JHVEPhotoI initiated a ‘Buy’ rating for Marvell Technology (NASDAQ:MRVL) in June 2024, based on the thesis of fast growth in AI revenues from optics and custom ASIC. Marvell announced their Q2 result on August 29th after the bell, with an upbeat outlook for Q3. Notably, their data center business grew by 92% year-over-year. I reiterate a ‘Buy’ rating with a one-year price target of $90 per share. Ramping Up Electro-Optics & Custom Silicon My biggest takeaway from the quarter is Marvell’s strong growth i ...

Revenue Performance - Net revenue for Q2 fiscal 2025 was $1.3 billion, a decrease of 5% compared to $1.34 billion in Q2 fiscal 2024, primarily due to declines in multiple end markets[96]. - Net revenue for the six months ended August 3, 2024, decreased by $228.8 million, a decline of approximately 5% compared to the same period in 2023, primarily due to significant decreases in sales across most end markets[107]. Sales by End Market - Sales from the carrier infrastructure end market decreased by 72%, enterprise networking by 54%, consumer by 47%, and automotive/industrial by 31%, while data center sales increased by 92%[96][106]. - Sales from the carrier infrastructure end market decreased by 74%, enterprise networking by 56%, consumer by 58%, and automotive/industrial by 23%, while data center sales increased by 90%[107]. Shareholder Returns - The company returned $428.7 million to shareholders in the first half of fiscal 2024, including $325.0 million in stock repurchases and $103.7 million in cash dividends[101]. - The company repurchased $325.0 million of common stock during the six months ended August 3, 2024, as part of its financing activities[131]. Financial Position - Cash and cash equivalents were $808.7 million as of August 3, 2024, down $142.1 million from $950.8 million on February 3, 2024[101]. - The company had approximately $808.7 million in cash and cash equivalents as of August 3, 2024, with $580.5 million held by subsidiaries outside the United States[122]. - Total borrowings outstanding as of August 3, 2024, were $4.2 billion, including $3.5 billion of senior notes and $656.2 million under the 2026 Term Loan[122]. Operating Performance - Operating loss for Q2 fiscal 2025 was 7.9% of net revenue, an improvement from a 15.3% loss in Q2 fiscal 2024[105]. - Net cash provided by operating activities for the six months ended August 3, 2024, was $630.9 million, compared to $320.9 million for the same period in 2023, reflecting a significant increase of 96.7%[128][129]. - The company reported a net loss of $408.9 million for the six months ended August 3, 2024, adjusted for non-cash items, compared to a net loss of $376.4 million for the same period in 2023[128][129]. Research and Development - Research and development expenses were 38.2% of net revenue in Q2 fiscal 2025, compared to 35.4% in Q2 fiscal 2024[105]. - Research and development expenses for the six months ended August 3, 2024, were $962.8 million, a slight increase of 0.8% from $955.5 million in the same period in 2023, representing 39.6% of net revenue[108]. Tax and Income - Provision for income taxes for the six months ended August 3, 2024, was $64.9 million, compared to a tax benefit of $107.5 million in the same period in 2023[117]. - The company had a deferred income tax benefit of $58.3 million for the six months ended August 3, 2024, compared to $226.7 million for the same period in 2023, indicating a decrease of 74.3%[128][129]. Cash Flow and Investments - Cash outflow from working capital for the six months ended August 3, 2024, was $81.8 million, primarily driven by decreases in accounts receivable and inventories, while cash outflow for the same period in 2023 was $120.8 million[128][129]. - Net cash used in investing activities for the six months ended August 3, 2024, was $154.9 million, down from $219.7 million in the same period in 2023, indicating a reduction of 29.5%[130]. Interest Rate and Currency Risks - A hypothetical 1 percentage point increase in interest rates could result in an increase in annual interest expense by approximately $5.8 million, highlighting the company's exposure to interest rate risk[135]. - If the U.S. dollar weakened by 10%, operating expenses could increase by approximately 2%, indicating potential foreign currency exchange risk[138]. - The company maintains an investment policy that limits long-term interest rate risk by requiring effective maturities of generally less than five years[136]. Customer Concentration - Accounts receivable was concentrated with four customers, representing 70% of gross accounts receivable as of August 3, 2024[102]. - Approximately 77% of net revenue in Q2 fiscal 2025 came from customers with operations in Asia, compared to 68% in Q2 fiscal 2024[103]. Capacity and Future Outlook - The company has entered into capacity reservation arrangements with foundries and partners to secure long-term capacity[97]. - The company anticipates continued impact on revenue from U.S. government export restrictions on certain Chinese customers[98].

Marvell Technology Inc MRVL shares climbed in early trading on Friday, after the company reported upbeat second-quarter sales.The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.Goldman Sachs On Marvell TechnologyAnalyst Toshiya Hari maintained a Buy rating while lifting the price target from $77 to $87.Marvell Technology reported its first beat-and-raise in five quarters, with fiscal second-quarter revenue at $1.27 billion, representing 10% sequential grow ...

Key TakeawaysMarvell Technology reported better-than-expected sales for the second quarter, boosted by demand for artificial intelligence.CEO Matt Murphy said the company saw strong growth from its electro-optics products and that its custom AI programs began to ramp up.Marvell Technology shares surged nearly 5% in early trading Friday and have gained over one-fifth of their value since the start of the year. Marvell Technology (MRVL) shares surged nearly 5% in early trading Friday after the maker of networ ...

Marvell Technology (MRVL) reported better-than-expected results for the second quarter of fiscal 2025. The chipmaker’s revenues and earnings were above the midpoint of its guidance.The Wilmington, DE-based company reported non-GAAP earnings of 30 cents per share, which surpassed the Zacks Consensus Estimate by a penny. Quarterly earnings also came ahead of the midpoint of the company’s guidance of 29 cents (+/- 5 cents). The bottom line decreased 9.1% on a year-over-year basis, mainly due to higher-than-exp ...

Shares of Dell Technologies Inc (NYSE:DELL) and Marvell Technology Inc (NASDAQ:MRVL) are moving higher following their respective earnings reports.Dell, now a top vendor for servers oriented toward artificial intelligence (AI), reported second-quarter adjusted earnings of $1.89 per share on revenue of $25.06 billion, both of which beat Wall Street's expectations thanks to an 80% increase in server sales. At last glance, DELL was 1.7% higher at $112.58, extending its year-over-year lead to 97%.As far as anal ...

Marvell Technology continues to face challenges in its various segments.Marvell Technology (MRVL 2.05%), a leader in infrastructure semiconductor solutions, reported fiscal 2025 second-quarter earnings Thursday that were in line with internal guidance but mixed when measured against year-over-year data.Revenue of $1.27 billion was up 10% sequentially from Q1, although it marks a 5% year-over-year decline. Marvell continued to grapple with losses, posting a GAAP diluted loss per share of $0.22 and non-GAAP d ...

Financial Data and Key Metrics Changes - For Q2 2025, Marvell reported revenue of $1.27 billion, a 10% sequential growth, but a 5% decline year-over-year [5][21] - Non-GAAP earnings per share were $0.30, exceeding guidance and reflecting a 25% sequential increase [5][22] - GAAP gross margin was 46.2%, while non-GAAP gross margin was 61.9% [22] Business Line Data and Key Metrics Changes - Data center revenue reached a record $881 million, growing 92% year-over-year and 8% sequentially, driven by strong demand for electro-optics products [6][21] - Enterprise networking revenue was $151 million, and carrier revenue was $76 million, both flat sequentially [13][21] - Consumer revenue grew 112% sequentially to $89 million, recovering from prior inventory corrections [15][21] - Automotive and industrial revenue was $76 million, declining 31% year-over-year and 2% sequentially, but expected to grow in Q3 [16][21] Market Data and Key Metrics Changes - The data center market is projected to grow significantly, with a compound annual growth rate (CAGR) of 27% to $14 billion by 2028 [8] - The enterprise networking and carrier markets are expected to see mid-single-digit growth sequentially in Q3 [14][21] Company Strategy and Development Direction - Marvell is focusing on AI and accelerated infrastructure, reallocating investments towards high ROI opportunities [17] - The company aims to maintain leadership in the interconnect market, expanding its product portfolio to include new technologies [8][18] - Custom silicon is expected to be the largest revenue growth driver, with a focus on partnerships with Tier 1 cloud providers [10][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding AI revenue targets for the year, driven by strong demand in both custom and optics businesses [32][63] - The company anticipates a return to year-over-year revenue growth in Q3, with all end markets expected to grow [5][19] - Management highlighted the importance of maintaining operational discipline and leveraging operating margins as revenue grows [38][60] Other Important Information - Cash flow from operations was $306 million, with inventory reduced by nearly 20% year-over-year [23][21] - The company plans to increase stock repurchases in Q3, reflecting strong cash flow generation [23][25] Q&A Session Summary Question: Can you elaborate on operating leverage to gross margin? - Management indicated that while custom programs have lower gross margins, the recovery in core merchant products will offset this, leading to stable gross margins in the coming quarters [27][29] Question: What is the outlook for AI revenue? - Management confirmed strong demand in both custom compute and optics, with expectations to exceed the previously set targets for AI revenue [31][32] Question: Can you provide granularity on AI revenue numbers? - Management refrained from providing specific quarterly numbers but confirmed that both custom and electro-optics contributions are exceeding expectations [34][35] Question: What are the competitive dynamics in the AI business? - Management acknowledged a competitive landscape but emphasized Marvell's strong market share and comprehensive technology offerings [41][42] Question: What is the outlook for the custom compute business? - Management expressed confidence in multi-generational relationships with customers, indicating strong bookings and backlog for future programs [45][46] Question: How is the data center switching opportunity expected to ramp? - Management noted strong interest in the 51.2T silicon and believes they are well-positioned for future production [55][56] Question: What is the normalized run rate for traditional businesses? - Management indicated a target of returning both enterprise and carrier businesses to approximately $1 billion each annually, with growth expected in the coming quarters [59][60]

For the quarter ended July 2024, Marvell Technology (MRVL) reported revenue of $1.27 billion, down 5.1% over the same period last year. EPS came in at $0.30, compared to $0.33 in the year-ago quarter.The reported revenue represents a surprise of +1.79% over the Zacks Consensus Estimate of $1.25 billion. With the consensus EPS estimate being $0.29, the EPS surprise was +3.45%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine ...

Marvell Technology (MRVL) came out with quarterly earnings of $0.30 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.45%. A quarter ago, it was expected that this chipmaker would post earnings of $0.23 per share when it actually produced earnings of $0.24, delivering a surprise of 4.35%.Over the last four quarters, the compa ...