Marvell Technology ( MRVL Quick Quote MRVL - Free Report) reported splendid third-quarter fiscal 2022 results, wherein both earnings and revenues not only surpassed the respective Zacks Consensus Estimate but also improved significantly year over year. California-based Marvell delivered non-GAAP earnings of 43 cents per share beating the consensus mark of 38 cents per share. The bottom line improved 72% from the year-ago quarter.
Marvell reported revenues of $1.21 billion, which outpaced the Zacks Consensus Estimate of $1.15 billion. The top line increased 61% from the year-earlier quarter’s reported figure. This upsurge can primarily be attributed to substantial growth in all the end markets. The data center end market witnessed 109% year-over-year growth in the third quarter.
The results from Innovium acquisition in October are included in Marvell’s third-quarter performance.
From second-quarter fiscal 2022, Marvell changed its reporting segments from product basis to end market basis. The new reportable end-market business segments are: data center, carrier infrastructure, enterprise networking, consumer and industrial.
During the third quarter, Marvell’s data center revenues soared 109% year over year to $499.7 million. The segment represented 41% of fiscal third-quarter total revenues, highlighting that it is currently Marvell’s largest end market when compared to the rest.
Carrier infrastructure revenues, which constituted 18% of total revenues, grew 28% year over year to $215.1 million.
Revenues from enterprise networking jumped 56% year on year to $247.2 million and accounted for 20% of the total revenues.
Consumer revenues, representing 15% of total revenues, climbed 20% to $182.5 million.
Lastly, industrial revenues jumped 114% year over year to $66.6 million. Revenues from the industrial segment constituted 6% of total revenues.
Marvell’s non-GAAP gross margin expanded 210 basis points (bps) to 65.1%. Non-GAAP operating expenses flared up 32.4% year over year to $370.5 million. Non-GAAP operating margin expanded 880 bps year on year to 34.5%.
Balance Sheet and Cash Flow
Marvell exited the reported quarter with cash and cash equivalents of $523.5 million compared with the previous quarter’s $560 million. The company’s long-term debt totaled $4.50 billion.
The company generated $265 million of cash through operational activities in the third quarter and $473 million in the first nine months of fiscal 2022.
Marvell returned $50.4 million to shareholders through dividend payments in the third quarter and $140.3 million in the first nine months of fiscal 2022.
For the fourth quarter, Marvell expects strong sequential revenue growth driven by the data-center end market, accelerated 5G adoptions in the United States and other regions, and broad growth across multiple products.
Marvell projects fiscal fourth-quarter revenues of $1.320 billion (+/- 3%). The Zacks Consensus Estimate for revenues is pegged at $1.21 billion, suggesting growth of 51.4% from the year-ago quarter.
Non-GAAP earnings per share are expected to be approximately 48 cents (+/- 3 cents). The consensus mark of 43 cents indicates a year-over-year surge of 48.3%.
Non-GAAP gross margin is likely to be approximately 65%, while non-GAAP operating expenses are estimated between $390 and $395.
Zacks Rank & Stocks to Consider
Marvell currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are
Advanced Micro Devices ( AMD Quick Quote AMD - Free Report) , Qualcomm ( QCOM Quick Quote QCOM - Free Report) and CDW Corporation ( CDW Quick Quote CDW - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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