Marvell (MRVL) Q2 Earnings & Revenues Top Estimates, Up Y/Y

Marvell Technology MRVL reported splendid second-quarter fiscal 2023 results, wherein 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 57 cents per share, beating the consensus mark by a penny. The bottom line improved 67.6% from the year-ago quarter.

The semiconductor company reported revenues of $1.52 billion, which outpaced the Zacks Consensus Estimate of $1.51 billion. The top line increased 41% from the year-ago quarter’s reported figure. This upsurge can primarily be attributed to substantial growth in all end markets, particularly the data center end market.

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote

Quarter Details

In the fiscal second quarter, Marvell registered year-over-year revenue growth across all its end markets.

Data center revenues increased 48% year over year to $643.4 million. The segment accounted for 42.4% of the quarter’s total revenues, highlighting that it is currently MRVL’s largest end market.

Carrier infrastructure revenues, which constituted 18.8% of total revenues, grew 45% year over year to $285.2 million.

Revenues from enterprise networking jumped 53% year over year to $340.3 million and accounted for 22.4% of total revenues.

However, consumer revenues, representing 10.8% of total revenues, declined 1% to $164.4 million.

Automotive/Industrial revenues jumped 46% year over year to $83.6 million. Revenues from this segment constituted 5.5% of total revenues.

Marvell’s non-GAAP gross profit rose 41.3% to $985.5 million in the second quarter. Consequently, the margin expanded 20 basis points (bps) to 65%.

Non-GAAP operating expenses flared up 17.8% year over year to $431.6 million. The non-GAAP operating margin expanded 570 bps year over year to 36.5%.

Balance Sheet and Cash Flow

Marvell exited the second quarter with cash and cash equivalents of $617.1 million compared with the previous quarter’s $465 million. The company’s long-term debt totaled $3.95 billion, lower than the previous quarter’s $4.47 billion.

The company generated cash worth $331.5 million and $526.3 million through operational activities in the second quarter and the first half of fiscal 2023, respectively.

Marvell returned $51.1 million to shareholders through dividend payouts and repurchased stocks worth $50 million in the second quarter.

Guidance

For the third quarter of fiscal 2023, Marvell expects strong 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 $1.560 billion (+/- 3%).

The non-GAAP gross margin is likely to be 65% (+/- 0.25%), while non-GAAP operating expenses are estimated in the $435-$440 million band.

The company projects non-GAAP earnings per share for the third quarter to be approximately 59 cents (+/- 3 cents).

Zacks Rank & Key Picks

Marvell currently carries a Zacks Rank #4 (Sell). Shares of MRVL have declined 37.1% year to date.

Some better-ranked stocks from the broader Computer and Technology sector are Clearfield CLFD, Silicon Laboratories SLAB and Taiwan Semiconductor TSM, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised 10 cents north to 80 cents per share over the past 30 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 30 days.

Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have increased 49.9% year to date.

The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 22.9% to $1.02 per share over the past 30 days. For 2022, earnings estimates have moved 14.2% up to $4.18 per share in the past 30 days.

Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 33.4% year to date.

The Zacks Consensus Estimate for Taiwan Semiconductor's third-quarter 2022 earnings has been revised a penny southward to $1.69 per share over the past 30 days. For 2022, earnings estimates have moved 41 cents north to $6.30 per share in the past 60 days.

TSM's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.9%. Shares of the company have decreased 27.4% year to date.

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