Marvell: Fiscal 3Q15 Financial Results

Marvell Technology Group Ltd. reported financial results for the third quarter of fiscal year 2015, ended November 1, 2014.

3Q15 Financial Highlights

• Revenue: $930 million
• GAAP Net Income: $115 million
• GAAP Diluted EPS: $0.22
• Non-GAAP Net Income: $155 million
• Non-GAAP Diluted EPS: $0.29
• Free Cash Flow: $167 million

4Q15 Financial Outlook

• Revenue is expected to be in the range of $880 million to $900 million.
• GAAP gross margin is expected to be in the range of 50.1% +/- 100 bps.
• Non-GAAP gross margin is expected to be in the range of 50.5% +/- 100bps.
• GAAP operating expenses are expected to be in the range of $365 million +/- $10 million. Non-GAAP Operating Expenses to be in the range of $320 million +/- $10 million.
• GAAP diluted EPS expected to be in the range of $0.16 +/- $0.02.
• Non-GAAP diluted EPS expected to be in the range of $0.24 +/- $0.02.

3Q2015 Summary

• Revenue was $930 million, down approximately 3% from $962 million in the second quarter of fiscal 2015, ended August 2, 2014, and flat from $931 million in the third quarter of fiscal 2014, ended November 2, 2013.
• GAAP net income was $115 million, or $0.22 per share (diluted), compared with GAAP net income of $139 million, or $0.27 per share (diluted), for the second quarter of fiscal 2015, and $103 million, or $0.21 per share (diluted), for the third quarter of fiscal 2014.
• Non-GAAP net income was $155 million, or $0.29 per share (diluted), compared with non-GAAP net income of $181 million, or $0.34 per share (diluted), for the second quarter of fiscal 2015 and $163 million, or $0.32 per share (diluted), for the third quarter of fiscal 2014.
• GAAP gross margin was 51.1%, compared to 50.3% for the second quarter of fiscal 2015 and 50.1% for the third quarter of fiscal 2014.
• Non-GAAP gross margin was 51.0%, compared to 50.6% for the second quarter of fiscal 2015 and 50.3% for the third quarter of fiscal 2014.
• Shares used to compute GAAP net income per diluted share were 520 million shares, compared with 520 million shares in the second quarter of fiscal 2015 and 501 million shares in the third quarter of fiscal 2014.
• Shares used to compute non-GAAP net income per diluted share were 533 million shares, compared with 533 million shares for the second quarter of fiscal 2015 and 514 million shares for the third quarter of fiscal 2014.
• Cash flow from operations was $195 million, compared to the $157 million reported in the second quarter of fiscal 2015 and the $177 million reported in the third quarter of fiscal 2014. Free cash flow for the third quarter of fiscal 2015 was $167 million, compared to the $137 million reported in the second quarter of fiscal 2015 and the $157 million reported in the third quarter of fiscal 2014. Free cash flow as presented above is defined as cash flow from operations, less capital expenditures and purchases of technology licenses reported under investing and financing activities in the consolidated statement of cash flows.

Under the company’s authorized share repurchase program, Marvell repurchased approximately 3.7 million shares for a total of $45 million in the third quarter of fiscal 2015. It paid a quarterly dividend of $0.06 per share on October 2, 2014 to all shareholders of record as of September 11, 2014. It intends to pay its next quarterly dividend of $0.06 per share on December 29, 2014 to all shareholders of record as of December 11, 2014.

The payment of future quarterly cash dividends on common shares is subject to, among other things, the best interests of its shareholders, its results of operations, cash balances and future cash requirements, financial condition, developments in ongoing litigation, statutory requirements of Bermuda law, and other factors that the board of directors may deem relevant.