,466.4
Special items:
Stock-based compensation		(143.7)		(126.8)		(141.8)		(270.5)		(273.0)
Restructuring related charges (b)		(4.0)		(4.1)		(42.0)		(8.1)		(101.9)
Amortization of acquired intangible assets		(84.4)		(84.4)		(86.0)		(168.8)		(172.3)
Other (c)		(0.1)		(11.0)		(9.0)		(11.1)		(12.6)
Total special items		(232.2)		(226.3)		(278.8)		(458.5)		(559.8)
Total non-GAAP operating expenses		$     455.8		$     453.8		$     448.0		$     909.6		$     906.6
GAAP operating margin		(7.9) %		(13.1) %		(15.3) %		(10.4) %		(14.6) %
Other cost of goods sold (a)		(0.2) %		0.5 %		6.7 %		0.1 %		4.9 %
Stock-based compensation		12.2 %		11.8 %		11.4 %		12.0 %		11.1 %
Restructuring related charges (b)		0.3 %		0.4 %		3.1 %		0.3 %		3.8 %
Amortization of acquired intangible assets		21.7 %		22.8 %		20.3 %		22.2 %		20.3 %
Other (c)		— %		0.9 %		0.7 %		0.5 %		0.6 %
Non-GAAP operating margin		26.1 %		23.3 %		26.9 %		24.7 %		26.1 %
GAAP interest and other loss, net		$      (45.8)		$      (45.5)		$      (45.9)		$      (91.3)		$      (95.8)
Special items:
Other (c)		0.3		(2.4)		(8.5)		(2.1)		(8.4)
Total special items		0.3		(2.4)		(8.5)		(2.1)		(8.4)
Total non-GAAP interest and other loss, net		$      (45.5)		$      (47.9)		$      (54.4)		$      (93.4)		$   (104.2)
GAAP net loss		$   (193.3)		$   (215.6)		$   (207.5)		$   (408.9)		$   (376.4)
Special items:
Other cost of goods sold (a)		(2.6)		6.0		90.2		3.4		129.8
Stock-based compensation		154.9		136.5		152.8		291.4		296.0
Restructuring related charges (b)		4.0		4.1		42.0		8.1		101.9
Amortization of acquired intangible assets		275.7		264.9		271.8		540.6		541.8
Other (c)		0.4		8.6		0.5		9.0		4.2
Pre-tax total special items		432.4		420.1		557.3		852.5		1,073.7
Other income tax effects and adjustments (d)		27.1		2.2		(59.6)		29.3		(142.9)
Non-GAAP net income		$     266.2		$     206.7		$     290.2		$     472.9		$     554.4
GAAP weighted-average shares — basic		865.7		865.0		860.9		865.4		858.8
GAAP weighted-average shares — diluted		865.7		865.0		860.9		865.4		858.8
Non-GAAP weighted-average shares — diluted (e)		875.7		876.0		869.4		875.9		865.3
GAAP diluted net loss per share		$      (0.22)		$      (0.25)		$      (0.24)		$      (0.47)		$      (0.44)
Non-GAAP diluted net income per share		$        0.30		$        0.24		$        0.33		$        0.54		$        0.64

(a)	Other cost of goods sold includes charges for an intellectual property licensing claim, product claim related matters that were fully resolved in the fourth quarter of fiscal 2024, and acquisition integration related inventory costs.
(b)	Restructuring and other related items include employee severance costs, asset impairment charges, facilities related charges, and other.
(c)	Other costs in operating expenses and interest and other loss, net include gain or loss on investments and asset acquisition related costs.
(d)	Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 7.0% for the three and six months ended August 3, 2024 and three months ended May 4, 2024. Other income tax effects and adjustments are based on a non-GAAP income tax rate of 5.1% for the three months ended July 29, 2023. Other income tax effects and adjustments are based on a non-GAAP income tax rate of 6.0% for the six months ended July 29, 2023.
(e)	Non-GAAP diluted weighted-average shares differs from GAAP diluted weighted-average shares due to the non-GAAP net income reported.

 

Marvell Technology, Inc.
Outlook for the Third Quarter of Fiscal Year 2025
Reconciliations from GAAP to Non-GAAP (Unaudited)
(In millions, except per share amounts)
	Outlook for Three Months Ended November 2, 2024
GAAP net revenue	$1,450 +/- 5%
Special items:	—
Non-GAAP net revenue	$1,450 +/- 5%
GAAP gross margin	~ 47.2%
Special items:
Stock-based compensation	0.7 %
Amortization of acquired intangible assets	13.1 %
Non-GAAP gross margin	~ 61%
Total GAAP operating expenses	~ $693
Special items:
Stock-based compensation	144
Amortization of acquired intangible assets	84
Total non-GAAP operating expenses	~ $465
GAAP diluted loss per share	$(0.09) +/- $0.05
Special items:
Stock-based compensation	0.18
Amortization of acquired intangible assets	0.31
Non-GAAP diluted net income per share	$0.40 +/- $0.05

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 •          United States military and government solutions •          Video surveillance

 

Quarterly Revenue Trend (Unaudited) (Continued)
	Three Months Ended						% Change
Revenue by End Market (In millions)	August 3, 2024		May 4, 2024		July 29, 2023		YoY		QoQ
Data center	$                             880.9		$                             816.4		$                             459.8		92 %		8 %
Enterprise networking	151.0		153.1		327.7		(54) %		(1) %
Carrier infrastructure	75.9		71.8		275.5		(72) %		6 %
Consumer	88.9		42.0		167.7		(47) %		112 %
Automotive/industrial	76.2		77.6		110.2		(31) %		(2) %
Total Net Revenue	$                          1,272.9		$                          1,160.9		$                          1,340.9		(5) %		10 %

 

					Three Months Ended
Revenue by End Market % of Total					August 3, 2024		May 4, 2024		July 29, 2023
Data center					69 %		70 %		34 %
Enterprise networking					12 %		13 %		24 %
Carrier infrastructure					6 %		6 %		21 %
Consumer					7 %		4 %		13 %
Automotive/industrial					6 %		7 %		8 %
Total Net Revenue					100 %		100 %		100 %

For further information, contact:   
Ashish Saran
Senior Vice President, Investor Relations
408-222-0777
ir@marvell.com

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SOURCE Marvell

FAQ

What was Marvell's Q2 FY2025 revenue?

Marvell's Q2 FY2025 revenue was $1.273 billion, which was $23 million above the mid-point of the company's guidance.

How did Marvell's stock (MRVL) perform in Q2 FY2025?

The press release doesn't provide direct stock performance information. However, Marvell reported a GAAP net loss of $(193.3) million or $(0.22) per diluted share for Q2 FY2025.

What is Marvell's revenue guidance for Q3 FY2025?

Marvell expects Q3 FY2025 revenue to be $1.450 billion ±5%, representing a 14% sequential growth at the mid-point.

How did AI impact Marvell's Q2 FY2025 results?

Strong demand from AI drove Marvell's 10% sequential growth in Q2. The company saw strong growth from electro-optics products and the beginning of custom AI program ramps.