Marvell Technology, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results
4:05 PM ET 3/2/23 | PR Newswire
Marvell Technology, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results
PR Newswire
SANTA CLARA, Calif., March 2, 2023
-- Q4 Net Revenue: $1.419 billion, grew by 6% year-on-year -- Q4 Gross Margin: 47.5% GAAP gross margin; 63.5% non-GAAP gross margin -- Q4 Diluted income (loss) per share: $(0.02) GAAP diluted loss per share; $0.46 non-GAAP diluted income per share
SANTA CLARA, Calif., March 2, 2023 /PRNewswire/ -- Marvell Technology, Inc. (NASDAQ: MRVL), a leader in data infrastructure semiconductor solutions, today reported financial results for the fourth fiscal quarter and the full fiscal year, ended January 28, 2023.
Net revenue for the fourth quarter of fiscal 2023 was $1.419 billion, above the midpoint of the Company's guidance provided on January 11, 2023. GAAP net loss for the fourth quarter of fiscal 2023 was $(15) million, or $(0.02) per diluted share. Non-GAAP net income for the fourth quarter of fiscal 2023 was $396 million, or $0.46 per diluted share. Cash flow from operations for the fourth quarter was $351.5 million.
Net revenue for fiscal 2023 was $5.920 billion. GAAP net loss for fiscal 2023 was $(164) million, or $(0.19) per diluted share. Non-GAAP net income for fiscal 2023 was $1.822 billion, or $2.12 per diluted share.
"Marvell delivered record revenue of $5.92 billion in fiscal 2023, growing 33 percent year over year driven by strong growth from cloud, 5G, auto and enterprise networking. In the fourth quarter of fiscal 2023, we achieved revenue of $1.419 billion, growing 6 percent year over year, above the midpoint of guidance, driven by better-than-forecasted results from our datacenter end market," said Matt Murphy, Marvell's President and CEO. "While inventory corrections and resulting changes in product mix are impacting our guidance for fiscal first quarter revenue and gross margin, we expect these headwinds to subside later in fiscal 2024, as inventory levels normalize, and Marvell-specific growth drivers accelerate."
First Quarter of Fiscal 2024 Financial Outlook
-- Net revenue is expected to be $1.300 billion +/- 5%. -- GAAP gross margin is expected to be 45.1% +/- 1%. -- Non-GAAP gross margin is expected to be approximately 60%. -- GAAP operating expenses are expected to be approximately $687 million. -- Non-GAAP operating expenses are expected to be approximately $460 million. -- Basic weighted-average shares outstanding are expected to be 858 million. -- Diluted weighted-average shares outstanding are expected to be 863 million. -- GAAP diluted loss per share is expected to be $(0.17) +/- $0.05 per share. -- Non-GAAP diluted income per share is expected to be $0.29 +/- $0.05 per share.
GAAP diluted EPS is calculated using basic weighted average shares outstanding when there is a GAAP net loss, and calculated using diluted weighted average shares outstanding when there is a GAAP net income. Non-GAAP diluted EPS is calculated using diluted weighted average shares outstanding.
Conference Call
Marvell will conduct a conference call on Thursday, March 2, 2023 at 1:45 p.m. Pacific Time to discuss results for the fourth quarter and full fiscal year 2023. Interested parties may join the conference call by dialing 1-888-317-6003 or 1-412-317-6061, passcode 4137481. The call will be webcast and can be accessed at the Marvell Investor Relations website at investor.marvell.com. A replay of the call can be accessed by dialing 1-877-344-7529 or 1-412-317-0088, passcode 4079400 until Thursday, March 9, 2023.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of the inventory fair value adjustment associated with acquisitions, amortization of acquired intangible assets, acquisition and divestiture-related costs, restructuring and other related charges (including, but not limited to, asset impairment charges, employee severance costs, and facilities related charges), resolution of legal matters, and certain expenses and benefits that are driven primarily by discrete events that management does not consider to be directly related to Marvell's core business. Although Marvell excludes the amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and that such amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of intangible assets contributed to Marvell's revenues earned during the periods presented and are expected to contribute to Marvell's future period revenues as well.
Marvell uses a non-GAAP tax rate to compute the non-GAAP tax provision. This non-GAAP tax rate is based on Marvell's estimated annual GAAP income tax forecast, adjusted to account for items excluded from Marvell's non-GAAP income, as well as the effects of significant non-recurring and period specific tax items which vary in size and frequency, and excludes tax deductions and benefits from acquired tax loss and credit carryforwards and changes in valuation allowance on acquired deferred tax assets. Marvell's non-GAAP tax rate is determined on an annual basis and may be adjusted during the year to take into account events that may materially affect the non-GAAP tax rate such as tax law changes; acquisitions; significant changes in Marvell's geographic mix of revenue and expenses; or changes to Marvell's corporate structure. For the fourth quarter of fiscal 2023, a non-GAAP tax rate of 6.0% has been applied to the non-GAAP financial results.
Marvell believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to Marvell's financial condition and results of operations. While Marvell uses non-GAAP financial measures as a tool to enhance its understanding of certain aspects of its financial performance, Marvell does not consider these measures to be a substitute for, or superior to, financial measures calculated in accordance with GAAP. Consistent with this approach, Marvell believes that disclosing non-GAAP financial measures to the readers of its financial statements provides such readers with useful supplemental data that, while not a substitute for GAAP financial measures, allows for greater transparency in the review of its financial and operational performance.
Externally, management believes that investors may find Marvell's non-GAAP financial measures useful in their assessment of Marvell's operating performance and the valuation of Marvell. Internally, Marvell's non-GAAP financial measures are used in the following areas:
-- Management's evaluation of Marvell's operating performance; -- Management's establishment of internal operating budgets; -- Management's performance comparisons with internal forecasts and targeted business models; and -- Management's determination of the achievement and measurement of certain performance-based equity awards (adjustments may vary from award to award).
Non-GAAP financial measures have limitations in that they do not reflect all of the costs associated with the operations of Marvell's business as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of Marvell's results as reported under GAAP. The exclusion of the above items from our GAAP financial metrics does not necessarily mean that these costs are unusual or infrequent.
Forward-Looking Statements under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties. Words such as "anticipates," "expects," "intends," "plans, " "projects," "believes," "seeks," "estimates," "can," "may," "will," "would," "outlook," "forecast," "targets" and similar expressions identify such forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to, the statements describing our financial outlook and future period revenues. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Actual events or results may differ materially from those described in this press release due to a number of risks and uncertainties, including, but not limited to: risks related to changes in general economic conditions, or expectations of such conditions, such as rising interest rates, economic slowdowns, recessions, inflation, and stagflation; risks related to our ability to estimate customer demand and future sales accurately; risks related to higher inventory levels; risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; the risk of downturns in the semiconductor industry or our customer end markets; our ability to retain and hire key personnel; risks related to the rapid growth of the Company; risks related to the impact of the COVID-19 pandemic which have impacted, and for which lingering effects may continue to impact our business, employees and operations, the transportation and manufacturing of our products, and the operations of our customers, distributors, vendors, suppliers, and partners; risks related to use of a hybrid work model; delays or increased costs related to completing the design, development, production and introduction of our new
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