Marvell CEO: ‘The company’s cloud business will become another key growth driver’
Marvell Technology Group’s Q1 performance beat expectations, achieving a revenue growth of nearly 5% year over year, translating to $694 million, which is $14 million above the midpoint of guidance. The company’s President, CEO & Director Matthew J. Murphy stated in the earnings call that the success was driven partly by “stronger-than-expected” demand from Marvell’s data center and 5G infrastructure end markets.
“Compared to our assumptions when we provided our revenue guidance for the first quarter, the impact of COVID-19 turned out to be greater-than-expected in our storage business and lower than expected in our networking business,” he continued. “Our GAAP loss per share was $0.17. Our non-GAAP earnings per share was $0.18, above the high end of our guidance range, driven by higher revenue and tight OpEx control.”
When it comes to Q2, the company expects revenue of between $684 million and $756 million and earnings between 17 cents and 23 cents per share, while analysts are expecting revenue of $688.66 million with earnings of 23 cents per share.
While Murphy certainly acknowledged that investor focus has been notably high in the area of 5G, he directed those on the call towards the important role that the cloud data center market will play in Marvell’s future.
“For now, I’d like to draw your attention to the cloud data center market,” he said, “which represents an opportunity for our storage and networking products, similar in magnitude to 5G. This is in addition to our ARM server opportunity, which we have previously outlined as a large multibillion-dollar market for us. We’ve been working on building our business through organic investments over the past 4 years as well as through products and engagements via the Cavium and Avera acquisitions.”
He added that Marvell is in the process of creating a strong cloud franchise that combines the company’s storage, networking and processor technology.
“I’m pleased to report that for the first time, we estimate that our revenue from the cloud market exceeded 10% of total company revenue, growing from a fairly small position at the same time last year,” he revealed.
According to Murphy, Marvell believes that its cloud business will become another key growth driver for the company.
