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Marvell Technology Group Ltd. Reports Second Quarter of Fiscal Year 2021 Financial Results
- Q2 Revenue: $727 million
- Q2 Gross Margin: 49.4% GAAP gross margin; 63.3% non-GAAP gross margin
- Q2 Diluted income (loss) per share: $(0.24) GAAP diluted loss per share; $0.21 non-GAAP diluted income per share
- Cash and short-term investments: $832 million
SANTA CLARA, Calif., Aug. 27, 2020 /PRNewswire/ -- Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in infrastructure semiconductor solutions, today reported financial results for the second quarter of fiscal year 2021.
Revenue for the second quarter of fiscal 2021 was $727 million, which exceeded the midpoint of the Company's guidance provided on May 28, 2020. GAAP net loss for the second quarter of fiscal 2021 was $(158) million, or $(0.24) per diluted share. Non-GAAP net income for the second quarter of fiscal 2021 was $140 million, or $0.21 per diluted share. Cash flow from operations for the second quarter was $226 million.
"Marvell delivered strong second quarter financial results with revenue above the mid-point of guidance, growing 11% year on year and 5% sequentially. We are expecting revenue growth to continue in the third quarter, driven primarily from 5G wireless infrastructure and cloud datacenter end markets" said Matt Murphy, Marvell's President and CEO. "We also announced the extension of our long-term collaboration with TSMC to deliver a comprehensive silicon portfolio for the data infrastructure market leveraging the industry's most advanced 5 nanometer (nm) process technology. While we continue to invest in advanced technologies for future growth, our team also remains focused on driving operational excellence. Through successful integration execution and continued operational discipline, we expect to drive earnings expansion in the third quarter."
Marvell's third quarter guidance takes into account the U.S. Government's export restrictions on certain Chinese customers. Given the ongoing uncertainty associated with COVID-19 and related public health measures, we also have temporarily widened the guidance range on revenue.
Third Quarter of Fiscal 2021 Financial Outlook
- Revenue is expected to be $750 million +/- 5%.
- GAAP gross margin is expected to be approximately 51.4%.
- Non-GAAP gross margin is expected to be approximately 63%.
- GAAP operating expenses are expected to be approximately $368 million.
- Non-GAAP operating expenses are expected to be approximately $280 million.
- GAAP diluted income (loss) per share is expected to be $(0.04) to $0.04 per share.
- Non-GAAP diluted income per share is expected to be $0.22 to $0.28 per share.
Conference Call
Marvell will conduct a conference call on Thursday, August 27, 2020 at 1:45 p.m. Pacific Time to discuss results for the second quarter of fiscal 2021. Interested parties may join the conference call by dialing 1-844-647-5488 or 1-615-247-0258, pass-code 9776144. The call will be webcast and can be accessed at the Marvell Investor Relations website at http://investor.marvell.com/ with a replay available following the call until Thursday, September 3, 2020.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of share-based compensation expense, amortization of the inventory fair value adjustment associated with the Aquantia and Avera 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 GAAP income in calculating 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. 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; significant changes in Marvell's geographic mix of revenue and expenses; or changes to Marvell's corporate structure. For the second quarter of fiscal 2021, a non-GAAP tax rate of 5.0% 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" 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. 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: risks related to the impact on our business of the novel coronavirus (COVID-19) pandemic which have impacted, and may continue to impact, our workforce and operations and the transportation and manufacturing of our products; risks related to the impact of the COVID-19 pandemic which have impacted, and may continue to impact the operations of our customers, distributors, vendors, suppliers, and partners; increased disruption and volatility in the capital markets and credit markets as a result of COVID-19, which could adversely affect our liquidity and capital resources; the impact of COVID-19, or other future pandemics, on the U.S. and global economies; disruptions caused by COVID-19 resulting in worker absenteeism, quarantines and restrictions on our employees' ability to work, innovate, collaborate, and travel; the effects that the current credit and market conditions caused by, or resulting from, COVID-19 could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations; 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; Marvell's ability to define, design and develop products for the 5G market; Marvell's ability to market its 5G products to Tier 1 infrastructure customers; extension of lead time due to supply chain disruptions or component shortages that may impact the production of our 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; Marvell's reliance on independent foundries and subcontractors for the manufacture, assembly and testing of our products; cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory; 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 Marvell operates and the loss of any beneficial tax treatment that Marvell currently enjoys; the risk of downturns in the highly cyclical semiconductor industry; the risk that the company may not realize the anticipated benefits of the acquisitions of Aquantia Corp. and the Application Specific Integrated Circuit (ASIC) business of GLOBALFOUNDRIES and the divestiture to NXP (collectively, the "Transactions"); the effect of the consummation of the Transactions on the company's business relationships, operating results, and business generally; potential difficulties in employee retention as a result of the Transactions; the ability of Marvell to implement its plans, forecasts, and other expectations with respect to the Transactions and realize the anticipated synergies and cost savings in the time frame anticipated; Marvell's dependence upon the storage and networking markets, which are highly cyclical and intensely competitive; the outcome of pending or future litigation and legal and regulatory proceedings; Marvell's dependence on a small number of customers; the impact and costs associated with changes in international financial and regulatory conditions; Marvell's ability and the ability of its customers to successfully compete in the markets in which it serves; Marvell's ability and its customers' ability to develop new and enhanced products and the adoption of those products in the market; decreases in gross margin and results of operations in the future due to a number of factors; Marvell's ability to estimate customer demand and future sales accurately; Marvell's ability to scale its 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; the effects of any other potential acquisitions, divestitures or investments; Marvell's ability to protect its intellectual property; Marvell's maintenance of an effective system of internal controls; severe financial hardship or bankruptcy of one or more of Marvell's major customers; and other risks detailed in Marvell's SEC filings from time to time. For other factors that could cause Marvell's results to vary from expectations, please see the risk factors identified in Marvell's Annual Report on Form 10-K for the fiscal year ended February 1, 2020 as filed with the SEC on March 23, 2020, Marvell's Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020 as filed with the SEC on May 29, 2020, and other factors detailed from time to time in Marvell's filings with the SEC. Marvell undertakes no obligation to revise or publicly update any forward-looking statements.
About Marvell
Marvell first revolutionized the digital storage industry by moving information at speeds never thought possible. Today, that same breakthrough innovation remains at the heart of the Company's storage, processing, networking, security and connectivity solutions. With leading intellectual property and deep system-level knowledge, Marvell's semiconductor solutions continue to transform the enterprise, cloud, automotive, industrial, and consumer markets. To learn more, visit: www.marvell.com.
Marvell ® and the Marvell logo are registered trademarks of Marvell and/or its affiliates.
|
Marvell Technology Group Ltd. |
||||||||||||||||||||
|
Condensed Consolidated Statements of Operations (Unaudited) |
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|
(In thousands, except per share amounts) |
||||||||||||||||||||
|
|
||||||||||||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
August 1, |
|
May 2, |
|
August 3, |
|
August 1, |
|
August 3, |
||||||||||
|
Net revenue |
|
$ |
727,297 |
|
|
$ |
693,641 |
|
|
$ |
656,568 |
|
|
$ |
1,420,938 |
|
|
$ |
1,319,020 |
|
|
Cost of goods sold |
|
368,041 |
|
|
366,739 |
|
|
305,866 |
|
|
734,780 |
|
|
606,890 |
|
|||||
|
Gross profit |
|
359,256 |
|
|
326,902 |
|
|
350,702 |
|
|
686,158 |
|
|
712,130 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Research and development |
|
277,139 |
|
|
279,584 |
|
|
266,354 |
|
|
556,723 |
|
|
533,221 |
|
|||||
|
Selling, general and administrative |
|
112,794 |
|
|
122,027 |
|
|
113,990 |
|
|
234,821 |
|
|
223,995 |
|
|||||
|
Restructuring related charges |
|
120,590 |
|
|
21,287 |
|
|
16,586 |
|
|
141,877 |
|
|
22,268 |
|
|||||
|
Total operating expenses |
|
510,523 |
|
|
422,898 |
|
|
396,930 |
|
|
933,421 |
|
|
779,484 |
|
|||||
|
Operating loss |
|
(151,267) |
|
|
(95,996) |
|
|
(46,228) |
|
|
(247,263) |
|
|
(67,354) |
|
|||||
|
Interest income |
|
577 |
|
|
1,058 |
|
|
1,077 |
|
|
1,635 |
|
|
2,345 |
|
|||||
|
Interest expense |
|
(15,635) |
|
|
(16,830) |
|
|
(20,531) |
|
|
(32,465) |
|
|
(41,734) |
|
|||||
|
Other income (loss), net |
|
(440) |
|
|
3,754 |
|
|
(2,197) |
|
|
3,314 |
|
|
(2,313) |
|
|||||
|
Interest and other income (loss), net |
|
(15,498) |
|
|
(12,018) |
|
|
(21,651) |
|
|
(27,516) |
|
|
(41,702) |
|
|||||
|
Loss before income taxes |
|
(166,765) |
|
|
(108,014) |
|
|
(67,879) |
|
|
(274,779) |
|
|
(109,056) |
|
|||||
|
Provision (benefit) for income taxes |
|
(8,872) |
|
|
5,019 |
|
|
(10,548) |
|
|
(3,853) |
|
|
(3,275) |
|
|||||
|
Net loss |
|
$ |
(157,893) |
|
|
$ |
(113,033) |
|
|
$ |
(57,331) |
|
|
$ |
(270,926) |
|
|
$ |
(105,781) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net loss per share — basic: |
|
$ |
(0.24) |
|
|
$ |
(0.17) |
|
|
$ |
(0.09) |
|
|
$ |
(0.41) |
|
|
$ |
(0.16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net loss per share — diluted: |
|
$ |
(0.24) |
|
|
$ |
(0.17) |
|
|
$ |
(0.09) |
|
|
$ |
(0.41) |
|
|
$ |
(0.16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
667,574 |
|
|
663,547 |
|
|
663,603 |
|
|
665,541 |
|
|
661,280 |
|
|||||
|
Diluted |
|
667,574 |
|
|
663,547 |
|
|
663,603 |
|
|
665,541 |
|
|
661,280 |
|
|||||
|
Marvell Technology Group Ltd. |
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|
Condensed Consolidated Balance Sheets (Unaudited) |
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|
(In thousands) |
||||||||
|
|
||||||||
|
|
|
August 1, 2020 |
|
February 1, 2020 |
||||
|
Assets |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
831,534 |
|
|
$ |
647,604 |
|
|
Accounts receivable, net |
|
483,542 |
|
|
492,346 |
|
||
|
Inventories |
|
262,875 |
|
|
322,980 |
|
||
|
Prepaid expenses and other current assets |
|
54,136 |
|
|
74,567 |
|
||
|
Total current assets |
|
1,632,087 |
|
|
1,537,497 |
|
||
|
Property and equipment, net |
|
335,035 |
|
|
357,092 |
|
||
|
Goodwill |
|
5,337,405 |
|
|
5,337,405 |
|
||
|
Acquired intangible assets, net |
|
2,489,815 |
|
|
2,764,600 |
|
||
|
Deferred tax assets |
|
645,633 |
|
|
639,791 |
|
||
|
Other non-current assets |
|
486,507 |
|
|
496,850 |
|
||
|
Total assets |
|
$ |
10,926,482 |
|
|
$ |
11,133,235 |
|
|
|
|
|
|
|
||||
|
Liabilities and Shareholders' Equity |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable |
|
$ |
238,537 |
|
|
$ |
213,747 |
|
|
Accrued liabilities |
|
406,804 |
|
|
346,639 |
|
||
|
Accrued employee compensation |
|
131,241 |
|
|
149,780 |
|
||
|
Short-term debt |
|
448,248 |
|
|
— |
|
||
|
Total current liabilities |
|
1,224,830 |
|
|
710,166 |
|
||
|
Long-term debt |
|
992,436 |
|
|
1,439,024 |
|
||
|
Other non-current liabilities |
|
291,679 |
|
|
305,465 |
|
||
|
Total liabilities |
|
2,508,945 |
|
|
2,454,655 |
|
||
|
|
|
|
|
|
||||
|
Shareholders' equity: |
|
|
|
|
||||
|
Common shares |
|
1,340 |
|
|
1,328 |
|
||
|
Additional paid-in capital |
|
6,225,242 |
|
|
6,135,939 |
|
||
|
Accumulated other comprehensive income |
|
450 |
|
|
— |
|
||
|
Retained earnings |
|
2,190,505 |
|
|
2,541,313 |
|
||
|
Total shareholders' equity |
|
8,417,537 |
|
|
8,678,580 |
|
||
|
Total liabilities and shareholders' equity |
|
$ |
10,926,482 |
|
|
$ |
11,133,235 |
|
|
Marvell Technology Group Ltd. |
||||||||||||||||
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||||||||||
|
(In thousands) |
||||||||||||||||
|
|
||||||||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
August 1, |
|
August 3, |
|
August 1, |
|
August 3, |
||||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
||||||||
|
Net loss |
|
$ |
(157,893) |
|
|
$ |
(57,331) |
|
|
$ |
(270,926) |
|
|
$ |
(105,781) |
|
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization |
|
51,605 |
|
|
37,926 |
|
|
102,088 |
|
|
76,580 |
|
||||
|
Share-based compensation |
|
62,586 |
|
|
63,676 |
|
|
122,273 |
|
|
122,274 |
|
||||
|
Amortization of acquired intangible assets |
|
111,579 |
|
|
80,967 |
|
|
224,501 |
|
|
160,707 |
|
||||
|
Amortization of inventory fair value adjustment associated with acquisitions |
|
— |
|
|
— |
|
|
17,284 |
|
|
— |
|
||||
|
Restructuring related impairment charges |
|
114,723 |
|
|
6,281 |
|
|
117,546 |
|
|
10,097 |
|
||||
|
Other expense, net |
|
6,282 |
|
|
5,773 |
|
|
14,910 |
|
|
14,534 |
|
||||
|
Deferred income taxes |
|
(2,816) |
|
|
(1,982) |
|
|
(444) |
|
|
2,374 |
|
||||
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
||||||||
|
Accounts receivable |
|
(14,782) |
|
|
17,601 |
|
|
8,804 |
|
|
40,376 |
|
||||
|
Inventories |
|
(33) |
|
|
(7,174) |
|
|
35,801 |
|
|
8,674 |
|
||||
|
Prepaid expenses and other assets |
|
3,679 |
|
|
(15,997) |
|
|
(3,015) |
|
|
(7,993) |
|
||||
|
Accounts payable |
|
33,204 |
|
|
24,370 |
|
|
29,647 |
|
|
22,497 |
|
||||
|
Accrued liabilities and other non-current liabilities |
|
10,732 |
|
|
(49,188) |
|
|
21,528 |
|
|
(80,117) |
|
||||
|
Accrued employee compensation |
|
6,964 |
|
|
(31,782) |
|
|
(18,539) |
|
|
(25,266) |
|
||||
|
Net cash provided by operating activities |
|
225,830 |
|
|
73,140 |
|
|
401,458 |
|
|
238,956 |
|
||||
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
||||||||
|
Purchases of technology licenses |
|
(3,080) |
|
|
(38) |
|
|
(6,764) |
|
|
(1,522) |
|
||||
|
Purchases of property and equipment |
|
(17,540) |
|
|
(23,010) |
|
|
(52,883) |
|
|
(42,193) |
|
||||
|
Other, net |
|
34 |
|
|
(47) |
|
|
699 |
|
|
(389) |
|
||||
|
Net cash used in investing activities |
|
(20,586) |
|
|
(23,095) |
|
|
(58,948) |
|
|
(44,104) |
|
||||
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
||||||||
|
Repurchases of common stock |
|
— |
|
|
(16,250) |
|
|
(25,202) |
|
|
(64,272) |
|
||||
|
Proceeds from employee stock plans |
|
42,776 |
|
|
50,230 |
|
|
48,234 |
|
|
81,314 |
|
||||
|
Tax withholding paid on behalf of employees for net share settlement |
|
(25,213) |
|
|
(32,884) |
|
|
(56,714) |
|
|
(61,642) |
|
||||
|
Dividend payments to shareholders |
|
(40,119) |
|
|
(39,889) |
|
|
(79,882) |
|
|
(79,356) |
|
||||
|
Payments on technology license obligations |
|
(18,702) |
|
|
(13,056) |
|
|
(42,509) |
|
|
(28,324) |
|
||||
|
Principal payments of debt |
|
— |
|
|
— |
|
|
— |
|
|
(50,000) |
|
||||
|
Other, net |
|
— |
|
|
3,407 |
|
|
(2,507) |
|
|
(1,486) |
|
||||
|
Net cash used in financing activities |
|
(41,258) |
|
|
(48,442) |
|
|
(158,580) |
|
|
(203,766) |
|
||||
|
Net increase (decrease) in cash and cash equivalents |
|
163,986 |
|
|
1,603 |
|
|
183,930 |
|
|
(8,914) |
|
||||
|
Cash and cash equivalents at beginning of period |
|
667,548 |
|
|
571,893 |
|
|
647,604 |
|
|
582,410 |
|
||||
|
Cash and cash equivalents at end of period |
|
$ |
831,534 |
|
|
$ |
573,496 |
|
|
$ |
831,534 |
|
|
$ |
573,496 |
|
|
Marvell Technology Group Ltd. |
||||||||||||||||||||
|
Reconciliations from GAAP to Non-GAAP (Unaudited) |
||||||||||||||||||||
|
(In thousands, except per share amounts) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
August 1,
|
|
May 2,
|
|
August 3,
|
|
August 1,
|
|
August 3,
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP gross profit: |
|
$ |
359,256 |
|
|
$ |
326,902 |
|
|
$ |
350,702 |
|
|
$ |
686,158 |
|
|
$ |
712,130 |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Share-based compensation |
|
4,082 |
|
|
3,538 |
|
|
3,662 |
|
|
7,620 |
|
|
6,588 |
|
|||||
|
Amortization of acquired intangible assets |
|
85,225 |
|
|
86,567 |
|
|
61,132 |
|
|
171,792 |
|
|
121,038 |
|
|||||
|
Other cost of goods sold (a) |
|
11,630 |
|
|
18,562 |
|
|
— |
|
|
30,192 |
|
|
450 |
|
|||||
|
Total special items |
|
100,937 |
|
|
108,667 |
|
|
64,794 |
|
|
209,604 |
|
|
128,076 |
|
|||||
|
Non-GAAP gross profit |
|
$ |
460,193 |
|
|
$ |
435,569 |
|
|
$ |
415,496 |
|
|
$ |
895,762 |
|
|
$ |
840,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP gross margin |
|
49.4 |
% |
|
47.1 |
% |
|
53.4 |
% |
|
48.3 |
% |
|
54.0 |
% |
|||||
|
Non-GAAP gross margin |
|
63.3 |
% |
|
62.8 |
% |
|
63.3 |
% |
|
63.0 |
% |
|
63.7 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Total GAAP operating expenses |
|
$ |
510,523 |
|
|
$ |
422,898 |
|
|
$ |
396,930 |
|
|
$ |
933,421 |
|
|
$ |
779,484 |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Share-based compensation |
|
(58,504) |
|
|
(56,149) |
|
|
(60,014) |
|
|
(114,653) |
|
|
(115,686) |
|
|||||
|
Restructuring related charges (b) |
|
(120,590) |
|
|
(21,287) |
|
|
(16,586) |
|
|
(141,877) |
|
|
(22,268) |
|
|||||
|
Amortization of acquired intangible assets |
|
(26,354) |
|
|
(26,355) |
|
|
(19,835) |
|
|
(52,709) |
|
|
(39,669) |
|
|||||
|
Other operating expenses (c) |
|
(8,125) |
|
|
(19,403) |
|
|
(20,676) |
|
|
(27,528) |
|
|
(27,245) |
|
|||||
|
Total special items |
|
(213,573) |
|
|
(123,194) |
|
|
(117,111) |
|
|
(336,767) |
|
|
(204,868) |
|
|||||
|
Total non-GAAP operating expenses |
|
$ |
296,950 |
|
|
$ |
299,704 |
|
|
$ |
279,819 |
|
|
$ |
596,654 |
|
|
$ |
574,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP operating margin |
|
(20.8) |
% |
|
(13.8) |
% |
|
(7.0) |
% |
|
(17.4) |
% |
|
(5.1) |
% |
|||||
|
Other cost of goods sold (a) |
|
1.6 |
% |
|
2.7 |
% |
|
— |
% |
|
2.1 |
% |
|
— |
% |
|||||
|
Share-based compensation |
|
8.6 |
% |
|
8.6 |
% |
|
9.7 |
% |
|
8.6 |
% |
|
9.3 |
% |
|||||
|
Restructuring related charges (b) |
|
16.6 |
% |
|
3.1 |
% |
|
2.5 |
% |
|
10.0 |
% |
|
1.7 |
% |
|||||
|
Amortization of acquired intangible assets |
|
15.3 |
% |
|
16.3 |
% |
|
12.3 |
% |
|
15.8 |
% |
|
12.2 |
% |
|||||
|
Other operating expenses (c) |
|
1.1 |
% |
|
2.7 |
% |
|
3.2 |
% |
|
2.0 |
% |
|
2.0 |
% |
|||||
|
Non-GAAP operating margin |
|
22.4 |
% |
|
19.6 |
% |
|
20.7 |
% |
|
21.1 |
% |
|
20.1 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP interest and other income (loss), net |
|
$ |
(15,498) |
|
|
$ |
(12,018) |
|
|
$ |
(21,651) |
|
|
$ |
(27,516) |
|
|
$ |
(41,702) |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Restructuring and other related items (d) |
|
— |
|
|
434 |
|
|
75 |
|
|
434 |
|
|
(263) |
|
|||||
|
Write-off of debt issuance costs (e) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
458 |
|
|||||
|
Deal costs (f) |
|
— |
|
|
— |
|
|
1,009 |
|
|
— |
|
|
1,009 |
|
|||||
|
Total special items |
|
— |
|
|
434 |
|
|
1,084 |
|
|
434 |
|
|
1,204 |
|
|||||
|
Total non-GAAP interest and other income (loss), net |
|
$ |
(15,498) |
|
|
$ |
(11,584) |
|
|
$ |
(20,567) |
|
|
$ |
(27,082) |
|
|
$ |
(40,498) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP net loss |
|
$ |
(157,893) |
|
|
$ |
(113,033) |
|
|
$ |
(57,331) |
|
|
$ |
(270,926) |
|
|
$ |
(105,781) |
|
|
Special items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Other cost of goods sold (a) |
|
11,630 |
|
|
18,562 |
|
|
— |
|
|
30,192 |
|
|
450 |
|
|||||
|
Share-based compensation |
|
62,586 |
|
|
59,687 |
|
|
63,676 |
|
|
122,273 |
|
|
122,274 |
|
|||||
|
Restructuring related charges in operating expenses (b) |
|
120,590 |
|
|
21,287 |
|
|
16,586 |
|
|
141,877 |
|
|
22,268 |
|
|||||
|
Other operating expenses (c) |
|
8,125 |
|
|
19,403 |
|
|
20,676 |
|
|
27,528 |
|
|
27,245 |
|
|||||
|
Restructuring and other related items in interest and other income, net (d) |
|
— |
|
|
434 |
|
|
75 |
|
|
434 |
|
|
(263) |
|
|||||
|
Amortization of acquired intangible assets |
|
111,579 |
|
|
112,922 |
|
|
80,967 |
|
|
224,501 |
|
|
160,707 |
|
|||||
|
Write-off of debt issuance costs (e) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
458 |
|
|||||
|
Transaction costs included in interest and other income, net (f) |
|
— |
|
|
— |
|
|
1,009 |
|
|
— |
|
|
1,009 |
|
|||||
|
Pre-tax total special items |
|
314,510 |
|
|
232,295 |
|
|
182,989 |
|
|
546,805 |
|
|
334,148 |
|
|||||
|
Other income tax effects and adjustments (g) |
|
(16,226) |
|
|
(1,229) |
|
|
(15,728) |
|
|
(17,455) |
|
|
(13,404) |
|
|||||
|
Non-GAAP net income |
|
$ |
140,391 |
|
|
$ |
118,033 |
|
|
$ |
109,930 |
|
|
$ |
258,424 |
|
|
$ |
214,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP weighted average shares — basic |
|
667,574 |
|
|
663,547 |
|
|
663,603 |
|
|
665,541 |
|
|
661,280 |
|
|||||
|
GAAP weighted average shares — diluted |
|
667,574 |
|
|
663,547 |
|
|
663,603 |
|
|
665,541 |
|
|
661,280 |
|
|||||
|
Non-GAAP weighted average shares — diluted (h) |
|
678,304 |
|
|
670,841 |
|
|
675,755 |
|
|
674,553 |
|
|
673,399 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP diluted net loss per share |
|
$ |
(0.24) |
|
|
$ |
(0.17) |
|
|
$ |
(0.09) |
|
|
$ |
(0.41) |
|
|
$ |
(0.16) |
|
|
Non-GAAP diluted net income per share |
|
$ |
0.21 |
|
|
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.38 |
|
|
$ |
0.32 |
|
|
|
|
|
(a) |
Other costs of goods sold includes inventory write-downs and amortization of acquired inventory fair value adjustments. |
|
(b) |
Restructuring related charges include asset impairment charges (including asset impairment charges due to changes to the scope of the server processor product line), employee severance costs, facilities related charges, and other. |
|
(c) |
Other operating expenses include integration costs associated with recent acquisitions. |
|
(d) |
Interest and other income (loss), net, includes restructuring and other related items such as foreign currency remeasurement associated with restructuring related accruals. |
|
(e) |
Write-off of debt issuance costs is associated with partial term loan repayment. |
|
(f) |
Deal costs include transaction costs incurred in connection with divestiture of the Wi-Fi Connectivity business. |
|
(g) |
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 August 1, 2020 and three months ended May 2, 2020. Other income tax effects and adjustments relate to tax provision based on a non-GAAP income tax rate of 4.5% for the three and six months ended August 3, 2019. |
|
(h) |
Non-GAAP diluted weighted average shares differs from GAAP diluted weighted average shares due to the non-GAAP net income reported. |
|
Marvell Technology Group Ltd. |
|
|
Outlook for the Third Quarter of Fiscal Year 2021 |
|
|
Reconciliations from GAAP to Non-GAAP (Unaudited) |
|
|
(In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
Outlook for Three Months Ended |
|
GAAP revenue |
$750 +/- 5% |
|
Special items: |
— |
|
Non-GAAP revenue |
$750 +/- 5% |
|
|
|
|
GAAP gross margin |
~51.4% |
|
Special items: |
|
|
Share-based compensation |
0.5% |
|
Amortization of acquired intangible assets |
11.1% |
|
Non-GAAP gross margin |
~63% |
|
|
|
|
Total GAAP operating expenses |
~$368 |
|
Special items: |
|
|
Share-based compensation |
56 |
|
Amortization of acquired intangible assets |
26 |
|
Restructuring related charges |
2 |
|
Other operating expenses |
4 |
|
Total non-GAAP operating expenses |
~$280 |
|
|
|
|
|
|
|
GAAP diluted net income (loss) per share |
$(0.04) - $0.04 |
|
Special items: |
|
|
Share-based compensation |
0.09 |
|
Amortization of acquired intangible assets |
0.16 |
|
Other operating expenses |
0.01 |
|
Other income tax effects and adjustments |
(0.01) |
|
Non-GAAP diluted net income per share |
$0.22 - $0.28 |
|
Quarterly Revenue Trend (Unaudited) |
|||||||||||||||||
|
(In thousands) |
|||||||||||||||||
|
|
|||||||||||||||||
|
|
Three Months Ended |
|
% Change |
||||||||||||||
|
|
August 1, 2020 |
|
May 2, 2020 |
|
August 3, 2019 |
|
YoY |
|
QoQ |
||||||||
|
Networking (1) |
$ |
406,008 |
|
|
$ |
393,920 |
|
|
$ |
329,605 |
|
|
23 |
% |
|
3 |
% |
|
Storage (2) |
290,495 |
|
|
258,688 |
|
|
274,905 |
|
|
6 |
% |
|
12 |
% |
|||
|
Total Core |
696,503 |
|
|
652,608 |
|
|
604,510 |
|
|
15 |
% |
|
7 |
% |
|||
|
Other (3) |
30,794 |
|
|
41,033 |
|
|
52,058 |
|
|
(41) |
% |
|
(25) |
% |
|||
|
Total Revenue |
$ |
727,297 |
|
|
$ |
693,641 |
|
|
$ |
656,568 |
|
|
11 |
% |
|
5 |
% |
|
|
Three Months Ended |
|||||||
|
% of Total |
August 1,
|
|
May 2,
|
|
August 3,
|
|||
|
Networking (1) |
56 |
% |
|
57 |
% |
|
50 |
% |
|
Storage (2) |
40 |
% |
|
37 |
% |
|
42 |
% |
|
Total Core |
96 |
% |
|
94 |
% |
|
92 |
% |
|
Other (3) |
4 |
% |
|
6 |
% |
|
8 |
% |
|
Total Revenue |
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
(1) Networking products are comprised primarily of Ethernet Solutions, Embedded Processors and Custom ASICs. |
|
(2) Storage products are comprised primarily of Storage Controllers and Fibre Channel Adapters. |
|
(3) Other products are comprised primarily of Printer Solutions. |
For further information, contact:
Ashish Saran
Vice President, Investor Relations
408-222-0777
ir@marvell.com
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SOURCE Marvell
