Marvell: Fiscal 1Q24 Financial Results

(in $ million)	1Q23	1Q24	Growth
Revenue	1,447	1,322	*-9%*
Net income (loss)	(165.7)	(168.9)

Highlights:
• 1FQ24 net revenue: $1.322 billion, declined by 9% Y/Y
• 1FQ24 gross margin: 42.2% GAAP gross margin; 60.0% non-GAAP gross margin
• 1FQ24 diluted income (loss) per share: $(0.20) GAAP diluted loss per share; $0.31 non-GAAP diluted income per share

Marvell Technology, Inc. reported financial results for the first quarter of fiscal year 2024.

Net revenue for 1FQ24 was $1.322 billion, $22 million above the midpoint of the company’s guidance provided on March 2, 2023. GAAP net loss for 1FQ24 was $(168.9) million, or $(0.20) per diluted share. Non-GAAP net income for 1FQ24 was $264 million, or $0.31 per diluted share. Cash flow from operations for 1FQ24 was $208.4 million.

“We delivered 1FQ24 revenue of $1.322 billion, above the midpoint of guidance, and are forecasting sequential revenue growth in the second quarter. We are expecting revenue growth to accelerate in the second half of this fiscal year, accompanied by gross and operating margin expansion,” said Matt Murphy, president and CEO. “AI has emerged as a key growth driver for Marvell, which we are enabling with our leading network connectivity products and emerging cloud optimized silicon platform. While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in FY24 to at least double from the prior year and continue to grow rapidly in the coming years.”

1FQ24 financial outlook:
• Net revenue is expected to be $1.330 billion +/- 5%.
• GAAP gross margin is expected to be 44.3% – 46.8%.
• Non-GAAP gross margin is expected to be approximately 60.0% – 61.0%.
• GAAP operating expenses are expected to be approximately $694 million.
• Non-GAAP operating expenses are expected to be approximately $455 million.
• Basic weighted average shares outstanding are expected to be 861 million.
• Diluted weighted average shares outstanding are expected to be 865 million.
• GAAP diluted loss per share is expected to be $(0.16) +/- $0.05 per share.
• Non-GAAP diluted income per share is expected to be $0.32 +/- $0.05 per share.

Comments

Marvell didn't publish any figure for its storage business, but Murphy did some comments on the subject in company's earnings call transcript:

"In the future, we expect generative AI implementations involving video and images to provide a tailwind to overall storage and exabyte growth, both in HDD and flash. However, it is difficult to accurately allocate revenue from our storage business specifically to AI, so the AI revenue forecast I just discussed does not include any storage contributions.

"As expected, storage was responsible for the majority of the overall sequential decline on our data center revenue in the first quarter, although we are forecasting sequential growth to start in the second quarter and our data center storage business continue to grow in the second half. Looking ahead to the second quarter for our overall data center end market, we expect cloud revenue to grow over 10% sequentially. However, we are expecting the enterprise on-premise portion of our data center end market to decline in offset growth from cloud. As a result, we expect revenue from our overall data center end market to be flat sequentially in the second quarter.

"We are forecasting our data center storage revenue to resume growth in the second quarter and continue to improve as we start shipping closer to end market demand. Putting aside storage, we expect cloud to be the key growth driver for our data center revenue. We are guiding our cloud revenue to grow over 10% sequentially in the second quarter. We are seeing a significant increase in demand from AI for the rest of the year."