Net revenue for the first quarter of fiscal 2024 was $1.322 billion, $22 million above the midpoint of the Company's guidance provided on March 2, 2023. GAAP net loss for the first quarter of fiscal 2024 was $(168.9) million, or $(0.20) per diluted share. Non-GAAP net income for the first quarter of fiscal 2024 was $264 million, or $0.31 per diluted share. Cash flow from operations for the first quarter was $208.4 million.
"We delivered first quarter fiscal 2024 revenue of $1.322 billion, above the midpoint of guidance, and are forecasting sequential revenue growth in the second quarter. We are expecting revenue growth to accelerate in the second half of this fiscal year, accompanied by gross and operating margin expansion," said Matt Murphy, Marvell's President and CEO. "AI has emerged as a key growth driver for Marvell, which we are enabling with our leading network connectivity products and emerging cloud optimized silicon platform. While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in fiscal 2024 to at least double from the prior year and continue to grow rapidly in the coming years."
Second Quarter of Fiscal 2024 Financial Outlook
- Net revenue is expected to be $1.330 billion +/- 5%.
- GAAP gross margin is expected to be 44.3% - 46.8%.
- Non-GAAP gross margin is expected to be approximately 60.0% - 61.0%.
- GAAP operating expenses are expected to be approximately $694 million.
- Non-GAAP operating expenses are expected to be approximately $455 million.
- Basic weighted average shares outstanding are expected to be 861 million.
- Diluted weighted average shares outstanding are expected to be 865 million.
- GAAP diluted loss per share is expected to be $(0.16) +/- $0.05 per share.
- Non-GAAP diluted income per share is expected to be $0.32 +/- $0.05 per share.
GAAP diluted EPS is calculated using basic weighted average shares outstanding when there is a GAAP net loss, and calculated using diluted weighted average shares outstanding when there is a GAAP net income. Non-GAAP diluted EPS is calculated using diluted weighted average shares outstanding.
Conference Call
Marvell will conduct a conference call on Thursday, May 25, 2023 at 1:45 p.m. Pacific Time to discuss results for the first quarter of fiscal 2024. Interested parties may join the conference call by dialing 1-888-317-6003 or 1-412-317-6061, passcode 1510543. The call will be webcast and can be accessed at the Marvell Investor Relations website at http://investor.marvell.com/. A replay of the call can be accessed by dialing 1-877-344-7529 or 1-412-317-0088, passcode 7997301 until Thursday, June 1, 2023.
Discussion of Non-GAAP Financial Measures
Non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of the inventory fair value adjustment associated with 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. Although Marvell excludes the amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and that such amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of intangible assets contributed to Marvell's revenues earned during the periods presented and are expected to contribute to Marvell's future period revenues as well.
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 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, and excludes tax deductions and benefits from acquired tax loss and credit carryforwards and changes in valuation allowance on acquired deferred tax assets. 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; acquisitions; significant changes in Marvell's geographic mix of revenue and expenses; or changes to Marvell's corporate structure. For the first quarter of fiscal 2024, a non-GAAP tax rate of 7.0% 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.
