Networking chips designer Marvell Technology (NASDAQ: MRVL) announced better-than-expected revenue in Q1 CY2025, with sales up 63.3% year on year to $1.90 billion. Guidance for next quarter’s revenue was better than expected at $2 billion at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $0.62 per share was in line with analysts’ consensus estimates.
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Marvell Technology (MRVL) Q1 CY2025 Highlights:
- Revenue: $1.90 billion vs analyst estimates of $1.88 billion (63.3% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.62 vs analyst estimates of $0.61 (in line)
- Adjusted EBITDA: $496.9 million vs analyst estimates of $716.2 million (26.2% margin, 30.6% miss)
- Revenue Guidance for Q2 CY2025 is $2 billion at the midpoint, above analyst estimates of $1.98 billion
- Adjusted EPS guidance for Q2 CY2025 is $0.67 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 14.3%, up from -13.1% in the same quarter last year
- Free Cash Flow Margin: 11.3%, down from 20.1% in the same quarter last year
- Inventory Days Outstanding: 103, in line with the previous quarter
- Market Capitalization: $55.79 billion
"Marvell delivered record revenue in the first quarter of $1.895 billion, a 63% year-over-year increase, and we are forecasting continued strong growth into the second quarter. This momentum is being fueled by strong AI demand in the data center end market, where our revenue is benefiting from the rapid scaling of our custom silicon programs and robust shipments of our electro-optics products," said Matt Murphy, Marvell's Chairman and CEO.
Company Overview
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Marvell Technology’s sales grew at an exceptional 18.9% compounded annual growth rate over the last five years. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Marvell Technology’s annualized revenue growth of 5.9% over the last two years is below its five-year trend, but we still think the results were respectable. 
This quarter, Marvell Technology reported magnificent year-on-year revenue growth of 63.3%, and its $1.90 billion of revenue beat Wall Street’s estimates by 0.9%. Beyond the beat, we believe the company is still in the early days of an upcycle as this was the third consecutive quarter of growth - a typical upcycle tends to last 8-10 quarters. Company management is currently guiding for a 57.1% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 31% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will fuel better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Marvell Technology’s DIO came in at 103, which is 3 more days than its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are slightly above the long-term average.
Key Takeaways from Marvell Technology’s Q1 Results
It was good to see Marvell Technology provide revenue guidance for next quarter that slightly beat analysts’ expectations. We were also happy its EPS narrowly outperformed Wall Street’s estimates. Looking ahead, Q2 revenue guidance came in ahead, but EPS guidance was just in line. Overall, this print was decent, but he market seemed to be hoping for more. The stock traded down 2% to $62.50 immediately after reporting.
Big picture, is Marvell Technology a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
