Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2023 Financial Results

• Q2 Net Revenue: $1.517 billion, grew by 41% year-on-year

• Q2 Gross Margin: 51.8% GAAP gross margin; 65.0% non-GAAP gross margin

• Q2 Diluted income per share: $0.01 GAAP diluted income per share; $0.57 non-GAAP diluted income per share

Santa Clara, Calif. (August 25, 2022) - Marvell Technology, Inc. (NASDAQ: MRVL), a leader in infrastructure semiconductor solutions, today reported financial results for the second quarter of fiscal year 2023.

Net revenue for the second quarter of fiscal 2023 was $1.517 billion, consistent with the midpoint of the Company’s guidance provided on May 26, 2022. GAAP net income for the second quarter of fiscal 2023 was $4 million, or $0.01 per diluted share. Non-GAAP net income for the second quarter of fiscal 2023 was $486 million, or $0.57 per diluted share. Cash flow from operations for the second quarter was $331.5 million.

“In the second quarter of fiscal 2023, we delivered record revenue of $1.52 billion, which grew 41 percent year over year and 5 percent sequentially. This was the 9th straight quarter of sequential revenue growth, and we are guiding for growth to continue in the third quarter, as we expand our leadership in data infrastructure,” said Matt Murphy, Marvell’s President and CEO. “Looking ahead, we expect sequential revenue growth to accelerate in the fourth quarter as supply constraints begin to ease. We believe we are well positioned to continue to benefit from our favorable end market exposure tied to strong secular growth trends and significant expected upcoming revenue contributions from a number of Marvell-specific product ramps.”

Third Quarter of Fiscal 2023 Financial Outlook

• Net revenue is expected to be $1.560 billion +/- 3%.

• GAAP gross margin is expected to be 51.1% +/- 1.1%.

• Non-GAAP gross margin is expected to be 65.0% +/- 0.25%.

• GAAP operating expenses are expected to be $667 million to $677 million.

• Non-GAAP operating expenses are expected to be $435 million to $440 million.

• Basic weighted average shares outstanding are expected to be 854 million.

• Diluted weighted average shares outstanding are expected to be 862 million.

• GAAP diluted income per share is expected to be $0.09 +/- $0.04 per share.

• Non-GAAP diluted income per share is expected to be $0.59 +/- $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 25, 2022 at 1:45 p.m. Pacific Time to discuss results for the second quarter of fiscal 2023. Interested parties may join the conference call by dialing 1-888-317-6003 or 1-412-317-6061, passcode 6112887. 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 2421301 until Thursday, September 1, 2022.

Discussion of Non-GAAP Financial Measures

Non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of the inventory fair value adjustment associated with acquisitions, 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 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 2023, a non-GAAP tax rate of 6.0% 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: our ability to retain and hire key personnel; risks related to the rapid growth of the Company; risks related to changes in general economic conditions such as rising interest rates, economic slowdowns, recessions, inflation, and stagflation; risks related to the impact of the COVID-19 pandemic which have impacted, and may continue to impact our business and operations, the transportation and manufacturing of our products, and the operations of our customers, distributors, vendors, suppliers, and partners; disruptions caused by COVID-19, including as a result of restrictions that may be imposed by us or third parties, resulting in worker absenteeism, turnover, quarantines and restrictions on our employees' ability to work, innovate, collaborate, and travel; supply chain disruptions or component shortages that may impact the production of our products including our kitting process or may impact the price of components which in turn may impact our margins on any impacted products and any constrained availability from other electronic suppliers impacting our customers' ability to ship their products, which in turn may adversely impact our sales to those customers; our reliance on our manufacturing partners for the manufacture, assembly, testing and packaging of our products; risks related to the ASIC business model which requires us to use third-party IP including the risk that we may lose business or experience reputational harm if third parties, including customers, lose confidence in our ability to protect their IP rights; the impact of international conflict and economic volatility in either domestic or foreign markets including risks related to trade conflicts, regulations, and tariffs, including but not limited to, restrictions imposed on our Chinese customers; the risks associated with manufacturing and selling products and customers' products outside of the United States; our ability to define, design and develop products for the Cloud and 5G markets; our ability to secure design wins from our customers and prospective customers; our ability to market our 5G products to Tier 1 infrastructure customers; our ability to complete and realize the anticipated benefits of any acquisitions, divestitures and investments; cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; our ability to estimate customer demand and future sales accurately; decreases in gross margin and results of operations in the future due to a number of factors, including increasing interest rates and volatility in foreign exchange rates; severe financial hardship or bankruptcy of one or more of our major customers; our ability to realize the expected benefits from restructuring activities; the effects of transitioning to smaller geometry process technologies; the impact of any change in the income tax laws in jurisdictions where we operate and the loss of any beneficial tax treatment that we currently enjoy; our ability to limit costs related to defective products; the risk of downturns in the semiconductor industry; risks related to our debt obligations; the outcome of pending or future litigation and legal and regulatory proceedings; risk related to our ESG program; our dependence on a small number of customers; the impact and costs associated with changes in international financial and regulatory conditions; our ability and the ability of our customers to successfully compete in the markets in which we serve; our ability and our customers' ability to develop new and enhanced products and the adoption of those products in the market; our ability to accurately categorize our products by end markets; our ability to scale our operations in response to changes in demand for existing or new products and services; risks associated with acquisition and consolidation activity in the semiconductor industry, including any consolidation of our manufacturing partners; our ability to protect our intellectual property; our maintenance of an effective system of internal controls; and other risks detailed in our SEC filings from time to time. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect our business described in the “Risk Factors” section of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed by us from time to time with the SEC. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

About Marvell

To deliver the data infrastructure technology that connects the world, we’re building solutions on the most powerful foundation: our partnerships with our customers. Trusted by the world’s leading technology companies for over 25 years, we move, store, process and secure the world’s data with semiconductor solutions designed for our customers’ current needs and future ambitions. Through a process of deep collaboration and transparency, we’re ultimately changing the way tomorrow’s enterprise, cloud, automotive, and carrier architectures transform—for the better.

Marvell® and the Marvell logo are registered trademarks of Marvell and/or its affiliates.

(a) Other cost of goods sold includes amortization of acquired inventory fair value adjustments.

(b) Restructuring and other related items include asset impairment charges, employee severance costs,

facilities related charges, and other.

(c) Relates to a settlement in principle of a contractual dispute.

(d) Other operating expenses include acquisition related costs.

(e) Debt issuance related costs and other includes the partial term loan repayment and bridge financing, and gains or losses on investments.

(f) Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 6.0% for the three and six months ended July 30, 2022, and for the three months ended April 30, 2022. Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 5.0% for the three and six months ended July 31, 2021.

(g) Non-GAAP diluted weighted average shares differs from GAAP diluted weighted average shares due to the non-GAAP net income reported.

For further information, contact: 
Ashish Saran
Senior Vice President, Investor Relations 408-222-0777
ir@marvell.com