Marvell Technology, Inc.

Good afternoon, and welcome to Marvell Technologies' fiscal first quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Ashish Saran, Senior Vice President of Investor Relations. Please go ahead.

Thank you and good afternoon, everyone. Welcome to Marvell's first quarter fiscal year 2023 earnings call. Joining me today are Matt Murphy, Marvell's President and CEO, and Gene Hu, our CFO. Let me remind everyone that certain comments made today may include forward-looking statements which are subject to significant risks and uncertainties. that could cause our actual results to differ materially from management's current expectations. Please review the cautionary statements and risk factors contained in our earnings press release, which we filed with the FCC today and posted on our website, as well as our most recent 10-K and 10-Q filings. We do not intend to update our forward-looking statements. During our call today, we will refer to certain non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available in the investor relations section of our website. With that, I'll turn the call over to Matt for his comments on our performance. Matt?

Thanks, Ashish, and good afternoon, everyone. In the first quarter of fiscal 2023, the Marvell team drove another record level of revenue at $1.45 billion, exceeding the midpoint of guidance, growing 8% sequentially and 74% year over year. We saw continued strength in bookings in all our data infrastructure and markets. Higher revenue achievement was primarily driven by our data center market, with additional strength from carrier infrastructure and automotive results, both of which were also above forecast. Due to supply chain related impacts, results from our enterprise networking market were below our guidance. However, growth was still very strong, with revenue growing a robust 64% year over year and 9% sequentially. The Marvell operations team did a great job in navigating a tight supply environment that was further compounded by COVID-related manufacturing challenges at our suppliers in certain geographies. Our team's efforts were a key enabler of our first quarter revenue, exceeding the midpoint of our forecast. We continue to make progress in securing additional capacity with our strategic partners to enable sustained revenue growth. Let me now move on to discussing our 5N markets, starting with data center. In our data center end market, revenue for the first quarter was $640.5 million, leading our guidance, having grown 12% sequentially and 131% year-over-year. Strong performance was broad-based with multiple product lines contributing to excellent results. Cloud continues to be a source of Marvell's strength in the data center. We are enabling our hyperscale customers to add new use cases, bringing the benefits of AI and machine learning to businesses increase process automation and productivity, and drive deeper relationships with their customers. Let me now discuss a number of Marvell product cycles driving strong growth in cloud, starting with electro-optics. We are seeing strong demand for our PAM solutions inside data centers and ZR pluggables between data centers. Inside cloud data centers, lead tier one customers are currently driving volume deployment of our PAM-based 200 gig and 400 gig solutions. The rest of the market has plans for starting deployments later this year and next year. As bandwidth requirements continue to grow, we expect the role of PAM-based electro-optics to expand, replacing legacy solutions, and as a result, to grow our opportunity. We believe that the next generation of more powerful server CPUs will accelerate the need for PAM technology. In addition to this expansion, we are also increasing our content per module with our next generation of higher-speed solutions that we are now starting to ship. Driven by the growth in AI deployments, our first quarter results benefited from a ramp in volume shipments of our 800 gig PAM solutions at two large customers.