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Marvell Technology Inc (MRVL) Q3 2025 Earnings Call Highlights: Record Data Center Growth and ...

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In This Article:

  • Revenue: $1.516 billion, 19% sequential growth, 7% year-over-year growth.

  • Non-GAAP Earnings Per Share (EPS): $0.43, 43% sequential growth.

  • Data Center Revenue: $1.1 billion, 98% year-over-year growth, 25% sequential growth.

  • Enterprise Networking Revenue: $151 million.

  • Carrier Revenue: $85 million.

  • Consumer Revenue: $97 million, 9% sequential growth.

  • Automotive and Industrial Revenue: $83 million, 9% sequential growth.

  • Non-GAAP Gross Margin: 60.5%.

  • Non-GAAP Operating Margin: 29.7%.

  • Cash Flow from Operations: $536 million.

  • Stock Repurchases: $200 million during the third quarter.

  • Fourth Quarter Revenue Guidance: $1.8 billion, plus or minus 5%.

  • Fourth Quarter Non-GAAP Gross Margin Guidance: Approximately 60%.

  • Fourth Quarter Non-GAAP EPS Guidance: $0.54 to $0.64.

Release Date: December 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Marvell Technology Inc (NASDAQ:MRVL) delivered revenue of $1.516 billion for the third quarter, exceeding the midpoint of guidance by $66 million, driven by strong AI demand.

  • Non-GAAP earnings per share grew by 43% sequentially, highlighting substantial operating leverage in the business model.

  • The company announced a significant multigenerational five-year agreement with Amazon Web Services, expected to drive substantial revenue growth.

  • Marvell's data center end market achieved record revenue of $1.1 billion, growing 98% year over year.

  • The company is forecasting strong sequential growth in the data center end market for the fourth quarter, driven by custom AI revenue and Ethernet switch products.

Negative Points

  • Marvell Technology Inc (NASDAQ:MRVL) incurred a restructuring charge of $715 million in the third quarter, primarily non-cash, due to redirecting investments towards the data center.

  • GAAP gross margin was 23%, significantly impacted by restructuring charges and higher custom silicon revenue.

  • The consumer end market is expected to decline sequentially in the mid-teens percentage due to seasonality and weakening gaming demand.

  • Despite recovery signs, enterprise networking and carrier infrastructure revenues are still shipping below end market consumption.

  • The company is facing challenges in maintaining gross margins above 60% due to the mix of custom silicon products.

Q & A Highlights

Q: Matt, could you help quantify the AI revenues for fiscal '25 overall and how we should start thinking about fiscal '26 given the upside in fiscal '25? A: We initially projected $1.5 billion for AI in fiscal '25 and $2.5 billion for fiscal '26. However, we're now tracking significantly ahead for both years, with this year's AI revenue exceeding by hundreds of millions of dollars. The demand is driving this growth, and we're well-positioned to meet it with our supply chain capacity.

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