Marvell Technology’s first quarter saw strong year-over-year revenue growth, but the market reacted negatively following the results. Management attributed the quarter’s performance primarily to continued expansion in the data center segment, led by robust demand for artificial intelligence (AI) infrastructure and custom silicon programs. CEO Matt Murphy explained that “the data center end market continued to deliver strong growth, driven by robust AI demand,” with custom accelerators and advanced packaging solutions playing a central role. Despite these strengths, shifts in product mix—particularly the increasing share of custom silicon, which carries lower gross margins—impacted overall profitability. Management also noted the ongoing recovery in enterprise networking and carrier infrastructure as supporting factors for the quarter.
Is now the time to buy MRVL? Find out in our full research report (it’s free).
Marvell Technology (MRVL) Q1 CY2025 Highlights:
- Revenue: $1.90 billion vs analyst estimates of $1.88 billion (63.3% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.62 vs analyst estimates of $0.61 (in line)
- Adjusted EBITDA: $731.5 million vs analyst estimates of $716.2 million (38.6% margin, 2.1% beat)
- Revenue Guidance for Q2 CY2025 is $2 billion at the midpoint, above analyst estimates of $1.98 billion
- Adjusted EPS guidance for Q2 CY2025 is $0.67 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 14.3%, up from -13.1% in the same quarter last year
- Inventory Days Outstanding: 103, in line with the previous quarter
- Market Capitalization: $66.53 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Marvell Technology’s Q1 Earnings Call
- Vivek Arya (Bank of America) asked about content growth and exclusivity in next-gen custom AI programs; CEO Matt Murphy clarified Marvell’s position as incumbent and expects revenue continuity even as customers pursue multiple supplier paths.
- Ross Seymore (Deutsche Bank) questioned Marvell’s ability to support a broader customer base for custom XPUs; Murphy highlighted increased R&D investment and capacity to engage with a growing set of hyperscale customers.
- Tore Svanberg (Stifel) inquired about Marvell’s SerDes technology positioning and the significance of the NVIDIA NVLink partnership; Murphy described strong technology roadmaps and a complementary role for custom silicon even with large ecosystem partners.
- Blayne Curtis (Jefferies) pressed on sustainable gross margins for AI custom silicon; Murphy explained that while custom programs run at lower margins, operating leverage and higher volumes support profitability.
- Srini Pajjuri (Raymond James) asked about market share and technology transitions in optical interconnect; Murphy confirmed Marvell’s leading market position and readiness to participate in new technology standards as they emerge.
Catalysts in Upcoming Quarters
In the coming quarters, our team will be watching (1) the pace of adoption and revenue diversification in Marvell’s custom AI silicon programs, (2) continued recovery and sequential growth in enterprise networking and carrier infrastructure segments, and (3) the impact of new optical and packaging product launches on customer uptake. Execution on customer design wins and updates from the June investor event will also be key markers of strategic progress.
Marvell Technology currently trades at $77.96, up from $63.78 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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