10-KPeriod: FY2024

Marvell Technology, Inc. Annual Report, Year Ended Feb 3, 2024

Filed March 13, 2024For Securities:MRVL

Summary

Marvell Technology, Inc. (MRVL) reported net revenue of $5.5 billion for the fiscal year ended February 3, 2024, a decrease of 7.0% compared to the prior fiscal year. This decline was primarily driven by softer demand in several key end markets, including data center, enterprise networking, and consumer segments, compounded by customer inventory corrections and continued low demand from OEM customers in China. However, the company experienced a significant increase in demand for its optical products, fueled by AI applications, offering a potential growth avenue. Operationally, Marvell incurred substantial restructuring charges of $131.1 million in fiscal year 2024. The company's gross margin saw a notable decrease of 8.9 percentage points, largely due to product-related claim matters totaling $251.0 million and a shift in product mix. Despite revenue challenges, Marvell continues to invest heavily in research and development, with R&D expenses increasing by 6.3% year-over-year, reflecting a focus on innovation. The company also actively manages its capital through dividends and stock repurchases, returning $356.8 million to stockholders in fiscal 2024. Looking ahead, Marvell faces risks related to macroeconomic conditions, geopolitical tensions, customer concentration, and supply chain dynamics, particularly concerning its significant reliance on Asian manufacturing.

Financial Highlights

57 data points
Beta

Revenue

$5.51B

41.6% Gross Margin

Net Income

-$933.40M

-16.9% Net Margin

EPS (Diluted)

$-1.08

Total Assets

$21.23B

Cash & Equivalents

$950.80M

Free Cash Flow

$1.03B

Financial Statements
Beta
Revenue$5.51B
Cost of Revenue$3.21B
Gross Profit$2.29B
R&D Expenses$1.90B
SG&A Expenses$834.00M
Operating Expenses$2.86B
Operating Income-$567.70M
Interest Expense$202.90M
Net Income-$933.40M
EPS (Basic)$-1.08
EPS (Diluted)$-1.08
Shares Outstanding (Basic)861.30M
Shares Outstanding (Diluted)861.30M

Key Highlights

  • 1Marvell reported a 7.0% year-over-year decline in net revenue to $5.5 billion for FY2024, impacted by softer demand across most end markets, particularly data center, enterprise networking, and consumer segments.
  • 2Strong demand for optical products driven by AI applications provided a partial offset to the overall revenue decline.
  • 3Gross margin contracted by 8.9 percentage points due to product-related claim matters ($251.0 million) and a shift in product mix.
  • 4Research and development (R&D) expenses increased by 6.3% to $1.9 billion, reflecting continued investment in innovation.
  • 5The company incurred $131.1 million in restructuring charges in FY2024 as part of efforts to streamline operations.
  • 6Marvell returned $356.8 million to stockholders in FY2024 through dividends ($206.8 million) and stock repurchases ($150.0 million).
  • 7Despite the revenue dip, the company maintained a strong cash position, with $950.8 million in cash and cash equivalents as of February 3, 2024.

Frequently Asked Questions

Marvell reported net revenue of $5.5 billion for the fiscal year ended February 3, 2024, a decrease of 7.0% compared to the $5.9 billion in the prior fiscal year. This decline was primarily attributed to reduced sales in the data center, enterprise networking, and consumer markets, partially offset by growth in the automotive/industrial sector and strong demand for optical products related to AI applications.

Marvell's gross profit decreased by 23.2% year-over-year, and the gross margin as a percentage of net revenue declined by 8.9 percentage points to 41.6%. This was significantly influenced by $251.0 million in charges for product-related claim matters, alongside a shift in product mix. Research and development expenses also increased by 6.3% due to higher engineering design and employee compensation costs.

Marvell initiated a restructuring plan in the first quarter of fiscal 2024 to streamline its organization and optimize resources, resulting in $131.1 million of restructuring-related charges. These charges primarily consisted of employee severance costs and impairment of purchased IP licenses. The company continues to focus on attracting and retaining skilled talent, investing in employee development, and fostering an inclusive culture.

Marvell remains committed to shareholder value, returning $356.8 million in fiscal year 2024 through cash dividends totaling $206.8 million and stock repurchases of $150.0 million. Subsequent to the fiscal year-end, the Board of Directors authorized an additional $3.0 billion for the stock repurchase program, indicating continued confidence and a commitment to capital returns.

Marvell highlighted several key risks, including macroeconomic conditions, geopolitical tensions affecting trade with China, customer concentration (with the top ten customers representing 72% of revenue in FY24), supply chain disruptions, intense competition, and the need for continuous product innovation. The company also noted risks related to its significant debt obligations and potential cybersecurity threats.