MRVL - Earnings call transcript Q2 2023 | Marvell Technology, Inc.

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Operator

Good afternoon, and welcome to Marvell Technology's Fiscal Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr.

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

Ashish Saran

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

Joining Murphy, Jean me Matt and today and CEO; Marvell's Hu, President CFO. our are

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

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

Matt Murphy

high Ashish, achievement XX% rate X% markets data annualized new In billion, quarter infrastructure XX% collectively the and fiscal XXXX, of sequentially, grew X% for at exceeded on focused our revenue. XX% Revenue another a of $X from the billion, team significant a reaching end of growing good everyone. drove Revenue Thanks, of Marvell $X.XX total Marvell. record year-over-year second run level afternoon, an our sequentially. and four year-over-year revenue and

income rest the of on the statement. to Moving

$X.XX. was operating margin X.X% gross GAAP was EPS GAAP XX.X%, GAAP margin Our was and

XX% revenue. non-GAAP OpEx record much as non-GAAP share to faster our midpoint growth we operating $X.XX, earnings at above guidance. continue share management and helped than non-GAAP Our XX.X% hit margin our grew our per XX%, a Earnings was operating per of the year-over-year, drive to revenue drive leverage. gross new Disciplined of margin

for the me and Now demand update supply. brief provide on a outlook let

very of demand grow and and end our exception new is adoption successful for of target revenue healthy to continue The to products long-term market consumer enabled above the our significantly HDD, products demand our Marvell overall supply. our see We model. has with demand strong outpacing

at rate. our XXXX, years model would annualized Investor in for billion. October revenue a time revenue long-term $X.X revenue to Day reminder, at taken XX% a midpoint annualized target, updated that of target achieve it of XX% had growth in we last of the our us to run As from an run billion two At the rate to have $X range

very are full milestone our we to able that of this were We pleased cross this year a target. quarter, ahead

forward, long-term we look we confident consistent model growth with off this opportunity our are higher that base our target revenue. of As is even

of environment, strength our guidance the me choppy Let model supply. enabled end a achieve diversity second Despite turn supply the in to business overall markets revenue in quarter. to and us now our

more mix We our expect end influenced the revenue in term. will near continue supply be by than to market demand by

of technology additional for simple center very continue contrast, data supply end our market, nodes with high as our such to open starting remains see long for are certain pockets supply we to support in chain In manufacturing tight. cycle complexity times, our leading-edge the advanced products and packaging we growth, As and encouraged capacity some to technologies. secure on up long-term to package

team with partners growth. operations execute long-term support deeply to our our engage strategy to to Our continues

driven basis, strong significantly grew the cloud product market, XX%, revenue to very end year-over-year Let data multiple growing for with demand with growth the center continued business picture discussing revenue. was me overall this the center now second driver In faster. five data our On our our $XXX with broad-based We believe In remains in decline our lines move starting our growth cloud by on-premise the Ethernet sequential a on single for million. market our On on-premise end growth data the data centers year-on-year was quarter that was healthy. adapters. channel our from center. Marvell. data from a business, business contributing over biggest and to sequential decline The was offset business a cloud primarily basis, our markets, revenue flattening in long-term fiber results. the and represents

cloud a PCIe state-of-the-art switching SSD Flash Memory center data to X portfolio. number Ethernet including broad Flash this ML Marvell solution of Bravera growth data showcased including custom cloud-optimized and storage solutions earlier CXL. expect AI of many center an continue Bunch and exciting Summit Gen our storage from At and We areas, the electrooptics, our solutions, for month, controller,

our includes Events to you such demonstrated as the industry's broad devices, first memory ecosystem CXL. cloud new recall and related The CXL accelerators data our CXL that of the quarter, data and enable the is leading CXL industry a challenges and evolution Marvell solution, hottest last see next the cloud with as expansion SAM Marvell. our This scaling IP into products at increase memory we embed standing for the pooling CXL in will FMS products. host and to As discussion around and and big from of the a data expanders, booth, excitement at our topic This centers. room-only addressing to range potential switches us many participants. centers reach cooling opportunity center by validated presentations memory presentations multibillion-dollar we presents a FMS strongly

design in significant working While and is the we stages of envision opportunities a on still industry win key early closing us the strong pipeline. in customers are at right front of adoption, CXL

meet XXXX. our revenue supply fully to Due quarter to demand are center, our third of growth the of nature year-over-year, now of a by XX%, market. third complex sequential this In we on the Turning over challenges the market, driven impact in to we products end expecting end data for expect fiscal quarter to ability the cloud basis.

and third quarter digits customers sequentially on-premise to to cloud flat project expect basis. data Therefore, the market percentage decline the As in sequentially center we revenue revenue our market, result, the a on in mid-single decline. end revenue for in overall we to a be from

However, quarter we to center supply and sequential anticipating product in in a in basis, fourth our new on cloud. increase data ramps expect improvement the an revenue

to and year-over-year carrier performance from infrastructure our for strong Turning We quarter $XXX was benefited well-above our end XX% market, and end at revenue XX% forecast sequentially. both markets. a the from wireless wired our growing second million and

the the an important growth we million, rate continued have from business wireless to an crossing revenue thrilled to advance milestone. achieved annualized $XXX quarter, Our run second in With XG adoption. benefiting in are

an to and of such a for period India growth XG our launch with fashion. multiple expect extended to see regions meaningful in We yet XG business as Europe

further other are the large see to only We first year their in geographies as expect US, deployment. such in of growth which mainstream

base of to addition, content TIAs and the in next In we of customers. wired In generation stations have coherent front expected still in growth DSPs and saw our wired, stronger than us. accompanying drivers significant we shipments of

We portfolio. a and our carrier long demand in metro are electro-optics by seeing strong haul rapid coherent of markets, XXX-gig adoption driven

products. strong launch pleased with these the are of We

wireless to market. in driven grow, of market, deployments. we the fiscal ahead the XG our end end expect a XXXX growth wireless by expecting On primarily basis, carrier our by were sequential revenue year-on-year mid-XX% Looking to third range, continue we driven for to quarter revenue

second in very from growth wireless. sequential strong a However, than offset to wire revenue we more from quarter, expect decline a the after

market As percentage from overall result, in digits end basis. the sequentially revenue a a the project we carrier to mid-single decline on

guidance second for enterprise was to than the our end quarter our on supply. XX% revenue growing million, in networking market, Moving by and driven improvements XX% year-over-year sequentially, better $XXX

is Our strong in of a growth unique primarily cycles. our enterprise result product networking own

have second their and multi-gigabit platforms have growth an products the as refreshed dual we of we revenue the Ethernet share higher-value driven the growth where Our increase adoption started accelerated benefits our and such has as from switch PHY see our gains content, PHYs. ongoing quarter, in our In portfolio. of new by shipping customers

products in fiscal the this the from is networking new of strong Marvell. third benefited we also enterprise market networking, demand in for In products end our a market. custom continuation which XXXX, of a our from silicon a quarter end for growth for expect vector We enterprise ramp

should pockets heard up you demand. us seeing opening supply up, we to catch to enable to are begin which As earlier, of

revenue a enterprise sequentially. networking we grow from result, to are projecting approximately over XX% As and XX% year-over-year

industrial market. for automotive end quarter million, the growing Revenue and Turning $XX to year-over-year. second was our XX%

grow but Our continued industrial this auto sequentially, a impacted supply was business. by business offset to than more

tend X% lifetime OEMs from largest combined Marvell's the our in expanded a I a declined driven market business, list Year-over-year, continued end adoption in these new trajectory in At higher result, that their the would Ethernet wins wins auto which Last in with from quarter, I worldwide of OEMs are XX internal EVs of by wins As revenue prior highest substantially design and than hybrids. winning large along is their with many end larger engine we the an These Ethernet OEMs, content to increase grow, by combustion segments, wins. volume their simultaneously. number bandwidth. covering our growth discussed quarter-over-quarter. growing to revenue to its content doubling. in strong of higher of for driven more be models Ethernet auto overall points, and multi-platform need highlight technology with result, our connected in the revenue the auto coupled total. eight business, XX nature, As design Overall, continuing is

of fiscal XXXX, of are strong the in where by revenue XX% market. remain percentage year-over-year our we improvements on in for industrial and basis continuing growth to over project be a end all the third projecting Looking growth quarter supply. auto are automotive driven sequentially and products mid-teens to the to we grow We experiencing sequential the combined

year-over-year revenue second demand Results million, revenue our SSD in from and Consumer sequentially. to consumer In both year-over-year. the consumer grow as controllers market, HDD from HDD continue declining market on X% quarter products, end sequentially the guidance was weakened. second the $XXX X% to for contrast and below were our to quarter Moving

guiding be third the XX% consumer revenue to the offset closing, by On end revenue market quarter basis, decline year-over-year consumer partially market, approximately ahead softness sequentially. third in expect our fiscal forecasting business. are consumer and in we quarter. XXXX In SSD record flattish a end to the growth growth to are Looking demand, delivered in of we by continued we continued for from for for due HDD second to results quarter the our

strategy well Our and a on very portfolio strong deliver diversified as data is playing to infrastructure we focus continue to results. out

exposure EPS In drive to we at grow the headwinds business third leverage the grow by to the model at by companies year-over-year, we our facing. consumer-exposed that are XX% to limited and quarter, our range, XX% have now guidance the non-GAAP year-over-year. in of revenue midpoint the guiding of We to midpoint expect operating are

the on back new Looking forward, more we a on to are supply projecting our basis and of growth quarter accelerate the revenue ramps. in sequential product fourth

for As we last target the revenue, At full up that target note first fiscal of fiscal are we above I'm of now the pleased we range. very XXXX, which December. growth XX% had I'm towards XXXX revenue the in low revenue full high that running that XX% is established very we time, half year the wrap pleased for the with ahead to our well discussed target tracking annual trajectory with year growth well range.

and last in six the road tremendous our and years, increase M&A, transformed map we investments wins. the design to have driving data through pivoting infrastructure, company, Over strategic accelerating significantly organic technology a

markets. cloud, the XG, are and these of growth, seeing expansion efforts and operating and increased critical end margin We our revenue to exposure auto now the benefits

As we we prospects. look and next are despite concerns, semiconductor fiscal about at optimistic our year, economic cycle

last to have expect we which favorable significant exposure end of discussed in a quarters. contributions market benefit product the revenue several Marvell-specific our detail We number and over cycles, from from

excited Directors. serves to hand to at Corporate we Jean, join Chief Earlier and Board talent off in update extensive as Vice I compliance, Legal leader ethics our Secretary of to her. our Automation, looking security of in Global week, Marvell I'm have areas announced Industrial let group the forward of and currently affairs, strong provide on management, the Rebecca of and President, Senior and Automation background with I Before this Rockwell People Board and addition with me and directors an ESG. for her selected She Becky the XX,XXX Officer public legal, to was House working She employees am worldwide. already sustainability.

future of report sustainability ESG website announce goals. the review Finally, about I'm report. and encourage Marvell's our call I'll to detail to publication the you to I with inaugural more over that, to on turn learn our recent our the Jean more results for outlook. And and performance on pleased

Jean Hu

Non-GAAP $XXX below second acquired consolidated second the margin billion, a $XX million the an the million, $XXX amortization fiscal million, Revenue with largest revenue, was X%. by assets year-over-year. to XX% XX.X%. compensation due costs. operating Enterprise GAAP and gross of XXXX. profit midpoint of share-based results cost Matt, X% acquisition by charge new our the $XX year-over-year the XX% market, start XX% infrastructure Consumer industrial and other I'll was included design million, point legal at revenue. expenses were million, followed mix. to sequentially our year-over-year. current increased of of was disputes accounting the for GAAP $X.XXX XX% Thanks, with good our gross and added growing OpEx key revenue, won for quarter deliver XX% customers. financial guidance. with and XX% then below contractual segment center of slightly in was was total headcount networking marketable $XXX product of everyone. in and $XXX gross end million, Non-GAAP and attribute XX% for and quarter and our as review added quarter next afternoon, the of operating third we Data of of auto have middle $X provide divestiture-related expenses was margin of intangible were carrier million XX%, Non-GAAP increasing of we largest expenses

drive operating significantly operating million. was to strong growth. We to continue to revenue top grow line $XX less leverage OpEx than income GAAP

Marvel. and $XXX Our was non-GAAP non-GAAP year was for a profit by XX.X%, a record increasing operating XX% margin operating million, ago from

quarter, XX% diluted share by second $X.XX. per GAAP was was per share income $X.XX, year-over-year. diluted income the increasing Non-GAAP For

turning balance cash flow. Now to and our sheet

working support our quarter, investments line in we During the cash strong capital reflecting generated from $XXX growth. continued offset our million top operations, to by revenue earnings

a the few fiscal design $X.X quarters. looking $XXX that quarter to number start million very we in and to Purchase to in We increase billion. address a environment have a this of At was multiyear increased to our expect ramp next time period. demand with we -- will secure our of supply our to Consistent new high-volume in this shipping decline. chain with commitments The support start purchase to the number increased by chain by our ensure equivalents to for end from $XX approximately to as our of has commitment our of cash have DOI strategy cash cash wins We intend source significantly was smooth we years in a start inventory customers better longer-term supply last million of in tight majority few help business to long-term as the maintain Please materials term, total increased for higher a capacity $XXX of the and improvement, supply, our raw over second quarter, compared show commitment increased expect scale. the million. the longer design the note, second a to and balance wins. the are

Our was total $X.X billion. debt

and two was share ratio cash debt-to-EBITDA million to million We million net ratio of in times. returned $XX Our debt-to-EBITDA shareholders was X.X repurchase. $XXX through and dividends times gross $XX

range plus turning or fiscal margin in the guidance, to our margin. of XX% the X.XX%. in million in Non-GAAP range to we $XXX point of the the minus the of will of $XXX we to expect of of deliver million will or be expenses XX% quarter gross Now, plus GAAP million. following; plus expenses the $X.XX to XXXX, At or will gross Non-GAAP will GAAP for non-GAAP middle range billion, of our be operating will in minus margin third million. operating in $XXX XX.X%, guidance be minus X%. the operating $XXX be to range revenue be range X.X%. expect the

XX% make toward will our income approximately interest to to expense, target significant and continue progress operating million. Other expense, long-term We XX% of be including $XX margin. non-GAAP

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

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

a $X.XX. earnings GAAP to per range in As the $X.XX we expect share result, of

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

Operator

Thank you.

the begin Sachs. Instructions] Goldman first Hari question question-and-answer now session. Toshiya Please will [Operator of Our go ahead. We from comes

Toshiya Hari

Hi to I question. on the taking good XXXX. afternoon. a or Matt, calendar wanted so question thanks much fiscal ask XXXX

idiosyncratic to wafers comments to the or top of fiscal of thinking pertains the the brief about third are growth drivers Is that still helpful. you Any be some it line Do how XXXX? you'll top or us with, shipping you'll you about as has that And is hoping about past. on the by where start as fair you're growing think question, to gave part substrates? You too into could I my the Marvell some fiscal a I by to remind talked big consensus today of that supply so perhaps be you you've be or three equation. XXXX, demand Street side is look consensus out low? high, it in drivers too constrained, much. the was be XX%. Thanks comments whether would number think off that And you

Matt Murphy

we'll No Yeah. the And Thanks, ahead questions here. problem. do Toshi. of and trifecta go

So things I'll out, course, there of next specific a number growth cover you we're drivers, excited first well. which for of three on as as on year, them. there's the about. are of Marvell going And point one, other very then,

of couple we've year the area. cloud number quarters of following year on of then and $XXX that's at extremely sized of all this haven't number you optimized for three our new it wins million then even the year ramp. few still So three call the silicon last of achieved cloud revenue design and the the that after. And that What a in talked for million over in been one those about years next $XXX is we last well. biggest tracking incremental buckets is and the And it optimized we about silicon

line nature, We sight the on of diverse in those have programs. by way. good quite They're

all and number that going there's them have ramp are that's tracking of to So a to well.

The second which and incremental wireless, Marvell we even well. XG as out year. that, of have performance absolutely And in business and next of continue really, and coming is, adoption current gains the another our you again, quarter, to will content most specific XG top of more in saw on is SAM expansion the is strong

And it's our this very breadth well year. automotive electric front year-on-year on vehicles. as on back well in Toshiya, which doubling virtually And across almost for the over car the So a Ethernet. all few That also again, of proliferating a both basis, as go been wins, business, design us. emerging the that's third, outlook OEMs as is And strong in last the companies. well all also of way, has really as vehicles then ICE about in on next if general, the has quarters. is major top by as based the have This automotive we the you next-generation

good I So to are about. buckets those think think, three,

the to and will need thought then the When on to and follow-up we begin whether components with plan the process loosening which side, the billion to on the away we're advanced times, as required, carefully. the our of prepared long which will end those take we're On in that I types be we currently, think supply, at of discussions the our biggest the where just us, you technology if we ramp remarks, we feel dealing of final very those some you cycle substrates, went manage They leading we're back broader about on line programs revenue respect of good of be we were we very my thing edge advanced some as with, level, focus highest in part nature actually line said constraint I -- when we to QX. and But Analyst we are appropriately. technology products that's complex of have the about think node as having Day need, is with really sight have in to are of next rate. at XXXX, and plan supply at the you of these some and chain year, customers outlook next benefit the speak. able what run in I packaging the you look And seeing to some of to manufacturing on to up back our year, ahead $X the is annualized we're believe

Now back above thought like year to current end we of last looks year. at would the where it it's our be be going

positive. even all rate. that's do we model forward, revenue run off And long-term target So as achievable higher being we look the this see

So very add and comment. look you XXXX you that's more fiscal feel certainly, today, we we year. where of drivers or at our But XXXX about a are calendar good Thanks. next long-term if up growth

Toshiya Hari

much. so Thanks

Operator

question next Evercore. Muse from from C.J. comes The Please, ahead go

C.J. Muse

that Yes, is guess, otherwise, caught you particularly that. would around I relates love that kind a sequential Thank flat. or of than a hear constraint I October surprise, surprised less seems guide. light. center, a X% bit around to I your is by thoughts little question supply cloud for growth good the you only I'm the And data afternoon. question. as tracking to taking quarter guess, it that

Matt Murphy

couple prepared some this of C.J. a things. remarks. of Yes, Yes, I no problem, in One said is, the

by on side, like end through and in battled been the we've this supply quite companies market. when a year, what supply of lumpy comes in lot it's As other of the terms

an forecast able on the exactly, quarter, we how quarters, last even so, And much deliver. perfectly not can we're few average over to

We made perspective, step this Now that a constrained progress. we last great lot just for center said, a of up had We QX huge our in starting in were year. year. of data

we final like both little the slightly sort basis. the up the at of see Our on we've And on has frame. basis, that a a time that be, again, a sequential our fire. and year-over-year increased point sequentially QX something cloud in from on up quarter, step was would through believe, fourth absolutely -- And been maybe level, QX, held with XX% bit I then

surprised it say wouldn't I So necessarily us.

think -- us and it. doing going the do The has cloud known I better this this these we've at for this But quarter, we're and business how is programs, this point, to try best. way. our been would a timing extremely our want it's of issue, sure supply they operations to strong more ramp I to to overall our healthy. and team need all and say, for customers make Marvell, over ramp. see is we're we meet it But to at obviously we what by and for when remains try

C.J. Muse

you. Thank

Matt Murphy

Yes.

Operator

question ahead. The is Seymore Deutsche from next Ross from Please, Bank. go

Ross Seymore

I Hi. frankly, that the the side downs, and is you question. but me it about grow. lumpy, you that where an letting answers blend second side. idiosyncratic, the asked, was the ask Thanks cloud the know have already a a and expect Matt, driver do year. I together, optimized ups question to answered should part question talk and is to to first cloud idiosyncratic I how it's good the for for previous you But to next be want that,

deliver guess think that and the net it risk $XXX do or grow the of $XXX that very more supply it's over will even and next year macro a I you there to So the choppy and/or those see million stays lumpy, customer-specific do you of to customized then after another in allow million numbers environment? aspect year those the businesses all is,

Matt Murphy

of is just together, the together this our North we've but Marvell it, just overall a management put I model with business since view. right, level answer I'll Yes. give been it's transformation. great been the and has go since and frame model this the team question and before where if that to just Star, and your it higher strategy Sure, diversification and Ross joined and offering obviously, we've Maybe product breadth cloud-specific, a I one driven put I And the technology company has financial question.

even infrastructure, time here. around at example, doing of then can how short I but this time while when our be be very quarter there way by to you because business extremely think we've And it's resilient to accelerating. you Marvell. business the well, constraints are actually enterprise and diversification our automotive, of in like, QX next by look our out you all term the architected got to from that’s model, And is So see So quarter, we've for may 'parts' of it long focused actually in taken and QX and the cloud data our it's that when our being design, lumpy model get time, proving look a up to of where

and So picture bigger the that's lumpiness. think we around about how it managing

both earnings year. actually XXX and in our including said And incremental was we've with I a XXXX. XXX XXX, we've it identified communications business might the to fiscal asterisk which XXXX investors, last subsequently, cloud, means revenue with talked fiscal prior little put by calls, to XXX-plus in the then Now that we've in won actually respect the more since calls, with XXX-plus then want about and being and XXX,

after. So next year year the and

kind programs. XXX-plus, a it So number of think of as of diversified across XXX-plus

ramp. So very about good the is bottom line that feel we

of than we sure require the I'm less them just sure, will very for I'm year, in ramp and And we're point. this planning very But years. just only of with solid this in my them, few will next planning. aggregate, judge when a those for even more did recently, Some we we're lot require key not of internally, in both at that a of a refresh terms than but outlook, planning looks customers of

Ross Seymore

Thank you.

Operator

go is Arcuri Please question with ahead. UBS. from next Timothy The

Timothy Arcuri

improve center. going about wanted to And year. supply the half quarter, I going think I Matt. the data the last that as fiscal you into lot, to a ask Thanks back expectation the to of were was also was see reacceleration some

be that maybe understand as sort cloud of data portion going you also enterprise XX% of the how going should up there? it's you I tell QX, up. the center that's it total business? Maybe ramping. into I'm supply, to portion that And But is billion then of us said wondering products would know I be total to XXs, can So easily be be $X.X double-digits you us will sounds Q-on-Q. is think X-nanometer be to is up more up But how I but up Q-on-Q, much much the and close to nearly it going help you what's fiscal high on business have with for a mean like center weak. revenue data

you help I wonder that. if Thanks. can with So

Matt Murphy

Sure. things. of Yes, a couple

the said part in data on of the our on we've that the larger the first what So cloud. -- total portion center, is is

XX-plus call number, disclosed but XX%, percent the we XX%. So it, it closer to exact haven't quite versus

on even grew So that's been the said much just enterprise than we of quarter the this prior faster the -- total why in the of year-on-year, and mix. that's because cloud

a little a business proxy enterprise from somewhat of market what bit a the are Now and enterprise channel for side, Ethernet sell I of center are that of products standpoint which that call the adapters, we fiber would great those on Marvell. legacy it's data reminder, into not type

that of pretty ahead. one lot growth about we've per So been a That this. doesn't have upfront se

to so said, of company -- QX. And expect revenue, really, QX, all off overall we as in we it's accelerate cloud. the been about the The

haven't pegged We the number.

at the high range you're XXs just produced, make we've take if But in already to range QX looks get on little the our two QX, back think and comment I a to we a look sense. you'll made and seems you you discussing guide take the we side. the that quarters to high

in and we more the story of how and primarily would is So we type it's half second that's is of supply. acceleration the out get -- we a the basis on on yeah, thought guess I than QX, QX do playing think bottom cloud I line

Timothy Arcuri

you. Thank Okay.

Operator

Please The next from go Barclays. is Blayne Curtis question with ahead.

Blayne Curtis

part for but HDDs two you thanks equation. my Hey, beginning, back the question. weak, the the said only of are down. thing and to the wanted thought demand in good to that I I were just you go afternoon, segments taking have consumer

maybe revisit just it just the like So sounds up that in like that enterprise areas even a supply. are bit,

mean on in So think I are the for outlook it center lumpy, have you I that lumping even if wanted down, is data demand just the you said is and timing businesses and revisit seen I that demand any broader but or downticks you could all side? supply

Matt Murphy

I that, enterprise lumpy at and on-prem, and it. we've terms do delivered more when has that in the how there, of your look we've think I Yeah. gotten side question particularly Blayne, the supply been think I the

second We had changes quarter to a seen little of in of supply lot first our demand we really se. per we're bit But more quarter, haven't and there than produce we able our a certainly, hoped.

cycle. So the it's to of talk we we customers, This to normal within kind bit versus going when range. like huge because up the all we're of out seen signals historically. we ordinary look what of it where anything the before back a there demand don't But were feels little this have

the our really think down. being mentioned the -- comment delivery around on demand than quantify consumer of But can was I down, more other it's is the lumpiness it's part you HDD We rather it's pronounced. it. supply

Blayne Curtis

Matt. Thanks

Matt Murphy

Yeah.

Operator

Matt go from is question ahead. Cowen. Ramsay next The Please with

Matt Ramsay

Yeah. Thank you maybe for very I just much. Good not don't afternoon. something know, change pace, a engage. of

Matt Murphy

can problem. go there, Matt, no You

Matt Ramsay

XX% that disaggregate fact, or you segment to in for Thanks. going wanted where specific is I year-over-year. the the on that's XX% be to driving you're about upside supply just almost that what's in and about could The Is there it, and cycles upside guiding maybe the big there, growth fastest-growing now? product that ask talk segment. able -- networking are or enterprise right to

Matt Murphy

have ago. our finally -- a why starting had been Yeah. This quarters us. of we're products. our Actually, second we -- in one delinquency, more where we of strong little a cover this Thanks. But and that say, of that's areas would on catch a I'll I been it's bit Yeah. out to to a up. of both pronounced we're demand called have couple combination we very then unique also, for

producing Matt, strong very combination in is only we as a think not I finished. obviously, guide out the it's of the a both, but just result, quarter which we guide, So QX also

adoption front And the and us, side, think sort area. it's So, here, a and that introductions for right showing PHY of on while, it's in we've about it's right? I and numbers those In one and PHY share actually product products switch our Marvell and is technology. talked up of I In enterprise in large OEMs, we've quite they're lot of was multi-gig driven mean, we you at uptick. consistent some rate line as seeing think a couple things, The can which the big than of rate. I new their sell of A lot X, with Ethernet wireless of class rate is wired trend commentary, solution. classic by to listen a we portfolio the some that WiFi together and point, going cases, two very faster enterprise our a had total the the part in the -- of had a success demand gains of

adoption. before. XX%. switch a driven as it per won okay? sort So, a of PHY up products XX%, And big it's customers you've that's port gained We've new the multiples on increased like new and ramping. was not content has you few last and got hitting, years And we've port pretty per XX%, the that's content, over where dramatically And multi-gig. the basis to of share. gone So, It's

way, consistent, a that, it's of So, story, that partnerships seeing supply then although by on that's started our top a few various lot own good it's quarters. the in we've been with suppliers. had area, our improvements we last finally pretty and the on in constraints this been struck based of And we the the accelerated

as of well. starting so caught And sort more we're that's benefit getting And here. to up finally

in bright was pleased we designs going but at that next won it, rate Matt, ASIC from one the or enterprise, the think to thinking incremental year, some area run even I also also It's which historically here. planning we business And but where is played. say, great we still have year outlook a Investor were we our I back enterprise. performance, of I certainly, were even higher all-in-all, So, out a I ago, much Day and a have than we're think a that ramped at or actually up, people obviously, think rate year. reaching starting new full final -- as not and are volume custom-silicon an not those run both we call let's would The on well, volume had production this

a new improvements. of lot I So, and good product stuff supply think

Matt Ramsay

detail all Matt. Thanks for the

Operator

next Wells The from Mobley from ahead. Gary Please go Fargo. question is

Gary Mobley

up the half question. foundry It on a up purchase you partners that are not then commitment to -- able purchase -- price do if freeing your future? foundry you Good years' on to And for mentioned to Jean, some in Thanks there your a anticipate that to pass wondering partners taking a revenue. you're we obligations or have that take might seems ticked I'm relationships. questions that maybe be believe well, had of obligations have as your afternoon of everybody. sequentially. may worth bit, of off? customers? And the of foundry risks with level about sits about capacity eventually in all my the being couple from XX% those see I you additional any I what given you that increases

Jean Hu

for thanks the Gary, question. Hey Yes.

First, commitment. on purchase long-term the

right, mentioned, focus data Matt As we on infrastructure.

a tend cycle products of Our have to our so long and soft. were products very product most

secure So, the based we suppliers the and and term. the with relationships strategic the we on capacity planning, the have can in design our to we ramp wins struck longer product business ensure

long-term seven even beyond at commitments look the those three, to or purchase five you like when years. are So the commitment, very two,

a we long-term to really great what need Our supply should purchase what a Typically, very and portion job as our done needs. team small overall only we analyze strike agreement. a it's has of

what committing. feel the comfortable or the actually ramp product analyzing customer the we are very So need, by we relationship and

month, seven year, it's and its beyond. actually small at it look you right, years each If spread into very

question feel pretty chain about On we cost, tight good environment. supply chain input second it's about very still supply that. your So

of to and believe generation complex going even we in challenges side. component next continue We face in year older to to are substrate wafer and some the continue

our working for sure suppliers been approach overall. imbalance, there's the our our really customers because we supply-demand increase cost of and make us, the So, with cost we if has share definitely to -- to increase input strategy and

So that's our current expectation.

Gary Mobley

Jean. Thanks,

Operator

question The Please, Sur Harlan ahead. JPMorgan. comes from with go next

Harlan Sur

afternoon. question. for Good Thanks my taking

the transition. of connectivity both the tailwind next if data four have great and titans XXX-gig On inside cycles year, I centers, top between still cloud one to into going optical hyperscale I that the that's PAMX the the really business, there's for been look this start at this believe And multi-year least is upgrade US team.

need You to still that China have CSPs fire.

You've I how like Historically, customers DR got But these is fire as environment. track continued transitions, multiple year? viewed think, this slowing that They're that's in revenues year? on well. upgrade is have a team customers strategic. Innovium on are cloud thinking this about don't macro think demand to impacted very by been I the drive on your going views for momentum $XXX million in these your upgrades relatedly, segment and just to next And as,

Matt Murphy

What of top which where, is AI a we a able we've Yes, area XXX happening in gig which to inside material, keep XXX could on and That on more be Hey. if new it, demand seen between that first part gig, terms I for in the workloads. -- obviously the in bit Thanks, the ramps in is, advanced extremely QX. it also, obviously, would gig terms center. well produce transition pretty in Harlan. got is the And DCI XXX little of data PAMX right data ways, strong constraint very on really think of the you we're an XXX ZR been then, and we centers. has add I'd up of being of seeing is around, some now shipping

So that's trend. also a positive

So on you've XXX and got pretty that way sort going the all to to gig, look up of the transition continues good.

data data -- total with DSPs our solution. track XX.X in we're talking of side, switching in on to year. the we this the kind $XXX the market PAMX center now solutions, a about at are very On as of we good center million And the switching see for traction

well team The into very strong. pretty that's the has also very map been exciting. looks well. Road company. going So integrated It's

XXX you million it's not But that was -- vector us did $X for lump the incremental another XXX, of I cloud, in could guess but opportunity So switching. also growth that mention cloud upfront, our I not ramp. part that's

Harlan Sur

Perfect. Matt. Thanks,

Matt Murphy

Yes.

Operator

from comes Stifel. question next go Tore with ahead. Please The Svanberg

Tore Svanberg

on another quarter. record Congrats Yes.

little a to next Just kind few especially of bit what's on years. staying in the come,

And here? of billion You SAM than we're to than sort that $X could start business. a I was CXL. I mean talking about become about more business when talked Consumer quite that bit bigger wondering ramp? business will the just HDD when

drivers market Just into of put drivers? versus to growth kind Thank unique you. perspective,

Matt Murphy

up terms exciting product that's we -- for the a of be the is Tore, can in to -- But that's this would actually if all to now transition to champagne in at where ecosystem. have Well, we This crack new solutions or early. used the The very get development seriousness, really full still these a day. happening. in HDD well road great It's that memory is consumer underway map new. can to team a the the technology enabling Yes. CXL, We business it's be. look but

So be a time. out. the SAM, And to way, just multibillion. opportunity, over we couple or clear the on years the that's $X was by we're of still The said billion-plus

on ahead out. to We're do that, absolute be the still when of of it's road encouraged. of a It's not the talk investing CXL. a curve. ready can we map leader the exactly to sort Tremendous So of here. an very traction in We're We but timing ways we're breadth and intend real what about trend. our

right, investors it to them, So accounts. is solutions appropriate future. yet set lot great just the to technology flag the into for actually And same and we thought leverage was a CXL to opportunity another have in we exciting that an the enable of one, architect for case the these of it's helped of

of few to but a of the an it's $XXX as incremental the not little out. out. That's pretty it's year, be example. I in ways next That So a would And that going sort like is think it. be of none a all one, million years exciting part --

Tore Svanberg

Great. Thank you.

Operator

go is Please The Pajjuri Nikko. from from SMBC question Srini next ahead.

Srini Pajjuri

Thank is Matt. you. My XG, particular. on question in Hi,

the should us, even is you it? driving we position think XG what's that are And half think curious then there, a but versus perspective guiding to second Europe opportunity, into strong strength, a opportunity put the to think XG just you're that up pretty India I US that I'm in I quarter. be or as third opportunity? Matt? have how you about auctions Now could behind that

curious just as Thank any from you. seeing I'm So India yet? if action you're

Matt Murphy

you still us for a can you type Jean, I year India mentioned, of that's -- gone And the through. chime think well Yes. have still but next although We're -- that. is the for positioned event, in, tenders as I think

historically think strong way consistent business about broader, there. XG had I our partners, would performer. through now we've think it's position But our a -- to is the say diversified a and I more

think a you're an don't it to quarter it's been in some performing as I well. see given So going I take example. mean, enormous leap extremely

had strategy try good smaller If whereas, you reduce think, sequential partners know, where try at the environment. scale of initial quarters key I to such So find seven a a one, we've that except markets, we example ramps up I of -- right? go diversification growth, volatility all basically we two-plus we're every maybe to to years kind don't line number the way think in ago, to it's tried go any ago these do back it's we perform were -- we the and to of I drive, a we quarter, flat well maybe, again, about something, with into or

base think I I example. So maybe is out new another and think Marvell content well. just to that tailwind be also in as more the And per bigger increased there's But I laying silicon India station. even more other are think just roll with going is geographies as systems

in But any up a think where I add? particular really ramping on thoughts Jean, bigger impact than that's will a to quarter. that be a geography given

Jean Hu

that's just seen And America, already really to has just of North largely over have the now. significant benefited right? is XG North adoption $XXX this And run been you to we by year, actually add and American strong Yeah. growth, said Matt, rate million the year. what this is

us. definitely next or this to actually year be business cycle in product But very beyond. a long It India pretty right, is next visibility forward, driver is maybe significant XG is good market. Matt Going for will a really growth and our the continue year has

Srini Pajjuri

Thanks Got it. Jean. Matt. Thanks

Operator

Please go Harsh The next question with Piper from Sandler. comes ahead. Kumar

Harsh Kumar

for question Yeah. Hey, had a I you. Matt,

XX% not will that business. organically. odd grow to about much, cloud I then your the cloud if if your in that's custom on silicon, layer your least $XXX million So of business more, And I thoughts growth itself at assume by

it business So that us better for to be data for range in Yeah. odd even center fair XX-something for that? January the is think than XXXX somewhere to percent or

Matt Murphy

have go I think to get I'd figure a that you're out But in spreadsheet I out, Harsh. one Yeah, to think think right directionally, I probably that.

wins you're And the a what You is of doesn't revenues what ramping to the then didn't have up and also which the absolutely layering bring up. right, right, you I business, include cloud get million that certain is certainly estimate are $XXX an new would our base in number.

sized of it's existing to well electro things that's piece portfolio it programs to of already are that in because grow already in clearly, those certainly we've some rate rate about the of of So whether the as we exactly, today haven't some talked that are next going run but optics, in the cloud switching, year, going it's whether kind run grow.

head So don't to -- yeah, know that you there, I kind of I I I think from that's say -- think exact have so. of think number a top I when my XXXX, you'll off -- got the

Harsh Kumar

No, it. very Matt. helpful. you Appreciate Thank

Matt Murphy

Yeah.

Operator

with The ahead. Please Needham. next Quinn go Bolton from comes question

Quinn Bolton

up in a and follow-up Hey and look over the on years. the October Ramsay's half looks If to that's I Matt, two question Matt times enterprise business million, over on at be wanted like it quarter, networking. probably two you'll I $XXX

at content But in up the period. I the inventory space, know market of some over levels phenomenal that some Xx OEM networking if you that So, of clearly market. -- is two-year ahead well growth, are but probably inventory gains, of its share. look

knowing guys in inventory million that's strong very accumulated levels you especially flows do and -- quarterly of any so you beyond And or some can you sustain run ebb you this October? you after any think do Do there's may think whether next see year, looking $XXX into have a of sort channel? rate way that October

Matt Murphy

Yes.

a And kind lot this gone a growth serve. certainly, couple give markets comfort. a we us of in very of we're of one, the particular, it's on think inventory things in great of end Quinn, Okay, the that's of aware a question. broader that number I And

still designs. of ramping we've these is into first been The some new

and is almost is effectively I -- not supply it of years so the mean to is on we lining up. over rate. skis ago rate, business programs this we get So, run it's two have that able on new x our it's was ramped run that two shipping. haven't had x silver they're constraint and all at the at been guess I now not over far times

new way, enterprise the And so by have to the networking today, in escalations -- and on, our short are And and those I said, terms within most systems of the they're typically continue are we to even to trying and in the because we're sell. again, the programs, OEMs ones trying the new demand. as meet

as concerned. a But rate So, that's a I not somebody end would and for it's on while over because inflated certainly, think that's overall in for few that for last run inventory of of question. business, got that get And market of a a growth given a it got been a going market very share in lot had years, one had enterprise much today. the networking us concern fair

and than think ahead And pretty of we're lot No have for so the we're the watching running that thought, we still fact question. we're rate growth Quinn. good us, feel but we closely run sure, it farther a on some I and ahead we about

Quinn Bolton

weakening as know of about hyperscalers? that recent some in out peers I hyperscalers? or hyperscale your just Chinese much of your you by follow-up, they've industry Thanks. the how a quick a China of business can commented comment driven cloud have And business the -- Great. the demand maybe seen the

Matt Murphy

Jean. We're Yes. ahead go --

Jean Hu

Hi Quinn, I'll answer, this Matt, is can add. Jean.

data primarily are business hyperscale cloud Our US centers.

a data centers with revenue have actually we the So, very today. Chinese limited hyperscale exposure

Quinn Bolton

you. Thank Great.

Operator

Stanley. Joe ahead. Morgan from Moore The next question Please comes go from

Joe Moore

could Thank you. about I you if the wonder talk supply constraints.

getting about where also giving getting more I have I Can think talk Are so parts, ago, at little getting talked just priorities wafers. probably issue Thank was what's chain and You little problem What complicated biggest quarter bit are better? a you trailing-edge is bit substrates trouble. worse? or about those supply been of parts a our better you is supply the a analog an shifting? that you. know sort

Matt Murphy

Thanks, think Great. Yes. right. No, you're Joe. I

with all I like peer independent golden within right, screw remains mean, think of that be that out. of caused certainly there's constraints themselves there's things issues have the to broader us, those -- been and I group when analog seen -- sort sort and

have of our to those For our some CMOS mixed broad we in again, and pretty a older technology, of been the We've have years, sure. or because historically technology, which by They -- it's It's XX-nanometer, we some for gotten do better to do of purposes, would XX-nanometer, some Those last constrained. two nodes constraints gotten over usage constrained. relative the very of CMOS be -- be XX/XX. overlap, continue signal but better.

that supply of the some been come lumpiness older -- And of has where those some of have our nodes in.

can that guide uses even actually when portion older of automotive you strong And can look business, some -- business there. see sequential the guide for at those technology. of the very You five see our you we're this

And on go a into only are some when and There's to get So packages, having And where substrates, still these now, starting to very the going especially there. you BGAs you work large think more that even that's required out. complex be we're ABF the capacity larger, more that's that to shape. to of is is for rough trouble. too, in advance, trend is Joe, flip-chip That up. going peers plan just constraints little in complex way have itself still I use bit

of high-performance and probably I of high continues And time, continue have a complex And complexity, I to and be what this think GPUs, more nodes companies out, our we custom-silicon to get as heads are so, be over match and cycle Marvell power going a the just or move do tremendous and pain in it's tactical and the that's for lightens products such up. I just some where is all it, think there's in amounts where complex supply who and or or stuff lot technology, itself to the down compute point. computing probably you our legacy a peers think, need. to we broadly, more whether industry, producing keep like and just and the large demand the it But analog plays it's and CPUs of more networking name

Joe Moore

Thank Very helpful. you.

Operator

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

now may You disconnect.

Marvell Technology (MRVL) 25 Aug 222023 Q2 Earnings call transcript