Marvell (MRVL) Q2 Earnings & Revenues Top Estimates, Up Y/Y
Marvell Technology MRVL reported splendid second-quarter fiscal 2022 results, wherein both earnings and revenues not only surpassed the respective Zacks Consensus Estimate but also improved significantly year over year.
California-based Marvell delivered non-GAAP earnings of 34 cents per share beating the consensus mark of 31 cents per share. The bottom line reflected a significant growth of 62% from the year-ago quarter.
The company reported revenues of $1.08 billion, marginally higher than the Zacks Consensus Estimate of $1.07 billion. The top line improved 48% from the year-earlier quarter’s reported figure. This upsurge was primarily driven by substantial growth in data-center end market. The acquisition of Inphi Corporation in April also aided the top line.
Marvell Technology, Inc. Price, Consensus and EPS Surprise
Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote
Quarter Details
From second-quarter fiscal 2022, Marvell changed its reporting segments from product basis to end market basis. The new reportable end-market business segments are: data center, carrier infrastructure, enterprise networking, consumer and industrial.
The company’s data center revenues surged 62.5% year over year to $434 million. The segment represented 40% of fiscal second-quarter total revenues, indicating that it is now Marvell’s largest end market when compared to the rest.
Carrier infrastructure revenues, which constituted 18% of total revenues, grew 38.7% year over year to $197 million.
Revenues from enterprise networking jumped 41.1% year on year to $223 million and accounted for 21% of the total revenues.
Consumer revenues, representing 16% of total revenues, climbed 23.1% to $165 million.
Lastly, industrial revenues jumped 119.2% year over year to $57 million. Revenues from industrial segment constituted 5% of total revenues.
Marvell’s non-GAAP gross margin expanded 150 basis points (bps) to 64.8%. Non-GAAP operating expenses flared up 23.4% year over year to $366.4 million. Non-GAAP operating margin expanded 840 bps year on year to 30.8%.
Balance Sheet and Cash Flow
Marvell exited the reported quarter with cash and cash equivalents of $560 million compared with the previous quarter’s $522.5 million. The company’s long-term debt totaled $4.66 billion.
The company generated $222 million of cash through operational activities in the second quarter and $208 million in the first six months of fiscal 2022.
Marvell returned $49 million to shareholders through dividend payments in the second quarter and $90 million in the first half of fiscal 2022.
Guidance
For the third quarter, Marvell estimates strong sequential revenue growth driven by the data-center end market, accelerated 5G adoptions in the United States and other regions, and broad growth across multiple products.
The company projects fiscal third-quarter revenues of $1.145 billion (+/- 3%). The Zacks Consensus Estimate for revenues is pegged at $1.14 billion, suggesting growth of 51.9% from the year-ago quarter.
Non-GAAP earnings per share are expected to be approximately 38 cents (+/- 3 cents). The consensus mark of 37 cents indicates year-over-year surge of 48%.
Non-GAAP gross margin is likely to be 64-65%, while non-GAAP operating expenses are estimated between $365 and $370.
Zacks Rank & Other Key Picks
Marvell currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Avnet AVT, EPAM Systems EPAM and Paycom Software PAYC, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Avnet, EPAM Systems, and Paycom Software is currently pegged at 25.4%, 26.5% and 25%, respectively.
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