Marvell Technology (MRVL) 3 Dec 242025 Q3 Earnings call transcript

Good afternoon, and welcome to Marvell Technology Inc.

Third Quarter of Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

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

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

good Quarter and Welcome Marvell's to Thank Earnings afternoon, Call. Fiscal XXXX Third you, everyone.

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

forward-looking certain Let everyone that from could results significant comments management's statements, actual uncertainties which our differ made risks me and are that today to remind cause current to subject include materially expectations.

we website and statements in most and our forward-looking well release, to which Please posted our contained earnings today update SEC the factors review filed and the recent the risk XX-Q as do cautionary as filings. our on with not press XX-K statements. We intend

in During XXXX. be to held to next on our our certain release. will our I reconciliation announce refer June City Investor XX, financial between Day we GAAP A call will non-GAAP and that financial available measures our earnings in am today, press pleased York measures. non-GAAP New also is

an More in details release. will be shared upcoming press

turn to call now Let over his Matt comments the Matt? me the on quarter. for

everyone. good Ashish, and Thanks, afternoon,

For quarter of million strong revenue $XX demand by billion, of outperformance third the execution. the Marvell XXXX, and midpoint with $X.XXX growing above of guidance, AI delivered driven XX% fiscal sequentially the

line that our contributor will success Stronger target silicon than to this in our earnings leverage non-GAAP line business model. in a time operating result, double $X.XX growing believe margin silicon model. well was long-term growth also the substantial accelerate share As a our rate the in ramp continued midpoint our XX% This top per achieve was help earnings than which more operating of to our sequentially. above highlights by guidance, of custom was performance. growth We rate, forecast key custom

outlook guidance. grew On pleased our silicon I'm a year-over-year more our year-over-year of the for in we substantial project a era our the continued growth third to return of fourth growth growth with new Marvell. by accelerate to revenue along excited where year-over-year with results XX% Marvell growth very about of custom is revenue growth for even programs, quarter, by X%, and at midpoint ramp a quarter to the marking production optics. basis, strong driven entering volume

the our multigenerational we agreement. agreement center Amazon interconnect encompasses This electrical custom AI Web DSPs, a Yesterday, broad and Marvell's Ethernet semiconductors, active retimers, PCIe of switching relationship through cable strategic expansion Services silicon data including modules with X-year a solutions. announced range optical of products, comprehensive DSPs, center multigenerational optical data

cloud the Additionally, compute Marvell a will the leveraging collaborate expected volume scalable accelerate design. This advanced silicon capabilities in in of and infrastructure. in coming accelerated AWS significant years, demanding of the with EDA meet to represents we AWS needs for step-up working the the semiconductors of look AWS on business forward custom X between companies to the agreement AI and that and networking with

growing capabilities Let achieved each silicon the ramp market these strong a markets. our saw These our $X.X end AI in of for as by demand In sequentially. were custom AI me XX% step-up billion, our offered revenue results custom we now quarter, record customers significant chips. and differentiated end our driven increasing results discuss our new by center the of third and for XX% expectations data year-over-year for

demand to support AI We are and customers capacity seeing have our quarter strong the secured chain custom forecast. supply continue into fourth growth

samples engineering highly silicon to methodology chips team. Marvell's first-pass production from complex initial high-volume without these a billion-plus world-class ramping to in $XXX and robust any testament is [respence] on success design Our transistor

supply environment. deep and were team key a operations ramp rapid the enablers seasoned to partner drive in relationships of we able Our were constrained

higher the has advantage basis. on Marvell time-to-market In revenue digits their benefited third more on their silicon from is percentage double collaboration for execution which electro-optics grew given from sequentially our even and critical products, superb with expand projects. our forecasted customers them confidence a than quarter, The significant we a to

market-leading products, strong PAM and for first We see X-nanometer bookings to industry's our PAM and process XXX shipments we continue technology. X.XT DSP gig of also the began

strong the win to continue this for a leading momentum to with see ramp next and product production customers design We year. accelerate expect

industry's platform predecessor, and lowest To optical featuring announced by meet X-nanometer marking X.XT optical consumption and leveraging designed module highest insatiable products. at bandwidth for AI's the advances need and efficiency. compared X.XT the to in technology DSP, next-generation than Today, improvement Marvell significant lane By cadence next-generation electrical its per a is gig XXX reduce we energy the accelerating is power, of X-nanometer to SerDes, interfaces. process electrical the power more in this optical XX% first

XXX-gig performance, team starting multiple remains module electrical DSPs per remain best-in-class fast-growing continue driving the of partners. in schedule are laser-focused to DSP market. and our time production see acceleration with to market In XXX-gig this to on the large active and cable we ramp lane leader to electro-optics in market, an the Marvell's

We first applications. have copper industry's XXX lane, TAC per higher-speed to sampling X.X DSPs started short-reach upcoming gig also the interconnect address

fourth are growth fiscal low the to in for strong end our mid-XX% range. forecasting the XXXX center ahead sequential Looking quarter to data of market, we

these Ethernet by We expect into our high-volume be well from as growth AECs will as strong revenue products our This and interconnect drivers, be which TIAs, DSPs, significant switch augmented to growth programs further both products. another in continue step-up to include optical our by DCI custom production. portfolio, this driven as AI ramp

to million. these enterprise In turn to revenue recovery sequentially. carrier We growing collectively markets a with markets. end carrier Enterprise quarter, Marvell's and Now Networking was let revenue me began both was X% while end third $XXX of million, see the networking in revenue $XX

from in to in percentage aggregate networking quarter, to accelerate the fourth with grow We expect enterprise of carrier basis. the forecasted revenue the and a infrastructure on pace recovery mid-teens sequentially

consumption. below growth to continue revenue end products are market forecast momentum improve Marvell and these to end X this We markets, pleased anticipates order in see our although still shipping

was in the end sequentially. market. to $XX quarter consumer growing Turning the X% third Revenue million,

gaming from in the fourth begins revenue bottoms to percentage typically a seasonality demand, is which market fourth expect to out the quarter. quarter, the our the second decline first on Looking to quarter in rebound then consumer due end we fiscal our and weakens and quarter, in in This sequentially mid-teens to basis. ahead

end market. Revenue started automotive to third was X% a in and the recovery we Turning $XX see markets. industrial as end to quarter our million, in growing this sequentially

in sequential quarter, auto non-GAAP Marvell of industrial digits In to the team Looking from excellent share ahead are summary, above to XX% achieving on top low grow and mid-single we a the revenue growth and delivering the percentage the midpoint per fourth market projecting delivered the fiscal quarter, third end well revenue fiscal sequentially to the and guidance. line in earnings results both basis.

fourth year strong of full of our sequentially fiscal at fourth grow and quarter. in this again AI even continues event. our the For the it continue results for the earlier we quarters are fourth target $X.X guidance. AI quarter, consolidated to this year at our to revenue revenue billion almost the of midpoint lead strong third the are double revenue to forecasting stronger quarter, center the year an AI X way With we outlined significantly quarter to and belt clearly we year-over-year exceed under to AI XX% data driving in enabling expect growth set forecast,

Over organically of enabler both become to the and a accelerated through invested critical acquisitions past several years, technology, Marvell infrastructure. has in strategically

our of a we data expect of has full and solutions account interconnect, ability XX% and stitch in into to for center in these in third increase We driven suite have a across AI, percentage the market switching place platform. Marvell's center to the the fourth grown consolidated quarter. again quarter, data compute by to uniquely and this together unified end revenue

other forward. center, R&D end and the focused full our the are of actions fastest-growing super we discuss which third strong significant his advantage transformed will Marvell and actions an section. center taking our position AI rapidly semiconductor restructuring relative opportunity into company, our The to towards going In while operating on and These in data data cycle. has Willem made third decisions in continuing purposefully increase of to redirect center in investments leverage further to intensity resulted AI-first to our the quarter, towards our goal quarter, we solidify largest is in drive these the completely data markets. a charge

the is technology tremendous expanding is at advancing a and rapidly. pace, opportunity AI

We optical photonics. and are electrical interconnects, [indiscernible] continuing high-speed to SerDes, including platform, silicon enhance of XD our all comprehensive technology energy-efficient XD, packaging and and aspects advanced

are we optimizing fabrics. for addition, and In bandwidth SOCs memory, compute interfaces high

lead process to Our also progressing in cutting-edge technology. as very the continue well platform industry X-nanometer we is

Our Mil's enhance performance, to internally of efficiency, X-nanometer design suite broad developed and best-in-class platform flexibility. energy IP density our includes

for tremendous are X-nanometer next-generation customers interest seeing designs. We from

momentum. we networking, which see Turning to to to include gain our starting enterprise center carrier non-data the businesses, multimarket encouraged recovery are and

in a see to multimarket targeted company. and significantly all and had revenue of long firing we in to a cylinders, over investing period industry-leading built setup grow we very up have remember, in portfolio on an businesses. The favorable scale Marvell may gain successfully to you As the heavily team manner We markets these continue end share these to plan a invested products. is

XX% by our our attainment, outstanding has strong by driving have to from is the Over operating line addition EPS the quarter In that This top third time our quarter. tremendous Marvell leverage, fiscal grown same X.Xx which results. first rate. growth we the revenue revenue non-GAAP to growing demonstrated financial year, period, also team is XX%,

enabling flows, cash to the up the remaining repurchases XXX year. us bought year, through plenty and million our operating throughout back of we strong step driven have quarter cumulatively This have We stock fiscal authorization. third

to stock repurchase year, may addition earlier our $X As a this existing you program. our Board recall, billion authorized

reducing percent compensation as and We of are this expect expense improvement we metric on forward. also going significant in revenue, focused our a stock-based

expectations deliver in our we this positioned stockholders. fourth financial are growth for well we believe outstanding and strong Given quarter outlook revenue to the our robust fiscal returns XXXX, for to

Inphi. smooth over Loy semiconductor to decision over like including ensuring to transition. turn distinguished XXXX. made next integrity bench Marvell world-class would to instrumental Loy I Inphi team and past Willem, express contributions After member has my a his was of talent. successful few call key integration of and of I already deep announced thanks into Loy, the this retire succession and to characteristic of a Before Loy and long the has He in Marvell leadership heartfelt career Co-Founder a in With building in industry, has in years, thoughtfulness, team year. engaged and my of in a to incredible planning the the April

Marvell forward in with staying also his are after to benefit from wish family. the and his his We time with best We he forward can him to he well-deserved spending expertise. looking connected we retirement so during which retires Loy looks to quality insights continue more very

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

everyone. afternoon, good and Thanks, Matt,

start results growing summary and financial me was quarter Revenue in well fiscal year-over-year the above of a X% with of Data sequentially. X%. third the XX%, Let our XX% XXXX. billion, our at Marvell's end the midpoint was third and market, total quarter for driving guidance, X% of $X.XXX followed carrier was at auto revenue. industrial center with The and by each consumer networking of largest next enterprise infrastructure XX% largest

X/X are impairment As behind the the quarter, towards results investments assets Matt third that approximately charges This future of contractual I reflected would aggregate additional charges certain we the mentioned purchase were The charges an for redirect in components made third in largest decisions GAAP X and in their note technology is prepared our now nature XXX restructuring intangible these million, and resulted his data the restructuring charge restructuring largely remarks, are in also licenses noncash which us. of center. obligations. aggregate quarter. and to in acquired that further for

gross forward. Non-GAAP Continuing going was was GAAP our XX%. the are higher updating plan markets results. from invested that revenue These we on of targeted product than in several forecasted investments margin below in portfolios gross end and XX.X%, and fact enterprise we margin charges we our reflection over a significantly to slightly years, saw guidance more as silicon. these our carrier custom have

intangible XX.X%. compensation and Moving our billion, was operating on was stock-based in of were acquired restructuring operating negative while assets. XX.X%, $XXX operating line GAAP margin were amortization margin million, expenses. Non-GAAP including GAAP operating expenses $X.XXX expenses to guidance. non-GAAP costs, with operating

of illustrative For sequentially, Non-GAAP the $X.XX per loss share the XX% $X.XX. by $X.XX, our midpoint Non-GAAP grew quarter, per leverage diluted in business the was diluted was third share above of GAAP guidance. model. EPS income

sheet. our to and turning Now cash balance flow

in $XXX operations growing $XXX from flow million substantial million, Cash quarter the was the a from quarter. prior third by

in support Our the $XX the through third market. our inventory end at are data million, cash to We the quarter $XX $XXX significant to the dividends. increasing we of center was seeing returned quarter growth million prior by million stockholders from end

$XX million an of the we increase repurchased during quarter, prior the third from addition, of quarter. our stock $XXX In million

was billion. total Our $X.X debt

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

end the quarter, $XXX million cash of our the As from fiscal million, of increasing were equivalents by and the prior cash $XX third quarter.

Turning fiscal to of fourth XXXX. Marvell's quarter guidance for our

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

We GAAP approximately be gross expect our margin XX%. to

We approximately XX%. to be expect our margin non-GAAP gross

For $XXX be GAAP approximately expenses the operating to fourth quarter, we our project million.

to our anticipate We be operating non-GAAP $XXX expenses approximately million.

the quarter, income debt our fourth other including on be For approximately expect expense, and we to $XX interest million.

a income. XXXX year-over-year operating tax the non-GAAP quarter. in rate non-GAAP tax of fourth that to expect Please of to in rate meaningful of in range step we We in be the forecast our for X% a increase fiscal XX% note anticipation our XX% to up

basic be in to range million. of shares $X.XX. income per our $XXX We GAAP million average expect anticipate outstanding to $XXX weighted diluted share diluted We be $X.XX average and weighted our shares outstanding to the

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

fourth third We operating on generation delivered and continue results, well. year Marvell revenue return margins, to for see in We strong focused cash setup our strong a of and operating in efficient drive revenue cash next the for continuing quarter. flow a as as down compensation significant remain are to our fiscal expanding to acceleration guiding stock-based we year-over-year growth strong leverage, percentage shareholders. meaningful quarter bringing to

to forward guidance continue and fourth Thank metric. and in you. to line GAAP Operator, please improvement our with to the quarter, drive looking pleased also announce are this return we the open in Q&A I'm to instructions. profitability

[Operator Instructions]

First question of comes America. Bank from Vivek Arya with

overall. upside 'XX. fiscal Matt, you should when you 'XX how for start I fiscal help we could the then in these Is supply? was given 'XX the helpful. hoping revenues would quantify fiscal about fiscal just determined And thinking it is AI So Is And kind that and on it metrics at by? visibility? of be quantification very look more what that funnel, demand color 'XX

Yes. Vivek, thanks for the question.

ahead. the several year. So of our April for both and said year, AI -- as months from $X.X back calibrate we had and for see dollars. this $X.X we that you this this were just everybody, billion Last to back updated this day quarter, year in talked about for AI billion we tracking third we're year for of quarter And we year, millions fourth year of this for can ahead and guide and hundreds results our for quarter significantly and now, tracking next is order next on

results, this So actually has stronger-than-expected business every think, the done It's quarter year. had fantastic. I

year, very positioned with job when And it's And then driving the on We're demand. your plan year. customers again, as what's funnel basis. -- to portfolio side upside side, drive and need and the as a have on -- And next our we very supply as to AI question we aligning our done it next about moment what looks the capture very, we've switching on support but the mean extremely strong, is to on team so for interconnect at that. custom great which of well well optical our both all a and strong partners. well a the and in year-over-year outlook I to the

So firing Vivek. cylinders, on all

question Your Bank. from Deutsche comes Ross with next Seymore

then the you've I management but on noticed at the question. getting and just clarification the with the Matt, a clarification guess, I been Loy guess, that to retirement. press other if successful And obviously, may, congratulations in seemingly is, then first, opportunities. some is Marvell, I very

on looking the questions both Marvell you diversification. is of customer commitment at ask your or second comment once. then question But And elsewhere? kind could more my to I'll at on So all

diversifies How we compute timetable day? by talked Is think it's the same custom multiple the it business 'XX. do products have through and whether or things by in your customers AI at that around? moved about 'XX as that Or we go the you calendar still

nature of your appreciate and I direct questions. Yes. and Thanks, always frank Ross, your

thoughts. couple a of So

enterprise The turnaround you that time, at And think CEO billion. value this started this. of X sunk Marvell to was years. for situation. massive first it when about is, $X here, I now Many been remember The I I've a at

think years, the is outstanding. and cycle TAM all and a data team biggest growth We've career, worked Marvell. in can't center The best-in-class. seen opportunity. I am I the last On transform, tirelessly, got I've over is company team in, single and to company the the X place Marvell. is the AI is work to best okay? position this now me people, which better my of drive of at technology than have Marvell for And out my opportunity what super all

Ross, let that's just listening. topic, me be everyone So this and you clear on for

and focused As Yes, I'm actually that on Chairman here. Marvell, shape diversification. XXX% CEO said, of this the great customer With company, in okay? we're

presented we day, AI of If as of AI accelerators the range and custom as you had, you back actually on opportunities. variety look, to go we well wins a design other a and compute both

good actually across So us well is large solutions. with -- customers. them the called very of the and side. out multiple are AI we we custom Both multiple Day, different the on both as accelerator X customers, tracking have both across all opportunities side these driving well now, with right breadth as compute volume the And

the into third next have going And future. large year. we then programs other coming production There's our in customer

silicon. that's, So ability of lot gives our ambitions data proof another long-term in again, our drive custom or point confidence point to a that us in

lot very, would about on they're in a thinking even our And getting and remarks, current platform, front, complex sort attention but got say and customers broad that's is you. Thank of, just X-nanometer the best-in-class, IP designs extremely is beyond. on not of said prepared of everything as thing I that's of also we've progress tracking suite from our the So technology my the good well. very final I

Your with next from Harlan question JPMorgan. comes Sur

Congratulations the training That to at your so your custom solution been solution for today X same the cloud results AI to now, year, at next-generation deployment Matt, ASICs. these ramp be on months end right, articulating on the 'XX. strong custom calendar next which great customer customer strong strategy according large announced This them execution of its strong would and see has nanometers, outlook. X-nanometer for ramping in several customer.

Imagine pulling program. their in like AI they're many others,

assume multiyear few ramp by map fair the of the So given X-nanometer that that strong your vendor them. multigenerational characterization your ago, your days was next customer program next-gen a lot what a program. noise customer sort why X-nanometer to this appears be there of it around announced X-nanometer there year. of I to targeted continues around you team, supporting with execution competitive will be reason the The Marvell ASIC late this only because total and training of ask Is with is agreement to road this on out be just ASIC

for question, Thanks Harlan. the

first, I'd to that the silicon obviously So see our in we're think say even of It's excited is momentum, the in that custom we since time. the can gained where playing. very go. AI It's tremendous role terms all day news

as that we in validation to a full many be see of continues and we So years our it ago, strategy that started swing.

our TAM billion. on that XX% we set a call, share data market target and -- on we everybody of billion the team of in for that the a $XX silicon custom we being called AI center, billion For $XX set and total $XX day, at

billion. $X that's So

million numbers, now. context, we're had $XXX is right about custom to those course, $X part on for And our X from of going year. this overshooting AI For said, of billion next we year,

take market your year, $XXX billion next future. to line that So a about I in share take of the your think bogey is the XX% million draw plus this this $X plus year, would way

for very the announcement made we That's is AWS what And driving. with both we're companies. significant

importantly, supplier It the of most a drive its as us, first range in revenue to For that in going as custom them, covers you as and it broad agreement. products. AI networking it's a in products as us, for all, it's It's nature. pointed is a to out, significant multi-generational of X-year well

with building that before we're with even to So this relationships achieve customers, with we're goals confidence than kinds of we agreement our driving. that these have and these more Thanks.

Hari Your Toshiya question Sachs. comes Goldman next from with

with customer what And Matt, the B and coming I at part are inventory inventory your how And because of on quarters your some worried business of means going AI. tariff build up? had question sites, about marketplace years levels in would little curious over the customer X-part you can your I'm for and context today? the question of is, I asked expansion ASP kind DSPs years the or to a content a optical then characterize I investors if the your speak transition that particularly electrooptics you within forward. X.XT coming think

Thanks. Yes.

today, and very capability, supply visibility, the to our to of is overall till On module dynamic side, we look, customers. chain order pandemic robust We inside continue mindful now and right in can Look, of drive time. large to best orders a a are demand, have the as optical we come and strong built inventory. inventory upsides strong we quantity able lead and the through always continue meet very about very the picture, and we're on so the bookings

of back going people their was And ahead go were even ramp, you skis to getting concern what this AI cetera. to was et year ago, as happen, a started a if

diligent continue be strong, appears Visibility strong. now, right to and is continue bookings we be So as here demand monitor. it great. But to is

expect business next We us grow for to year. that significantly

fiscal see strong as from next be year, We're the we take 'XX away It into that part the next I On be don't now will to to the a that next be very it year. XXX-gig driven through that X.XT of but relates product year. will growth to want cycle continue our that, shipping will production. contributor

so so far, good. So,

question Jefferies. with Curtis Blayne next from comes Your

a on carrier. want Congrats and good I to quarter. ask actually enterprise on the

now, maybe you're about in been I past, X at mean plus has carrier digits in a talked the guidance billion rate. run You've I double getting think, looking quarters row. $X to back up, with I the guess,

can quickly that broad-based And curious billion think to of get the can rate how $X plus just you recovery you is. do you how back run annually? kind if So

certainly, get mid-teens, Yes, But question very which Yes. Thanks, if QX, then a double billion back is back, we and of digits. when to the run up $X think Blayne. and about up X% you we're were see to enterprise to going that combined quarter QX. we're guided in sort encouraged we've talking rate. The carrier it about

So net-net between the second recovered grown sort markets those half shipping faster consumption, together your end in we albeit both of market below which end is have than still and thought, question.

market won As we is -- took of Enterprise and so new huge something it's is through really that not cycles which production processor. we're market that stations in a but recovery inventory product that's incremental new be going as we It's some in bit more than where to few drivers, X a counting now. on have into specifically enterprise. get end next carrier side, ramping socket really It in corrected in we own pronounced socket, and in we it resumes, to recovery. the production, broad-based ago. than unique would a we is year also our our base a continue growth It's layer thought a but little that's really years as carrier more some both have longer own

to going Blayne. be that's So contributor, a

us terms in and marching just along and it operating really, to really income the of line. tailwind between driving as for up. business keep going keep just X we're that top so and recovers, a And profitability And it's

a how good, basis see the far, plus updating on We'll goes. especially we'll everybody the quarterly there. keep But so guide. on mid-teens it QX so And so

Tom O'Malley next with Barclays. comes Your question from

the the on of Congrats some results. I the wanted of announcement. ask great parts to Amazon on

products. PCIe was So mentioned, switching AEC retimers,

next robust companies for just look some maybe big out significant kind that to are outside other the of best you? significant And you're are when most Could optical of going see do size over So revenue seeing ramps. you area you like be growth Just where those a hearing smaller you what DSP lot the going business. today? from to then you those to core your XX of are for just how businesses DSP months, are the generally, that most nonoptical

Yes. Yes. Tom. Thanks,

the It's of and networking sway X. not important. massively, part custom agreement, the as So massively are side the extremely both between side the

very the on X-nanometer switching switch excellent production. those announced acquisition XX.X And come is compelling. with product various stages side, that's that very, gone our More of in all had networking also TLXX, Look, in are T they're there. front, areas road team a product. wheelhouse, there think our which Innovium. we And strong We So Interest and an into is maturity. done on our in our map, all the job. to great very has we

AEC's So that solutions emerging has some categories an partners. into we one, other us. very take-up strong And then basis, of area next more we're investing think, module see But we're strong long-term definitely is still growth we come, to see but And ramping are being areas not very a only year. next a for bright our again are on now heading of Marvell year. as in. through to that we those a spot. the That's area that

X-year of of type we're we things arrangement, to can X the just opportunity lot the about together a solutions, is innovation about think to drive there's a do just even to I think very new it haven't So sometimes thought way together. excited companies of, drive what

very, market seen success services, us cloud short AWS complete supplier time some And to theirs, us complex designs great to very we've EDA rebust very it's good in allowed and as with of as in with using performance. and customer very capacity then just for our a

think really with to And So really center the testament and I relationship I first is be strategy data of for landmark the is associated to and a for whole Marvell like say good would that honor is them. I team get win-win with investors. all-in us see the type really also and our the a recognized has final for it's that agreement a an think, for and us where the to put Thanks sign this, thing together it's

Evercore. Mark next Your with comes from question Lipacis

I may. if I a also question, had a clarification and

$XX Matt, think AI of did TAM the $XX I billion of custom you billion. suggest

the market, is as doing And landscape, So for suggest And now is, speaking. a workload the silicon, you every is custom Blackwall It what SKUs the do was does why standard, what helping maybe us different on you X a you the a side? like on happening, custom many is why how competitive -- a about NVIDIA the bunch believe guys you're was you And part standard that, ago, of thing? landscape the becoming custom you're can on thing? everything why can the becoming of understand then seems is do customers help xXX run to half of for characterize the on this your question custom custom just run custom that has roughly side. years How chip. companies whole silicon would server a

Yes. Thanks, Mark.

the So to AI day. to refer back

market what okay? TAM, okay? So custom of that, to billion we And of out called was our a numbers. kind XX% share then goal drive $XX is that's plus, the So

that, scaled of who very large, see and -- And up types highly other within can and one do solutions. then we really competitor then ourselves these

types a customer there are to that ways approaches. system there's going going be opportunities Now the of get There's different some been to lot these people a noise terms and of to already in of around in these lot try of applications. of

I for including bulk that the that and custom of SerDes first. the and capabilities from volume on of on, the the interconnect the can majority road IP going packaging, in to is internally, is view But be combination represent the and -- and our and companies ship accelerators IP actually and compute scaled-up HBM Fi's like what's have end, the the is but Marvell, and silicon go companies going map shipments vast strong to of in the

a team, zero second to silicon, team a talking execute that's to you're the with design enough past of billion experienced [quality] is a advanced hard do a and zero transistor is when nodes. about in type most incredibly is designs The the what $XXX first which means

field, to to meet have terms once The and third part have then of into and dynamic get to supply to of yield, capacity service these customers the quality products drive the that know-how is chain. the the the that capability manufacturing needs in they able be got drive and to you

to up, is high. that we done to we've know all because stack of one firsthand actually you And several the them products these barrier of ship when So entry now. very

are big that is to the coexist, a there's on it to that are to optimization, And And the what's landscape if the implements have it zero-sum So out and take really the as somebody TCO completely from is. comes competitive that to custom the still a over the whatever view to cost enough there. for are And merchant the the going down [indiscernible] to takes custom it on what to basis. a get makes and workloads performance TCO. going offering of a buck as it then obviously just design, of it's TCO doesn't product It bang implement These the mean we go where sense silicon why, that's going the game. ton despite you not well on it's get.

come the in power. help to to drive not about point higher try choice and with the also And the be of ship, custom total just solution silicon We system the maximum and It's that other customers and one to a they the way being view the you're interconnect out how custom chips, come think how they but lowest is of it's know at be way switching factor for of the ownership their with and and our around than network performance helpful piece it. and to doing layer of also possible the the to anyone else better our only accelerator not of implement the our in chip. get ways cost the when partner

Mark the it's those week, definitely dynamics we'll are and the today, this moving in our we see announcements train see is but direction. the this you keep I updated, you custom only can think And and just based on so in happening. And revenues,

comes Your Svanberg with from next question Tore Stifel.

Congratulations and to retirement. congratulations also on on the execution Loi his strong

X-nanometer, today. ARM the announced X.XT you DSP So

it's the ago think only you XX about I announced X-nanometer. Inova months since

be Am power. add too color towards Or lower there in going I push great. on Any was would big marketplace ARM X-nanometer you timing much there's can in surprised and a now I reading the a timing there? more So little about the bit there. the where is of on into something

Yes.

the can all reality to our the at what for market to faster mean, that think you and the if I is, data seeing and beat the Tore, consumption look rate means but we to we need be you you're we way need center all to of I to think have competitive the faster and on consumption power see solutions we reasons themselves, be market. is obviously lower power level hyperscale be back lead the for up to to speed. at centers data move time the need the the

you is years, it technology it's And semiconductor you you simple. in the for I doing to market, sample and the -- an can XX best win. It's okay, this the I've that's industry. when that inflection this in leading enter going tell company and growth And with the it, absolute works, can available, been

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[indiscernible] from Cisco. comes question next with Your

versus Matt, question in are and total set custom to business silicon? any level we Cisco I could kind hoping is [indiscernible]. way silicon. of terms Where on had us. the the there of total custom the I you I in perhaps for didn't business. part could 'XX the kind to portion, say, a the of what you to the calendar calendar 'XX. for growth for earlier an but question, you speak of and And know want non-AI foresee to 'XX just percentage a was growth And size overall rate give you AI AI

And pretty think at. Cisco got I'm yes, Thanks, doing just new Yes. a since didn't go great sure which you I job, you're to CJ. you

that. So congratulations on

sorry, I joke about the the -- a there. on question. make was lost question trying -- I On your sorry, to

your me tell -- again, one question more time. the On

Total custom silicon versus AI.

Yes. Got it.

the Day look, we -- next AI. year, programs year, have year this the by the for it's driven AI X, custom It's seen They've they're this largely and and The we've the has the to of we kind in, programs. Sorry. and been well, silicon others relative higher. the So just is said of other this come upside at happened magnitude AI but it -- number okay? But have -- vast majority. a the done of just really

wouldn't AI a is for we this those majority majority next as AI off the said vast -- is AI some But year. I of wins because other and example. design the of off write year Meta So vast wouldn't with I at [indiscernible] for we at an we like custom showed sort have

are our I'd That AI on out. default was, higher good switching the say because line. the not for types that those this the a and we revenue but half, non-AI quite base, going next did come kind by and custom bit those year, second to on going growth. and and help it's is in top to breaking been rate growth I And been the whereas that lower I'm in areas solutions a year line, really kind showcase going drive just in then the a think, into year custom market next are already other noncustom side OCP, it's the really drive also electrooptics of be the grow at both of to of ramping has and

with comes from Caso question Wolfe next Your Research. Chris

next we year, into guess, custom I go said good expectation flow Question importantly, the the the as custom margins. ramps? does to next into that for And on you operating on the guess, side. And How as set you you year? and business I year, go in as on past that very help operating leverage what is if just is next us numbers as the through then as that is could on level to we go business margin gross margins

let I'll take Great. go one. Willem Willem, Yes. ahead. that

Yes. Thanks, Chris.

be great a margin to the has saying ramping in gross half, as or team So year, at the the significantly, second by dependent margin let clearly, done mix. been driving XX% very when right? so next even -- And gross on look me we continue job custom programs above start at we've out the here will

our recovery overhead better the on leverage The from side. strong a businesses getting continue we're center manufacturing to on optics in -- we So non-data see very next growth year. revenue the higher that absorption

we to you continue that a XX% when together, so path about be And year. all see to add next do through

more of different. from seeing today, significantly what even be custom obviously, Now that would upsides, answer we're

guide operating at In you XX% terms came of is look when the XX%, margin at down QX our OM. even And about leverage, to X%. our X.X%, in by we results, so up up margin with around gross actually

the top you us continue at year line significant through next very to with expect leverage OpEx when on so you next a look outgrowing And to year. right should focus control, have through our OpEx

see our starting of of really next towards year, margin year. our bottom through end approach in the nice a next very really range to long-term increase should And so operating the end

Malik question next Citi. with comes Your from Atif

other Matt, Reinvent growth the the training their do listening can hitting [ AWC both on that he Tranium today, Matt inference. phase. mentioned I next and at ] to ], and [ Garman Congratulations was chip

So customer you at my has question thinking sales is, from the from mix to programs about the your ago? X contribution XX changed days ramp this

we've to together have that. our you custom in with where especially our do No, I think -- been No. this we've able business very area, been to well key customers plan

completely more but and about about plan, can team dynamics, probably prepared detail to I usually the we've to our Matt manufacturing so plan, support and all thanks to my I away they speak. that need, we're so would I And we're appreciate question. in go got say, customers defer talk That's to I do any it. whatever for it. really their and the going to and from stay supply But

Your with next question from comes Raymond James. Pajjuri Srini

you think larger And question I larger to Customer My in obviously, being think XXXX. about B to and customer side. the I At called also a And ramping be or C on sometime alluded talked is seems customer ASIC that the well. potentially doing customer B Day, you opportunity Analyst than X/X, A quite combined. you

been progress the you other how the customer still there's just customers? if if to So curious I'm opportunity update larger and that has X be any than on C, expect

AI yes, silicon is, the be to go their other that Day say continued go optimistic other to answer tracking customer go short also the we're execute and The the on, general, from and then continues concepts whole, It's it X. just so opportunity lot goes of with teams, to opportunity we're about Yes. largest and have unchanged each to customers next-generation we what and in have executing. There's X can custom support set great quarter from achieve than both very I'd a And we just gain seems treating. as momentum and well. on Thanks. do

remarks. There at are time. call questions further no CEO, Matt over will to turn this the closing Murphy, I for now

appreciate Closing really you all thoughtful And questions. -- Thank look, much. so Great. remarks. everybody I the

we 'XX. the as optimistic finish here, year So our we're very fiscal about

we about, of custom full happening. year have As talked a ramp we

to have of optics momentum. continuing a lot You've got

then kind and into like just production for time. the AECs areas new of Our volume first going real are switching business growing

terms of seeing even We're strong profitability very a fourth and business, kind multimarket that's in of in line our in contributions. and our recovery base encouraging EPS quarter also top very core

plan, we're this to opportunity and XXX% framework We then investment have really super cycle and support the capital very a AI on allocation targeted focused it.

all I'm the you of Day to our excited year update model entering given Investor the into. sort updated have we're comprehensively new era that to next with mid of long-term

also in returns service strong outstanding said drive our for our stockholders. to are for customers and me team financial in extremely and I As all support Q&A, the and the

holidays, very everybody wish to happy look everybody. you want listening Take the all new to care. year. I seeing on and I who's and the in forward So call Thanks,

today's presentation. attending for you Thank

You disconnect. now may