MRVL - Earnings call transcript Q4 2022 | Marvell Technology, Inc.

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Operator

Good afternoon and welcome to Marvell Technology’s Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr.

of President Vice Saran, Investor Relations. Ashish ahead. go Please

Ashish Saran

to Thank and quarter Welcome call. you good afternoon, and Marvell’s fiscal fourth everyone. year earnings XXXX

Joining factors the SEC and review as are our cautionary I cause on Please contained to Murphy, expectations. Jean intend risk we Matt made the in that recent XX-Q press today everyone and with our me could current and forward-looking not do today to comments which significant release, today XX-K and management’s We statements, differ risks our include CEO; uncertainties most well earnings which that our Marvell’s statements certain results update Hu, to statements. like posted filings. materially our would website, filed as and President forward-looking CFO. actual may from to subject remind our are and

will call section for I'll A GAAP call Matt between his our today, our financial in over Matt? our turn non-GAAP comments Investor During financial available measures. we With performance. to to that, reconciliation our is website. the non-GAAP refer and the certain on measures of Relations

Matt Murphy

everyone. Ashish, Thanks, afternoon, and good

Let the Marvell in year completion with momentum of exceptional XXXX, and revenue recap the acquisitions delivered strong substantial pivotal me in We growth for great an design results absolutely saw company. wins, businesses. the with fiscal the all a start in of increase two our significant

rest platform, focus in of our a portfolio, the all data-centric opportunities along enabler to technology new key with markets. Our winning X-nanometer be our proved for IP of

remain which for our wins up We winning revenue advanced company packaging. leadership technology for the important cloud year XXXX the also a and job tremendous silicon sizable a expect going prior sockets, year. a forward. securing on big in record platform, breakout step process focused extending did sockets from and drive sales of Our teams XXXX, will and we significant our a level design of fiscal product drove number Fiscal was optimized in a new

the mixed-signal They and packaging of chiplet multiple driving Our the and and engineering design inside to single complex X-nanometers. are nodes support to package. process a analog of our teams integration technologies architecture advanced are also XD advancing IP

heights. Inphi's network unique instrumental with optimized accretive Tier silicon position The platform. to opportunities into was success combined we passion additional in core at team of the center next-generation Inphi, company the integrated a values in and share teams are year, have the jointly similar the the increased capabilities engineering team earnings non-GAAP fully portfolio. customer switches X that growing to cloud The of in Ethernet attractive first data completed has electrooptics a them, customers, which Innovium Marvell aligned for the transaction, above our integrated proving architectures. business to in our the design switches. success. has and the our power cloud adding of success, centers a quarter very customers' and to The with customers within leveraging has substantially During Marvell X-nanometer deal switch excellence, road leading full has platform new across our developed acquisition our among The integration insights fast deep the acquisition, carrier map revenue team the are Inphi and company, center Innovium unlocking resounding customers, transformational founded and taking well Marvell's for portfolios with the cloud which market. their and a We Inphi including development innovation on been IP to relationships The data complete exceptionally DSP cloud participation cloud with given new at team complemented after our enterprise and been This are cloud combined extensive delivering Asia. performance. close our SerDes closely next-generation switch win technology for our a very Marvell's is for further accelerate XX.X fiscal a solution Innovium model. optimized roadmap provide cloud feature-rich T Tier optimized and data XXXX X to The is

with We are in also forward customers to looking fast-growing engaged our multiple and additional expanding market. this footprint are further

the XXXX, year-on-year to XX% by revenue billion our Marvell on Moving demand business revenue. business In The both robust growth. for strong were driven contributors $X.XX and grew to acquired organic Inphi products. to fiscal

the doubled our Our collectively year. reflect the end revenue in from prior success XG in cloud, markets, which results and automotive

enterprise XX% end the extended call hear revenue phenomenal an the more of period start enterprise of today, will you in in had refreshes also about a Our year growing with the infrastructure market market. networking year-over-year. Later details

XX% driver networking in quarter. We enterprise auto not XXXX with exceeded for stronger XX% and our in accelerated growth all expect record of sequentially particular fiscal projected XX% XG Cloud, about We growth networking and year-over-year. gears with forward. billion to business the delivered increased that, and momentum A share content these, enterprise Revenue with growing exited contributions. revenue our and enduring $X.XX fourth opportunities business. our cloud note, We the products, growing collectively And than growth sequentially only gains merchant across the going of will produce market. enterprise year-over-year. fourth delivered revenue new total record bookings combined revenue, and that in end from quarter. in our midpoint also talk hear will a markets Shifting and me a guidance of you to

customer their the in We Marvell. of continue scope the to our with engagements win as market

Growth secure result, demand grow. increases supply. And suppliers. continues tightly engaged in strategic and we’re Our our as operations continues to in continued our has a outstrip to to with capacity, delinquency team

suppliers secure We are wherever working closely possible. with our additional to capacity

sequentially markets, and cloud XX% The driven the move XXX% demand growing was for now center robust In the to year-over-year, data guidance. was from $XXX of me growth market, with exceeding end our on hyperscale data end by customers. our discussing Let from quarter our center. five starting million, revenue majority fourth

note and was data year-over-year lines sequential excellent sequentially the grew to our growth fourth broad-based center on-premise product quarter, me Let with business contributing multiple revenue the results. and that In also year-over-year.

track expect At cloud design are strong, in incremental new doubling contributions We to XXXX. fiscal Similar fiscal meaningful in to Investor to Development demand our the we data to offload prior new of won in networking our million wins. from quarters, we customers compute have these optimized ramp and $XXX wins is production and optimized enter looking several to and later year additional of variety products cloud centers. chips remain cloud the Since $XXX for these designs. cloud a also that acceleration in functions well Day, million in the outlook programs revenue. contributing from for update, on forward slated we wins, start expectations are discussed with or this revenue of multiple XXXX

these in data increase multiple cloud cloud number incremental revenue expecting fiscal for XXXX, In customers. these wins DPU had as are we early as reflecting are DPUs what in to optimized discussed substantially then a from the contributions time. and attach Both We at new wins start the of these XXXX in aggregate, fiscal A of centers. of Tier programs cloud our X side custom more Day. rate we won are designs have to significant implementations, across over ramp Investor over dozen

to trend this expect accelerate in next-generation architectures. We

are win all positioned we X-nanometer we our networking, our with are business, and compute, IP, In electro-optics our high-speed innovate. confident are portfolio uniquely security, optimized We opportunities them delivered of that to platform. continuing on these storage leading electro-optics of cloud to

nodes We our to with are the technology next-generation improve map leading-edge products. aggressively driving performance in road power

volume network DSPs, to We applications. modules center of enabling begun have of XXX-gig AI our optical shipments PAMX XXX-gig start and data cloud in customers deployment

the achieve that this confident are DSP milestone. industry's are production PAMX to we first We supplier

opens server active primarily Let we me center, market. new switch-to-switch are DSP products us switches now between of up our up lane. of deployed long-reach, today. for modules, XX traditionally expertise. passive signal to centers and In short-reach connections electrical for have these AI speeds our rack cable for gig cloud advanced data of emerging growth processing per in the a optical in in centers, used top used product for another None Today, data of the announced data avenue in same discuss leveraging cables core PAMX requires electrical just This interconnects line switches, the between to connections.

market, which is referred demand, first for performance cables, centers, the data to cloud industry's gig limitations. per have reach next-generation turning data-intensive cables to leading advanced based has workloads overcome challenges, these To To the require short-reach these our ML active the industry significant in and introduced electrical XXX-gig DSPs ADC as pushing are technology. these that electrical and meet higher SerDes on PAMX to and XXX-gig Marvell ADCs, DSPs. AI, At speeds, passive However, other lane XXX connections throughput.

all Our to unique us as with to work open business leading well allows model cable as cloud manufacturers drive ecosystem. both an customers,

Our enabled of cable industry-leading ADC development complete DSPs solutions. vendors their have first to major

working this also are operators opportunity. cloud with take We growth to advantage new multiple of

leading our drive our design PCIe process execution and platform wins center technology side, new storage map the SSD to data On road for continues controllers.

at the Marvell a we NAND Gen are X OEMs, total designs two adopting During the PCIe additional solution. secured three with making controllers our of quarter, who

our Looking road X ahead, PCIe about with map. very and are our Gen team forward excited customers pushing development, is also our our

to our first fiscal end the data for on from we of market, year-over-year. revenue the double percentage expectations our grow than sequentially to and more in on basis Moving fiscal digits mid-single quarter a project center XXXX

another a by cloud products. expecting are of range strong led performance broad We across customers

ramp products. of of interconnect are projecting data We XXX-gig strong also start ZR a center the our

this early expect at revenue rapid cycle. to we growth excited see eclipsing the of industry the we record are fact, over had ZR, quarter, of this lot ramp In Even expecting see a in drive more DCI XXX-gig in to the the achieved adoption, are time. first we growth and to new we very peak stage XXX a our to

starting ongoing revenue data this the forward, the data of contribution ramps see Looking center, our growth in in step-up beyond. including from second to revenue new the cloud-optimized and year another half center product in fiscal drive we

Dell to to station X telecom offering base customers. This announced baseband using codeveloped ramps market. Turning to open recently deliver and our service $XXX proven providers our growth year-over-year. of XX% our Revenue were new by product quarter which open fourth delivered XX% enable growing a over XG technology the the driven layer their Marvell was cloud-native solutions card in-line to silicon of guidance. with collaboration results for sequentially, help benefited XG XX% carrier rollout OCTEON their Fusion of includes multiple sequentially infrastructure from exceeding and a accelerator We These on processing. at broader substantial suite RAN million, XG end networks. our revenue business, transformation

a for radio X We continue at to resulting platform, XG see a strong traction another Tier ASIC our win customer. technology X-nanometer on station key in base design

the of the Following revenue quarter, strong market expect grow to step-up fiscal the fourth to first in in XXXX. we continue from quarter carrier the end

year-over-year to is the remain over revenue single-digits projecting XX%. growth low grow are We sequentially, strong in expected at while to

was networking XX% and Moving sequentially X% on Marvell enterprise market. to growing year-over-year, another large from the and Revenue $XXX this our and million, growing for business. performance fourth end quarter strong

you stay, is to here As immersive, becoming current bandwidth, new an extended of anywhere, building their an now going end environment. heard was is upon infrastructure through beefing usage market Companies increasing and from redundancy, infrastructure, this inflection. the digital connect massively opening capabilities, this designed flexible, networking refreshing and in but to embarking remarks, high seamless, security. are video support the never enabling Hybrid up borderless, period work

we driven remember features such been These over You as with our have by market. also several refreshed in winning MACsec. designs typically that with products multi-gig and content, prior wins Ethernet come our end have this new higher Marvell discussions will from years

momentum, share beginning higher cycle we to upgrade the As content. and where gains our market enterprise we customers ship new networking their increased in see to platforms the starting are have

Looking result, to enterprises will networks. expect as to ongoing from forward, growth their we end we market. continue a project modernize continue And this

end new growth this market, silicon. Marvell source of for Let me in discuss now custom a

from building a We end very have also revenue the stream and business hyperscalers products. custom optimized large successful with market our cloud carrier in a are

pull enterprise enabling advantage Marvell take frequently We our number market designs the networking additional product platform. point a through are that I would of our lines. across like now of advanced to content to technology out these

adding we another silicon growth is from opportunities networking and leg our of custom pipeline tool, to ongoing merchant see enterprise Our becoming the to the products. growing

to durable cloud, networking complement in from $XXX revenue well pillars. to our auto and expect In to fiscal We custom strongly enterprise XXXX. over products XG, and growth aggregate, period expect high from grow we a sharply of networking enterprise million very

expect we XXXX, market. fiscal of quarter enterprise networking to first growth the accelerate to ahead Looking our end in

mid-teens year-over-year cycle. projecting our the are reflects be a infrastructure sequentially over outlook ongoing We up expectations basis supply our Its the higher enterprise percentage growth product and to revenue XX%. of support growth and on ramps in to refresh

to growth growing in end a Ethernet the for higher number quarter Turning from being industrial and revenue multiple million, our year-over-year. our market in by revenue growing fourth Strong OEMs. adoption is vehicles of market, and solutions driven sequentially XX% was this of automotive $XX Brightlane XXX% end

the to are we ahead growth from our quarter strong Looking first fiscal XXXX, auto outlook industrial and continue of sequential flattish to business. a expecting for

XX%. auto a industrial digits projecting percentage while are basis, end in sequential expected and growth revenue As we growth on single a result, market, the for is year-over-year above the high

X% market. market consoles. SSD being XX% sequentially our Moving end shipping controllers, consumer fourth consumer-oriented million, our by platforms in on such this end Revenue as into was quarter the growing driven game Growth year-over-year. is and for to $XXX

Looking ahead long-term fiscal XXXX, the and to grow target approximately delivered continue be quarter to closing, XXXX, of basis. the In the results well-above record year a fourth revenue on fiscal quarter growing first in model. year-over-year, digits basis our we revenue on percentage expect for sequential a we to and flattish double

We to transformation three growth end another semiconductors; to also growth uniquely expect Marvell. cloud, and The continue. for market in is enterprise important positioned this automotive. the momentum from in Marvell is driver opportunities benefit becoming XG most continuing the

will large drive supported from of expect and end We which design continue by our revenue. secured growth wins, to markets, secular incremental pipeline growing all our further

also are make a sure sustainable to that grow we manner. responsible in working We and

track year, emissions based to put and traditionally encourage as past and have taken of committed are science diverse social goals Marvell to leadership company fourth we the Building and environmental, inclusive Board thank year outreach new the would the outlined action visit and evolving our setting underrepresented our for important achieving of workforce increased progress date. to to XXXX. our more focus, goal. target they've investors and this to has our behalf a Over governance helped outstanding Marvell's the on reach setting strategy, transparency. meaningful website I our I quarter on valued review employees team, a new and us another and We've is net-zero throughout to deliver On fiscal results we've talent. and ESG goals area a to increasing in

company through Ours exciting cycle is has an period in strong to team across point exceptional uncertainty. team look work focused our a forward address us. outlook. continuing more the in that our stayed challenges opportunities seeing inflection highly turn extended and to alongside we've and and call is of outperformed detail resilient of This I'll With as numerous an an in that, are to businesses Board. and growth time for Marvell our the momentum I results the for to our over Jean our recent front hit on

Jean Hu

XXXX a summary start I'll everyone. afternoon, of good results. with our and Matt, Thanks, fiscal year

and to $X.XX XX% from while Revenue We with aggressively performance continuing infrastructure long-term the growth data GAAP per our billion. margin drive delivering to and strong XXXX, was revenue record invest year-on-year loss to XX.X% market. in profitability $X.XX. pleased diluted are GAAP was significantly share grew fiscal by very gross the

share operating Revenue in margin growth Our expanding customers. XX.X%, basis our differentiation margin expanded we gross our and points, strong by reflecting increase earnings year-on-year provide the to leverage with was to the points grew from expansion, and in the $X.XX. value XXX non-GAAP combined non-GAAP XXX gross robust earnings business growth XX.X%. operating for And XX.X% Non-GAAP from to XX% year. model, drove by basis margin per

faster fourth was profit Data the XX.X% by of position sequentially financial gross GAAP of by strong operating and leading revenue. growing $X.XXX acquired at and of our expenses operating record settlements gross the was basis XX% XXX quarter at $XX year driven growing exceeding Moving year, $XXX assets, at product market, reflects We was operating a XX% expenses, our driving and expenses compensation largest to $XXX strong was end million were mix, largest an a followed quarter. revenue, Revenue million. divestiture-related amortization from guidance, auto achieved next include of intangible Non-GAAP year-over-year. of at GAAP was revenue, Non-GAAP up our our the of $XXX the or XX% with significantly improvement Non-GAAP revenue. the million, were record was acquisition consolidated X%. of consumer prior infrastructure operating portfolio. range. operating the costs. points fourth IP in $XXX point million, industrial leverage XX.X% ago, total operating XX% share-based billion, margin and another profit model. end in and legal of middle results cost low non-GAAP million carrier networking product and rich reflecting was Enterprise XX%, the from for our guidance on than the our income of XX% XX.X%. margin, center GAAP business XXX%

income share fourth middle $X.XX. per year-over-year, our the diluted the $X.XX, quarter, of exceeding diluted share point income guidance. XX% was GAAP per For Non-GAAP up was

our turning flow. Now balance to and sheet cash

During returned investing to capital with XX flow the revenue We was from pleased in growth. million. our quarter, million cash cash shareholders dividends. cash to I'm flow support generation $XXX working through while strong significantly operations strong

cash debt was and end As our of $X.X cash fourth quarter, and of the $XXX the billion. million, equivalents fiscal our were long-term

was ratio net Our X.X gross debt-to-EBITDA times debt-to-EBITDA was ratio and X.X times.

ratio due this this of step-up at of on next of We We inventory million. purchase was our the Inventory we the debt-to-EBITDA time the is end million second which quarters. over balance of track quarter accounting. amortizing Innovium, share two from price repurchase. at by $XXX end to $XX to targeted anticipate quarter fiscal the XXXX, fourth expect two are restart we are to times confident achieve gross the that of

also forecasting. process our accelerated line significantly have support the inventory We top growth are growth executed growth. faster rapid well, team exceptionally we In earnings summary, revenue increased to delivering working expansion strong Marvell the than in revenue and

our fiscal fourth XXXX. Turning for of quarter to the guidance

revenue We to $X.XXX are plus or forecasting billion, of X%. in range the be minus

We expect to approximately We our operating the will project our be to $XXX expenses XX.X%. to our margin margin in $XXX be to We XX% GAAP XX%. in of the project GAAP the gross our of XX.X% million of gross anticipate in We million. range expenses non-GAAP million. will be range operating $XXX be non-GAAP to range

tax of X%. For we the non-GAAP expect rate quarter, first

our expect shares outstanding And average average XXX be share weighted We diluted weighted million. basic will be million. XXX outstanding our will

a low result, the of earnings on the As anticipate per per GAAP we range loss diluted end income end. in of $X.XX share of to an the high per on $X.XX share share a

non-GAAP expect We the please open in diluted line range Operator, instructions. $X.XX income Q&A of Thank to $X.XX. share and you. the per announce

Operator

In Instructions] begin and now will restrict of time, one [Operator answer We only. question the interest please the question yourself session. to

time, questions, have queue. If the pause our you additional roster. momentarily rejoin to please At assemble we’ll this

Our from Arcuri UBS. Timothy with comes first question

now may go ahead. You

Timothy Arcuri

like more seems ahead I'm Thanks year. if us look you're you than on it grow fiscal your And could you that. fiscal wondering a can of than also, seems to XX% lot. XXXX, Matt, do better you this to and then you But update like plan, know going it growth you're I said XXXX as forecast.

for had can because that, -- you the then that somewhere fiscal getting well, range on any fiscal XXXX, guidance delinquencies. also, I supply. you little Now include like more XXXX think in maybe didn't grow work hinted it And seems a also you're in

sounds possibly, Thanks. you higher, like confident maybe you of can and XX% quite those. on that I'm bit year It grow in you'd this XXXX? kind than even us fiscal XX% wondering, just more can So incrementally be update if a

Matt Murphy

that Tim. ahead to the happy now, of our yes, Thanks we're Great, And, for Yes. answer, question. just plan QX. right outlook based on for very strong

Second, continue get to we supply. more do

as saw quarter You is fourth that in as very outlook, in first our well quarter, which positive. our

And order when XXXX, give very which feeling very, continues new you We the of outlook quarter, to -- think beyond. a course, XXXX our strong. good. had confidence to in fourth well, and of momentum look lot be then, also strong I us in out us wins, our design have very bookings as

results I outlook, well really So, got, very we're plus we're plus tracking pleased the with think across and the view. our long-term we've the board

Timothy Arcuri

I can was sneak quick Matt, one? wondering in I if a second you--

Matt Murphy

Sure.

Timothy Arcuri

big size up across segments, Thanks. different Can just custom aggregate revenue of but in and maybe sort a sort give know ASIC the Thanks. add today? reported can us the sense custom is how it you of I you all for business? ASIC it's of

Matt Murphy

that Yes. have you kind gotten line, to We've Tim, interesting the precisely just and the And and you this over think it's on offer. hard investors of range the actually off refresh because we of customization, years. an this this is about to question. on when really define business products a models

of business case But of our cloud either to For it and from for lot then or with and hyperscalers we IP example, up the SKUs the our Avera. world. derivatives an That candidly, sense merchant we offerings, in and want. a the our we even doing customers take in we IP business that would have work as work optimized up special customer's be we work And that in telecom what a with something full put have end custom large of traditional together. XG ASIC semi-custom an the picked example, where or also do

even market it's we it's So, an I'd say absolute way I say It's something What exactly is trend. quantify that moving. would internally. not generally, the is can the

in advantage But hot positioned is as key and to the the I probably say. with to as automotive intellectual of market think take what and business a moving it's set able best much that's hyperscale is flexibility how rich not way this cloud, as anyway, your we XG. also I business think Tim, a us model. it. have the that's our model as You flexible future, customers. company well as going differentiator It's be And for have to in for for in It's for and I the a we're to It's well. be And property engage trend. call your just enterprise of can then you the

Timothy Arcuri

Matt. Okay you. Thank

Matt Murphy

Thanks Tim.

Operator

with comes Securities. America from next Arya Bank Our of question Vivek

You may now go ahead.

Vivek Arya

market, Thanks question. customers constrained, so backlog not are and Matt, for ensuring supply you given stocking are up are taking And seems what just and well of even product? you positive. wisdom demand enterprise and the conditions suggest, be that the making the that to to sure above my conventional history seem which related quality is how incrementally and strength the more be in would but to

on thoughts and just sustainability the of strength quality overall just enterprise? in So, demand

Matt Murphy

Sure, Vivek. Yes, this the is this supply but were of something we've been paying in demand extremely as close the attention fourth through the going onset and to, at imbalance not just quarter, even we pandemic. really

We very have internal a rigorous review process.

good products to content XG be kinds in that, data with of, terms number as a very ship we about, base calculate And what are of to to servers -- are our things all, on which have that how example. gave have everything from Same shipping. We those. would deployments. which end enterprise, relates carriers can it good et attaching stations we of We many the then We how very many then deploying, market to the is cloud data that know cetera.

end So at. that we we have an look focus market

where we what because of handful major focused we they're insight Vivek, company, we We We are backlog conditions a go place the have non-cancelable And firm. engagement rigorous, guess, very into what our deep put very very are. nature with. actually very a and limited. do that have customers, of with is the those also model good of on doing we do, what that, given also system-level I orders. needs a -- the top Reschedules have accounts we're in On we've

we then we what would backlog finally, And has and that to the of of a as the closer. around schedule say, prioritize And so leaders that sure And OEMs process chip brought, through we've I'd leaders want. even then actually this the bookings, make get the the industry I it's we and people gone that. crisis say

so And way interactions way we another customers the of major triangulate. level that the to CEO our my is all

various of enterprise They've more security this here things relates the migrated as area. also as inside it also of We've there. ASP just enterprise, per growth is of and infrastructure Ethernet. most significant candidly As that multi-gigabit of have the these content We've like MACsec. combination on to been port to and electronics things a like gain there's added an -- focused pieces example

through business and and if at enterprise you portfolio So PHY, offerings staying and by have share gained switch a also business our staying in competitive standpoint then that And from the on look market focused we refreshing up new we've technical traditional Marvell market. silicon like custom I product were if year-over-year, where look sharply mean, custom basically, that you areas ramping, in area, our XXXX. it's very ago fiscal a at enterprise, which we year in that in is dramatically and ramping

people too. have and So two the layering as mean, And real, the Marvell in. Things work. back changed through at bring there's other last just major companies, are if years. trends a you lot what to I you look at over we even go

an upgrade also there's that's spend companies so to cycle enterprise And as modernize their in infrastructure. kicking

of already achieving. we're those grow numbers base in excited continuing it's that things. The are off XXXX So combination beyond terms think we this to a and higher this revenue of that, and by the of I growth. in business We're fiscal see of dramatic

Vivek Arya

Matt. Thanks

Matt Murphy

Yeah.

Operator

next comes John Pitzer Our question with from Suisse. Credit

go now may ahead. You

John Pitzer

the Good Yeah. talking margins your chain. ability of assuming to about little gross you Thanks is bit margins, cost that to a gross in about talked Clearly, strong is, on if business, gross more as of lower, custom how But pretty things better some silicon pass side margin since are both you be kind seeing line. cyclically guys A high. I'm afternoon of input done how on crux supply ask could restructuring margins increases guys. overall kind secularly. custom on just minutes model. gross given on question was margins silicon me that congratulations neutral of Matt, But wondering ever you're could you the your solid I highlight, business my that ARM and talked a a the margins results. the job for when customer a spend -- to op of the letting about reset you bar, the that few on server question. you've lot real

custom is thought? you So you guess getting these my into that as are the I engagements, than perhaps you're question really profitability better finding is out originally

Matt Murphy

part, John, And gross a by set We're the Yes. Thanks, gross XX.X% questions. driven certainly, in this a the company. durable past were performance of record the to large margin solid margin very results, have of pleased the quarter. for

XX% all mid. to we gross went be our margins to the also We of to Then range in range, at the model. is, long-term high-end way the the it, XX% guided up which call

input kinds teams all engineering what with silicon. when the and the invest -- the a in about I On back ultimately increases We're started business. your already the all, range us they faced, is volume allows of they've in cost gross products start to despite into think cloud of us quality maintain and ramping of in of ramping, high well, and our question our custom that first the optimized quality happens to some right? of these enabling what's So challenges margin and products deep

any own of segment obviously If you would look within at our our our majority be data Cloud than The of center revenue, other is cloud. data larger segments. on that its biggest center. it's

ones, from there's of our and were of chart be businesses. highest data and already to market. our center by you growth And highest are if two had great you two gross recall, actually Jean remember contribution. those end happen that And the Day, if automotive So also Investor margins a our

so this growing might that's think op even lower margin, deal So that Inphi product are slightly to that individual products We're we that fast. already business than able an to example, and less from margin, faster. like look, if or gross but also gross even be you I will, average as with there be because large it's higher the anything are margin higher so honest, margin are here an gross have growing growing -- is and

model a put we we've think can I the actually of long-term to aggressive that's high-volume can John. together that and model So do have. grow the still especially rich we I compute. our be beauty to business And and this testament maintain mix sockets, products think company's model, margins, We on the We of in target large, the which could take business. is

John Pitzer

Thank Helpful. you.

Matt Murphy

Yes.

Operator

C.J. next Evercore. from comes question Our Muse with

go now ahead. may You

C.J. Muse

beyond afternoon. good products new are the ramping talked you number year about and new taking Matt, the on this well Thanks as wins. question. for that design call, as of Yes, a

curious, question. two-part So

that those think First, you for both including include coming $X.X billion design originally as -- the you you when those beyond? are are is highlight one, wins most model, both about relevant And the these kind then way XXXX you there fiscal or of the fiscal or you rank kind order of or XXXX? of into think three into a and model guided did to of the two, to

Matt Murphy

and the things of relates it about. Sure. CJ, as couple side I think think to win I design a to Yes, think products, new

all, my of I I've remarks First give in as said to -- just a want and shout-out.

achievement. business significant process We a design the applications absolutely of Our out park step-up year went kind They job. a numbers. to it just our great on in knocked was our sales team wins. of It final and did review field through units the this

as respect in, us. some the -- we of mentioned, as front and layer XXXX. that XXXX in to of got, will ever Our with opportunities we've funnel they as The in incremental do fiscal them is large wins

you win typically also in revenue the the start on planned that's typically, to looking million, that's the it's not to bit this a year. of going $XXX new product, and start Some got million. existing in really year. half may $XXX to a feed also a ramping earlier. But That's of little going the second we've fiscal new them But when remember, get design good,

we specifically, sort and lot So from this area that I you think the to the already to about really fiscal very in see perspective, cloud of ones incremental just say, would But same -- are of it at the are capture getting, the a time, a that just wouldn't XXXX won lot a we XXXX. tracking is, well. year. keep additive the wins not I the think it way There's timing

C.J. Muse

Thank you.

Matt Murphy

Yeah.

Operator

with Our question next from comes Curtis Blayne Barclays.

now go may ahead. You

Blayne Curtis

to A benefit good people last kind down. costs. one follow was that of in lot margins just thing John's and saw future first margins. Thanks a come Hey, wafer on taking question. superseded afternoon. I up for of pricing your question on we want the month, my quarter And earnings, saw

kind that in I and build saw level just a then about curious, off I'm companies of other same of dynamic earnings. of gross to can make So that And of you just, margin. wanted sure kind the this talk if the strength that through kind is wasn't you lot it a of

Jean Hu

for question. Hi, the Blayne. Thanks

chain tight I we very supply think, environment. been in have a

price dealing for increase time long have the So with the chain increase, now. on side cost we a supply been

with increase team the our just the work thing. really closely customers and try cost whole will and us, offset the suppliers during to For

have product We cycle. very a long

ahead. can we plan So

earlier. gross Our end about driven by that mix margin primarily market Matt the talked is

look and gross also strong, Enterprise the market pleased the are trend guidance, but the margin margin, because very with QX, growing data is you growing market, really this fast. center to fast, at continue up. are really Automotive, largely If they is QX gross very end we

that look So really at our overall, drive mix, you margin. if our gross

situation of rest similar It given be will largely any the quarter. depends the year, the mix. in For it on the

Blayne Curtis

Jean. Thanks,

Operator

Our with Joe Stanley. from Morgan comes next question Moore

go You ahead. may now

Joe Moore

Great. Thank supply-demand a could touch bit you if wonder you. situation the I little more. on

of of You can rising, of are product a tell, times Any the you waiting progress any but there down? of other cases, bottleneck lot your are you for supply. are you still getting kind arrive? lead said kind product to in still more is or And of is kind your on delinquencies chips constraint, possibility getting to these

Matt Murphy

that quarter. backlog. was the companies quarter also It fourth -- calling old in at this it like look And We But this question. rise shocking say, in point it cycle. Yes. be doing will time delinquency. gap been I raised thought in has But, supply between our the actually it yes, great number -- quarter. long in Hey, we which It's at would me. rise some grown. and this and And call I Joe, is unfulfilled the you've school, each never a we demand to the continues first to rose

is demand So, very strong.

Now I within from to more -- position And and having up get business personally hard think and hats exceeding guide I'd of actually we you key both transformation units over we're to need. guidance the year. grind suppliers But supply -- We've relative even is with so we've last although -- what our our I with but Koopmans I yes, sequentially our quarter led a by to we're operations, the say, Chris suppliers our chain, and we're still our supply. engaging QX year-over-year. team getting the we supply And off very also dramatically, to and we're opportunity, see mean strong, moved -- our in engage our and myself understanding think, the down that been big chain. last has more

to -- us. they Joe. not We've our I very we close. to opportunity, continue It's long. is, very wasn't be prioritize, major we all in involved understand managed it pole with personally I'm if So, And helping or think, which tent just accounts. for were, the I'm the long the

to making designed gets now, of So, well, the to with the to secular not we've cycle market inventory, in. creating exposure in. to market team we in tight up But for think know say of the right a have been We very be dynamics. the those end it it more I just the growth given customers the of barely that, I anybody with with But think we'll don't haven't is final us right a supply and that I on and our strength as think pressure demand, to terms get us need continue cycle continue we're managing and we're -- tactical we'll customers. satisfying in the it we're seen I we're ramp able would through we that's the top And is on Marvell, short-term and closely at happen. but have, to continue very best it we're doing our we to given our but -- building thing down that of And we I customers even unprecedented do even duration. manage And stay to match it's make to our least have sort sure ahead it think make job, great this I and and challenge. share, increased line we have the drivers work

Joe Moore

Thank you very much.

Matt Murphy

Yes.

Operator

Svanberg Our from question next Tore with Stifel. comes

You may go now ahead.

Tore Svanberg

your me it's I about your cloud, Matt, enterprise and -- least record Thank think custom more But you you big be bit on business much the quarter from what with you custom Yes. said this think is I half companies. is congratulations and pretty a working mean, little enterprise the highlight and at like bigger a a I results. than to you if elaborate look probably obvious of enterprise group a perhaps actually are that? you companies. just handful Could on a dozen companies? on side, of going carrier

Matt Murphy

people will, custom stations. said, people our a I everything, make like Well, ultimately, or do can somebody then on sell -- starting in and base folks the a different X-nanometer. offload had as a in And a competitive things optimization, of to diversity table. in then lot do that Tore, kind the solution going with. including even design, the full we've model. certainly one the set our as full custom then advantage processing enterprise. than of else the the it in maybe of afford business product the interesting and They a in Actually, really the engaged the whether applications to a And we of going a customers core a being the all little it, design in manifest reality X-nanometer. enterprise if that That one that's without to That's to a same on most we even think The there's compute themselves there's this card DPU is lot And having do especially the call is opportunity maybe OEMs you puts very or market. though high-performance of want the It's a as want multiple bit it's Tore, chip of our is of of we that market narrower together, yeah, do OCTEON broader is subset. XX acceleration we're they attractive, trends fashion. very to competitive things, let's ability IP. customize in, a but bring want DPU well, capability In to latest OCTEON to lot enterprise. finally, capability, hyperscale are now, looking And -- in X-nanometer an are our our

pipeline broader, So because the with these corporate there, the enterprise we Investor than of -- of have profile in custom revenue. on going set yeah, we Tore. showed is products pleased is. And the gross time. really uplift comment, we're with Jean pleased also business opportunities back the anyway, your much last we're But obviously, to long enterprise, this had and but average it's at Day, where about And in a the margin Marvell profitability overall before, the

example, -- set set of gross in. other are long that So very can get Ethernet-based sockets. you and are the customers, margins, I designs of pull very product pull-through in as cycles broad once mean designed healthy an there able applications life broad to five. through sticky And very we're you

a there's enterprise. So in things lot great going of on

Tore Svanberg

you Thank Matt.

Matt Murphy

Yeah.

Operator

next Our Nikko Securities. with Pajjuri Srini comes question SMBC from

ahead. may now go You

Srini Pajjuri

Matt. question the on Hi, Thank you. A cycle. XXXZR

we QX, something you know the said are early that you more to in I in very high be revenue is days but also even guess, grow interesting said cycle. I higher going going -- be this previous to it's going to in the it's said, peak. You very, than

big the driving just that if be would be could is going think XXXZR, think you could I versus into some how about you perspective, strength? that And put if you SAM also, previous, helpful. talk guess, that very I So what's the to

Matt Murphy

Inphi, we XXX we is have is which when including was now the peak, XXX-gig gig. which developed original And clarify, COLORZ talk and X, products, sure. which just Yeah, right, the about by to COLORZ, I'm

was its So then COLORZ, peak, Inphi run and about million Marvell. $XXX for of, into when it -- at rate was, sort as

a start really DCI then have and X DCI customers. The one in In what at it's it's past, the grow will, we're it contribution, In XXXZR, And our is this hyperscale customer, peak now multiple there. working in be is by COLORZ, a it's and on but that revenue waiting on peak are revenue. total COLORZ customers that there revenues at a that for, was and driven was line, the been almost here, from to of so QX DCI the that with. a products. product contribution, XXX you -- We'll gig, going saying it's QX. if transition now of And to multiple ramp And we've all exciting very engagement. like contributing semi-custom the that revenue we're is

Srini Pajjuri

Thank it. Got you.

Matt Murphy

Yes.

Operator

from question with comes JPMorgan. Harlan Sur next Our

You may now ahead. go

Harlan Sur

million the win on congratulations afternoon in strong results your and cloud some Good and pipeline, DIY fiscal target design execution. $XXX ASIC and On XXXX. of your optimized

ASIC XXXX, sense design I phase XXXX. types think, surplus developing deep of and next-generation are on of And Is so cloud just color us important, AI learning your Matt, primarily Is already for X-nanometers, you're engage their you starting then Is for be this to fiscal that is of for programs any customers? DPUs, customers would the it it on custom guys just in your CPUs, cloud cetera? as team said doubling chips that then you're give programs? now fiscal machine video on the transcode? you that with on point et you in X-nanometer great. the guys early can at acceleration? And track these a it many products

Matt Murphy

the networking of with are things -- and very types you doing we've that this. customization we're these video. And of a understand as it's well. that said you're pipeline segment that of and the it's the question. There's for all custom while. like great saying of of DPUs, going the There mean or by if we've with applications think I be you a security sort on for what this ASICs a is It There – could it's in it won acceleration There's Think primarily. that way, customized. as are of like say, some compute. will. be storage. then opportunity pursuing, we things I as SmartNIC we're -- at It's lot sensitivities Well, it much Yes. for to we been the and look I would discussing. have hyperscalers. between you could quite And pretty those respect well the that engagement

Harlan. -- So the in one way, no view, numbers. trick a There's well. in and pony gave gave it's range, very here sort a we of all wide when And we they're tracking by those extremely judged aggregate,

but layer top but incremental obviously on we've are gave customers' maybe which baseline. forecasts now of we higher designs, obviously, So actually But of that's -- won not that. our than what sort you, would our

precise bit a to announcement it's So I without all little at tough. super a ability point customer positive, get be but would think this our

Harlan Sur

-- you early engaged you And already X-nanometer? are on guys guys

Matt Murphy

Yes.

yes. Sorry,

in I be that So part of we've rich mean winning engaged on very key actually very in deep markets, architecture X-nanometer is we're -- XG products the now enterprise and in multiple a we're on end to portfolio platform. IP way, to from multiple been And by very Harlan. having discussion why cloud about X-nanometer using that's X-nanometer underway. our committed, X-nanometer, honest, to

the and quite nanometer road train, we're we're and well So are we're customers excited. executing committed on and on our map fully

Harlan Sur

momentum. Strong Matt. Yes. Thanks,

Matt Murphy

you, Thank Yes. Harlan.

Operator

comes question Christopher next Our from Susquehanna. Rolland with

You may ahead. go now

Christopher Rolland

also I Thanks question. echo congrats. want for the my to

here? to for to comes guess ultimately, in -- a what's market? this share? Thanks. And when could on it guys Basically, mentioned or How my product opportunity you AEC. DSP majority position questions big this the are, I think a do are AEC here, You timing be you take Matt. market new

Matt Murphy

traditionally, you was this prepared or I -- of about technology. least -- where excited said been last pretty generation based needed type in transition in We're of remarks. NRZ on at and active Yes. this that as was hasn't it my Chris, the market, the But some cable needed this

we, a So and Inphi. market XXX little intercepted and XXX and take at We X-nanometers. say the PAMX-based it's bit did with growth as we technology I'd -- like us to in about off in meaning,

is then for of optimizing got, in what already products think -- of as but our this this leveraging the terms the just right So wheelhouse we've application. in specific

some We've done and -- we've done of partners announcements. them. a Our whole flurry

They're around be of cables with We're You've -- the to the directly road But with the customers sampling available. cable them manufacturers enhancements reckoned engaged probably are map. seen to now. cloud up. on additional But OFC to customers working we are those be Are the we're all major that hyperscalers. force going pieces, market. And coming sort to hang ASICs that a supply a to the -- will, then with all these around fit when having into the if the having you AEC also because in now having the it's and this for having think of and perfect insight things us, the products, having in DPUs sort all the about that switch, interface. optics, you

full We solution. And don't of with exactly maybe one have companies the only piece puzzle optimize to really that a happening. our that see to unique that's work have the something quite what's customers opportunity

This are So for you who opportunity very to, this. talk size, $X depending it's incremental about an billion-plus. Market us. excited some is saying on

for it in We're but -- we'll sizing see. the we're but that we still We're I it's us. think opportunity today. for optimistic big a what think means market Marvell,

Christopher Rolland

Exciting. Thanks, Matt.

Matt Murphy

Yes.

Operator

Fargo Wells with Gary from Our Securities. next Mobley question comes

ahead. go You now may

Gary Mobley

and quantifiable Thanks everyone. question. commitments to yet. with XX-K sneaking that's I you purchase your your that, in notable Hi, specifically, well, foundry anything my called But CNRs filed purchase know to behalf with and relates to there commitments as with is your for customers? as then it respect haven't they're your partners, on respect

Jean Hu

know, Hi, last the longer have we are Gary, far XX-K ensure only $X year have for yet. we engaging quarter and about end, suppliers capacity not commitment But year, the not billion Yes, as we this have filed with purchase this as agreement, you for our as to Jean. we is next term.

is ago, million. just So year as you probably this noticed, $XXX a

have So our increased we commitment significantly.

make You're of because really we customers. same going support forward, focus our trend driving to company is the see going to have the to capacity the that's the sure

Matt Murphy

are line. relate can as the of the on some follow And the -- even directly questions to we our that optimized had need you you about engagements out talked We're various ramps indicated, can Jean with supply now, about XXXX fiscal other The key prior we cloud Gary, the capacity I kind would to we and that planning of technologies respect pieces chain. the trend add, as actually of some them XXXX. and substrates required, critical business of in beyond our

the see So, be very chain these both continue meet make our our then you'll key that as business that plan we all actually ramps sure lockstep product in multiple end trend to to required next are very, our and few going we're OEMs steep years. partners supply over with to

Gary Mobley

you, Thank Matt.

Matt Murphy

Thank you, Gary.

Operator

Our Ramsay Matt next with question comes Cowen. from

ahead. go now may You

Matt Ramsay

see spending pent-up you big that are space And the customers, your data you're given Intel, over as spending lack the guys of next Thank in see Do you sort clarity? things such your of you held center it you characterize to on. from a pretty important to you me you maybe as a today? -- Thanks. are months very in has in that how of that Sapphire My of spending a guys and XXX-gig -- next things an observation an letting optics the year much quick Intel's or of on about data upgrade from coming with with the road really I I business. given engage map question that? wonder other with do XX part me in cloud PAMX back things ask wonder with is wanted for how environment lot to I some the own AMD, two the hyperscale a with have just space. General cycle center Matt, inflection is agree bunch would

Matt Murphy

Matt, Thanks, call. the and to Yes. welcome

we're think the here. that right I you're trends talking absolutely So, about on

start equation well, refreshes be trends. the fundamentally the going all what's but I that of through chips, the are the is you just I new the are think the underpinning itself, server that's then the And way, to clusters. sort going there's silicon the workloads, CapEx underpinning by going not all processor needed. then AI, as to cloud refreshes, the sort of and mean new architectures the of ultimately, different we and into that just kinds required, have as new GPU server of acceleration flow

it's just come that per cycles good position whether an there's per new as right, these much in design content in -- systems, PAMX the coming, one, Marvell. the we and name just our So, for center, on really new is new great are it. you example. server, the XXX-gig But the higher, architectures win inflection, And it's data opportunities

there's certain to way another that But roadmap from Marvell. think a of that kind for And suppliers here And so and yes, us. that's of that and and uplift is growth we're been happens, into transition And delays seeing to those I executed exciting lot there. some some gets projecting back of there's as that. as that the

Operator

our attending concludes for you session. This today's Thank presentation. question-and-answer

may disconnect. You now

Marvell Technology (MRVL) 3 Mar 222022 Q4 Earnings call transcript