filings.toolsItem 1. Financial Statements
96K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value per share)
| May 3, 2025 | February 1, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 885.9 | $ | 948.3 | |||||||
| Accounts receivable, net | 1,144.0 | 1,028.4 | |||||||||
| Inventories | 1,071.4 | 1,029.7 | |||||||||
| Prepaid expenses and other current assets | 148.1 | 113.9 | |||||||||
| Assets held for sale | 588.2 | — | |||||||||
| Total current assets | 3,837.6 | 3,120.3 | |||||||||
| Property and equipment, net | 774.7 | 790.5 | |||||||||
| Goodwill | 11,062.2 | 11,586.9 | |||||||||
| Acquired intangible assets, net | 2,450.9 | 2,710.6 | |||||||||
| Deferred tax assets | 405.9 | 401.2 | |||||||||
| Other non-current assets | 1,492.4 | 1,595.0 | |||||||||
| Total assets | $ | 20,023.7 | $ | 20,204.5 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 562.7 | $ | 622.2 | |||||||
| Accrued liabilities | 939.8 | 972.6 | |||||||||
| Accrued employee compensation | 183.7 | 302.5 | |||||||||
| Short-term debt | 1,255.2 | 129.5 | |||||||||
| Total current liabilities | 2,941.4 | 2,026.8 | |||||||||
| Long-term debt | 2,977.4 | 3,934.3 | |||||||||
| Other non-current liabilities | 792.2 | 816.4 | |||||||||
| Total liabilities | 6,711.0 | 6,777.5 | |||||||||
| Commitments and contingencies (Note 8) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Common stock, $0.002 par value | 1.7 | 1.7 | |||||||||
| Additional paid-in capital | 14,294.2 | 14,534.1 | |||||||||
| Accumulated other comprehensive income (loss) | (0.1) | 0.4 | |||||||||
| Accumulated deficit | (983.1) | (1,109.2) | |||||||||
| Total stockholders’ equity | 13,312.7 | 13,427.0 | |||||||||
| Total liabilities and stockholders’ equity | $ | 20,023.7 | $ | 20,204.5 |
See accompanying notes to unaudited condensed consolidated financial statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
| Three Months Ended | |||||||||||||||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||||||||||||||
| Net revenue | $ | 1,895.3 | $ | 1,160.9 | |||||||||||||||||||
| Cost of goods sold | 942.9 | 633.1 | |||||||||||||||||||||
| Gross profit | 952.4 | 527.8 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 507.7 | 476.1 | |||||||||||||||||||||
| Selling, general and administrative | 186.4 | 199.9 | |||||||||||||||||||||
| Restructuring related charges (gains), net | (12.3) | 4.1 | |||||||||||||||||||||
| Total operating expenses | 681.8 | 680.1 | |||||||||||||||||||||
| Operating income (loss) | 270.6 | (152.3) | |||||||||||||||||||||
| Interest expense | (48.7) | (48.8) | |||||||||||||||||||||
| Interest income and other, net | (6.0) | 3.3 | |||||||||||||||||||||
| Interest and other loss, net | (54.7) | (45.5) | |||||||||||||||||||||
| Income (loss) before income taxes | 215.9 | (197.8) | |||||||||||||||||||||
| Provision for income taxes | 38.0 | 17.8 | |||||||||||||||||||||
| Net income (loss) | $ | 177.9 | $ | (215.6) | |||||||||||||||||||
| Net income (loss) per share — basic | $ | 0.21 | $ | (0.25) | |||||||||||||||||||
| Net income (loss) per share — diluted | $ | 0.20 | $ | (0.25) | |||||||||||||||||||
| Weighted-average shares: | |||||||||||||||||||||||
| Basic | 864.8 | 865.0 | |||||||||||||||||||||
| Diluted | 875.6 | 865.0 |
See accompanying notes to unaudited condensed consolidated financial statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
| Three Months Ended | |||||||||||||||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||||||||||||||
| Net income (loss) | $ | 177.9 | $ | (215.6) | |||||||||||||||||||
| Other comprehensive loss, net of tax | |||||||||||||||||||||||
| Net change in unrealized loss on cash flow hedges | (0.5) | (0.7) | |||||||||||||||||||||
| Other comprehensive loss, net of tax | (0.5) | (0.7) | |||||||||||||||||||||
| Comprehensive income (loss), net of tax | $ | 177.4 | $ | (216.3) |
See accompanying notes to unaudited condensed consolidated financial statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per share amounts)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | ||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at February 1, 2025 | 866.0 | $ | 1.7 | $ | 14,534.1 | $ | 0.4 | $ | (1,109.2) | $ | 13,427.0 | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with equity incentive plans | 1.8 | — | 0.6 | — | — | 0.6 | |||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlement of restricted stock units | — | — | (50.2) | — | — | (50.2) | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 142.9 | — | — | 142.9 | |||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (5.6) | — | (340.0) | — | — | (340.0) | |||||||||||||||||||||||||||||||||||||||||
| Vestings of common stock in connection with customer warrant | — | — | 6.8 | — | — | 6.8 | |||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared and paid ($0.06 per share) | — | — | — | — | (51.8) | (51.8) | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | 177.9 | 177.9 | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (0.5) | — | (0.5) | |||||||||||||||||||||||||||||||||||||||||
| Balance at May 3, 2025 | 862.2 | $ | 1.7 | $ | 14,294.2 | $ | (0.1) | $ | (983.1) | $ | 13,312.7 | ||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | ||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at February 3, 2024 | 865.5 | $ | 1.7 | $ | 14,845.3 | $ | 1.1 | $ | (16.7) | $ | 14,831.4 | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with equity incentive plans | 2.2 | — | 2.2 | — | — | 2.2 | |||||||||||||||||||||||||||||||||||||||||
| Tax withholdings related to net share settlement of restricted stock units | — | — | (74.1) | — | — | (74.1) | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 137.3 | — | — | 137.3 | |||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (2.2) | — | (150.0) | — | — | (150.0) | |||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared and paid ($0.06 per share) | — | — | — | — | (51.8) | (51.8) | |||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | (215.6) | (215.6) | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (0.7) | — | (0.7) | |||||||||||||||||||||||||||||||||||||||||
| Balance at May 4, 2024 | 865.5 | $ | 1.7 | $ | 14,760.7 | $ | 0.4 | $ | (284.1) | $ | 14,478.7 | ||||||||||||||||||||||||||||||||||||
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
| Three Months Ended | |||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 177.9 | $ | (215.6) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 84.2 | 72.6 | |||||||||
| Stock-based compensation | 142.1 | 136.5 | |||||||||
| Amortization of acquired intangible assets | 245.7 | 264.9 | |||||||||
| Restructuring related charges (gains), net | (14.0) | 0.7 | |||||||||
| Deferred income taxes | (4.3) | (22.2) | |||||||||
| Other expense, net | 44.1 | 21.8 | |||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable | (115.6) | 239.7 | |||||||||
| Prepaid expenses and other assets | 24.1 | 85.8 | |||||||||
| Inventories | (69.9) | 38.8 | |||||||||
| Accounts payable | (37.4) | (58.3) | |||||||||
| Accrued employee compensation | (117.6) | (92.2) | |||||||||
| Accrued liabilities and other non-current liabilities | (26.4) | (148.0) | |||||||||
| Net cash provided by operating activities | 332.9 | 324.5 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of technology licenses | (1.1) | (0.5) | |||||||||
| Purchases of property and equipment | (118.8) | (91.5) | |||||||||
| Proceeds from sales of property and equipment | 25.9 | 0.1 | |||||||||
| Other, net | (0.1) | (10.0) | |||||||||
| Net cash used in investing activities | (94.1) | (101.9) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repurchases of common stock | (340.0) | (150.0) | |||||||||
| Proceeds from employee stock plans | 0.6 | 2.3 | |||||||||
| Tax withholding paid on behalf of employees for net share settlement | (50.2) | (74.1) | |||||||||
| Dividend payments to stockholders | (51.8) | (51.8) | |||||||||
| Payments on technology license obligations | (26.8) | (30.2) | |||||||||
| Proceeds from borrowings | 200.0 | — | |||||||||
| Principal payments of debt | (32.8) | (21.9) | |||||||||
| Other, net | (0.2) | — | |||||||||
| Net cash used in financing activities | (301.2) | (325.7) | |||||||||
| Net decrease in cash and cash equivalents | (62.4) | (103.1) | |||||||||
| Cash and cash equivalents at beginning of period | 948.3 | 950.8 | |||||||||
| Cash and cash equivalents at end of period | $ | 885.9 | $ | 847.7 |
See accompanying notes to unaudited condensed consolidated financial statements
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The unaudited condensed consolidated financial statements of Marvell Technology, Inc. (“MTI”), a Delaware corporation, and its wholly owned subsidiaries (the “Company”), as of and for the three months ended May 3, 2025, have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted as permitted by the SEC. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s fiscal 2025 audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025. In the opinion of management, the financial statements include all adjustments, including normal recurring adjustments and other adjustments, that are considered necessary for fair presentation of the Company’s financial position and results of operations. All inter-company accounts and transactions have been eliminated. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These financial statements should also be read in conjunction with the Company’s critical accounting policies included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025 and those included in this Quarterly Report on Form 10-Q below. All dollar amounts in the financial statements and tables in these notes, except per share amounts, are stated in millions of U.S. dollars unless otherwise noted.
The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2025 had a 52-week year. Fiscal 2026 is a 52-week year.
On April 7, 2025, the Company entered into a definitive agreement to sell its automotive ethernet business to Infineon Technologies AG (the “Buyer”) for $2.5 billion in cash. The divestiture encompasses the Company's automotive ethernet product portfolio and related assets. In addition, the Company will license certain intellectual property to the Buyer in connection with the transferred business and provide certain temporary transition services following completion of the sale. As of May 3, 2025, the Company classified assets held for sale of $588.2 million, which consisted of $29.0 million of inventories, $17.4 million of property and equipment, $524.7 million of goodwill, $14.0 million of acquired intangible assets, and other related assets. The transaction is expected to close within calendar year 2025, subject to customary closing conditions and regulatory approvals.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, provisions for sales returns and allowances, inventory excess and obsolescence, goodwill and other intangible assets, restructuring, government incentives, income taxes, litigation and other contingencies. Actual results could differ from these estimates and such differences could affect the results of operations reported in future periods. In the current macroeconomic environment, these estimates could require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.
Note 2. Recent Accounting Pronouncements
Accounting Pronouncements Not Yet Effective
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to improve income tax disclosures to enhance transparency and decision usefulness of income tax disclosure. This ASU will be effective for the Company’s annual reporting for fiscal 2026 on a prospective basis, with retrospective application permitted. Adoption of this new guidance will result in enhanced cash tax and effective tax rate disclosures in the Notes to Consolidated Financial Statements. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses requiring disaggregated disclosure of certain expense captions into specified categories in the notes to financial statements on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2026 with updates to be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer to reduce diversity in practice and improve the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The ASU is effective for fiscal years beginning after December 15, 2026 with updates to be applied on a retrospective or modified retrospective basis. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.
Note 3. Revenue
Disaggregation of Revenue
The majority of the Company’s revenue is generated from sales of the Company’s products.
The following table summarizes net revenue disaggregated by end market (in millions, except percentages):
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| May 3, 2025 | % of Total | May 4, 2024 | % of Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue by end market: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Data center | $ | 1,440.6 | 76 | % | $ | 816.4 | 70 | % | ||||||||||||||||||||||||||||||||||||||||||
| Enterprise networking | 177.5 | 9 | % | 153.1 | 13 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Carrier infrastructure | 138.4 | 7 | % | 71.8 | 6 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer | 63.1 | 3 | % | 42.0 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Automotive/industrial | 75.7 | 5 | % | 77.6 | 7 | % | ||||||||||||||||||||||||||||||||||||||||||||
| $ | 1,895.3 | $ | 1,160.9 |
The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in millions, except percentages):
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| May 3, 2025 | % of Total | May 4, 2024 | % of Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue based on destination of shipment: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| China | $ | 708.9 | 37 | % | $ | 529.6 | 46 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taiwan | 327.3 | 17 | % | 42.6 | 4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| United States | 305.2 | 16 | % | 216.5 | 19 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Singapore | 163.1 | 9 | % | 111.3 | 9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Netherlands | 91.3 | 5 | % | 6.8 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Japan | 46.9 | 2 | % | 17.3 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Thailand | 42.2 | 2 | % | 65.0 | 5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Finland | 36.1 | 2 | % | 22.4 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Malaysia | 34.9 | 2 | % | 53.0 | 5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 139.4 | 8 | % | 96.4 | 8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 1,895.3 | $ | 1,160.9 |
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
These destinations of shipment are not necessarily indicative of the geographic location of the Company’s end customers or the country in which the Company’s end customers sell devices containing the Company’s products. For example, a substantial majority of the shipments made to China relate to sales to non-China based customers that have factories or contract manufacturing operations located within China.
The following table summarizes net revenue disaggregated by customer type (in millions, except percentages):
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| May 3, 2025 | % of Total | May 4, 2024 | % of Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net revenue by customer type: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct customers | $ | 1,069.3 | 56 | % | $ | 608.1 | 52 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributors | 826.0 | 44 | % | 552.8 | 48 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 1,895.3 | $ | 1,160.9 |
Contract Liabilities
Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. Contract liability balances are comprised of deferred revenue. The amount of revenue recognized during the three months ended May 3, 2025 that was included in the deferred revenue balance at February 1, 2025 was not material.
As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. The Company has elected the practical expedient and does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.
Customer Warrant
During fiscal 2025, the Company issued a warrant to a customer for the purchase of up to 4.2 million shares (“Warrant Shares”) of the Company’s common stock at an exercise price of $87.77 per share. The warrant has an exercise term of seven years and a vesting term of five years. The Warrant Shares vest primarily based on the customer’s achievement of qualifying product revenue milestones and are recognized as a reduction to revenue as qualifying revenues are recognized during the five year vesting term. The grant date fair value of the Warrant was determined to be $54.44 per share and a total fair value of $227.6 million using the Black-Scholes option pricing model. A total of 0.1 million Warrant Shares were vested as of May 3, 2025.
Note 4. Goodwill and Acquired Intangible Assets, Net
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The carrying value of goodwill as of May 3, 2025 and February 1, 2025 was $11.1 billion and $11.6 billion, respectively. In connection with the definitive agreement entered into on April 7, 2025, the Company reclassified $524.7 million of goodwill to assets held for sale based on the relative fair value of the automotive ethernet business. See “Note 1 – Basis of Presentation” for discussion of the automotive ethernet business divestiture.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Acquired Intangible Assets, Net
As of May 3, 2025 and February 1, 2025, net carrying amounts excluding fully amortized intangible assets are as follows (in millions, except for weighted-average remaining amortization period):
| May 3, 2025 | |||||||||||||||||||||||
| Gross Carrying Amounts | Accumulated Amortization and Impairment | Net Carrying Amounts | Weighted-Average Remaining Amortization Period (Years) | ||||||||||||||||||||
| Developed technologies | $ | 5,162.0 | $ | (3,635.4) | $ | 1,526.6 | 3.5 | ||||||||||||||||
| Customer contracts and related relationships | 2,039.0 | (1,446.4) | 592.6 | 2.1 | |||||||||||||||||||
| Trade names | 50.0 | (40.3) | 9.7 | 1.0 | |||||||||||||||||||
| Total acquired amortizable intangible assets | $ | 7,251.0 | $ | (5,122.1) | $ | 2,128.9 | 3.1 | ||||||||||||||||
| In-process research and development | 322.0 | — | 322.0 | n/a | |||||||||||||||||||
| Total acquired intangible assets | $ | 7,573.0 | $ | (5,122.1) | $ | 2,450.9 |
| February 1, 2025 | |||||||||||||||||||||||
| Gross Carrying Amounts | Accumulated Amortization and Impairment | Net Carrying Amounts | Weighted-Average Remaining Amortization Period (Years) | ||||||||||||||||||||
| Developed technologies | $ | 5,162.0 | $ | (3,466.1) | $ | 1,695.9 | 3.6 | ||||||||||||||||
| Customer contracts and related relationships | 2,039.0 | (1,372.5) | 666.5 | 2.4 | |||||||||||||||||||
| Trade names | 50.0 | (37.8) | 12.2 | 1.2 | |||||||||||||||||||
| Total acquired amortizable intangible assets | $ | 7,251.0 | $ | (4,876.4) | $ | 2,374.6 | 3.3 | ||||||||||||||||
| In-process research and development | 336.0 | — | 336.0 | n/a | |||||||||||||||||||
| Total acquired intangible assets | $ | 7,587.0 | $ | (4,876.4) | $ | 2,710.6 |
The Company regularly assesses the results of its business to determine whether events or circumstances exist that indicate whether the carrying amount of the acquired intangible assets may not be recoverable. During fiscal 2025, impairment charges of $240.1 million related to certain acquired developed technologies intangible assets were recognized as part of restructuring actions. The gross carrying amounts and accumulated amortization of fully impaired intangible assets were excluded from the table above. See “Note 7 – Restructuring” for further information.
The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives, which more closely align with the pattern of realization of economic benefits expected to be obtained. The in-process research and development (“IPR&D”) will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying project reaches technological feasibility and commercial production, at which point, the IPR&D is reclassified as an amortizable acquired intangible asset and amortized over the asset’s estimated useful life. Useful lives for these IPR&D projects are expected to range between 8 to 9 years. In the event the IPR&D is abandoned, the related assets will be written off.
Amortization expense for acquired intangible assets for the three months ended May 3, 2025 and May 4, 2024 was $245.7 million and $264.9 million, respectively.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of May 3, 2025 (in millions):
| Fiscal Year | Amount | |||||||
| Remainder of 2026 | $ | 696.0 | ||||||
| 2027 | 811.3 | |||||||
| 2028 | 282.1 | |||||||
| 2029 | 129.0 | |||||||
| 2030 | 106.8 | |||||||
| Thereafter | 103.7 | |||||||
| $ | 2,128.9 |
Note 5. Fair Value Measurements
Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
Level 2 — Other inputs that are directly or indirectly observable in the marketplace.
Level 3 — Unobservable inputs that are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company’s Level 1 assets include marketable equity investments and securities under the Company’s non-qualified deferred compensation (“NQDC”) plan, which are classified as other non-current assets and valued primarily using quoted market prices. The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, forward contracts and the severance pay fund are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The tables below set forth, by level, the Company’s assets that are measured at fair value on a recurring basis. The tables do not include assets that are measured at historical cost or any basis other than fair value (in millions):
| Fair Value Measurements at May 3, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Items measured at fair value on a recurring basis: | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Time deposits | $ | — | $ | 60.2 | $ | — | $ | 60.2 | |||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||||||||
| Foreign currency forward contracts | — | 0.4 | — | 0.4 | |||||||||||||||||||
| Other non-current assets: | |||||||||||||||||||||||
| Marketable equity investments | 10.1 | — | — | 10.1 | |||||||||||||||||||
| Securities under the NQDC plan | 0.9 | — | — | 0.9 | |||||||||||||||||||
| Severance pay fund | — | 0.6 | — | 0.6 | |||||||||||||||||||
| Total assets | $ | 11.0 | $ | 61.2 | $ | — | $ | 72.2 | |||||||||||||||
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
The carrying value of investments in non-marketable equity securities recorded to fair value on a non-recurring basis is adjusted for observable transactions for identical or similar investments of the same issuer or for impairment. These securities relate to equity investments in privately-held companies. These items measured at fair value on a non-recurring basis are classified as Level 3 in the fair value hierarchy because the value is estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights and obligations of the securities held. As of May 3, 2025 and February 1, 2025, non-marketable equity investments had a carrying value of $48.6 million and $48.2 million, respectively, and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.
| Fair Value Measurements at February 1, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Items measured at fair value on a recurring basis: | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Time deposits | $ | — | $ | 57.2 | $ | — | $ | 57.2 | |||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||||||||
| Foreign currency forward contracts | — | 0.5 | — | 0.5 | |||||||||||||||||||
| Other non-current assets: | |||||||||||||||||||||||
| Marketable equity investments | 15.6 | — | — | 15.6 | |||||||||||||||||||
| Severance pay fund | — | 0.6 | — | 0.6 | |||||||||||||||||||
| Total assets | $ | 15.6 | $ | 58.3 | $ | — | $ | 73.9 | |||||||||||||||
Fair Value of Debt
The Company classified the 2026 Term Loan, the 2023 Revolving Credit Facility, 2026 Senior Notes, 2028 Senior Notes, 2029 Senior Notes, 2031 Senior Notes, and 2033 Senior Notes as Level 2 in the fair value measurement hierarchy. The carrying values of the 2026 Term Loan and the 2023 Revolving Credit Facility approximate their fair value as the 2026 Term Loan and the 2023 Revolving Credit Facility are carried at market observable interest rates that reset periodically. The estimated aggregate fair value of the unsecured senior notes was $3.4 billion at May 3, 2025 and February 1, 2025, and were classified as Level 2 as there are quoted prices from less active markets for the notes. See “Note 6 – Debt” for additional information.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Note 6. Debt
Summary of Borrowings and Outstanding Debt
The following table summarizes the Company’s outstanding debt at May 3, 2025 and February 1, 2025 (in millions):
| May 3, 2025 | February 1, 2025 | |||||||||||||
| Face Value Outstanding: | ||||||||||||||
| 2026 Term Loan - 5-Year Tranche | $ | 557.8 | $ | 590.6 | ||||||||||
| Term Loan Total | 557.8 | 590.6 | ||||||||||||
| 2023 Revolving Credit Facility | 200.0 | — | ||||||||||||
| Revolving Credit Facility Total | 200.0 | — | ||||||||||||
| 4.875% MTG/MTI 2028 Senior Notes | 499.9 | 499.9 | ||||||||||||
| 1.650% 2026 Senior Notes | 500.0 | 500.0 | ||||||||||||
| 2.450% 2028 Senior Notes | 750.0 | 750.0 | ||||||||||||
| 5.750% 2029 Senior Notes | 500.0 | 500.0 | ||||||||||||
| 2.950% 2031 Senior Notes | 750.0 | 750.0 | ||||||||||||
| 5.950% 2033 Senior Notes | 500.0 | 500.0 | ||||||||||||
| Senior Notes Total | 3,499.9 | 3,499.9 | ||||||||||||
| Total borrowings | $ | 4,257.7 | $ | 4,090.5 | ||||||||||
| Less: Unamortized debt discount and issuance cost | (25.1) | (26.7) | ||||||||||||
| Net carrying amount of debt | $ | 4,232.6 | $ | 4,063.8 | ||||||||||
| Less: Current portion (1) | 1,255.2 | 129.5 | ||||||||||||
| Non-current portion | $ | 2,977.4 | $ | 3,934.3 |
(1)As of May 3, 2025, the current portion of outstanding debt that is due within twelve months includes the outstanding balance of the 2023 Revolving Credit Facility, the 2026 Term Loan - 5-Year Tranche, and the 2026 Senior Notes. The Company intends to repay the current balance with operating cash flows or opportunistically refinance such debt. The weighted-average interest rate on short-term debt outstanding at May 3, 2025 and February 1, 2025 was 4.147% and 5.785%, respectively.
2026 Term Loan
The Company’s 2026 Term Loan (the “5-Year Tranche Loan”) has a stated floating interest rate which equates to an adjusted term Secured Overnight Financing Rate (“SOFR”) + 137.5 bps. The effective interest rate for the 5-Year Tranche Loan was 4.914% as of May 3, 2025. During the three months ended May 3, 2025, the Company repaid $32.8 million of the principal outstanding of the 5-Year Tranche Loan.
As of May 3, 2025, the Company was in compliance with its debt covenants for the term loan agreement.
2023 Revolving Credit Facility
The Company’s 2023 Revolving Credit Facility has a stated floating interest rate which equates to an adjusted term SOFR plus an applicable margin. The annual unused commitment fee rate was 0.175% at May 3, 2025. During the three months ended May 3, 2025, the Company drew down $200.0 million on the 2023 Revolving Credit Facility that remained outstanding at May 3, 2025. The Company intends to repay the outstanding amount during fiscal 2026. As of May 3, 2025, $800.0 million of the $1.0 billion total borrowing capacity under the 2023 Revolving Credit Facility was undrawn and is available for draw down through April 14, 2028.
As of May 3, 2025, the Company was in compliance with its debt covenants for the revolving line of credit agreement.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
2029 and 2033 Senior Unsecured Notes
The stated and effective interest rates for the Company’s 2029 Senior Notes are 5.750% and 5.891%, respectively. The stated and effective interest rates for the Company’s 2033 Senior Notes are 5.950% and 6.082%, respectively.
2026, 2028, and 2031 Senior Unsecured Notes
The stated and effective interest rates for the Company’s 2026 Senior Notes are 1.650% and 1.839%, respectively. The stated and effective interest rates for the Company’s 2028 Senior Notes are 2.450% and 2.554%, respectively. The stated and effective interest rates for the Company’s 2031 Senior Notes are 2.950% and 3.043%, respectively.
MTG / MTI 2028 Senior Unsecured Notes
The stated and effective interest rates for the Company’s MTI 2028 Senior Notes are 4.875% and 4.988%, respectively. The stated and effective interest rates for the Company’s MTG 2028 Senior Notes are 4.875% and 4.940%, respectively.
Interest Expense and Future Contractual Maturities
During the three months ended May 3, 2025 and May 4, 2024, the Company recognized $44.8 million and $46.8 million, respectively, of interest expense in its unaudited condensed consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding debt.
As of May 3, 2025, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, are as follows (in millions):
| Fiscal Year | Amount | |||||||
| Remainder of 2026 | $ | 298.4 | ||||||
| 2027 | 959.4 | |||||||
| 2028 | — | |||||||
| 2029 | 1,249.9 | |||||||
| 2030 | 500.0 | |||||||
| Thereafter | 1,250.0 | |||||||
| Total | $ | 4,257.7 |
For additional information about the Company's debt, see "Note 7 - Debt" in the Notes to Consolidated Financial Statements within Item 8 of the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025.
Note 7. Restructuring
The Company continuously evaluates its existing operations to increase operational efficiency, decrease costs and increase profitability. A restructuring plan was initiated during the third quarter of fiscal 2025 (the “Fiscal 2025 Plan”) to increase research and development investment in the data center end market and reduce investment in new product development in other end markets including the cancellation of certain future product releases. Restructuring charges were mainly comprised of impairment and write-off of acquired intangible assets, purchased technology licenses, inventories, property and equipment and other non-current assets, as well as recognition of future contractual obligations, severance, other one-time termination benefits, and other costs. The Company expects the Fiscal 2025 Plan to be substantially completed by the end of fiscal 2026.
During the three months ended May 3, 2025, the Company recognized a net restructuring gain of $12.3 million, mainly comprised of a gain on sale of property that was affected by restructuring actions associated with project and facility reductions to optimize resources, offset by employee severance and related costs. During the three months ended May 4, 2024, the Company recognized restructuring related charges of $4.1 million, mainly comprised of employee severance and related costs.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by major type of cost associated with the restructuring charges (in millions):
| Employee Severance and Related Costs | Other Exit-Related Costs | Total | |||||||||||||||
| Balance at February 1, 2025 | $ | 12.9 | $ | 316.2 | $ | 329.1 | |||||||||||
| Charges (1) | 2.5 | (0.8) | 1.7 | ||||||||||||||
| Net cash payments | (10.1) | (11.7) | (21.8) | ||||||||||||||
| Balance at May 3, 2025 | 5.3 | 303.7 | 309.0 | ||||||||||||||
| Less: non-current portion | — | 219.9 | 219.9 | ||||||||||||||
| Current portion | $ | 5.3 | $ | 83.8 | $ | 89.1 |
(1)Restructuring gain of $14.0 million recognized in the current quarter was recorded directly to the unaudited condensed consolidated statements of operations and was not included in the restructuring liability balances above.
The current portion of the restructuring liability is comprised of $61.1 million and $28.0 million included as components of accrued liabilities and accounts payable, respectively, and the non-current portion of the restructuring liability is included as a component of other non-current liabilities in the accompanying unaudited condensed consolidated balance sheets.
Note 8. Commitments and Contingencies
Warranty Obligations
The Company generally warrants that its products sold to its customers will conform to its approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. The Company may offer a longer warranty period in limited situations based on product type and negotiated warranty terms with certain customers.
Commitments
The Company’s commitments primarily consist of wafer purchase obligations with foundry partners, supply capacity reservation payment commitments with foundries and test and assembly partners, technology license fee obligations, minimum purchase commitments under technology service agreements, and commitments for capital expenditures.
Future unconditional purchase commitments as of May 3, 2025 are as follows (in millions):
| Fiscal Year | Purchase Commitments to Foundries and Test and Assembly Partners | Technology Services and License Fees | ||||||||||||
| Remainder of 2026 | $ | 816.4 | $ | 134.6 | ||||||||||
| 2027 | 169.2 | 156.2 | ||||||||||||
| 2028 | 151.2 | 164.6 | ||||||||||||
| 2029 | 68.4 | 121.6 | ||||||||||||
| 2030 | 66.3 | 111.9 | ||||||||||||
| Thereafter | 182.4 | 77.3 | ||||||||||||
| Total unconditional purchase commitments | $ | 1,453.9 | $ | 766.2 |
Technology license fees include the liabilities under agreements for technology licenses between the Company and various vendors.
In addition, as of May 3, 2025, the Company had approximately $152.2 million of commitments for capital expenditures, majority of which are expected to be paid within fiscal 2026.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation, and in some cases, may result in incremental fees, loss of amounts paid in advance, or loss of priority to reserved capacity for a period of time.
The Company entered into manufacturing supply capacity reservation agreements with foundries and test and assembly suppliers in prior fiscal years. Under these arrangements, the Company agreed to pay capacity fees or refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements, which ranges from 4 to 10 years. In addition, the Company committed to certain purchase levels that were in line with the capacity reserved. The Company currently estimates that it has agreed to purchase level commitments of at least $534.9 million of wafers, substrates, and other manufacturing products for the remainder of fiscal 2026 through fiscal 2033 under the capacity reservation agreements. In addition, total fees and refundable deposits payable under these arrangements are $23.1 million in fiscal 2027 through fiscal 2028. Such purchase commitments are summarized in the preceding table.
In September 2021, the Company entered into a technology licensing agreement with a vendor which provided complete access to the vendor’s intellectual property portfolio for 10 years. The arrangement provided access to intellectual property over the term of the contract, including existing intellectual property, as well as intellectual property in development, and to be developed in the future. The contract provided support and maintenance over the term of the contract as well. In the third quarter of fiscal 2025, the Company ceased use of this arrangement due to restructuring actions taken during the quarter, resulting in recognition of asset impairment charges. See “Note 7 – Restructuring” for further information. Aggregate remaining fees of $268.5 million as of the cease use date are payable quarterly over the contract term.
Contingencies and Legal Proceedings
The Company currently is, and may from time to time become, subject to claims, lawsuits, governmental inquiries, inspections or investigations and other legal proceedings (collectively, “Legal Matters”) arising in the course of its business. Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources.
The Company is currently unable to predict the final outcome of its pending Legal Matters and therefore cannot determine the likelihood of loss or estimate a range of possible loss, except with respect to amounts where it has determined a loss is both probable and estimable and has made an accrual. The Company evaluates, at least on a quarterly basis, developments in its Legal Matters that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. The ultimate outcome of its pending Legal Matters involves judgments, estimates and inherent uncertainties. An unfavorable outcome in a Legal Matter could require the Company to pay damages or could prevent the Company from selling some of its products in certain jurisdictions. While the Company cannot predict with certainty the results of the Legal Matters in which it is currently involved, the Company does not expect that the ultimate costs to resolve these Legal Matters will individually or in the aggregate have a material adverse effect on its financial condition, however, there can be no assurance that the current or any future Legal Matters will be resolved in a manner that is not adverse to the Company’s business, financial statements, results of operations or cash flows.
Indemnities, Commitments and Guarantees
During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities may include indemnities for general commercial obligations, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of Delaware. In addition, the Company has contractual commitments to various customers, which could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. In general, the Company does not record any liability for these indemnities, commitments and guarantees in the accompanying unaudited condensed consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and estimable.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Intellectual Property Indemnification
In addition to the above indemnities, the Company has agreed to indemnify certain customers for claims made against the Company’s products where such claims allege infringement of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer as well as the attorneys’ fees and costs under an infringement claim. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. Generally, but not always, there are limits on and exceptions to the Company’s potential liability for indemnification. Historically the Company has not made significant payments under these indemnification obligations and the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant.
Note 9. Income Tax
The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in tax laws, the applicability of special tax regimes, changes in how the Company does business, discrete items, and acquisitions, as well as the integration of such acquisitions.
The Company recorded income tax expense of $38.0 million for the three months ended May 3, 2025. The Company’s estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to a substantial portion of its earnings, or in some cases, losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, valuation allowance releases as well as discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation.
Note 10. Net Income (Loss) Per Share
The Company reports both basic net income (loss) per share, which is based on the weighted-average number of common stock outstanding during the period, and diluted net income (loss) per share, which is based on the weighted-average number of common stock outstanding and potentially dilutive shares outstanding during the period.
The computations of basic and diluted net income (loss) per share are presented in the following table (in millions, except per share amounts):
| Three Months Ended | |||||||||||||||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | 177.9 | $ | (215.6) | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares — basic | 864.8 | 865.0 | |||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Stock-based awards and warrant shares | 10.8 | — | |||||||||||||||||||||
| Weighted-average shares — diluted | 875.6 | 865.0 | |||||||||||||||||||||
| Net income (loss) per share | |||||||||||||||||||||||
| Basic | $ | 0.21 | $ | (0.25) | |||||||||||||||||||
| Diluted | $ | 0.20 | $ | (0.25) |
Potential dilutive securities include dilutive common stock from stock-based awards attributable to the assumed exercise of stock options, restricted stock units, employee stock purchase plan shares and warrant shares using the treasury stock method. Under the treasury stock method, potential common stock outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Anti-dilutive potential shares are presented in the following table (in millions):
| Three Months Ended | |||||||||||||||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||
| Stock-based awards and warrant shares | 3.4 | 11.5 | |||||||||||||||||||||
Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the stock-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for the three months ended May 4, 2024 due to the net loss reported in that period.
Note 11. Segment Information
The Company operates in one reportable segment — the design, development and sale of integrated circuits. The chief executive officer was identified as the chief operating decision maker (“CODM”). Based on his direct involvement with the Company’s operations and product development, the CODM is ultimately responsible for and actively involved in the allocation of resources and the assessment of the Company’s performance using consolidated net income (loss) reported on the unaudited condensed consolidated statements of operations. The Company’s organizational structure is based along functional lines, with each of the functional department heads, as well as shared resources, reporting directly to the CODM or to a direct report of the CODM. The Company uses a highly-integrated approach in developing its products in that discrete technologies developed by the Company are frequently integrated across many of its products, and substantially all of the Company’s integrated circuits are manufactured under similar manufacturing processes. Accordingly, the Company operates under a single operating segment.
The following table presents a summary of consolidated net income (loss) inclusive of significant segment expenses and other expense information provided to the CODM (in millions):
| Three Months Ended | |||||||||||
| May 3, 2025 | May 4, 2024 | ||||||||||
| Net revenue | $ | 1,895.3 | $ | 1,160.9 | |||||||
| Less: | |||||||||||
| Product costs (a) | 761.8 | 436.9 | |||||||||
| Employee compensation and related in operating expenses | 347.9 | 321.7 | |||||||||
| Amortization of acquired intangible assets | 245.7 | 264.9 | |||||||||
| Restructuring related charges (gains), net | (12.3) | 4.1 | |||||||||
| Stock-based compensation | 142.1 | 136.5 | |||||||||
| Engineering design related costs | 50.7 | 54.0 | |||||||||
| Interest expense | 48.7 | 48.8 | |||||||||
| Provision for income taxes | 38.0 | 17.8 | |||||||||
| Other segment expenses (b) | 94.8 | 91.8 | |||||||||
| Net income (loss) | $ | 177.9 | $ | (215.6) |
(a)Includes material, labor and other product related costs, excluding the other categories above.
(b)Includes depreciation and amortization expenses, facilities expenses, legal expenses, interest income and other income and expenses.
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
This expense information is based on management's internal view of expense classification when reviewing aspects of financial and operating performance of the business, and may not be representative of expense classification that is comparable to other peer companies' internal management views. As a result, this expense information should not be considered in isolation or as substitute for analysis of Marvell’s results in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto.
Note 12. Supplemental Financial Information (in millions)
Consolidated Balance Sheets
Accounts Receivable, net
The Company sells certain of its trade accounts receivable on a non-recourse basis to a third-party financial institution pursuant to a factoring arrangement. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the unaudited condensed consolidated statements of cash flows. After the sale of its trade accounts receivable, the Company will collect payment from the customer and remit it to the third-party financial institution. Total trade accounts receivable sold under the factoring arrangement was $289.6 million for the three months ended May 3, 2025, of which $279.5 million remained subject to servicing by the Company as of May 3, 2025. Total trade accounts receivable sold under the factoring arrangement were $268.1 million for the three months ended May 4, 2024, of which $268.1 million remained subject to servicing by the Company as of May 4, 2024. Factoring fees for the sales of receivables were recorded in interest income and other, net and were not material.
| May 3, 2025 | February 1, 2025 | ||||||||||
| Inventories: | |||||||||||
| Work-in-process | $ | 739.0 | $ | 709.0 | |||||||
| Finished goods | 332.4 | 320.7 | |||||||||
| Inventories | $ | 1,071.4 | $ | 1,029.7 |
| May 3, 2025 | February 1, 2025 | ||||||||||
| Property and equipment, net: | |||||||||||
| Machinery and equipment | $ | 1,568.3 | $ | 1,570.2 | |||||||
| Land, buildings, and leasehold improvements | 315.7 | 306.6 | |||||||||
| Computer software | 128.5 | 126.4 | |||||||||
| Furniture and fixtures | 34.7 | 34.3 | |||||||||
| 2,047.2 | 2,037.5 | ||||||||||
| Less: Accumulated depreciation | (1,272.5) | (1,247.0) | |||||||||
| Property and equipment, net | $ | 774.7 | $ | 790.5 |
| May 3, 2025 | February 1, 2025 | ||||||||||
| Other non-current assets: | |||||||||||
| Prepaid ship and debits | $ | 439.8 | $ | 516.9 | |||||||
| Technology licenses | 376.3 | 401.3 | |||||||||
| Prepayments on supply capacity reservation agreements | 310.5 | 307.8 | |||||||||
| Operating right-of-use assets | 246.3 | 246.0 | |||||||||
| Non-marketable equity investments | 48.6 | 48.2 | |||||||||
| Other | 70.9 | 74.8 | |||||||||
| Other non-current assets | $ | 1,492.4 | $ | 1,595.0 |
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
| May 3, 2025 | February 1, 2025 | ||||||||||
| Accrued liabilities: | |||||||||||
| Variable consideration estimates (1) | $ | 493.0 | $ | 517.9 | |||||||
| Technology license obligations | 101.4 | 101.8 | |||||||||
| Accrued income tax payable | 78.0 | 55.6 | |||||||||
| Accrued restructuring | 61.1 | 91.5 | |||||||||
| Lease liabilities - current portion | 50.2 | 48.3 | |||||||||
| Deferred revenue | 31.8 | 22.1 | |||||||||
| Accrued interest | 24.9 | 43.5 | |||||||||
| Accrued royalties | 19.1 | 11.7 | |||||||||
| Accrued legal reserve | 12.2 | 11.7 | |||||||||
| Other | 68.1 | 68.5 | |||||||||
| Accrued liabilities | $ | 939.8 | $ | 972.6 |
(1)Substantially all of the variable consideration estimate is comprised of the ship and debit claims accrual, but also includes estimated customer returns, price discounts, price protection, rebates, and stock rotation programs.
| May 3, 2025 | February 1, 2025 | ||||||||||
| Other non-current liabilities: | |||||||||||
| Lease liabilities - non-current | $ | 229.2 | $ | 231.0 | |||||||
| Non-current restructuring liabilities | 219.9 | 228.4 | |||||||||
| Technology license obligations | 214.6 | 233.8 | |||||||||
| Non-current income tax payable | 76.5 | 73.4 | |||||||||
| Deferred tax liabilities | 34.2 | 33.8 | |||||||||
| Other | 17.8 | 16.0 | |||||||||
| Other non-current liabilities | $ | 792.2 | $ | 816.4 |
Accumulated Other Comprehensive Income (Loss)
The changes in accumulated other comprehensive income (loss), net of tax, by components for the comparative periods are presented in the following table (in millions):
| Unrealized Gain (Loss) on Cash Flow Hedges | ||||||||||||||||||||||||||
| Balance at February 1, 2025 | $ | 0.4 | ||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (0.4) | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (0.1) | |||||||||||||||||||||||||
| Net current-period other comprehensive income (loss), net of tax | (0.5) | |||||||||||||||||||||||||
| Balance at May 3, 2025 | $ | (0.1) |
MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
| Unrealized Gain (Loss) on Cash Flow Hedges | ||||||||||||||||||||||||||
| Balance at February 3, 2024 | $ | 1.1 | ||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (0.2) | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | (0.5) | |||||||||||||||||||||||||
| Net current-period other comprehensive income (loss), net of tax | (0.7) | |||||||||||||||||||||||||
| Balance at May 4, 2024 | $ | 0.4 |
Government Incentives
On May 1, 2025, the Company received notification that its application for government incentives in a foreign jurisdiction in which the Company operates has been approved by the necessary government agencies. The Company is accounting for the benefit as a government incentive and has elected to reduce qualifying cost of sales and operating expenditures by the incentives earned, recognized in the same line item on the unaudited condensed consolidated statements of operations for which the incentive is intended to compensate. For incentives related to the purchase of qualifying expenditures that are subject to capitalization, the Company has elected to reduce the cost basis of the underlying capitalized assets by the associated incentives and is recognizing incentive benefits in the unaudited condensed consolidated statements of operations in accordance with the cost recovery of the assets. Government incentives earned prior to being received are recognized in prepaid expenses and other current assets on the Company’s unaudited condensed consolidated balance sheets.
Stock Repurchase Program
On November 17, 2016, the Company announced that its Board of Directors authorized a $1.0 billion stock repurchase plan with no fixed expiration. The stock repurchase program replaced in its entirety the prior $3.3 billion stock repurchase program. On October 16, 2018, the Company announced that its Board of Directors authorized a $700.0 million addition to the balance of its existing stock repurchase program. On March 7, 2024, the Company announced that its Board of Directors authorized a $3.0 billion addition to the balance of its existing stock repurchase program. As of May 3, 2025, $2.2 billion remained available for future stock repurchases. The Company intends to effect stock repurchases in accordance with the conditions of Rule 10b-18 under the Exchange Act, but may also make repurchases in the open market outside of Rule 10b-18 or in privately negotiated transactions. The stock repurchase program is subject to market conditions and other factors, and does not obligate the Company to repurchase any dollar amount or number of shares of its common stock and the repurchase program may be extended, modified, suspended or discontinued at any time.
During the three months ended May 3, 2025, the Company repurchased 5.6 million shares of its common stock for $340.0 million. During the three months ended May 4, 2024, the Company repurchased 2.2 million shares of its common stock for $150.0 million. The Company records all repurchases, as well as investment purchases and sales, based on their trade date. The repurchased shares are retired immediately after repurchases are completed.
Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations