Marvell Q4 2024 Earnings: The Stock Plunges 15% After Disappointing Outlook
Posted:
Marvell Technology (NASDAQ: MRVL) reported its fiscal fourth-quarter results on March 5, 2025, with revenues of $1.82 billion and adjusted earnings of 60 cents per share. Despite these solid figures, the company's stock declined by 15% in after-hours trading, as its revenue forecast of $1.875 billion for the upcoming quarter, while positive, failed to surpass prior projections.
Key Financial Highlights:
- Revenue: $1.82 billion for the quarter, a 27% year-over-year increase.
- Adjusted Earnings: 60 cents per share, up from 59 cents in the same period last year.
- Data Center Segment Growth: Achieved a 78% year-over-year revenue increase, driven by AI demand.
- Revenue Forecast: Projected $1.875 billion for the next quarter, aligning with analyst expectations.
Segment Performance
Data Center: The data center segment generated $1.37 billion in revenue, accounting for 75% of total revenue. This marks a 78% year-over-year increase and a 24% sequential growth from the previous quarter, driven by strong demand for AI and data center networking solutions.
Enterprise Networking: This segment reported $171 million in revenue, representing 9% of total revenue. Although there was a 14% sequential growth, the segment experienced a 35% decline compared to the same period last year, reflecting a slowdown in corporate on-premises demand.
Carrier Infrastructure: Revenue from carrier infrastructure was $106 million, making up 6% of total revenue. The segment saw a 25% sequential increase but a 38% year-over-year decrease, indicating ongoing challenges in this market.
Consumer: The consumer segment contributed $89 million, or 5% of total revenue. It experienced an 8% sequential decline and a 38% drop compared to the same quarter last year, highlighting reduced consumer demand.
Automotive/Industrial: This segment reported $86 million in revenue, accounting for 5% of total revenue. It showed modest growth with a 3% sequential increase and a 4% year-over-year rise, indicating steady performance in automotive and industrial applications.
Overall, Marvell's data center segment demonstrated robust growth, while other segments faced varying degrees of decline, reflecting shifting market dynamics.
Other Data
In fiscal 2025, Marvell achieved a record $1.68 billion in operating cash flow while significantly increasing shareholder returns, repurchasing stock and issuing dividends totaling $933 million.
Forward Guidance
Marvell’s management projects Q1 fiscal 2026 revenue to reach $1.875 billion, representing over 60% year-over-year growth. GAAP gross margins are expected to remain around 50.5%, while adjusted margins should hold at approximately 60%, even with potentially higher custom silicon volumes. This reflects Marvell’s ability to efficiently manage margins while scaling its manufacturing operations.
Looking ahead to fiscal 2026, Marvell expects continued growth in the automotive sector, though this will likely be offset by a sequential decline in the industrial segment due to variable order patterns. Overall, auto and industrial revenues are projected to decline by a high single-digit percentage.
Despite this, Marvell anticipates strong year-over-year growth, with its AI-driven data center business remaining a key driver. The data center segment, which accounted for 75% of total revenue in Q4, has become the company’s primary focus. In fiscal 2025, Marvell strategically shifted investments toward data center growth to fully capitalize on AI’s expanding opportunities.
CEO & Management Commentary
“Our custom AI silicon programs have now entered volume production, and demand for our interconnect products remains strong,” said Matt Murphy, Marvell’s Chairman and CEO. “We’ve secured multiple new design wins, including several custom silicon programs that will drive future growth. With a solid start to fiscal 2026, we anticipate first-quarter revenue growth of over 60% year-over-year at the midpoint of our guidance and expect strong revenue momentum throughout the year.”
Stock Performance & Investors Perspective
Marvell Technology's stock experienced a 15% decline following its fiscal fourth-quarter earnings report. Despite posting strong results. The recent drop reflects investor concerns about the company's growth trajectory in the competitive AI market, despite its strong earnings performance.
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