What you need to know ahead of Marvell Technology’s earnings report

Key takeaways

Marvell Technology is scheduled to report earnings for the first quarter of fiscal 2025 after the bell on Thursday.
According to analyst estimates compiled by Visible Alpha, the technology company is expected to report a decline in revenue sequentially and compared to the prior-year period, while net profit is expected to decline steadily but widen the loss compared to the prior-year quarter.
Investors will likely keep an eye on data center revenues as this segment is exposed to Marvell’s AI offerings.
Marvell may also provide additional details on AI’s impact on revenue in its earnings report.

Marvell Technology (MRVL) is scheduled to report first-quarter fiscal 2025 results on Thursday after the bell, and investors will likely be watching the company’s data center segment growth and any artificial intelligence (AI)-related updates.

Analysts forecast Marvell’s revenue of $1.15 billion in the first quarter of fiscal 2025, down from the previous quarter and the same period a year earlier, according to estimates compiled by Visible Alpha.

Analysts expect a net loss of $196.6 million, down from the final quarter of fiscal 2024 but a more significant loss than the $168.9 million loss reported in the year-ago period. Analysts expect a loss of 20 cents in the company’s diluted earnings per share (EPS), unchanged from the same period a year earlier but reduced from the previous quarter’s loss of 45 cents per share.

Marvell announces earnings after giving weaker-than-expected guidance for the quarter, with CEO Matt Murphy saying the company anticipates “soft demand impacting consumers, carrier infrastructure and enterprise networks in the near term,” although he added that the company expects “revenue declines for these end markets will be behind us after the first quarter” and recovery will occur in the second half of fiscal 2025.

UBS analysts said the core business is now “at a ‘beyond the floor’ place and as such should start to grow in the coming quarters as MRVL begins to deliver goods more in line with AI-powered demand.” JPMorgan analysts say they expect first-quarter results to be “in line with expectations/slightly better and represent the low point of the year as the team’s AI ASIC/Optical programs accelerate.”

	Analyst estimates for the first quarter of fiscal year 2025	Q4 2024	Q1 2024
Income	$1.15 billion	$1.43 billion	$1.32 billion
(Diluted) Earnings per share	(20 cents)	(45 cents)	(20 cents)
Net income	($196.6 million)	($392.7 million)	($168.9 million)

Key indicator: growth of the data center segment

Marvell’s data center segment, which includes several AI-related offerings, accounted for 40% of the company’s total revenue in fiscal 2024.

Data center businesses include cloud and on-premises AI systems and servers, as well as Ethernet switching, storage systems, networking and interconnection.

Data center revenues in the final quarter of fiscal 2024 were $765.3 million. Analysts expect segment revenue to reach $786.8 million in the first quarter of fiscal 2025, which would represent more than 80% year-over-year growth.

Business in the spotlight: artificial intelligence programs and products

A month before earnings, Marvell held an artificial intelligence infrastructure event where it told investors that 30% of its revenue in 2025 would be related to artificial intelligence.

The company forecast AI revenue of more than $1.5 billion, or 30% of its total revenue, in fiscal 2025, which is three times the share of AI in the year-ago period. The company expects two-thirds of its projected AI revenue to come from conductivity-related products and another third from custom computing offerings.

In fiscal year 2024, Marvell reported more than $550 million in AI-related revenue, representing approximately 10% of total revenue, which is three times the approximately $200 million reported in fiscal year 2023, representing 3% of total revenue.

Bank of America Securities analysts highlighted that since Marvell’s last earnings report, there has been “greater clarity/confidence around custom ASIC ramp” for leading hyperscale customers, “solid demand for 800 Gig/1.6 Terabit/s optical transceivers,” and “improvement in storage (higher hard drive prices) and potential declines in enterprise demand.”

JPMorgan analysts said Marvell’s “AI (optical/ASIC) programs/products are on track to deliver a strong growth profile in FY24,” with AI revenue expected to triple year-over-year.

Marvell shares have gained more than 26% since the start of 2024, trading at $76.05 as of 2:30 p.m. ET on Wednesday.