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Marvell Q4 Earnings Beat, Stock Falls on Tepid Sales Guidance
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Marvell Technology, Inc. (MRVL - Free Report) ended fiscal 2025 on a strong note by reporting stronger-than-expected fourth-quarter results. The chip maker reported fourth-quarter non-GAAP earnings of 60 cents per share, decisively exceeding the Zacks Consensus Estimate by 1.7%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings also came ahead of the midpoint of the company’s guidance of 59 cents (+/- 5 cents). Furthermore, the bottom line increased 30% year over year and 40% sequentially, driven by higher revenues and effective cost management.
Marvell’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.2%.
Marvell Technology, Inc. Price, Consensus and EPS Surprise
Marvell’s fourth-quarter revenues of $1.82 billion beat the Zacks Consensus Estimate by 0.7%. The top line was also above the midpoint of management’s guidance of $1.8 billion (+/- 5%). Fourth-quarter revenues grew 27% year over year and 20% sequentially, mainly driven by strong growth in the data center, partially offset by inventory corrections in other end markets.
Despite a better-than-expected fourth-quarter performance, shares of Marvell plunged 14.9% during Wednesday’s extended trading session as the sales outlook for the first quarter of fiscal 2026 failed to impress investors. The top-line projection for the first quarter is roughly in line with the Zacks Consensus Estimate.
Marvell’s Q4 End Market Details
Marvell’s top-line growth was supported by impressive performances across its segments, which rose sequentially, while the data center segment registered phenomenal growth both year over year and quarterly.
Data center revenues of $1.37 billion increased 78% year over year and 24% sequentially. The solid momentum in electro-optics products, custom AI silicon and next-gen switch divisions primarily drove the robust year-over-year and sequential increase. The segment accounted for 75% of the quarter’s total revenues, demonstrating that it is currently MRVL’s largest end market. Our estimate for Data Center’s fiscal fourth-quarter revenues was pegged at $1.36 billion.
Revenues from enterprise networking dropped 35% year over year to $171 million and accounted for 9% of the total revenues. The year-over-year decline was primarily due to the weak demand environment and ongoing inventory correction in this end market. However, a sequential increase of 14% depicts continued recovery in the segment. Our estimate for enterprise networking’s fiscal fourth-quarter revenues was pegged at $176.3 million.
Carrier infrastructure revenues, which accounted for 6% of the total revenues, plunged 38% year over year to $106 million due to a soft demand environment and ongoing inventory correction. Our estimate for the division’s fiscal fourth-quarter revenues was pegged at $98.9 million. Sequentially, the segment increased 25%, reflecting a continued recovery. Networking and carrier infrastructure collectively grew 18% on a quarter-on-quarter basis.
Automotive/Industrial revenues increased 4% year over year and 3% sequentially to $86 million, mainly driven by continued recovery in the automotive division partially offset by a decline in industrial due to lumpy order patterns. Revenues from this segment constituted 5% of the total revenues. Our estimate for the Automotive/Industrial’s fiscal fourth-quarter revenues was pegged at $84.9 million.
Consumer revenues, representing 5% of the total revenues, decreased 38% year over year and 8% sequentially to $85.7 million. Our estimate for Consumer’s fiscal fourth-quarter revenues was pegged at $82 million.
Marvell's Q4 Operating Details
Marvell’s non-GAAP gross profit of $1.09 billion reflected an increase of 19.9% on a year-over-year basis. However, the non-GAAP gross margin of 63.9% contracted 380 basis points (bps) on a year-over-year basis and 40 bps sequentially.
Non-GAAP operating expenses totaled $479.4 million compared with $428.5 million in the year-ago quarter and $466.9 million in the previous quarter.
Marvell’s non-GAAP operating margin of 33.7% contracted 10 bps year over year. However, it expanded 400 bps sequentially.
Marvell’s Balance Sheet & Cash Flow
As of Feb. 1, 2025, MRVL’s cash and cash equivalents were $948.3 million compared with $868.1 million in the previous quarter. The company’s long-term debt totaled $3.93 billion, slightly lower than the previous quarter’s $3.97 billion.
Cash flow from operations for the fourth quarter was $514 million. In full-fiscal 2025, the company generated an operating cash flow of $1.68 billion.
During the fourth quarter, Marvell returned $251.9 million to its shareholders through repurchasing stocks worth $200 million and paying $51.9 million in dividends. The company bought back shares worth $725 million and paid $207.5 million in dividends.
Marvell Initiates Guidance for Q1 2026
For the first quarter of fiscal 2026, Marvell expects revenues to be $1.875 billion (+/- 5%). The Zacks Consensus Estimate for revenues is pegged at $1.87 billion, with a year-over-year improvement of 60.9%. The non-GAAP gross margin is projected to be 60%, while non-GAAP operating expenses are estimated to be $490 million.
The company projects non-GAAP earnings per share for the fiscal first quarter to be 61 cents per share (+/- 5 cents per share), while the consensus mark for the same is currently pegged at 59 cents. The figure remains unchanged over the past 60 days, with a year-over-year improvement of 145.8%.
Atlassian shares have soared 39.6% in the past year. The Zacks Consensus Estimate for TEAM’s fiscal 2025 earnings is pegged at $3.44 per share, indicating a 17.4% year-over-year increase.
Radware shares have gained 23.9% in the past year. The Zacks Consensus Estimate for RDWR’s 2025 bottom line is pinned at earnings of 95 cents per share, indicating a year-over-year increase of 9.2%.
Fortinet shares have surged 49.7% in the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.45 per share, suggesting a year-over-year increase of 3.4%.
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Marvell Q4 Earnings Beat, Stock Falls on Tepid Sales Guidance
Marvell Technology, Inc. (MRVL - Free Report) ended fiscal 2025 on a strong note by reporting stronger-than-expected fourth-quarter results. The chip maker reported fourth-quarter non-GAAP earnings of 60 cents per share, decisively exceeding the Zacks Consensus Estimate by 1.7%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Quarterly earnings also came ahead of the midpoint of the company’s guidance of 59 cents (+/- 5 cents). Furthermore, the bottom line increased 30% year over year and 40% sequentially, driven by higher revenues and effective cost management.
Marvell’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.2%.
Marvell Technology, Inc. Price, Consensus and EPS Surprise
Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote
Marvell’s fourth-quarter revenues of $1.82 billion beat the Zacks Consensus Estimate by 0.7%. The top line was also above the midpoint of management’s guidance of $1.8 billion (+/- 5%). Fourth-quarter revenues grew 27% year over year and 20% sequentially, mainly driven by strong growth in the data center, partially offset by inventory corrections in other end markets.
Despite a better-than-expected fourth-quarter performance, shares of Marvell plunged 14.9% during Wednesday’s extended trading session as the sales outlook for the first quarter of fiscal 2026 failed to impress investors. The top-line projection for the first quarter is roughly in line with the Zacks Consensus Estimate.
Marvell’s Q4 End Market Details
Marvell’s top-line growth was supported by impressive performances across its segments, which rose sequentially, while the data center segment registered phenomenal growth both year over year and quarterly.
Data center revenues of $1.37 billion increased 78% year over year and 24% sequentially. The solid momentum in electro-optics products, custom AI silicon and next-gen switch divisions primarily drove the robust year-over-year and sequential increase. The segment accounted for 75% of the quarter’s total revenues, demonstrating that it is currently MRVL’s largest end market. Our estimate for Data Center’s fiscal fourth-quarter revenues was pegged at $1.36 billion.
Revenues from enterprise networking dropped 35% year over year to $171 million and accounted for 9% of the total revenues. The year-over-year decline was primarily due to the weak demand environment and ongoing inventory correction in this end market. However, a sequential increase of 14% depicts continued recovery in the segment. Our estimate for enterprise networking’s fiscal fourth-quarter revenues was pegged at $176.3 million.
Carrier infrastructure revenues, which accounted for 6% of the total revenues, plunged 38% year over year to $106 million due to a soft demand environment and ongoing inventory correction. Our estimate for the division’s fiscal fourth-quarter revenues was pegged at $98.9 million. Sequentially, the segment increased 25%, reflecting a continued recovery. Networking and carrier infrastructure collectively grew 18% on a quarter-on-quarter basis.
Automotive/Industrial revenues increased 4% year over year and 3% sequentially to $86 million, mainly driven by continued recovery in the automotive division partially offset by a decline in industrial due to lumpy order patterns. Revenues from this segment constituted 5% of the total revenues. Our estimate for the Automotive/Industrial’s fiscal fourth-quarter revenues was pegged at $84.9 million.
Consumer revenues, representing 5% of the total revenues, decreased 38% year over year and 8% sequentially to $85.7 million. Our estimate for Consumer’s fiscal fourth-quarter revenues was pegged at $82 million.
Marvell's Q4 Operating Details
Marvell’s non-GAAP gross profit of $1.09 billion reflected an increase of 19.9% on a year-over-year basis. However, the non-GAAP gross margin of 63.9% contracted 380 basis points (bps) on a year-over-year basis and 40 bps sequentially.
Non-GAAP operating expenses totaled $479.4 million compared with $428.5 million in the year-ago quarter and $466.9 million in the previous quarter.
Marvell’s non-GAAP operating margin of 33.7% contracted 10 bps year over year. However, it expanded 400 bps sequentially.
Marvell’s Balance Sheet & Cash Flow
As of Feb. 1, 2025, MRVL’s cash and cash equivalents were $948.3 million compared with $868.1 million in the previous quarter. The company’s long-term debt totaled $3.93 billion, slightly lower than the previous quarter’s $3.97 billion.
Cash flow from operations for the fourth quarter was $514 million. In full-fiscal 2025, the company generated an operating cash flow of $1.68 billion.
During the fourth quarter, Marvell returned $251.9 million to its shareholders through repurchasing stocks worth $200 million and paying $51.9 million in dividends. The company bought back shares worth $725 million and paid $207.5 million in dividends.
Marvell Initiates Guidance for Q1 2026
For the first quarter of fiscal 2026, Marvell expects revenues to be $1.875 billion (+/- 5%). The Zacks Consensus Estimate for revenues is pegged at $1.87 billion, with a year-over-year improvement of 60.9%. The non-GAAP gross margin is projected to be 60%, while non-GAAP operating expenses are estimated to be $490 million.
The company projects non-GAAP earnings per share for the fiscal first quarter to be 61 cents per share (+/- 5 cents per share), while the consensus mark for the same is currently pegged at 59 cents. The figure remains unchanged over the past 60 days, with a year-over-year improvement of 145.8%.
MRVL’s Zacks Rank & Other Stocks to Consider
Marvell currently carries a Zacks Rank #2 (Buy).
Atlassian (TEAM - Free Report) , Radware (RDWR - Free Report) and Fortinet (FTNT - Free Report) are some other stocks that investors can consider in the broader Zacks Computer and Technology sector. TEAM, RDWR and FTNT carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Atlassian shares have soared 39.6% in the past year. The Zacks Consensus Estimate for TEAM’s fiscal 2025 earnings is pegged at $3.44 per share, indicating a 17.4% year-over-year increase.
Radware shares have gained 23.9% in the past year. The Zacks Consensus Estimate for RDWR’s 2025 bottom line is pinned at earnings of 95 cents per share, indicating a year-over-year increase of 9.2%.
Fortinet shares have surged 49.7% in the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.45 per share, suggesting a year-over-year increase of 3.4%.