Product Innovation & Technology - The iPhone Air is the thinnest iPhone ever at 5.6mm, featuring a flexible front camera and dual recording capabilities [1] - The A19 Pro chip, Apple's most advanced, powers both the Air and 17 Pro, integrating neural accelerators into the GPU cores for on-device AI [2][3] - Apple's new modem, C1X, and wireless chip, N1, signify a move towards controlling the full silicon stack for optimized product solutions [4] AI Strategy & Implementation - Apple is focusing on building the best on-device AI capability, integrating neural processing into GPUs for enhanced performance across applications [8][9][12] - The integration of neural accelerators into each GPU core allows for seamless switching between 3D rendering and neural processing instructions [9] - Apple emphasizes privacy, efficiency, and control as key benefits of on-device AI processing [15] Supply Chain & Manufacturing - Apple is increasing its commitment to manufacture in the US, with TSMC ramping up three-nanometer production in Arizona [35][36] - Geopolitical risks associated with relying entirely on Taiwan for chip manufacturing are a concern for Apple [33] - Apple anticipates using its own modems in all devices within the next two years, including Mac and iPad [30] Competition & Market Dynamics - Apple's move to in-house wireless and Bluetooth chips impacts Broadcom and Qualcomm, though licensing deals will continue [18][21][28] - Qualcomm remains the gold standard for modems, particularly in high-end Android smartphones [28] - Apple's custom modem, C1X, uses 30% less energy compared to the Qualcomm modem in the iPhone 16 Pro [23][24]

Financial Data and Key Metrics Changes - Marvell reported record revenue of $2,006 million, reflecting a 6% sequential increase and a strong 58% year-over-year growth [4][25] - Non-GAAP operating margin expanded by 870 basis points year-over-year to 34.8% [4] - Non-GAAP earnings per share reached $0.67, up 123% year-over-year [4][27] - Operating cash flow was $462 million, significantly up from $333 million in the first quarter [5][27] - GAAP gross margin was 50.4%, while non-GAAP gross margin was 59.4% [25][26] Business Line Data and Key Metrics Changes - Data center revenue was $1,490 million, growing 3% sequentially and 69% year-over-year, driven by custom XPU and XPU attached products [11][25] - Enterprise networking revenue was $194 million, and carrier infrastructure revenue totaled $130 million, with combined revenue growing 2% sequentially and 43% year-over-year [19] - Consumer market revenue was $116 million, up 84% sequentially and 30% year-over-year, primarily driven by gaming demand [21] - Automotive and industrial revenue was $76 million, flat both sequentially and year-over-year [21] Market Data and Key Metrics Changes - The data center end market now accounts for 74% of total revenue, up from 34% in 2024 [32] - The total addressable market (TAM) for data centers is projected to increase to $94 billion by 2028, a 26% increase from previous estimates [8] - The company expects data center revenue to continue delivering strong growth in the mid-thirty percent range year-over-year in the third quarter [12] Company Strategy and Development Direction - The divestiture of the automotive Ethernet business for $2,500 million aligns with the strategy to focus on AI opportunities in the data center market [6][7] - Marvell aims to grow its data center market share from 13% of a $33 billion TAM in 2024 to 20% of a $94 billion TAM by 2028 [8] - The company plans to consolidate non-data center end markets into a new single communications and other end market starting in the third quarter [7][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing momentum in the data center market, driven by AI demand [4][23] - The company anticipates overall revenue in the third quarter to be approximately $2,060 million, representing 36% year-over-year growth [22] - Management noted that the custom business is expected to see growth in the second half of the fiscal year compared to the first half [39] Other Important Information - Marvell has repurchased $540 million of stock in the first half of the fiscal year, with approximately $2 billion remaining in its authorization [5] - The company completed a public offering of notes totaling $1 billion, using most proceeds to repay existing debt [28] Q&A Session Summary Question: Guidance for the custom business and headwinds in Q3 - Management acknowledged the lumpiness in the custom business but expects a strong recovery in Q4, driven by optics business growth [37][39] Question: Clarity on design wins and revenue expectations - Management reported significant design activity and new design wins, with many opportunities in the billions of dollars [42][44] Question: Impact of supply constraints and tariffs - Management indicated tight supply chain conditions but has not seen significant impacts from tariffs [45][48] Question: Concentration among lead customers and timing of design wins - Management confirmed that initial programs are ramping and additional design wins are expected to contribute to revenue over the next 18-24 months [52][54] Question: Update on three nanometer XPU program - Management stated that initial programs are ramping and expressed confidence in growth from this program next year [106]

Financial Data and Key Metrics Changes - In Q4, the company achieved record revenue exceeding $1,000,000,000 for the first time, with full-year revenue surpassing $4,000,000,000 and royalty revenue exceeding $2,000,000,000 [7][8] - Total revenue for Q4 was $1,240,000,000, with royalty revenue growing 18% year-on-year to a record $607,000,000 [13][14] - Licensing revenue increased over 50% year-on-year to a record $634,000,000, driven by demand for ARMv9 technology [14][15] Business Line Data and Key Metrics Changes - Smartphone royalties increased by 30% year-on-year, significantly outpacing the 2% growth in shipments, indicating a rising value per device [10][14] - The company launched its first ARMv9 Edge AI platform, which has been adopted by major players in the industry [10][11] - Custom silicon demand is driving both licensing and royalty growth, with significant contributions from data centers, automotive, smartphones, and IoT [8][10] Market Data and Key Metrics Changes - The company expects up to 50% of new server chips at hyperscalers to be ARM-based this year, reflecting strong momentum in the data center market [8][62] - The automotive sector has shown strong double-digit growth, with ARM gaining market share in advanced driver-assistance systems (ADAS) [60] - IoT and embedded markets have seen some slowness, but growth is expected to continue, albeit at a slower pace compared to other sectors [61] Company Strategy and Development Direction - The company is focusing on customization of silicon to differentiate performance and unlock unique features, particularly in automotive and hyperscaler markets [42][44] - There is a strategic shift towards direct relationships with OEMs, which may impact traditional fabless semiconductor companies [42][45] - The company plans to aggressively invest in R&D to support customer needs and capitalize on the growing demand for AI technologies [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in healthy growth despite macroeconomic uncertainties, citing strong visibility into customer design pipelines and contracted royalty rates [20][21] - The company anticipates limited direct impact from tariffs on royalty and licensing revenues, with potential indirect effects on end demand [16][26] - Future revenue growth is expected to enable increased investment in next-generation technologies [19][20] Other Important Information - The company signed a significant multi-year agreement with the Malaysian government to develop an ARM-based AI ecosystem, indicating potential for future sovereign-level licensing deals [66][68] - The company is seeing strong demand for its compute subsystems, which are now shipping in volume, boosting both mobile and cloud royalty revenue [11][12] Q&A Session Summary Question: Impact of tariffs on revenue - Management clarified that tariffs do not directly impact costs, and any revenue impact would be indirect, primarily affecting demand elasticity [23][25] Question: ARMv9 adoption rate - The adoption rate for ARMv9 has increased to over 30%, driven by custom silicon solutions [32][33] Question: Strategic direction towards OEMs - Management confirmed a trend towards direct relationships with OEMs for customized silicon, which may affect traditional semiconductor companies [42][45] Question: Licensing performance in Q4 - Licensing revenue growth was strong, with a year-on-year increase of 53%, driven by demand for CSS and AI technologies [76][80] Question: Royalty growth by end market - Management indicated strong growth in smartphones and infrastructure, with automotive also showing double-digit growth, while IoT is recovering slowly [60][61] Question: Future of chiplet technology - Management acknowledged the importance of chiplet technology and its integration with ARM's architecture, emphasizing its role in custom silicon solutions [92][95]

Financial Data and Key Metrics Changes - In Q4, the company achieved record revenue exceeding $1,000,000,000 for the first time, with full-year revenue surpassing $4,000,000,000 and royalty revenue exceeding $2,000,000,000 [6][13] - Non-GAAP operating profit reached a record $655,000,000, with non-GAAP EPS of $0.55, at the high end of guidance [16][19] - Royalty revenue grew 18% year on year to a record $607,000,000, driven by flagship smartphone launches [13][14] Business Line Data and Key Metrics Changes - Licensing revenue hit an all-time high of $634,000,000, increasing over 50% year on year, primarily due to demand for ARMv9 technology [7][14] - Smartphone royalties increased by 30% year on year, significantly outpacing the modest 2% growth in shipments [10][14] - The company launched its first ARMv9 Edge AI platform, which has been adopted by major industry players [10][11] Market Data and Key Metrics Changes - The company expects up to 50% of new server chips at hyperscalers to be ARM-based this year, indicating strong momentum in the data center market [7][8] - The automotive sector has shown strong double-digit growth, with ARM gaining share in advanced driver-assistance systems (ADAS) [55] - IoT and embedded markets have experienced some slowness, but signs of recovery are anticipated [56] Company Strategy and Development Direction - The company is focusing on customization of silicon to differentiate performance and unlock unique features, particularly in automotive and hyperscaler markets [41][42] - There is a strategic shift towards signing deals directly with OEMs, which may increase the total addressable market (TAM) [41][42] - The company plans to continue aggressive investment in R&D to support customer needs and capitalize on AI demand [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in healthy growth despite macroeconomic uncertainties, citing visibility into customer design pipelines and rising demand for custom silicon [19][20] - The company does not expect a significant direct impact from tariffs on royalty and licensing revenues, but acknowledges potential indirect effects [16][25] - Future guidance for Q1 indicates revenue growth of 12% year on year, with strong expectations for royalty growth between 25% to 30% [17][19] Other Important Information - The company has expanded its developer community to over 22,000,000, the largest in the world [11] - A significant licensing agreement was signed with the Malaysian government to accelerate the development of an ARM-based AI ecosystem [64] Q&A Session Summary Question: Impact of tariffs on revenue - Management clarified that tariffs do not directly impact costs, and any revenue impact would be indirect, primarily affecting demand elasticity [22][24] Question: ARMv9 adoption rate - The adoption rate for ARMv9 has increased to over 30%, driven by custom silicon solutions [30][32] Question: Strategic direction towards OEMs - Management confirmed a trend towards direct relationships with OEMs for customized silicon, which is expected to continue [41][42] Question: Licensing performance in Q4 - Licensing revenue growth was strong, with a year-on-year increase of 53%, and management remains optimistic about future growth [72][75] Question: Royalty growth by end market - Management indicated strong growth in smartphones and infrastructure, with expectations for continued growth in automotive and recovery in IoT [55][56] Question: Licensing deal with the Malaysian government - The deal is seen as a milestone, with potential for similar agreements with other governments in the future [64] Question: Sequential trends in royalty growth - Management expects Q1 to show strong growth, with a seasonal dip in Q2, followed by growth in the latter half of the year [70][71]