The News: Marvell Technology, Inc. (NASDAQ: MRVL), the semiconductor maker which continues to successfully diversify into broader technology product markets, reported its Q4 and Fiscal Year 2022 earnings on March 3, boasting a 68 percent Q4 year-over-year revenue increase to $1.34 billion and a FY2022 year-over-year revenue increase of 50 percent to $4.46 billion. Marvell’s five-year transition from being solely a semiconductor company into a diverse technology partner for customers is continuing with sound and sustained results. Read the full Press Release from Marvell Technology here.
Analyst Take: As we said in a research note in December 2021 about the company’s Q3 earnings report, Marvell Technology is a company on fire when it comes to hot earnings numbers. For fiscal Q4 and FY 2022, the success continues, giving Marvell quite a shot in the arm. The company’s Q4 ended on Jan. 29. 2022. Here are the latest financial highlights:
- Q4 2022 fiscal net revenue was $1.34 billion, up 68 percent from $797.8 million one year ago.
- Q4 2022 fiscal non-GAAP net income was $429 million, up 17.7 percent from 2021 Q4 when non-GAAP net income was $364,315.
- Q4 2022 fiscal non-GAAP diluted earnings per share were 50 cents, up from 43 cents one year ago.
- Full year fiscal 2022 net revenue was $4.46 billion, up 50 percent from $2.96 billion in full year 2021.
- Full year fiscal non-GAAP net income was $1.278 billion, up 104 percent from $627 million in fiscal 2021.
- Full year fiscal non-GAAP diluted earnings per share were 1.57 per share, compared to 92 cents per share in the prior year.
What a year it has been for Marvell. This is impressive financial performance on every level, and it shows how the company is working hard and executing on its strategy to diversify and grow its data infrastructure business and expertise to meet the expanding needs of business of all sizes.
With its core business in semiconductors, Marvell has completely pivoted to capitalize on the market opportunity beyond its previous consumer-focused specialization. This has continued to prove itself a critical transformation as it has been key to the company’s recent earnings growth and strong diversification into key market segments
As we wrote in December, Marvell is no longer an also-ran in the semiconductor space and now has to be considered as one of the top companies in that market.
We said back then, and it holds true today and into the future – if you are looking at investible, if you are looking at collaborations and partnerships in the data infrastructure space, then Marvell is a company that is addressing all of today’s hot market segments, including automotive, enterprise, data center, and 5G.
Marvell’s impressive progress has come under the leadership of CEO Matt Murphy, who joined Marvell in 2016 and continues his mission of transforming the company’s previous consumer-focus into a company that is taking on the big names in the data infrastructure semiconductor industry. Murphy has also been making wise acquisitions to grow Marvell as well, including inking the $1.1 billion deal for cloud and edge networking vendor Innovium in August of 2020 and the $10 billion deal for high-speed data movement vendor Inphi in April of 2021.
We have been impressed by the size and strategic fit of its recent deals. Of course, all large deals come with risk, but these deals, together with Marvell’s existing product lines and expertise, these acquisitions are setting it on a path for continued and sustained growth in a business marketplace that is providing heavy demand for these technologies and accompanying integration services.
We believe that these are the moves that are taking Marvell to the next level and will help to position the company for even greater success in the future. It’s important to note here that Marvell’s secret sauce is all about relentless focus and execution of its strategy. The moves the company has made are all about bringing together the right parts and technologies at the right time and making them work better for customers, partners, and enterprises that need help. This is a recipe for real success and Marvell under Murphy’s leadership is demonstrating that it is putting a line in the sand and declaring the company ready to meet — and deliver — on these challenges.
Perhaps we sound like “fans” of Marvell, but this is simply the results of closely watching the company’s tactics, strategies, and execution over the past few years. What has driven the revenue, and the share price up, barring the recent market pull back, has earned this type of praise.
Marvell’s Q4 2022 Performance by Market
The strong results in Q4 2022 revenue figures for Marvell appear across the company’s departments as well.
Revenue for Q4 in Data Center sales was $574 million, up 113 percent from $269.1 million in the same quarter one year ago. Revenue for Q4 in Carrier Infrastructure was $241 million, up 45 percent from $166 million one year ago. Revenue for Q4 in Enterprise Networking was even hotter, with $263 million in sales, up 64 percent from $160.7 million one year ago. Automotive and Industrial Q4 revenue totaled $79.4 million, up 134 percent from $33.9 million one year ago. And in Consumer Sales revenue for Q4, the company posted $185.4 million, up 11 percent from $167.7 million in the same quarter one year ago.
Those revenue figures also illustrated shifts in Marvell’s revenue by end market segment. For Q4 2022, the Data Center end market segment brought in 43 percent of the company’s overall revenue, up from 34 percent a year ago, while the Carrier Infrastructure end market segment brought in 18 percent of the total revenue, down from 21 percent one year ago. The Enterprise Networking end market segment brought in 19 percent of the Q4 revenue, down from 20 percent a year ago. The Automotive/Industrial end market segment brought in 6 percent of total revenue, up from 4 percent in the same quarter in 2021, while the Consumer end market segment brought in 14 percent in Q4, down from 21 percent a year ago.
Since Marvell changed its reporting and provided more insights into markets, it has also helped the market and analysts better understand the company’s trajectory. The participation in secular trends including 5G, Automotive, Datacenter, Cloud, and Edge, are all material growth opportunities, which is reflected in its recent growth.
Marvell’s FY2023 Outlook
As with all successful companies, Marvell is making it clear that it is not resting on its past successes.
This past week in Barcelona at Mobile World Congress 2022, Marvell was front and center in a collaboration with Dell Technologies to offer a Dell Open RAN Accelerator Card, which brings new in-line 5G Layer 1 processing for vRAN and Open RAN implementations. Designed for Dell PowerEdge and other x86 servers, the PCIe accelerator card uses the same Marvell OCTEON Fusion technology that is spreading across 5G networks. The card aims to help advance Open RAN adoption, the companies said.
We believe that this collaboration with Dell will significantly help Open RAN acceptance and position Marvell to be in the front of the pack in aiding top-tier cloud service providers that are making that move from proprietary RAN implementations. We continue to anticipate that the Open RAN transition will take two to three years for Open RAN revenues to hit double digits in terms of overall global RAN revenue percentages, but it is a promising market for Marvell, and it will be time well spent in growing it with Dell.
As we see it, FY2023 should be another good year for Marvell, with continuing growth and steady leadership as it bolsters its market share and importance in the data infrastructure tech market.
Marvell has released estimates for its Q1 FY2023 outlook, calling for net revenue of about $1.425 billion and a non-GAAP gross margin of about 65 percent to 66 percent. The non-GAAP expected diluted earnings per share is expected to be 51 cents per share.
A sound quarter with continued positive momentum, hard not to expect more of the same in the company’s next quarter, which will report in June.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.