Net revenue increased 61% year over year (YoY) to $1.211 billion, exceeding estimates of $1.149 billion, according to FactSet. Adjusted earnings per share grew 72% YoY to $0.43, beating the FactSet consensus of $0.38 and topping the high end of management’s guidance range. In addition to the headline results, non-GAAP gross margins and operating margins were both records at 65.1% and 34.5%, respectively.
- By product group, Data Center revenue increased 15% quarter over quarter (QoQ) and 109% YoY to about $500 million thanks to robust demand from cloud customers and also a positive contribution from the on-premise data center business. Management called out specific product lines like 200- and 400-gig PAM4 electro-optics, data center interconnect ZR modules, SSD and HDD controllers, cloud-optimized SoCs and Ethernet switches as the contributors to the sequential revenue growth. CEO Matt Murphy said on the conference call that he expects this strong level of revenue growth to be sustained because the majority of their product lines are benefitting from the start of new product ramps.
- Carrier Infrastructure revenue increased 9% QoQ and 27% YoY to $215 million. Driving growth in the quarter was the ramping of Marvell’s 5G products at multiple customers. In addition, improved supply in their wired business helped drive sequential growth.
- Enterprise Networking revenue increased 11% QoQ and 56% YoY to $247 million. This was a big positive surprise as management previously thought revenues would be down on a sequential basis. But Marvell was able to deliver and exceed their initial expectations thanks to an improved supply environment. Driving the revenue growth in the quarter was Marvell’s Ethernet networking portfolio which has been gaining market share.
- Consumer revenue increased 10% QoQ and 20% YoY to $183 million. Not much to add here other than that growth is being driven by their SSD controllers which are featured in video game consoles.
- Auto/Industrial revenue increased 16% QoQ and 114% YoY to $67 million. Marvell said its auto business is now over a $140 million annualized revenue rate, ahead of prior expectations, due in part to the faster pace of adoption of their Ethernet solutions by auto OEMs who are prioritizing their latest models which are rich in semiconductor content. Outside of connective, management continues to believe the company’s next multi-billion dollar market opportunity is in automotive compute.