Net revenue for the second quarter of fiscal 2025 was $1.273 billion, $23.0 million above the mid-point of the Company's guidance provided on May 30, 2024. GAAP net loss for the second quarter of fiscal 2025 was $(193.3) million, or $(0.22) per diluted share. Non-GAAP net income for the second quarter of fiscal 2025 was $266.2 million, or $0.30 per diluted share. Cash flow from operations for the second quarter was $306.4 million.
"Marvell's second quarter revenue grew 10% sequentially, above the mid-point of guidance driven by strong demand from AI. We saw strong growth from our electro-optics products and our custom AI programs began to ramp," said Matt Murphy, Marvell's Chairman and CEO. "Next quarter, we expect our combined enterprise networking and carrier end markets to return to growth, while our data center end market growth accelerates. As a result, for the third quarter of fiscal 2025, we expect all our end markets to grow sequentially, with consolidated revenue forecasted to grow 14% sequentially at the mid-point, accompanied by a significant increase in operating leverage."
Third Quarter of Fiscal 2025 Financial Outlook
- Net revenue is expected to be $1.450 billion +/- 5%.
- GAAP gross margin is expected to be approximately 47.2%.
- Non-GAAP gross margin is expected to be approximately 61%.
- GAAP operating expenses are expected to be approximately $693 million.
- Non-GAAP operating expenses are expected to be approximately $465 million.
- Basic weighted-average shares outstanding are expected to be 867 million.
- Diluted weighted-average shares outstanding are expected to be 875 million.
- GAAP diluted loss per share is expected to be $(0.09) +/- $0.05 per share.
- Non-GAAP diluted income per share is expected to be $0.40 +/- $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, August 29, 2024 at 1:45 p.m. Pacific Time to discuss results for the second quarter of fiscal year 2025. Interested parties may join the conference call without operator assistance by registering and entering their phone number at https://emportal.ink/4bYingS to receive an instant automated call back. To join the call with operator assistance, please dial 1-800-836-8184 or 1-646-357-8785. 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 1-888-660-6345 or 1-646-517-4150, passcode 45397# until Thursday, September 5, 2024.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of stock-based compensation expense, 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 second quarter of fiscal 2025, a non-GAAP tax rate of 7.0% has been applied to the non-GAAP financial results.
