Marvell Technology(MRVL) - 2025 Q3 - Quarterly Results

Financial Highlights & Outlook Q3 FY25 Financial Results Marvell Technology's Q3 FY25 net revenue of $1.516 billion increased 7% year-on-year, exceeding guidance, with a GAAP diluted loss and non-GAAP income per share Three Months Ended November 2, 2024 (in millions, except per share amounts) | Metric | Value | | :-------------------------- | :------------------- | | Net Revenue | $1.516 billion | | GAAP Gross Margin | 23.0% | | Non-GAAP Gross Margin | 60.5% | | GAAP Diluted Loss Per Share | $(0.78) | | Non-GAAP Diluted Income Per Share | $0.43 | | Cash Flow from Operations | $536.3 million | - Q3 FY25 net revenue of $1.516 billion was $66.0 million above the mid-point of the Company's guidance[3] CEO Commentary CEO Matt Murphy highlighted strong Q3 sequential revenue growth from AI and custom AI silicon, anticipating significant Q4 year-over-year revenue acceleration - Marvell's fiscal third quarter 2025 revenue grew 19% sequentially, well above guidance, driven by strong demand from AI[4] - Custom AI silicon programs are now in volume production, augmented by robust ongoing demand from cloud customers for interconnect products[4] - For Q4, the company forecasts another 19% sequential revenue growth and expects year-over-year revenue growth to accelerate significantly to 26%, marking the beginning of a new era of growth[4] Q4 FY25 Financial Outlook Marvell projects Q4 FY25 net revenue of $1.800 billion (+/- 5%) and non-GAAP diluted net income per share of $0.59 (+/- $0.05) Q4 FY25 Financial Outlook | Metric | Outlook | | :-------------------------------- | :------------------- | | Net Revenue | $1.800 billion +/- 5% | | GAAP Gross Margin | ~50% | | Non-GAAP Gross Margin | ~60% | | GAAP Operating Expenses | ~$710 million | | Non-GAAP Operating Expenses | ~$480 million | | GAAP Diluted Net Income Per Share | $0.16 +/- $0.05 | | Non-GAAP Diluted Net Income Per Share | $0.59 +/- $0.05 | Non-GAAP Financial Measures Conference Call Information Marvell will host a conference call on December 3, 2024, at 1:45 p.m. PT to discuss Q3 FY25 results, with webcast and replay options - A conference call to discuss Q3 FY25 results will be held on Tuesday, December 3, 2024, at 1:45 p.m. Pacific Time[7] - Interested parties can join via registration for an automated call back, direct dial, or access the webcast on the Marvell Investor Relations website[7] Discussion of Non-GAAP Measures Marvell uses non-GAAP measures, excluding items like stock-based compensation, for supplemental insights and internal evaluation, not as a GAAP substitute - Non-GAAP financial measures exclude stock-based compensation, amortization of acquired intangible assets, acquisition/divestiture-related costs, restructuring charges, and certain discrete event expenses[8] - A non-GAAP tax rate of 7.0% was applied for the third quarter of fiscal 2025, based on estimated annual GAAP income tax forecast adjusted for non-GAAP items[9] - Non-GAAP measures are used internally for management's evaluation of operating performance, budgeting, performance comparisons, and compensation determination, and externally for assessing operating performance and valuation[11] Forward-Looking Statements Forward-Looking Statements Disclaimer This section contains forward-looking statements subject to known and unknown risks, including macroeconomic conditions and supply chain disruptions, with no commitment to updates - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from implied statements[13] - Key risks include changes in general macroeconomic conditions, ability to estimate customer demand, dependence on a few customers, downturns in the semiconductor industry, and supply chain disruptions[13] - The company assumes no obligation and does not intend to update or revise these forward-looking statements[13] About Marvell Technology, Inc. Company Overview Marvell Technology is a leading provider of data infrastructure semiconductor solutions, collaborating globally to move, store, process, and secure data across diverse architectures - Marvell is a leader in data infrastructure semiconductor solutions, building solutions through partnerships with customers[14] - The company moves, stores, processes, and secures the world's data with semiconductor solutions designed for current and future needs[14] - Marvell's solutions transform enterprise, cloud, automotive, and carrier architectures through deep collaboration and transparency[14] Condensed Consolidated Financial Statements Condensed Consolidated Statements of Operations Marvell reported Q3 FY25 net revenue of $1,516.1 million, a GAAP gross profit of $349.4 million, and a net loss of $(676.3) million, resulting in a diluted net loss per share Three Months Ended November 2, 2024 (in millions, except per share amounts) | Metric | Amount (USD) | | :-------------------------- | :------- | | Net Revenue | $1,516.1 | | Cost of Goods Sold | $1,166.7 | | Gross Profit | $349.4 | | Total Operating Expenses | $1,052.2 | | Operating Loss | $(702.8) | | Net Loss | $(676.3) | | Net Loss Per Share — Diluted | $(0.78) | Condensed Consolidated Balance Sheets As of November 2, 2024, Marvell's total assets were $19,715.6 million, with cash and cash equivalents at $868.1 million, total liabilities, and stockholders' equity As of November 2, 2024 (in millions) | Metric | Nov 2, 2024 (USD) | Feb 3, 2024 (USD) | | :---------------------------- | :---------- | :---------- | | Cash and Cash Equivalents | $868.1 | $950.8 | | Total Current Assets | $2,816.8 | $3,062.7 | | Goodwill | $11,586.9 | $11,586.9 | | Acquired Intangible Assets, net | $2,957.7 | $4,004.1 | | Total Assets | $19,715.6 | $21,228.5 | | Total Liabilities | $6,342.7 | $6,397.1 | | Total Stockholders' Equity | $13,372.9 | $14,831.4 | Condensed Consolidated Statements of Cash Flows For Q3 FY25, Marvell generated $536.3 million in net cash from operating activities, with investing and financing activities resulting in a $59.4 million net increase in cash and cash equivalents Three Months Ended November 2, 2024 (in millions) | Metric | Amount (USD) | | :---------------------------------------- | :------- | | Net Cash Provided by Operating Activities | $536.3 | | Net Cash Used in Investing Activities | $(75.5) | | Net Cash Used in Financing Activities | $(401.4) | | Net Increase in Cash and Cash Equivalents | $59.4 | | Cash and Cash Equivalents at End of Period | $868.1 | Reconciliations from GAAP to Non-GAAP Q3 FY25 GAAP to Non-GAAP Reconciliations Marvell's Q3 FY25 GAAP results were reconciled to non-GAAP by adjusting for special items, resulting in a non-GAAP gross profit of $917.1 million (60.5% margin) and non-GAAP net income of $373.0 million Q3 FY25 GAAP to Non-GAAP Gross Profit and Margin (in millions) | Metric | GAAP (USD) | Special Items (USD) | Non-GAAP (USD) | | :------------------- | :------- | :------------ | :------- | | Gross Profit | $349.4 | $567.7 | $917.1 | | Gross Margin | 23.0% | | 60.5% | Q3 FY25 GAAP to Non-GAAP Operating Expenses and Margin (in millions) | Metric | GAAP (USD) | Special Items (USD) | Non-GAAP (USD) | | :------------------------- | :--------- | :------------ | :--------- | | Total Operating Expenses | $1,052.2 | $(585.3) | $466.9 | | Operating Margin | (46.4)% | | 29.7% | Q3 FY25 GAAP to Non-GAAP Net Income and EPS (in millions, except per share amounts) | Metric | GAAP (USD) | Special Items (Pre-tax) (USD) | Non-GAAP (USD) | | :-------------------------------- | :--------- | :---------------------- | :------- | | Net Loss/Income | $(676.3) | $1,151.6 | $373.0 | | Diluted Net Loss/Income Per Share | $(0.78) | | $0.43 | Q4 FY25 Outlook GAAP to Non-GAAP Reconciliations Q4 FY25 outlook reconciles GAAP to non-GAAP, adjusting for special items, projecting a non-GAAP gross margin of approximately 60% and diluted net income per share Q4 FY25 Outlook GAAP to Non-GAAP Gross Margin | Metric | GAAP Outlook | Special Items | Non-GAAP Outlook | | :----------- | :----------- | :------------ | :--------------- | | Gross Margin | ~50% | 0.7% (SBC), 9.3% (Amort.) | ~60% | Q4 FY25 Outlook GAAP to Non-GAAP Operating Expenses (in millions) | Metric | GAAP Outlook (USD) | Special Items (USD) | Non-GAAP Outlook (USD) | | :----------------------- | :----------- | :------------ | :--------------- | | Total Operating Expenses | ~$710 | 142 (SBC), 78 (Amort.), 10 (Restruct.) | ~$480 | Q4 FY25 Outlook GAAP to Non-GAAP Diluted Net Income Per Share | Metric | GAAP Outlook | Special Items | Non-GAAP Outlook | | :--------------------------- | :----------- | :------------ | :--------------- | | Diluted Net Income Per Share | $0.16 +/- $0.05 | 0.18 (SBC), 0.28 (Amort.), 0.01 (Restruct.), (0.04) (Tax) | $0.59 +/- $0.05 | Quarterly Revenue Trend End Market Overview Marvell's product solutions serve five key end markets: data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial - Marvell's product solutions serve five large end markets: data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial[30] - Data center applications include cloud and on-premise AI systems, ethernet switching, network-attached storage, and various servers[30] Quarterly Revenue Trends by End Market Q3 FY25 Data Center revenue grew substantially to $1,101.1 million, increasing 98% year-over-year and 25% quarter-over-quarter, now representing 73% of total net revenue Revenue by End Market (Three Months Ended November 2, 2024, in millions) | End Market | Revenue (USD) | % Change YoY | % Change QoQ | % of Total Revenue | | :-------------------- | :-------- | :----------- | :----------- | :----------------- | | Data Center | $1,101.1 | 98% | 25% | 73% | | Enterprise Networking | $150.9 | (44)% | —% | 10% | | Carrier Infrastructure | $84.7 | (73)% | 12% | 6% | | Consumer | $96.5 | (43)% | 9% | 6% | | Automotive/Industrial | $82.9 | (22)% | 9% | 5% | | Total Net Revenue | $1,516.1 | 7% | 19% | 100% |