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Marvell earnings display big AI revenue boost, but other areas still challenged

By Emily Bary

Data-center end-market revenue rose 87% from a year before

This story has been updated to correct the name of CEO Matt Murphy.

Marvell Technology Inc. rode artificial-intelligence demand to strong growth in its data-center business for the most recent quarter, but shares fell in the extended session as other businesses continued to report pressure.

Data-center end-market revenue rose 87% from a year before, Marvell said Thursday afternoon. That compares with a 54% year-over-year growth rate seen in the fiscal fourth quarter.

Chief Executive Matt Murphy called out "the start of a ramp in our custom AI programs complementing our substantial base of electro-optics revenue."

The AI momentum outweighed some pressure in more traditional businesses, with the other segments besides data-center all showing declines.

Overall, Marvell (MRVL) posted $1.16 billion in revenue, down from $1.32 billion a year before. Analysts had been looking for $1.15 billion.

The stock was down about 4% in Thursday's after-hours trading.

Enterprise networking revenue dropped 58% from a year before to $153 million, while carrier-infrastructure revenue fell 75% to $72 million. Consumer revenue was down 70% to $42 million, and automative and industrial revenue dropped 13% to $78 million.

The company logged a net loss of $216 million, or 25 cents a share, compared with a loss of $169 million, or 20 a share, a year prior.

Marvell's second-quarter outlook calls for $1.25 billion in revenue at the midpoint, as well as 29 cents in adjusted earnings per share at the midpoint. Analysts were looking for $1.22 billion and 28 cents, respectively.

The revenue forecast is "fueled by ramping custom AI silicon," Murphy said.

"We see a favorable setup for the second half of this fiscal year, driven by continued growth in data center and the beginning of a recovery in enterprise networking and carrier infrastructure," he added in the release.

-Emily Bary

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05-30-24 1803ET

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