*DJ Marvell Technology 2Q Loss/Shr 34c >MRVL
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*DJ Marvell Technology 2Q Loss $276.4M >MRVL
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Press Release: Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2022 Financial Results
Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2022 Financial Results
- Q2 Net Revenue: $1.076 billion, grew by 48% year-on-year
- Q2 Gross Margin: 34.6% GAAP gross margin; 64.8% non-GAAP gross margin
- Q2 Diluted income (loss) per share: $(0.34) GAAP diluted loss per share; $0.34 non-GAAP diluted income per share
- Cash and cash equivalents: $560 million
PR Newswire
SANTA CLARA, Calif., Aug. 26, 2021
SANTA CLARA, Calif., Aug. 26, 2021 /PRNewswire/ -- Marvell Technology, Inc. (NASDAQ: MRVL), a leader in infrastructure semiconductor solutions, today reported financial results for the second quarter of fiscal year 2022.
Net revenue for the second quarter of fiscal 2022 was $1.076 billion, which exceeded the midpoint of the Company's guidance provided on June 7, 2021. GAAP net loss for the second quarter of fiscal 2022 was $(276) million, or $(0.34) per diluted share. Non-GAAP net income for the second quarter of fiscal 2022 was $284 million, or $0.34 per diluted share. Cash flow from operations for the second quarter was $222 million.
"Marvell delivered record revenue of $1.076 billion in the fiscal second quarter, above the midpoint of guidance, growing 29 percent sequentially and 48 percent year over year. Growth was driven by the data center, which now represents Marvell's largest end market at 40 percent of total revenue, benefiting from our growing momentum in the fast-growing cloud infrastructure market," said Matt Murphy, Marvell's President and CEO. "I am pleased that stand-alone Marvell and the acquired Inphi businesses both contributed to our strong year-over-year revenue growth. We expect year-over-year revenue growth will accelerate in the third quarter, led by substantial contributions from the cloud data center market. In addition, we expect our 5G business to continue to grow with strong sequential revenue growth in the third quarter, and a significant step up projected in the fourth quarter."
Historically, the Company reported revenue from three product groups: networking, storage and other. Beginning with the second quarter of fiscal 2022, the Company is changing its reporting to present revenue from five end markets: data center, carrier infrastructure, enterprise networking, consumer, and automotive/industrial. The company believes this presentation provides a better understanding of its business. For transition purposes, in this press release, the Company is reporting revenue from both product groups and end markets, including providing historical revenue data from end markets for prior periods. Starting with the third quarter of fiscal 2022, the Company expects to no longer report revenue by product group.
We categorize revenue from our five end markets by using a number of data points, including the type of customer purchasing the product, the function of our product being sold, and our knowledge of the end customer product or application into which our product will be incorporated. The categorization of products by end market is inherently subjective and can vary over time, both as a result of continued improvements in our ability to understand the final usage of our products, as well as changes in how our customers utilize our products.
Subsequent to quarter end, on August 3, 2021, the Company announced the execution of a definitive agreement to acquire Innovium, Inc. in an all-stock transaction. The transaction is expected to close by the end of calendar 2021, subject to the satisfaction of customary closing conditions, including approval by Innovium's stockholders and applicable regulatory approvals.
The financial outlook for the third quarter of fiscal 2022 includes expected results of Inphi for the full quarter.
Third Quarter of Fiscal 2022 Financial Outlook
-- Net revenue is expected to be $1.145 billion +/- 3%. -- GAAP gross margin is expected to be 46.3% to 48.3%. -- Non-GAAP gross margin is expected to be 64% to 65%. -- GAAP operating expenses are expected to be $584 million to $594 million. -- Non-GAAP operating expenses are expected to be $365 million to $370 million. -- Basic weighted average shares outstanding are expected to be 824 million. -- Diluted weighted average shares outstanding are expected to be 841 million. -- GAAP diluted loss per share is expected to be $(0.10) +/- $0.04 per share. -- Non-GAAP diluted income per share is expected to be $0.38 +/- $0.03 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, August 26, 2021 at 1:45 p.m. Pacific Time to discuss results for the second quarter of fiscal 2022. Interested parties may join the conference call by dialing 1-888-317-6003 or 1-412-317-6061, passcode 6573871. The call will be webcast and can be accessed at the Marvell Investor Relations website at http://investor.marvell.com/. A replay of the call can be accessed by dialing 1-877-344-7529 or 1-412-317-0088, passcode 10159336 until Thursday, September 2, 2021.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based compensation expense, amortization of the inventory fair value adjustment associated with acquisition, 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.
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 GAAP income in calculating 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. 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; significant changes in Marvell's geographic mix of revenue and expenses; or changes to Marvell's corporate structure. For the second quarter of fiscal 2022, a non-GAAP tax rate of 5.0% 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. 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: failure to realize the anticipated benefits of the transaction with Inphi Corporation on a timely basis or at all, including as a result of our ability to successfully integrate the businesses of Marvell and Inphi or due to unexpected costs, liabilities, delays or other factors impacting the semiconductor industry; the risk that disruptions from the transaction with Inphi
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