Marvell Q3 Revenue: $1.419B Exceeds Expectations

Marvell, a prominent electronic components manufacturer, projects sustained growth in its data center business for the upcoming year, despite challenges faced by its clients. However, an anticipated dip in approximately half of the business revenue is foreseen for the fourth quarter of the 2024 fiscal year (concluding in January 2024).

CEO Matthew Murphy attributes the envisaged decline in revenue from wireless operator infrastructure and enterprise businesses to the prevailing complex macroeconomic landscape and prolonged customer inventory adjustments. Murphy highlights the vulnerability of the current business environment, evident in public announcements from major corporations and telecom entities.

In the third quarter of 2024 (concluding on October 28), Marvell's data center division, encompassing custom artificial intelligence (AI) chip business and network devices, surpassed market expectations. Murphy anticipates sustained growth in this segment, albeit uncertainties, particularly related to the artificial intelligence sector. Acknowledging the substantial growth in AI this year, he acknowledges the challenges in predicting the upcoming year's landscape.

Marvell plays a pivotal role in manufacturing custom chips for entities such as Amazon Web Services. However, the process of inventory clearance has impacted the prospects of chip manufacturers, including Marvell, in securing new orders for enterprise and telecom businesses.

Despite Marvell's optimistic outlook for future year-over-year growth, Murphy expresses reservations regarding potential impediments posed by increased inventory levels to growth estimates in the upcoming quarters.

The rapid expansion of artificial intelligence has driven demand for Marvell's chips, resulting in Q3 revenues and profits exceeding expectations on Wall Street.

As per data from the London Stock Exchange (LSEG), Marvell reported Q3 revenue of $1.419 billion for the 2024 fiscal year, an 8% decrease compared to the same period last year but surpassing the market expectation of $1.4 billion. The company reported a loss of $0.19 per share, in contrast to a profit of $0.02 per share in the same period last year. Adjusted earnings per share were $0.41, slightly surpassing the market's anticipated $0.4.

During the same period, Marvell's data center market revenue was $556 million, down 11.4% year-over-year; enterprise network market revenue was $271 million, down 27.9% year-over-year; operator infrastructure market revenue was $317 million, up 16.6% year-over-year; and automotive/industrial market revenue was $107 million, up 26.5% year-over-year.

Marvell forecasts Q4 revenue to be $1.42 billion, with a 5% fluctuation, down from the previous expectation of $1.46 billion. The company's adjusted earnings per share for Q4 are expected to be $0.46, with a 5-cent fluctuation, falling short of Wall Street's expectations.