Marvell Technology (MRVL) 2 Mar 232023 Q4 Earnings call transcript

Good afternoon, and welcome to Marvell Technology’s Fourth Quarter and Fiscal Year 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. And please note that this event is being recorded today.

I would now like to turn the conference over to Mr.

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

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

me CEO; President new Murphy, are Willem CFO. Meintjes, our Joining and today Matt and Marvell's

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

today, section to is financial our non-GAAP financial During certain GAAP between Relations will measure reconciliation our refer Investor non-GAAP of our the call A measures. and website. available in we

on for turn I'll the that, comments With Matt? to call Matt his our over performance.

Thanks, Ashish, afternoon, and everyone. good

the him me and CFO opportunities Willem markets, our on is knowledge I Marvell of Treasurer being Accounting our XXXX, in by and since today company into which seamlessly has institutional front previously us. his forward partnering deep call many end continue with earnings execute in we to helped to his named first Officer Let transition Willem, January. as participating of look Marvell's welcoming since served Chief Having has role. in who new him, start as

center from market. X% year-over-year, guidance, midpoint XXXX. the quarter fiscal growing was business end with our Revenue $X.XX of our for billion, the Turning data fourth results better-than-expected results to above of

and center relatively sequentially by the macroeconomic market. up customers environment. grew The correction, of data in revenue our Revenue slightly end consumer of reduction storage our industrial well rest our products in X%, and enterprise broad-based worsening auto declined in inventory the as held dealt a carrier, from networking. coming markets Sequentially, end with within majority with declined a

correction that ahead for our demand, has Looking along to continued some to impact seasonality typical the quarter last described quarter, products. we inventory the near-term of first with

As and by of midpoint year-over-year. are to sequentially the X% result, guidance, expecting consolidated XX% decline revenue a at we

out later. correction crunch, storage broadening inventory a In to coming the to the unusual additional creating quarter, decline expect of revenue addition, spread an In further areas are supply first inventory and corrections number will we to discuss I of mix.

gross strong in but the from At ASICs, same very we below of Marvell's corporate XG average. custom forecasting these are margins have revenue sequential growth a well number time, and

a next gross As result, quarters. outlook the margin we expect challenging a for few

our are prepared discuss we the we confident in that will into environment, margins inventory a will to be gross remarks. digestion recover. more from Willem well emerge positioned However, normalized our for once phase his we expectations

Let center. our discussing me center markets, XX% and for on million, sequentially. data year-over-year now was move our declining In end to end starting the XX% $XXX with revenue quarter fourth data market,

driven data from switches. better-than-expected PAM our anticipated, primarily than DSPs higher and was Revenue center by results,

the center for sequential the responsible bulk data As decline was our expected, of in business our revenue. storage overall

market in deceleration to the beginning the customers their inventory adjust our reflect center end results more efforts to of Our market by and a the to challenging data respond conditions.

We data multiple are are products. trend to expecting center this impact and demand continue lower projecting to

cloud our first in to of in data We first decline quarter impact basis. percentage SSD data the multiple from As this sequentially again optimized end on a also is data timing in center HDD, of channel impacting the result, data center center across we products. expect the decline design rest market inventory our and to Slowdown mid-teens expect revenue wins. large also lesser sequentially customers center our year storage a the in fiber broadly quarter see adjustments signaled the project to spending to of degree, the a by and ramp

design key win but is the of remain programs intact, delayed. Our some start projects being production of these for

ramp of the shifted quarters out revenue As prior a projections. to couple a by compared has result,

expectations from these wins revenue same as the in range communicated. lifetime Our design remain previously

we the center, near-term the While work in confident dynamics we data the market. for this in growth outlook through remain end

such few key seeing customers are ML prioritizing years. the next investment center with potentially and We data over areas growth as larger much AI

is we architects example challenges announced to next-generation as solutions. Amazon relationship their their cloud specific silicon on relationship cloud-first design, we companies. has solve collaboration with Our optimized key between to Web our X the with their in helping continued most long-standing customer One Tier customers data engage intended enable pressing the deepen with with extending centers Services

essential boundaries is the design delivering customers, long-term AWS to silicon of the center security, applications. performance leadership We optimized the AWS, that helps needs for strategic essential in believe supplier addressing critical push driving and custom helps solutions of Marvell infrastructure including cloud silicon electro-optics, meet of technologies their Marvell's growth. a storage delivery data multiple AWS networking,

optical to XX.XT enables bandwidth industry's size DSPs the first technology breakthrough optical today, density XX possible twice same and announced per available by center next-generation second over solutions physical switches significant to provide and wavelength, modules the DSP deployment physical a networks. thermal solutions XXX twice made commercially data of our first for new pluggable existing switches Nova PAMX fiber. Nova for a of Teralynx essential terabits in data Earlier the existing the and we of are constraints These centers. gig optical provide throughput package the improvement modules. full within in This per the is the X.X electro-optics similar

gig, centers XXX-gig new networking X.XT the DSPs, to the the lead driving XXX to reinforcing pluggables XX-gig electro-optics enabled high-speed complete data for provides established Inphi remain module solution, future. of and drivers higher PAM and expectations The within a to PAM that will optical extend including backbone our ecosystem, in the TIAs foreseeable by continue from NRZ, the X-nanometer optical PAM. DSP platform this XX-gig Nova performance market The helps to

The be for XX.X leading close X-nanometer Teralynx realization to is in use and a solution cloud-optimized, cloud enable a optics focused platform collaboration breakthrough Nova, in marks the bandwidth Inphi XX, infrastructure. a switches with This high quadrupling the per for centers. and leaf-and-spine in XX.XT in second leap latest entity was combination bandwidth a This AI they programmable This networks in data increase per of Innovium applications. and single the designing in need compelling tangible a X.XT versus Marvell, a bandwidth support lower creates cost large switch designed with bandwidth series existing and to architectures. a for switches of significant low-latency, with other the into next driver solutions. at together of bit XX a for benefit Teralynx data customers TCO upgrade customers cloud combining full terabit of their will power capacity to enables on viably

pluggable testing modules the new verification customers, their Nova-based should with Marvell's also should work their of co-deployment switches Teralynx and reduce accelerate in when and and extensive For technology. risk transitioning XX a minimize interoperability And time-to-market. combined to

We wireless X% XX% for $XXX infrastructure wired fourth XG drove growing and Turning adoption quarter to as products was million, carrier end demand Revenue year-on-year for our Marvell's businesses saw expand. sequentially. wireless continue growth. and strong market. year-over-year the strong to a our

business the during wired pandemic. upgrades from Our benefited accelerated carrier bandwidth that backbone

processing Fusion adopted complete customizable platform OCTEON our Mobile announced and Congress, provide This next-generation DPU XX been OCTEON provides to platform has World new baseband, XG OEMs base layer leading XX baseband processor. This a wireless comprehensive, our X X-nanometer At processor, MIMO. announced along by in-line transport, with acceleration. we station previously massive for

interest see generation and customers partners conventional to of products continue our for At MWC, cloud-based and from for we strong multiple XG both architectures. latest

quarter. for the Moving our on to outlook next

geographies of G significant our growth are revenue with to driven expecting For we by the sequentially ramps. fiscal in in by wireless deployments increase and our X first product XXXX, business customer-specific approximately XX% projected multiple quarter

other On percentage an business, period sequentially a extended the of double hand, strong our we after digits revenue decline on wired basis. growth expecting in in to are the

end expect the to our result, quarter mid-teens fiscal mid-single year-over-year market for a basis. on the sequentially in we grow digits first percentage As XXXX, from overall in the revenue a carrier of

networking strong end this market growing million, of primarily enterprise which $XXX and our share drove end Revenue XXXX. in market. was the a content quarter to the year-over-year in higher products, by merchant driven fourth revenue on our growth, with XX% our Moving vast fiscal for of majority

by Sequentially, growth reductions our in our including X% offset declined ASICs. of channel This as by revenue we to inventory started custom products, run merchant partially was China. in decrease rate further

networking. the to in channel and first planning and XXXX, inventory ahead products merchant quarter fiscal Looking our we for are customer reduction of additional enterprise of

However, a offset strong in partially decline. expect to custom we ASICs ramp this

growth in high a to is networking enterprise in overall our single-digits project we strong result, sequentially, basis. year-over-year revenue the teens decline high a while remain the to percentage on As projected

our $XX million. automotive Revenue growth improved. industrial to in end Sequential the and supply year-over-year fourth XX% revenue markets. accelerated as grew to to Turning XX% quarter

Looking in our decline growth offset business. business our our fiscal strong first our we XX%, we industrial project a be by by a continued from business sequential industrial business. auto continue decline quarter from to auto growth XXXX, than the more of of offset Year-over-year, expect to to over

our slightly be decline to for XX% we year-over-year. As – up approximately auto end a flat overall and industrial revenue to expect and result sequentially up market,

SSD quarter and was growing X% market. Revenue X% the ASICs printer declining our Moving our HDD fourth consumer grow, legacy end sequentially. and saw we controllers controllers. continue while to declines to on from consumer Revenue for $XXX year-over-year million, in

revenue ahead seasonally consumer XX%. end forecasting are tends which by the to first market, the in quarter, we sequentially decline Looking softer approximately to be to

strong growing XXXX XX% revenue markets. Revenue million, grew industry $XXX and well cloud and million for long-term $X.X very XG from crossed model. $XXX target the year over fiscal was year-over-year end important for summary, revenue both Marvell, auto billion, above Annual to milestones year-over-year. In from our approximately a over with crossed XX%

a full the We ramp CXL ramp XXX-gig our of we products. the During switch center combined drove a of development. continued XXXZR to to Innovium, our fiscal completed on strong center cylinders, interconnect PAMX first XXXX, portfolio Tanzanite accelerate in the as acquisition organic our The acquisition with significant year data fire a data revenue Inphi of and all team. DSPs following

scaled enterprise significant last we manner gains we revenue. a in below the networking Our have content rapid year the share the year-over-year, with growth, well business period growing company this thoughtful tremendous over year-over-year, growing with and non-GAAP a of XX% in Through XX% reflecting XX% revenue two years. driven had growth OpEx the

expand another we Following funnel our design with well is opportunity year to sockets that win. to wins, large positioned many for Marvell continues strong believe

industry, long-term. continue semiconductor to is dealing execute to ability are Marvell, headwinds, cycle the our the this While weather with in including we broader confident and near-term over

and capital focused allocation efficiency. remain improving on laser We

best opportunities. latest across evaluating the investment are and We resources customers' our of our level our plans, to portfolio redirecting assessing

we As to result, in of XXXX. fiscal second our OpEx a half expect reduce the

our Over the compelling. prospects remain long-term,

We support have our we in and to conviction our strategy. plan, invest continue to will

As as inventory and fiscal subside, to XXXX will begin patterns normalize. from digestion progresses, demand the we expect mix will improve headwinds

While path stock, clearing to from has are impacted customers encouraged reduce finished have their storage goods a that see been inventory digestion, most we the to started the for recovery.

OEM cloud and fiscal become a declined than China optimized of customers company revenue continue less and programs data XXXZR and as from to expect demand grow, to reopens, start from has we tailwind. But in. to In our XX% we in recover Revenue revenue. XXXX, expect center China silicon switching will total layer will

In to grow fiscal XXXX. auto continue will and addition, XG our end project in markets we

well quarter to expect future. markets second start on As with that to the diversified second end gather overall fiscal are exposure growing and momentum and Longer-term, secular in confident in we a for result, revenue growth year. data the for us focus our of infrastructure the the we position half Marvell,

wireless our market, gains layer in worldwide. XG end as continues expect In we to content adoption

years. to Our the automotive over growing over continues $XXX to see we path few million a grow, opportunity revenue annually to and next

In we and streams to new from expect open emerging up AEC revenue data opportunities. CXL center,

data optimized to We couple we transformation a silicon architecture. for opportunity of center cloud expect trend generative custom over extensively AI compute, bigger last discussed We massive for drive in the had a years. see

generative met the infrastructure the move is and interconnect networking level data leadership to these high-speed significant models are ultra-high these connections. technology in best links believe important compute, in by to We of low requirements in innovation amounts and criteria. platforms latency with sufficient optical energy bandwidth scaling In supercomputers. This of addition requires these reach, a requires minimizing AI expended another to massive

first XXX industry's almost a AI Last launched year, saw ramp the and we PAM by applications. driven DSP exclusively gig huge

Our DSP XXXX, AI PAM fiscal from from year. quadrupled more revenue the in than prior

within today, require will second bandwidth in doubling a that further bandwidth. they As announced AI AI we more cluster. complexity, Earlier models low-latency platform, per continue we to of X.X terabit more the expect and the first grow enabling PAM industry's

a engine we for this AI in portfolio. our new as accelerates, electro-optics investment see As growth

often heard culture XXX ongoing in is Best for they of greatest In named the top the foundation say, our as US one you've Marvell's As resource, XXXX. our employees January, Places built the are Marvell me of Work to success. Glassdoor have the

We the to certification. were highest to second companies. Place Work are semiconductor honored in In among Great the we February, ranking receive

infrastructure. a dedication to our These compassionate Marvell their leading-edge us workplace, data that essential execution. awards enable to for a and are helps testament to to power while team develop technology growth Thank remaining respectful contributions culture collaborative, on and our focused world's creating entire and the to

and over outlook. turn that, call the more recent I'll to on detail for results Willem With our

good afternoon, Thanks, Matt, and everyone.

XX% year XX.X% billion. gross XXXX to Marvell's margin loss per revenue GAAP by and with start significantly $X.XX. fiscal results. was a record a me our $X.XX grew was diluted share summary year-on-year of Let GAAP

gross was XX.X%. Our non-GAAP margin

margin Our GAAP operating was X%.

expanded Non-GAAP grew margin per and through diluted operating dividends to share buybacks. XX% XX.X%. earnings shareholders to million We $XXX Non-GAAP returned to $X.XX. year-on-year

to in fourth driving total Revenue billion, quarter. XX% the market Data declining on our X% growing of largest year-over-year the our revenue. end exceeding sequentially. our guidance, and results $X.XXX midpoint was the X% was our of fourth center Moving for financial quarter

Enterprise gross XX was XX% at million, total revenue of intangible certain markets within largest, of legal end in change followed networking and $XXX XX%, settlements acquired acquisition share-based XX.X%, operating guidance. related consumer basis next our a margin mix to XX.X%. due with was X%. auto GAAP at Non-GAAP to were gross points XX% compared was by industrial revenue, infrastructure GAAP primarily including margin forecast, compensation, carrier the expenses costs. and below amortization assets, at

expenses was million. Non-GAAP margin operating GAAP was margin were Non-GAAP $XXX operating X.X%. XX.X%. operating

diluted income at For diluted per Non-GAAP loss share of quarter, the was share per GAAP midpoint fourth was $X.XX the $X.XX. guidance.

and Now turning flow. to cash sheet our balance

capacity was $XX quarter, the from long-term XXXX, included long-term payments for $XXX cash $XXX operations million. totaled million During In agreements. flow This fiscal in for million. capacity payments

fourth growing ahead Looking flow. of currently payments and sequentially. we significantly to at $XXX reduced to end a million anticipating the fiscal quarter the Inventory operating for lower much was headwind billion, XXXX, by are cash capacity $X.XX

upcoming As we product prior to our grow the expected in to call, ramps. in inventory we indicated quarter fourth support

cash be the come million we to over $XX tailwind expect year. dividends. through a start We ahead the to quarter, Looking first to inventory shareholders returned to down cash and operating to flow

equivalents As from quarter, million fourth of the million, were end $XXX of the $XXX fiscal by prior quarter. our cash and the cash growing

billion. was debt total Our $X.X

and Our gross times. $XXX due of X.XX X.XX XXXX. in debt-to-EBITDA June debt was ratio our total is million was ratio times net debt-to-EBITDA

gross cash this free currently planning are to our balance paying leverage. flow, using on we which and off We improve our cash expect

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

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

approximately expenses forecast increases. our We actions includes end underway, the our the $XXX be a and salary to GAAP in will of expenses guidance be takes non-GAAP into typical margin $XXX be margin gross the non-GAAP the seasonality project We This margin revenue range quarter taxes and anticipate employee non-GAAP first gross with to our currently XX%. payroll this we get GAAP few approximately correction, adverse to approximately quarter. the operating we remain from our a to improvement quarter, expecting be account combined by fourth expect low range through due We will challenging will step-up operating XX.X%. of in prior we expect million. our are quarters. XX.X% in the merit get mix target cost for This Once expect of closer to project period we We mix inventory gross to million.

initiatives intend of Matt reduce the operating our optimizing quarter invest discussed, million to approximately As in and to we by long-term continue Altogether, year. capital prudently deployment. further to growth half second while our the expect run rate a expense efficiency improving $XX in non-GAAP we

full achieved the the expect fourth We in to quarter. reduction be

income our million. Other debt be on approximately to is expense, $XX interest including expected and

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

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

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

non-GAAP per the diluted income $X.XX in range to share We of expect $X.XX.

announce please Thank and instructions. open line the you. Q&A Operator,

session. Instructions] Seymore begin now ahead. Ross from will come our will We with question the Bank. [Operator And question-and-answer Please go first Deutsche

Hi it guys. -- October about and/or quarter, the you Thanks question. for thus the the of the January then and quarter? to I conditions. quarter. the through said far whether quarter that be In you the general in ask end about April Can end linearity you you quarter, the markets go letting Matt, towards me as ask business quarter last just a the the by throughout were the into of demand, wanted weakening talked January end things of about geographies talk and

Yes. in continue Thanks to see conditions say was of the to thought I'd Ross business again. the storage had kind decline. of for the and going I'd continued of steepness the the breadth down the it's couple some of question. we We've months, last out. the to bottom quarter, seen weaken, Last -- that We've say,

correction then our storage, guidance. and data see see broadly customer just is to some what there broader. not improve. terms the that going in still of going There I'd as throughout you end bit can area little a inventory storage stock in But are down, levels and the only year, in green but on. that's generally, we shoots believe the we center, given coming say in just, from The

continues positive a a think as great same see wireless the that's again and this strong be upward what's to well XG, happened growing, business continued trajectory. and be business on That's growing very year. we time, for resilient as I that us, a automotive in is the to in At as which very

of have kind but pieces, these the how where lot various have end of a things the I'd areas we different are ago were So, continued better. bit little And more. It's a continued quarter interesting optimism, moving to that moving markets really then say Ross, times. those some a weaken to weaker do had at

But when plus inventory in in back see then ramp. really next the be and half look a optimized what the few strength XG the our automotive of and we result do like in you quarter second you quarters, out growth and add as normalization also it the then cloud all will and and basically, continued up, believe digestion we the over things

And in optimistic some about starting the we're the come to recovery. second of should theory, China relative to business be half back, the

So and of up infrastructure moving a pieces, the consumer as, this it's that's I the down -- much business, some and agree, as typically move doesn't in say, business.

We're in a we the recovery through then April journey and quarters, So second and going in the it started the October. January still see half. here in

Thank you.

ahead. go our And Vivek America. Arya with of come will next Please question Bank from

then at able margin cloud-optimized be lower I the range. little the Thanks kind rate, lower a also my And to know second to question. the potential is Is you were think that for half the that back confused range. gross I'm what should curious will to end $XXX only the like? $XXX be why Willem in view mentioned I'm to that Matt, of to of margin silicon. taking million the at. you the of gross as there what recovery, you guys would if And of there end billion and recovery I'm $X.X-ish part quarterly that, run thing get get then the curious one updated looks this million be

you. of questions. kind So Thank related

treat We'll as Yes. question. problem, Sure. Vivek. one it integrated No

me ramp. cloud So start the with optimized let

data very programs, companies can As deploy. those how some happening sort We programs couple lifetime what's those is have, aggregate, overall you area, there's and my but revenue the a they quarters. within going some to in good in out I about and by see prioritization they're the feel of of in shifted delay, on the said there center of and remarks, prepared

half. a more that of about that's couple numbers, it year that just out probably for you So think big know quarters, was yet quite a a but as exactly, effect by assume to million loaded now. just back-end it We $XXX you pushing the takes then don't ramped down by plan if we the for those think safe give this of I round assumption

the second other was around look does half The question recovery like. what

broad to from in look still business, mean I we're early beyond. back. do we big think of seeing it our it The we and and from this feet and can too volatility step a question our is growing start from to I we it's see guide. how as call the But take as from at QX lot said, and is XX,XXX expect you we comes specifically customers, when the first quarter back it at also the point. recovery what indicators

precisely to that's hard a going this it's So at call to juncture. little bit where be

margins, company but And really you had I thing. pretty again, mix. to a little moved a look, the predictable been gross they've mean, then comes actually bit, has around if the down on we've margins. fairly it in Historically, general, -- gross that's stable

we're downturn the mix. this on relative based the see to can that's volatility in come going through You just

So in second we improving that see half. the

I think early the to call too it's trajectory. exact Again,

and up it's mix, what do. So here, ramps just this being on But we're the the at of of product abundance This calling time. getting it know best highly we markets is the end range. to in dependent end again, lower the prudent the

you, Thank Matt.

from come Goldman with will question Hari Sachs. Please go next Our ahead. Toshiya

your good Thanks have customer wanted question. Hi, the past I much taking AI so couple about conversations of Matt, extent to afternoon. for months. the evolved and to the generative over ask

AI? optimized the you about cloud to But pull have relates it talked in as sensed out. customer change pushed any You opportunity being

You talked and your about in exposure compute networking.

you're how business fiscal you. about PAM talked quadrupling year. XXXX? in also You that in Thank your specifically business, last AI thinking Curious about DSP

Sure. Yeah.

XXX-gig years AI buzz real -- driven that ramp AI we prepared the said and our positive was a and around the is Marvell. impact the in last for clusters AI few generative the applications. think remarks, the on as by I of really products The over

we time and over business. very, a see well, on very our tailwind So optics that's there gone

has just believe, and XXX-gig our also we production, that's X.X going product, it's into sometime also native product That's I/O. per a year. announced second note, lane we next sampling, which terabit real per go I'd today to

And again, relative us the because bandwidth, doubling the pull ramp will to the AI. for big another of there be of

has despite So a a lot of under us. the on that we're real in for been And businesses, very spot the bright chop hood, other that the outlook. encouraged

then, are And also for these are the -- to optimized the AI drive silicon in get addition, to get rearchitected as to of And as to to complement clusters data are some going get that have cloud quite to frankly. systems -- going have centers well optics. GPUs for that's need going we the as well used, think

there's opportunity sure. I here for think, broader So, a

very for bright I a cloud. I And think very this think quickly. is the it's us evolving in spot

you anything that? to to Ashish, add want did

think in the seen I distinct think really right? we're already example. No, availability we've starting I or of our I think products, cloud as thing next-gen X.XX I I'd requests over other we our a from the to an say, where last change accelerate is, tone, see add introduced customers quarter to would the two

at how quickly. become see really quickly it expanding a because can getting certainly bandwidth the very, You're very request they needs a, available,

to it's think critical even for products get I these out very faster. us So

Thanks, guys.

And of ahead. C. from go will Evercore. J. our come next question Please, Muse

question. taking you Thank Yes. Good afternoon. the for

you, for part routine Just Matt.

of kind implied I you've seen won't was we I on to long. could specific the into based little the guide. year-on-year take hoping But deeper trends bit data drill So center, a too

of way kind think, Is $XXX of channel a million. through to there how is I storage, to that roughly, down parse preamp, fiber other? much and So

storage, understand new products the then the parts about between do kind how spoke you of think that slowdown maybe other, of the us And about. from what here, help that? different better And and of you kind kind in other already drove

we helpful. So there. have good would a way kind But to frame very that be pretty of idea any

Yes. ahead. can start go Great add J., let it Willem I'll then off, Yes, to C. question. I Sure. sure, as appropriate. and

Yes.

The think, storage, that about bigger first QX. we right? billion J., of C. part of basis, I the storage for much spoke is year-over-year a all, think a way $X.X we about for originally decline So, it, on

And look center. you a was so, XX% it's quarterly about at that data on if basis,

last more So on obviously significantly. data down was $XXX a quarter, the rest. And in in was this decrease quarterly million. basis, we And quarter, storage again, over the just compared indicated to center it's that

certainly out I storage, other to there the million of parties like of roughly it see how I outside million and you recovery? a feels guess, but your the in that $XXX to on $XXX part love is way mean, we'd XX maybe of business storage? decline what frame isolate that

Hey Ashish. CJ, it's

just add color. some me Let more

if storage, Willem well I smaller at you QX. much bigger year-on-year, product where So much in through, lines, the the a you think networking products optics right, our the walked of of as all look as within about other data portion just if include think some this decline as that's center, seeing we're

of expect say, to So lot you'll they couple back, I them I a to And take right? the in start second bigger. would inventory think These bounce think quarters, corrections I get a typically half.

the of basis, incremental center though cloud portion we you gets that, really an non-storage data of pushed of some in the see some second of additional So even And out revenue the on our ramps a bigger. lot second recover starts top half in and on have will optimized, half. the to

is of second year. see how recovering So of data the the big half overall, we non-storage in center a part

you. Thank

next Morgan our Joe ahead. question Please Stanley. go will from come And Moore with

ASIC other is that being Thank of And corporate sense to pressure carrier digit you business margin. incremental I ramp up quarter, the gross from you expect custom gross that and I between parts Can just the that, as rest talk you the margin for Great. give guess, it? wonder mid-single then more us the like cloud, carrier the be not into centric do of some see separate you. margin custom in disparity much revenue. April you about could gross if the

Yeah.

let start. So me

growth So the by I that was offset wireless. the that think about wire about think way prepared is, said and significantly done the in just XX% was to in remarks we

dynamics that two small offsetting net-net, see there, So those a each it's you other. growth but

growth Okay. like four-point And still seems cause like… margin XG, to it XX% it a mean, even overall, disparity seems I in

sure. Yeah,

So which in I is HCV it additional saw fiber look and way typically we at weakness think the channel, higher storage, to particularly product is us. margin for in overall, gross

is In enterprise a our gross networking product. in business, decrease we've seen margin which higher addition, a also merchant

business, that fixed -- from lower strong XG, And seen some top growth in margin typically are increase with then certainly ASIC of gross the some with product. headwinds we've the And both had in that with cost we've slightly those combination so also and down, in our line absorption. which coming

so the decrease that's seeing. overall, that driving And you're

let of it's Joe, a couple things Hey very question. because good a me add

at with agree to lines is fairly had rapidly. gross it, that And significantly everything some seeing characterized margin average, we in said the which growth in declined same fully first, product strong time, significantly the margin than the fundamentally it's experienced corporate accretive and the much time. gross are that more Willem less fairly way So product than lines we're in and anything he we've some moved

for take top bigger picture a a to on just maybe second. from And the it

been Marvell executed And gross well. time going has in grown business if we've you knew team The than be came the grown portfolio. And probably fact, and XXXX. we -- driver able margin great And to been faster for growth the It's it's us. of a to well. that really back look, that overall a custom in was from and lower purchase was fine. Our it's business actually Avera at that

time, that at and But we've been from the XXXX to Marvell's now, able drive gross actually timeframe. margins it, over increase to up call same

margins wide So, different we've been blend in predictable. that's balanced product and had something have diversified lines a general, and very, very product gross range to very that healthy been lines a that of portfolio,

was breadth the with. the steepness the correction was of inventory -- dealing change we're and really What the

quite these are about have you very so gross And growth been kicking continuing Those margin has on you also transparent then in this grow that point ASIC. that. us. drivers for been a through actually still to And are lower as cycle significantly. business We've out, always carrier,

our come or own And correction inventory lot. lines a customers for reasons, burn, whether those have their channel then product again, it's down just highest various inventory doing margin

we next at start quarters, look normalize over the and think So, that's we few numbers, that why should again. to the

and helpful then that's provide to hope picture, Joe. both I bigger the detail the So,

you. Thank

Yes.

our And ahead. come Cowen. with Please question from next Ramsay Matt will go

to for very that Matt, a when of maybe the in change the $XXX into that about timing one it. architecture out million Good folks one And or of periods different customer talked you can digestion have a words you probably guys. about year. cloud-optimized you through this obviously just changes, while look all guys talked afternoon. are there's bit of guys hyperscale you for next and million -- number right? the year, a But not these push characterize you going Thank and $XXX is of program,

through that -- some maybe I some So, you ramp dynamic? of a about thinking are at delayed to a still year? bit, and maybe guess early are how I'm of quarters couple early you the are that there get is $XXX could programs next walk on that what things million that if time? some trying of just are programs, Are And pushed

real that quick a just then a clarification on asked. Joe question And

As these you specifically? going could that cloud Maybe are solutions, Thank margin a be we to those accretive to bit. gross you. address optimized ramp

Sure.

mean So, high-level it's even for is ahead. next And year, I nailed say my it. call. be as some of early bit answer a thought, programs are the we tracking might you kind to some I'd of too little

than more we out pushed have thought. Some

year, net as call trying for see just this we're the the effect it to So, on today shift. it we

know sliding. Now, for just next don't that year, it I keeps

out. I I own but to at of from for how to too just I'm to I sort option still in reticent there's try precision I it understand much these the and I there. see it's now, near Marvell guess for going to keep think conservative, in given want if we more five area, you frankly, any be mean, four shifting or And these call little ramp term. how bit, happen you it a quite out next to a quarters provide programs play going to but changing this is have pace. their growth early year are think some what's could of call to think to

think depends more that profile. on of traditional program. some and same custom more all nature the it the would on I not question be And margins, in are the the They're really

and to year. towards But driving to higher. Some see its end we're returning next the overall it still company year, going of long-term towards the the keep blend for we then back are model the this range our low in the

of So year. versus and ramp to too going at kind then margins and happen of early this to point, I what's when call next think it's infer would that gross the what those programs they be

give and this whether model I long-term we or revenue margins the that. precision through Matt, not margins. growth terms get on we're financial more you gross changing year, growth can in think, point the But model, our we long-term it's So at of operating as

the Thanks, Matt. Appreciate color.

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

want NRE I center. in your Jeremy the you And resilient demand? a center rest areas of Yes, current of business? get some true maybe custom specifically on Is silicon. programs, ongoing data this It This in to in in pushouts custom business sounds more a is the of the of also, in your good focus than calling reflected like the investments better is comparing and function I more visibility to this relative those and bit Tore. proven little end for programs guess may of here data customers this maybe afternoon. the other the nature that resiliency has

are Sure. things Yes, going of a couple that on.

those ASIC well because has overall still I that be really tend growth, and to terms ramping. team said, of think as I one, in business done programs

part the inventory of So growth. there's lot that's of not that's built been a been

would explain some that it. So of

area, they're in But I'd also and enterprise. but our this they're also engagements center, in custom traditional breadth the note we carrier also the in data of have that

we've enterprise Willem ramping with traditional the up. shift as which stuff even coming higher then within segment, much products, margin so there gross the of had merchant And are just mix some some the indicated, down and ASIC

think the proven that be going in I normalized But get to certainly, all growth time. resilient. to again, of area, very it's because this So over is

sure, some think because is I gotten NRE. maybe we've it of And

to team But I get mostly You to that's don't had -- more they're little bit type -- I business a been, little I that think think, predictable, has ramping. there's because think that seems be a those know. of in just new It been bit -- -- a general, programs I one has it's plan. easier historically,

talk you segments? the the to any here other Have changes pushouts can there there? And been significant relative about

that say Sorry, again?

guess, in I seeing has pushouts impacted the of you're center? custom program data areas other by has been the

of No. again, those talked we major are some cloud I that's again, say that about, optimized I mean, mean, factor. a I programs the custom. wouldn't

data been correction. the whether impact term, custom but again, the impact really short hasn't going has storage more driven still by of rest the been, or in pronounced, center as its own But it on whatever portfolio, be the and optics, it's through the or

Thank you. Great.

go Blayne Curtis Our Barclays. next ahead. Please, question will from with come

Hey, I understand is thanks back go to I what your on centers. data question. want for message my wanted to just taking -- to just

actually of of So inventory the your a business it's data okay. seeing overall PAM was I drive, hard switching the customer. you correction What were are correction more Because quarter message the -- kind just last from at center? thought and

if to that's then data on about more. kind those mentioned cloud cloud you're I'm the why you're architecture center optimized And I of just guess, saying can a you is talking So, elaborate confused guess. how center and still trying you little I'm understand relate, data softer, two I delaying changes, and you when said out pushing what ramp.

into Sure. Maybe, pieces. two I'll break it

we're -- there's two back issues to about. go because think talking let's I So separate

signaled So center, very it pronounced in weakness was last storage. the quarter, data we in when

And that there'll we signs little continued a going down said go again, of then at at the were our portfolio, but likely inventory the rest to see was flat mild correction more it also be, correction. was to time, a most least on that expectation now, we more muted. was of storage starting And And maybe bit more.

the the time in storage happened to think correct. continue center need -- to I is, centers data more data what's

So QX portfolio declined seeing quarter. the I a also in the has again than guide. thought And we that's more would say, needed now correction of of last the -- then, rest is

Okay.

in So Blayne. short right that's the now, term

up other So, them a are including and moving more but correction yes, aggregate. the I rest mentioned, of you portfolio. then inventory is data the in is lines little an of and down within across net going storage, the product there bit on those that mean, effect the down, center some portfolio, underneath, in

happen our out been year, were it's over still of ramp this is been it's issue. been of we the separate optimized -- of wins, of to gathered been Independent years. but have a couple -- cloud we a design anticipating that, pushed last a have We -- few quarters. That's which by going some

growth. year execution at ramps, in program separate than their So correction. customers, But we the sort of of the kicking cetera. That's still to timing our of adding inventory that just end see et and that's any by

growth outside year well as silicon a were trend now high-speed next or it's whether And here, term, significant systems we on pointing both all mean, that's talking the about our and as think the window which AI-based stuff optics. growth going longer we and the be then to we're that's cloud-optimized that, third year, just, I the architecture this as data on clusters centers, was that's AI-centric to point, and in out is we see going that, AI-based require

long term three short it, to think I term, So pieces term. and medium

lot. a Thanks

line. Blayne, overall, the Very punch I dynamic guess, that's

Yes. Thanks.

Yes.

from ahead. come will Christopher with question go Susquehanna. next our And Please, Rolland

maybe regardless Thanks versus into maybe the be composition of great. would for those or question. in the wins well, my composition there optics I around you elaborate storage Hey, million pushouts. you $XXX the is visibility compute Just composition, guess, first you as any even versus else network offer? can percentage guys. the that to and anything any on visibility Do the of can million the have $XXX into

of couple Hey challenges Chris, there. a there's Yeah.

those. high I public the would it. the type it, more be helpful; nature there, very you All So These just are all the ahead, maybe until one not going of types discussing offload give Ideally, based. to of out try can really compute, my is these time, over those there's is say, custom do it's to custom of go of more customer be NDA not don't level general, would us but That sensitivity there. something I'd thing. I'm is maybe networking, want applications. This accelerators, a in get really of bulk that on They customers programs. much to really storage in we say

Okay.

ramps And about materialize, for we transparency think go to that I our as things, a closer these hoping continue early I'm these got and product can to provide we prefer things talk as I'd that to do closer but we obviously Chris, to more as bit we along, get it's And mix. investors,

Sure.

you question, probably that will like like one. didn't you this If

would I Go ahead. Chris. love questions, your

you talked optics one terms AI, about had you was wondering and had point cards. if talked I compute. map, road ability about on provide there any also In AI At you to networking, makes your of you sense. all that But

would kind tabled to can provide effort. you I know AI? think that But love yeah, into you I of if compute

into, And million then you willing it's number? that visibility say, guide gave the that billion beyond you second $X is, time you $XXX to part Do $XXX let's have are million since question beyond as the million? been of to $XXX some

those, the applications. for of one, that I just to is for cloud-optimized think and real Maybe I AI Okay. high-level be on answer an opportunity custom and both will think

are people use thing, want merchant. their to things and in that's meaning will They some that of I to want combination. probably use a special think real own things

that's potential. think that's part the of I an So opportunity

yeah, I years And hit you wins, then we think the going when until ramp. into peak many them, it far would $XXX won keep as long-term from $XXX because million, peak the we don't as revenue those, to the said typically, million

wins the larger over design the becomes with So intact, $XXX million time.

was something think one, year How like early the an that big $XXX it ramp the call. of view But look two I time would too at million on that because it's would annual basis really, just the to certainly, that. is? year exceed our

you, Awesome. Matt. Thank

Yeah.

with next our question BNP. Ackerman ahead. come Please Karl will from And go

a more -- of that's at hyperscalers, into into comment, rebalancing and Marvell, that quarter July a delve just bleed wanted there. to softness a that's -- second comment. not modules Thank well? I just not you. some guess of for for data specific like I the an relates that's center, sounds industry to does company I as optical if But could, Yes. It the of

are picture and about XXXX, in how thinking to picture, influence And of then some the address you. XXXX Thank the XXX broad then your bigger despite terms gig? view and that the have product bigger given of for you Does you XXX-gig gig XXX portfolio XXXX near-term challenges. that cycle both upgrade

chain. point, the at and again, you're back think module the business digestion we're sell that's I our of this I Yes, optical we mean step inventory one in supply of part Karl, a seeing the guys, is PAM right. to -- that kind products we're where,

see would we that So, and and are we it. seeing that feeling

next it's demand that is question exactly next because timeframe is in but the or going quarter that which quarters. still recovers, in -- to When quarter, after, The few that happen quarter this the it's quarter, the strong. underlying probably next

the And the face if then half, in now becomes tailwind I second think then, your a course, other question -- the we that's case. of headwind and was on

ZR or your XXX-gig PAM--? other on the inside was center it think it on the data was question, I XXX-gig

quarters? on as portfolio of near-term, broadly your do think about Your but about the the cycle over you how that next market Thanks. think think upgrade XXX-gig the cycle upgrade guess, and portfolio because how obviously, you I you and about XXX-gig couple softer broader

ZR between to products, mean, a a inside and of year, quite XXX, rollout, strong multiyear upgrade XXX We the right, from X.XT XXX we centers frankly of I cycle think Yes, year last blend and announced. data tend that right? it's very as a had XXX, center, data

shift say and I'd a very demand the strong rate. continues that to So, PAM at the

have slope growth the but acceleration. kind in CapEx not inventory guys the cloud hyperscale at just revenue declining correction dropping, half. more And the growth same not or the again, of we of module-related issue. That's of first some rate of Again, a

all think after. end year, way its works continues very and strongly we last that the grow year, through consumption year and to this So,

you. Thank

Quinn ahead. Bolton from next with go Company. our And question Please will come & Needham

AI The question. those you just you different talked driven the have those growth you in hyperscalers about Hey by guess for fabrics Do whether are one clusters or Ethernet impartial I clusters? connected Matt. different through to think optics. for and are -- AI guys clusters AI one -- I clarification high-speed then clarification, InfiniBand because

just going parts drive Thanks. growth and or -- kind I from see more of And you have the think direct if other the DSP talked you the that week, line you DSPs the next OFC then there's drive in card. PAM. We've do and my don't where about talk PAMX forward threat curious address now about could the linear guys question you to the business? got need modules any linear is, of I'm driver, show modules

Sure. Yes. No.

OFC at time we've first of both this tend solutions closely to We to general, got for week. need. next with design exciting those. agnostic given partner the up they in just optics the an the and it's coming we're Yes, on one, So, customers point

it's that IP the fundamental So, matters. really

out As think there, it history been relates disruptive that's lurking the around that of I to optics. the technologies are

under by is ramp many OFC, of the to last pluggables year view real you years of around standard is come. to be our going encouraged the facto And XXX And we're there's for the of X.XT. people systems building showing at gig Our ramp de course, high-volume demonstrations us this. certainly, had X.XT, confidence product of gives new

would it, So attention all to Quinn, of we're say. I paying

feel single team Innovium, all We've it's think But now, and very which plus confident plus the approach various got excellent combination the nice announced, a platform, trade-offs understands switch a together understands we of with I set. that right assets coming also now Inphi coupled Marvell solution really really in a our and our platform. been in has of the our architectures. And

more after and on you and happy of come team rest the to OFC. certainly, at debrief And So we're the to that. with

a lot activity I think of there's there. going to be

Matt. you, Thank

ahead. next James. will And from go come Raymond our question Please Pajjuri with Srini

to Thank you. it's business see that wireless doing Hi, good well. Obviously, Matt. quite business. Question your on

of weakness market. in that Some have some your peers reported

we worry business? can talk time the semiconductor potential about in visibility, any about you build. see every to in you to Just out strength for have you the we -- you Because sustainability the to And particular? XX%, extent as start inventory look that I growth you what's that of next few do XX% business, then as driving curious mean, can quarters, to

about be out you you. there, helpful. seeing you're can if what that So talk Thank will

combination solutions, with some the especially big No, area, I the in especially then you think just more it think some XG the they tend of of type and have Srini, wireless spending, there's -- see I of But LTE they've XG and like chips call Yes. it, two. issue, incumbent larger businesses, be a have the new are point. then let's communications mix legacy, players got of in with that carrier wireless some bulk Sure. to maybe that XG of going large carrier is at all the can as pretty up, ramping this much to

a very had where is before gains little and the And legacy all perspective, on rolled content we older from in. really so the XG Marvell standard

a that's So for growth continued us driver a as nice to be result.

business. very around on the enough carrier tends mean And be of top as block been I'd you've see to say I well, that, this to a lumpy

I is XG. overall And bursty little be for So a happy it that's the certainly, a with going won, something would linear at plan we be us would very lumpy. a what is that is of a according in to tends it say have times. that and be. this bit terms this capture can designs doesn't certainly, we're ever really we we But content -- that little could move the historically overall, seeing, that we're not But year year in to in think going the of fashion kind to be growth growth

a you crossed which last it was look had mark we we ago. said years if remarks, bogey And the the set million just $XXX we finally, prepared in and year, in several XG,

happy by it's exact a really just to year, we're little bit it year. last like few talked bounded be years the able time after We quarters. open, that goal, exact had were haven’t in but that this We achieve four we a way, this left we going to pretty about it

the some there's for in the and yes, going of work is some on. good just issues obviously, portfolio. one end of markets. XG automotives and bright some So things and Marvell have through We other the sure, in to them there's other, spots

And I last our question? that Ashish, think, with is that,

it Matt. is, Yes,

closing If you with end some be can that maybe great. would remarks,

call at Yes. I everybody's I on Perfect. look year, When time a the today. Well, success it great last appreciate for was Marvell. fiscal our back

in in sort we looking the and in were I was I and was strong Inphi the say, Innovium extremely brought by Inphi ourselves, margins, -- few everybody we executed growth reflecting where we fiscal years great combining XXXX, very overall. a growth, later, It of really think I it with also, and back, in, the think were of XXXX, process during back, pandemic, I and at strong let's look -- well. very, way, we team the very

Certainly, to also in after real point we're through, where going trying and shipping a model back now We're that's back with doing our prudently demand more years to correction we're understand inventory, than several and and in to to that growth, managing real in demand. a their strong that we're expeditiously where very partnership customers, pronounced get a markets others. through extremely some of

believe we Marvell of point, this products. At consumption below we're shipping

years, team, also And that recognize do growth. gotten margin has the our to wins new get back last have we will funnel recovery lead business there. few want design sales the we gross work, that, can so, the done over when that hard team driving and in And our our all we've to of the win unit And then all we it increase profile. to in back

Marvell, my complete are seventh long about -- short-term say, year The I'd issues, CEO. the entering company at seventh actually, mean, we very this as to despite my prospects for think year So, tremendous. I okay? as I'm term

execute long-term programs in is us. and of needed front opportunity. end want really the R&D our to markets right in conviction have that's the And the customers our to We investment

on We the best focused laser to reassess opportunities. have an we're opportunity, really sure and and think, make focused I that

think I from priority made allocation capital a we've for one, strategic day Marvell.

intact as through cycle doing we have actually our better believe, best much for our programs really opportunity come I with stronger the with and a company growth much And a this ROI. customers key -- prospects can long-term

as the we process and whole we're good very the about So that always, of through going do now, company. future I feel

look earnings. So appreciate forward post and catching the time today, everybody, up to

attending now has very you for much conference Thank presentation. today's concluded. The

lines. You now your may disconnect