迈威尔科技(MRVL.US)2026财年第三季度业绩电话会
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会议摘要
Marvell Technology Inc. reported record revenue, driven by data center and communications end markets. The acquisition of Celestial AI is expected to enhance AI infrastructure capabilities. Strong revenue growth is anticipated, with data center revenue projected to grow over 25% in the next fiscal year. The company expects continued momentum in Q4 and beyond, supported by strategic acquisitions, leadership in interconnect solutions, and robust custom business growth. Financially, Marvell reported increased revenue, margins, and earnings per share, with plans for capital return to shareholders.
会议速览
Marvell's Q3 FY23 Earnings Call: Business Updates and Acquisition AnnouncementThe call discusses Marvell's third quarter fiscal year earnings, business updates, and a new acquisition. The company consolidates its non-data center end markets into a single new communications and other end market. Forward-looking statements are subject to risks, and non-GAAP financial measures are reconciled in the earnings release. An extended call includes details on the acquisition and extensive business updates.
Marvell's Strategic Acquisition of Celestial AI to Revolutionize Data Center InterconnectsMarvell announced the acquisition of Celestial AI, a company with a disruptive photonic fabric platform for next-generation scale-up interconnects, aiming to strengthen its data center portfolio. The deal, expected to close in Q1 next fiscal year, will significantly contribute to revenue growth, with forecasts reaching $1 billion by Q4. Celestial AI's technology, featuring a compact PF chiplet with 16 Tb/s bandwidth, offers unparalleled efficiency, latency, and thermal stability, securing major design wins with hyperscalers. This acquisition, following previous successes, positions Marvell to capitalize on the expanding data center market, leveraging Celestial AI's expertise in optics and advanced packaging.
Marvell's Enhanced Fiscal Growth Outlook: Accelerated Data Center and Communications RevenueMarvell revises its fiscal growth expectations upward, anticipating robust year-over-year data center revenue growth exceeding initial projections, driven by heightened cloud CapEx, strong demand for switching products, and consistent custom business forecasts. The company also foresees steady revenue growth in communications and other end markets, excluding potential gains from the pending Celestial AI acquisition.
Data Center Revenue Surges with Double-Digit Growth, Forecasting High Single-Digit Q4 ExpansionRecord-breaking data center revenue growth, driven by networking portfolio demand, is expected to accelerate in Q4 with high single-digit sequential growth, offsetting custom revenue decline.
Leveraging Sustained Investment for Interconnect Leadership in High-Speed Data CentersThe company's strategic focus on early market entry and continuous technological advancement secures its leadership in high-speed data center interconnect solutions, driving demand for its innovative Pam DSP and coherent light technologies, and expanding into emerging LPO categories.
Marvell's Dominance in High-Speed AECs, Re-Timers, and Data Center SwitchingMarvell anticipates significant growth in AECs and re-timers, with substantial product ramps and design wins at major hyperscalers. Data center switching revenue is projected to exceed $100 million, with next-gen products driving further expansion.
Marvell's Accelerated Growth in Custom Business and XP Attached MarketMarvell anticipates accelerated growth in custom business, driven by a growing portfolio of design wins, including xpu and XP attached sockets. The company has secured additional custom sockets, representing a significant lifetime revenue opportunity. Marvell is leading the transition to next-generation memory architectures with CXL-based products, overcoming the memory wall challenge. The XP attached market is evolving rapidly, with Marvell's solutions exceeding initial expectations, leading to a forecast of revenue exceeding $1 billion by fiscal 2025 and significantly higher in subsequent years.
Strong Q3 Revenue Growth in Communications Market, Expecting Steady Q4 ProgressCommunications end market revenue surged, driven by normalized inventories and new product adoption. Enterprise networking revenue is poised to normalize, with carrier business recovery anticipated, guiding fourth-quarter revenue growth in low single digits. Repurchase programs funded by cash flow highlight financial health.
Strong Market Demand and Strategic Growth Drivers Propel Company's Revenue and Expansion OutlookThe company forecasts robust revenue growth, driven by strong market demand, strategic acquisitions, and innovative product cycles, positioning for exceptional performance in fiscal 2028 with a focus on AI capacity and interconnect technologies.
Q3 Financials, Growth Strategies, and Acquisitions in FocusHighlights Q3 revenue of $2.075B, 37% YoY growth, non-GAAP earnings per share increase, record cash flow, and guidance for Q4 revenue and expenses. Discusses strategic investments, operating leverage, and Celestial AI acquisition's impact.
Financial Strategy for Acquisition, Growth, and Capital ReturnPlans to finance acquisition with stock and cash, avoiding debt. Aims for revenue growth, operational leverage, and expanded market reach. Continues to prioritize shareholder returns through dividends and buybacks.
Marvell's Revenue Projections and Long-Term Growth TargetsThe dialogue discusses Marvell's expected revenue growth for the upcoming year, highlighting a target of approximately $Ed billion, and outlines a strategic path towards long-term growth targets, emphasizing the acceleration in custom business and interconnect growth, with optimism for future advancements in AI and related technologies.
Update on Substrate Nanometer Design Pipelines and Production Ramp TimelineThe dialogue discusses the status of substrate nanometer design pipelines, including involvement in next-generation 2nm designs alongside current XP projects, and inquires about the timeline for these programs to transition into production.
Strong Execution and Exciting Developments in 2nm Products and AI TechnologyThe company is on track with its transition to next-generation products, boasting strong visibility in the design funnel and compelling power benefits. AI is driving advancements, keeping Moore's Law relevant through significant power savings. Internally, the team is executing exceptionally well, with a focus on core IP, nodes, and packaging. Ramps are anticipated in the fiscal 28, particularly for 2nm products, marking a significant step forward in process technology.
Celestial AI Revenue Targets: PF Chiplet's Pivotal Role and Total Business InclusionThe dialogue discusses Celestial AI's revenue targets and earn-out, clarifying they encompass the entire business, with initial focus on PF chiplet products. It highlights the PF shiplet's leadership in revenue generation, while emphasizing all business segments are integral to achieving fiscal goals.
Celestial's Revenue Ramp: Broad Industry Engagement and Diversified Revenue StreamThe dialogue discusses Celestial's expected revenue growth, emphasizing broad industry interest and collaboration with a lead hyperscaler customer. The integration of Celestial with Marvell's silicon photonics expertise is highlighted, aiming for high-volume production and market leadership in photonics within data centers.
Investor Queries on Custom Business Growth and Long-Term Revenue VisibilityInvestor inquires about custom business growth potential, emphasizing script as a safe base case number, and expresses interest in long-term revenue materialization visibility. Company acknowledges investor feedback, outlines multi-year AI infrastructure build, and commits to sharing base case assumptions for ambitious targets.
Fiscal Outlook Confidence Linked to Customer Planning and Industry GrowthThe fiscal outlook is robust due to industry growth, particularly in optics and switching, with CapEx growth outpacing expenses. Customer planning provides visibility, enhancing confidence in long-term projections, aligning with RD schedules and capacity ramps. This perspective is shared to inform investors, emphasizing growth beyond the immediate fiscal periods.
Expanding Tech Collaboration: Photonics Products Agreement with HyperscalerA significant agreement was announced, extending a strategic partnership by adding photonic products to the existing AI and networking product lanes. This collaboration, involving a leading hyperscaler, includes a strong earn-out incentive, aiming for substantial production and market impact. The move is seen as a positive step in technology advancement and market expansion.
Optics Business Correlation with AI Growth and Custom Projects BaselineDiscussion on the correlation of optics business with AI accelerator growth rather than cloud CapEx, emphasizing AI's faster growth. Clarification on custom projects growth tied to current customer transitions and future potential, highlighting a rational base plan with room for improvement.
Exploring ASIC Industry Shifts: Moving Beyond Silicon to Rack-Level SolutionsDiscussion revolves around the industry's move from silicon to comprehensive system solutions, questioning the readiness for rack-level offerings amid increasing complexity.
Comprehensive Rack-Level Solution for Optical Interconnects and AI SystemsThe dialogue emphasizes a strategy to offer a holistic rack-level solution, integrating various optical interconnect technologies and AI components. The focus is on providing a comprehensive suite from high-end XPUs to board-level retimers, collaborating closely with customers to enable end-to-end solutions. While not expecting system-level revenues in the near term, the approach prioritizes a strategic market entry with a broad range of foundational pieces, positioning the company as a one-stop shop for advanced AI and optical networking needs.
Marvell's CEO Highlights Strong Performance, Strategic Acquisitions, and Positive OutlookManagement expresses gratitude for investor interest, emphasizes Marvell's strong execution, strategic acquisitions, and bright future prospects, concluding the conference with appreciation for participation.
要点回答
Q：What are the key components of Marvell's strategic acquisition of Celestial AI?
A：Marvell's strategic acquisition of Celestial AI is aimed at strengthening its data center portfolio with a photonic fabric platform purpose-built for next-generation scale-up interconnect. This acquisition is seen as a critical move to capitalize on the massive opportunity in accelerated infrastructure and is expected to close in the first quarter of the next year, pending regulatory reviews.
Q：How does the photonic fabric technology from Celestial AI differ from traditional interconnect solutions?
A：Celestial AI's photonic fabric technology offers performance and efficiency benefits for scale-up interconnects. It is engineered to deliver high bandwidth, ultra-low latency, and low power consumption, with greater reach than copper-based interconnects. The technology spans across racks and supports large AI clusters, and its compact and integrated design enables higher bandwidth and improved thermal stability, which is a significant competitive differentiator.
Q：What is the significance of the 'photonic fabric chiplet' developed by Celestial AI?
A：The photonic fabric chiplet (PF chiplet) developed by Celestial AI is the industry's first scale-up optical solution, integrating all required electrical and optical components into a compact form factor. It provides an unprecedented bandwidth of 16 Tb per second per chiplet, 10 times the capacity of current state-of-the-art 1.6 T ports used in scale-out applications. This allows for co-packaging with XPs and scale-up switches to increase total bandwidth and remove bandwidth constraints.
Q：What future revenue contributions are expected from the acquisition of Celestial AI?
A：After the close of the transaction, Marvell expects meaningful revenue contributions from Celestial AI to begin in the second half of fiscal year Ed. The base case forecast shows Celestial AI revenue reaching a $500 million annualized run rate in the fourth quarter of fiscal year Ed and doubling to $1 billion by the following quarter. Celestial AI's team will be integrated into Marvell, bringing a strong photonic interconnect engineering group.
Q：How is Marvell's outlook for the next fiscal year influenced by the acquisition of Celestial AI and the increase in cloud CapEx growth expectations?
A：Marvell's outlook for the next fiscal year is influenced by strong demand for its products and the acquisition of Celestial AI. With the updated view of cloud CapEx growth expectations at over 20% next year, and considering the purchase orders for the next generation of interconnect products, Marvell expects revenue growth across its interconnect, custom, and data center businesses. The company anticipates custom business growth of at least 15%, driven by higher demand for switching products, and significant revenue contributions from new high volume custom designs in the remaining part of the data center business.
Q：What is the expected growth for Marvell's data center revenue in the next fiscal year?
A：Marvell expects its data center revenue to grow year over year by more than Ed next fiscal year.
Q：What factors drove the record third quarter revenue in the data center end market?
A：The record third quarter revenue in the data center end market was driven by increased demand across the networking portfolio, particularly in the optical connect businesses, data center storage, and switch businesses.
Q：What are the expected sequential and year-over-year revenue growth rates for the fourth quarter in the data center end market?
A：The fourth quarter is expected to show sequential revenue growth in the high single digits on a percentage basis and approximately Ed year over year in the data center end market.
Q：What recent achievements in high-speed connectivity portfolio and technology developments at Marvell are mentioned?
A：Marvell has continued to demonstrate leadership in high-speed connectivity with the broadest and most comprehensive portfolio, accelerated Pam DSP production, and solutions such as the first 5 nm solution. They have also secured major customer qualifications ahead of competitors, as well as leading the transition to the next industry transition with 1.6 T solutions.
Q：What are the upcoming developments in Marvell's coherent light solutions for data centers?
A：Marvell is set to start shipping their Ed Edt coherent light solution next year and is on track to deliver their script lyt solution the year after, enhancing long-reach connectivity support for data centers.
Q：How are the AEC and Re timer markets for Marvell evolving and what are their future prospects?
A：The AEC and Re timer markets are shifting to high-speed Pam-based solutions, which aligns with Marvell's strengths. They have secured design wins and are on the cusp of substantial product ramps with strong demand, expecting share growth as Pam-based technology becomes dominant.
Q：What are the revenue growth expectations for Marvell's data center switching business in the next fiscal year?
A：Marvell expects its data center switch revenue to surpass script million dollars in the next fiscal year, with a stronger revenue contribution anticipated from the new generation Script QT products.
Q：What is the forecast for Marvell's custom business growth?
A：Marvell anticipates accelerated growth in its custom business over the next several years, supported by a growing portfolio of design wins, with several already in volume production and additional prospects ramping over the next couple of years.
Q：How is the XP attached device market developing for Marvell, and what are the expected revenue contributions from it?
A：The XP attached device market is experiencing rapid growth with Marvell having more than 15x ATS. With multiple use cases in hyperscales, the market is expected to generate revenue exceeding Ed billion dollars by fiscal script with significant growth in the following years.
Q：What is the expected revenue growth for Marvell's communications end market in the fourth quarter?
A：The revenue from Marvell's communications end market is expected to grow sequentially in the low single digits on a percentage basis with year-over-year growth of 5% to 40% in the fourth quarter.
Q：What is the forecast for total company revenue in the fourth quarter?
A：The forecast for total company revenue in the fourth quarter is Ed Ed Billion at the midpoint, representing Ed sequential and Ed year-over-year growth, excluding the impact of the former automotive Ethernet business.
Q：What are the expectations for revenue growth in fiscal 2028?
A：The company expects its data center revenue growth in fiscal 2028 to meaningfully exceed the 25% growth anticipated for fiscal 2027, driven by strong market tailwinds and new product cycles.
Q：What key acquisitions and business segments are highlighted for driving growth?
A：The key growth drivers include the expected closure of the transformational acquisition of Celestial AI in the first quarter of the next fiscal year and the strong performance of the Interconnections business with world-class roadmaps and accelerating demand for their elect optic interconnects.
Q：What were the financial results for the third quarter of fiscal 2023?
A：Revenue for the third quarter was $2.075 billion, growing 37% year over year and 3% sequentially. Data center was the largest end market, contributing the majority of total revenue. GAAP gross margin was 50.1%, and non-GAAP gross margin was 59.4%. GAAP operating expenses were $712 million, with a GAAP operating margin of $485 million. Non-GAAP operating margin was $515 million, evidencing a 150 basis point sequential increase. GAAP earnings per diluted share was $2.20, including a gain from the divestiture of the automotive Ethernet business, and non-GAAP earnings per diluted share was $5.29, reflecting year-over-year growth and operating leverage in the company's model.
Q：What is the forecasted revenue range for the fourth quarter of fiscal 2023?
A：The revenue forecast for the fourth quarter of fiscal 2023 is in a range of $2.2 billion plus or minus 5%. The expected GAAP gross margin is between 51.1% and 52.1%, and the non-GAP operating margin is between 515 million and 545 million. GAAP operating expenses are expected to be approximately $741 million, while non-GAP operating expenses are anticipated to be about $515 million. GAAP and non-GAP other income and expense, including interest on debt, is expected to be approximately zero. The non-GAP tax rate is forecasted to be 5% for the fourth quarter, with GAAP earnings per diluted share in the range of $1.25 to $1.35 and non-GAP earnings per diluted share in the range of $5.05 to $5.15.
Q：What is the projected impact of the acquisition of Celestial AI on the company's financials?
A：Post-closing, the acquisition of Celestial AI is expected to add approximately $300 million in annual operating expenses. The company expects Celestial AI to start generating meaningful revenue in the second half of fiscal 2024 and to become accretive to the company's non-GAP earnings.
Q：What is the company's strategy for returning capital to stockholders?
A：The company plans to fund the acquisition through a combination of stock and cash on hand and continue returning capital to stockholders through dividends and buybacks. This strategy is designed to maintain a strong balance sheet and robust cash flow while pursuing growth and operating leverage.
Q：How does the anticipated revenue growth align with the company's long-term targets?
A：The anticipated revenue growth aligns with the company's long-term targets as it projects a substantial increase in revenue, growing at a rate that is anticipated to meet or exceed the company's previously stated long-term targets, including the growth expectations discussed for fiscal years subsequent to the next fiscal year in detail.
Q：How does Marvell view the impact of AI and other growth drivers?
A：Marvell is very optimistic about its outlook over the next couple of years, with growth drivers like AI kicking in starting in fiscal Eds and continuing through the end of the decade.
Q：Can you provide an update on Marvell's progress with next-generation nanometer designs?
A：Marvell is focused on next-generation AC and AC technologies. They are concluding work on the tail end of 7nm design while simultaneously beginning to work with customers on 2nm designs for the next generation.
Q：What is the status of Marvell's product transition and what does it include?
A：Marvell's product transition, which includes work on next-generation AI products, is baked into the numbers provided. They have secured backlog and orders for this transition, which is crucial to their revenue projections.
Q：What can be said about the design pipeline and timeline for Marvell's next-generation designs?
A：The design funnel is increasing with more programs in next-generation nanometer designs. Power benefits are compelling, and Marvell expects ramps in production, particularly in fiscal 28 with the introduction of 2nm products.
Q：What is the impact of the acquisition on Marvell's revenue targets?
A：The revenue targets and earn-out are all based on Celestial AI in totality, with the lead being the PF chiplet. The engagements are broad, but significant activity is expected from a leading hyperscaler partner.
Q：How diversified is the revenue stream from Celestial's products over time?
A：The revenue engagement is broad, with a strong effort across the industry to bring products into volume stable production. While there is a focus on a few big companies, including a leading hyperscaler, there is also a strong engagement with others, indicating a diverse revenue stream.
Q：What is the outlook for Marvell's custom business growth in the coming years?
A：The outlook for Marvell's custom business growth is positive. For the next year, at least script growth is expected, and if everything works out right, a normalized FFO FYI growth rate could be higher. The long-term visibility and revenue materialization are comfortable and solid, supported by a strong backlog and the potential for better performance.
Q：What visibility are customers providing for future builds and what is the impact on the company's planning?
A：Customers are providing visibility several years out for future builds, which is giving the company increased confidence in its outlook. This visibility is impacting the company's planning, including their RD schedules, capacity, and ramps.
Q：Why was it important for the company to file an Ed K with respect to their relationship with Amazon?
A：It was important to file an Ed K to formally extend the strategic agreement with Amazon, adding a new dimension to their partnership by including photonic products, which is expected to be significant for both companies.
Q：What was the rationale behind correlating the company's optics business to cloud CapEx rather than the growth of AI accelerators?
A：The rationale behind correlating the company's optics business to cloud CapEx was to provide a broad proxy to the investment community about how to think about their business, using a very common metric. Although the optic business is fundamentally driven by AI and AI acceleration, making it grow faster than CapEx, this correlation offered a simplified representation for market understanding.
Q：What factors are expected to drive the company's growth next year?
A：The company's growth next year is expected to be driven primarily by their current business, product transitions, and upcoming demands from customers. Some of the xpu attachment is anticipated to kick in during the second half, contributing to the anticipated revenue growth.
Q：Does the company plan to move beyond ASICs to systems and rack-level solutions, and what is their current strategy?
A：The company is looking at the potential to move beyond ASICs to systems and rack-level solutions, considering the increasing complexity in the market. Their current strategy involves being a one-stop shop for various solutions including AI chips, traditional and re timing, photonic fabrics, and scale-up and scale-out switching, with the goal of providing a comprehensive offering to their customers.
Marvell Technology, Inc.
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