Marvell Technology, Inc.

Q4 2024 Earnings Conference Call

3/7/2024

spk01: Our non-GAAP gross margin was 61.2%. Non-GAAP operating margin was 29%. And our non-GAAP earnings per diluted share was $1.51. We returned $357 million to shareholders through dividends and buybacks. Moving on to our financial results for the fourth quarter. Revenue in the fourth quarter was $1.427 billion. exceeding the midpoint of our guidance, growing 1% on a year-over-year and sequential basis. Data center was our largest end market, driving 54% of total revenue. The next largest was enterprise networking with 19%, followed by carrier infrastructure at 12%, consumer at 10%, and auto industrial at 5%. Gap gross margin was 46.6%. Non-GAAP gross margin was 63.9%, growing 330 basis points sequentially, driven by a significantly better product mix as we had expected. Moving on to operating expenses. GAAP operating expenses were $697 million, including stock-based compensation, amortization of acquired intangible assets, restructuring costs, and acquisition-related costs. Non-GAAP operating expenses were $429 million, in line with our guidance. These results reflect the successful completion of our fiscal 2024 cost reduction plan we had outlined at the beginning of the year. GAAP operating margin was negative 2.3%, while non-GAAP operating margin was 33.8%. For the fourth quarter, GAAP loss per diluted share was 45 cents. Non-GAAP income per deleted share was $0.46, growing 12% sequentially. Now, turning to our cash flow and balance sheet. Cash flow from operations in the fourth quarter was $547 million. I'm pleased to report to you our second straight quarter delivering robust operating cash flow of over $500 million. Our inventory at the end of the fourth quarter was $864 million, decreasing by $77 million from the prior quarter. Our DSO was 77 days, decreasing by a day from the prior quarter. We returned 52 million to shareholders through cash dividends. In addition, we repurchased 100 million of our stock during the fourth quarter, doubling from the prior quarter. We expect to further increase repurchases in the first quarter of fiscal 2025. As you saw earlier today, Marvell's board has approved the largest repurchase authorization in our history. increasing our current plan by $3 billion, which brings our total available authorization to $3.3 billion. Our total debt was $4.17 billion. Our gross debt to EBITDA ratio was 2.19 times, and net debt to EBITDA ratio was 1.69 times. As of the end of the fourth fiscal quarter, our cash and cash equivalents were $951 million, increasing by $225 million from the prior quarter. Turning to our guidance for the first quarter of fiscal 2025. We are forecasting revenue to be in the range of $1.15 billion, plus or minus 5%. We expect our gap gross margin to be in the range of 44.5% to 47.2%. We expect our non-gap gross margin to be in the range of 62% to 63%. We are forecasting a sequential decrease in non-GAAP gross margin due to lower revenue impacting fixed cost absorption. Looking forward, we expect that the overall level of revenue and product mix will remain key determinants of our gross margin in any given quarter. For the first quarter, we project our GAAP operating expenses to be approximately $676 million. We anticipate our non-GAAP operating expenses to be approximately $455 million. This forecast includes a step up from the prior quarter due to typical seasonality in payroll taxes and employee salary merit increases. For the first quarter, we expect other income and expense, including interest on our debt, to be approximately $48 million. We expect our non-GAAP tax rate of 7% for the first quarter. We expect our basic weighted average shares outstanding to be $866 million and our diluted weighted average shares outstanding to be $875 million. We anticipate gap earnings per diluted share in the range of a loss of 18 cents to a loss of 28 cents. We expect non-gap income per diluted share in the range of 18 cents to 28 cents. Operator, please open the line and announce Q&A instructions. Thank you.
spk02: We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. In the interest of time, please restrict yourself to one question only. If you have additional questions, please rejoin the queue. At this time, we'll pause momentarily to assemble our roster. Our first question will come from Ross Seymour with Deutsche Bank. Please go ahead.
spk13: Hey, guys. Thanks for really asking the question. Clearly, it's kind of tail two cities. The data center and AI side is going to be really strong. The rest of it, not so much. So why don't we just get the bad news out of the way first. Matt, the magnitude of the drops next to your data center are kind of shocking. Can you just walk us through how much of that is something that is not going to come back? you know, some of the stuff in 5G, et cetera, versus what do you view as just taking the cyclical medicine and then a snapback should ensue soon thereafter?
spk11: Yeah. Hey, great. Thanks, Ross. And yeah, definitely a tale of two cities. On the carrier enterprise and consumer side, the way to think about it is, sure, the drops are pretty steep in Q4 and Q1. We're definitely going through a cyclical downturn in the industry um you've been doing this a long time so have i we've seen that happen um and that's what we're going through the way to think about both of those businesses is at their peak together they were about two and a half billion in revenue and this would sort of be during the pandemic and some of the supply chain uh the issues that went on um You can now see we're shipping well below that. And so I said in my prepared remarks, both of these are very solid businesses, Ross or Marvell. Both will recover to greater than $1 billion in revenue over time. The question is when. And remember as well, within these businesses, these are very long product life cycles, typically like seven years in production. So these are designs, in some cases, we won three or four or five years ago. Some of them we just won a year or two ago. So we still get about these businesses, but they are going through some demand softness and some inventory correction. But we expect to see that behind us. And to be very specific, none of this is due to any business that's not, quote, coming back or share loss. And in fact, when things recover back to a normalized run rate, we do have Marvell product growth drivers in both of those segments, carrier and enterprise, to drive growth. going forward.
spk04: So we're just managing through it in the short term.
spk03: Thank you.
spk02: The next question will come from Matt Ramsey with TD Calwin. Please go ahead.
spk09: Thank you very much. Good afternoon, guys. I guess kind of a two-part question on the custom silicon business. The first part of it, Matt, you mentioned gave us some good color in your script as to how you see $200 million exiting the year and exceeding the $800 million for next. And you kind of referenced the billion dollars at scale. And I just wonder if you could maybe square the rest of that circle with that just for business you've won today for fiscal 26, or is there more to come? And I guess the second part of the question, my observation is you guys probably have A, more shops on goal for custom silicon, and B, each one of the shops on goal could be potentially a very large or larger than expected piece of business given what's happening in the AI trend. But I guess my concern is as you evaluate those opportunities when those programs will be shipping two, three, four years in advance and trying to figure out how those programs would sort of align with technology the dominant player in the space's roadmap two or three years out and the pace of that innovation. How do you guys evaluate the potential for the size of the business when lots of shots on goal, but the probability of each of those shots on goal being successful might be hard to gauge given how quickly the industry is moving? Hopefully that makes sense. I'm just trying to get an idea of how you're scaling the business and taking on orders given all the volatility and rapid technology advancements in the space.
spk11: Thanks. Yeah, got you, Matt. Okay, let me just tackle them both. On the first one, yeah, super excited about the ramp we're seeing now on the custom silicon programs we won a couple years back. So we're shipping in Q1 on both programs. Fantastic. We gave some color in the prepared remarks on the exit rate, you know, being 200 million plus. You know, I don't want to cap that at this point, but that's, you know, but certainly that's sort of the way to think about it is the floor, and then we go from there. So that would imply, obviously, in fiscal 26, a much larger number than the 800 million we had called out. And again, I think it's still dynamic and still early, but we're very excited from the bullish forecast we're seeing from our customers. So 26 looks very strong from the programs that we've won, and we should be way ahead of the plan that we had articulated a ways back. On the second question, yeah, I don't think I've ever seen more design win activity you know, in my career as right now in AI, custom silicon, networking, optics, you know, you name it, this whole transformation that's going on in data center architectures is creating this massive opportunity for Marvell, specifically on the custom portion of it. I mean, we're talking about a TAM creation that's going to be in the tens of billions of dollars range. And we'll talk more about that at our AI day, but very significant sort of opportunity that's emerging in front of us. And that being said, I feel that it's very complementary to the merchant leader in this space. I think both have a place, given the workloads that are required, given the scale of computing that's needed. And I don't think it's a zero-sum game. I've been saying this for a while. I think both segments, the merchant side as well as the custom side, are going to grow to be very enormous TAMs. And so, yeah, we're right in the mix on all the major opportunities and programs. We have assembled an incredible team, an incredible portfolio of technology. We announced today, you know, our continued partnership with TSMC with a very full and robust roadmap of IP and technology to specifically address AI and accelerated computing applications for the next generation. So that's got a lot of excitement with the customers as well. So, yeah, overall, we're very bullish, and we think all the boats are going to lift on this one, and certainly for Marvell, creates a huge new TAM opportunity that we really didn't have just a few years ago.
spk04: Thanks, Matt.
spk11: Thank you. Yeah.
spk02: The next question will come from Christopher Rowland with Susquehanna. Please go ahead. Hey, thanks, guys.
spk06: I guess, first of all, Matt, thanks for giving that the custom ASIC opportunity numbers. Again, I think that means probably means you guys have a pretty strong pipeline. But would love would love to drill down on that a little bit more. So I guess first of all, maybe you can talk about these opportunities, training versus inference, how you see that versus perhaps just compute. And then What's kind of the – do you have a secret sauce that's landing these? Like your competitor has really used their, at the time, leading edge, Surdy's IP as a driver of those wins. Is there something that you have, some special sauce that are winning these? Thanks.
spk11: Yeah, thanks, Chris. Great to hear from you. Um, and yeah, hopefully some of the custom numbers were, were helpful, you know, investors last year and this year was a lot of, a lot of interest in sort of what the size of that was. And, and now that we've got the visibility, it's great to start articulating where we think that is. Um, I, you know, I think on your second sort of piece of your question around, um, training versus inference and compute, you know, at this point I would just put it in a very large bucket of what I'm calling, you know, deca billions in TAM creation. Um, I don't know that we're on this call, certainly prepared to slice it out. And I don't even think we know, you know, where this is going to be in three to five years relative to that exact split. But I would say the opportunity set for us crosses all of those applications. Okay. And then relative to where we are in terms of our technology, our competitiveness, I mean, it's pretty astonishing if you think about it. When we won the designs we won, Chris, at five nanometer, that was really our first time as Marvell to compete in this segment, especially in the data center. The origins of this business go back to our purchase of Avera in 2019. We pivoted that roadmap during the pendency of the close and right after from 14 nanometer technology all the way to five. And even though it was our first time out, you know, Syrdes was competitive, packaging technology, interconnect, manufacturing scale, strategic partnerships up and down the supply chains. And that enabled us to win a significant share of ASICs in business, which is now coming to fruition here in fiscal 25 and 26. We followed that up with our three nanometer platform, which has now been a big part of the opportunity set in the funnel we're competing in today. We are in a completely different position now relative to five nanometer because we had the learnings, we had the readiness. And now we're really leaning in, okay, in terms of being, you know, a first mindset around not just nanometers, but die-to-die interconnect, packaging, 30s technology, optics, and really in chiplets and thinking about how to stitch all this together. And on top of that, you know, with the scale of Marvell and our strategic partnerships, we really look to our customers like an incredibly solid, trustworthy, long-term partner for their needs to really help them realize their AI silicon ambitions. So that's where we are today. I mean, we did great on five. We're going to do great on three, and we're going to do great in the future.
spk04: Thanks.
spk11: Congrats. Thanks, Matt.
spk02: Yeah. The next question will come from Quinn Bolton with Needham & Company. Please go ahead.
spk14: Hey, guys. I'm going to follow up on the CloudOS ASIC question as well, but I guess I'm coming at it from a margin perspective, Matt. You know, you look at some of these programs, on the cloud compute side to the extent that they integrate high bandwidth memory. It certainly does nice things to the ASP, but there's also a pretty significant cost that you may have to pass through. And so I'm wondering, can you talk about the gross margins on some of these ASIC platforms? How does that compare to the corporate average? And as you ramp, especially if cloud ASICs get to be similar in size to the optics, which I know are good margins, how do you see the margin mix changing with this now very, very strong ramp of cloud ASIC programs? And then I've got a quick follow-up if I can sneak it in.
spk11: Sure, yeah. I mean, the way we've talked about that business actually since Avera in 2019 is that it would always, due to the nature of custom business, be at a lower gross margin overall than the company average and the target. At the same time, because of the NRE and non-recurring engineering that we receive as part of the customer funding of these programs, the operating margins of this business tend to be very competitive and over time in line with our company targets. When you start talking about these very, very large programs, you've got opportunity, given the volume and scale on the OM line, to really drive a lot of leverage in the model. But the GMs, just due to the nature of that business model, will always be will be a little bit lower than the total. I would say, though, at the same time, because the sort of follow-on sometimes is, well, gee, if that happens, what happens to the overall company gross margin profile? And remember, we still have very strong gross margin merchant businesses in storage and in networking, automotive. Some of those are even under shipping demand right now. So as the year plays out, some of those businesses will come back. And that should be a little bit of a margin offset to some of the custom stuff. So we're still managing to our long-term target model. But, yeah, the cloud stuff, especially at these volumes, certainly will have lower risk margin. If we've got a quick one for the second, we can do it. Otherwise, we've got to – Yeah, quick one on the second.
spk14: You mentioned sort of ramping AECs at multiple hyperscalers this year. Just wondering if you might be able to give us some sense. Is that meaningful? Any sense on the magnitude of that ramp?
spk11: Yeah, I think what I'd say is it's absolutely a real market. We felt that way for some time, even back when we acquired InFi, you know, that was sort of shot on goal we thought was possible. I think the big news is that we're qualifying at multiple hyperscalers now. We're starting to go into production this year. We'll get a very nice solid kind of more full year-ish ramp in fiscal 26, but it's definitely an incremental, you know, additive category to Marvell, and it really leverages our high-speed DSP or high-performance DSP and PAM technology, which is really now inflecting in this wave of AC before it was based on the older modulation techniques where we didn't participate. So, yeah, really excited about it, but let's let it play out for a few more quarters. Thanks. Thanks, Matt.
spk02: The next question will come from Harsh Kumar with Piper Sandler. Please go ahead.
spk05: Yeah, hey guys, thanks for letting me ask a question. Matt, so AI is hot. There's no other way to put it. You are in kind of a pole position with your optical piece, the old in-pie piece. Can you give us a sense of the magnitude of the size of that business, either quarterly or last year? Anything you can throw at us that helps us size it and also kind of what kind of growth rate you expect to see from this business? And then, Matt, when you say the bottom is, you know, for some of the pieces like consumer and networking, the bottom will be this 1Q timeframe. What piece do you think will come off the bottom in 2Q, or do you expect all the pieces to come off the bottom in 2Q?
spk11: Okay, let me do this. I'll take the first one, and I'll let Willem take the second one, so I can take a breather, and he can also answer your question. Yeah. On the first one, I think we gave some pretty good color. I mean, if you think about it, the, the Q4 exit rate on AI, right. Was, was, was well north of 200 million. And the bulk of that, as we said, was, was in optics. So if you just, and then you can start extrapolating, you know, well, geez, then you got to add in, um, how much revenue is Marvell getting on the standard cloud side in optics. And that's another very nice chunk. Um, And then you've got some of the stuff that we have that shows up in the carrier side, which we're talking about Infi now, on the coherent DSPs. There's some ASICs that we have. So the overall Infi business, if that's what you're asking, since we bought it, has clearly outperformed the deal model and has just become an incredibly strategic asset for us, both in terms of just the technology we picked up, but the team, the synergy with the other portfolio partners, the other product lines we have, and so just super positive about that. And it just looks like that whole opportunity is going to be much larger than I think we were in FISA just a few years back. Willem, do you want to take the second part of it?
spk01: Yeah, thanks, Matt. Hey, Harsh. Yeah, so we're really working with customers to focus on Q1 being the bottom. really confident that that's the bottom. And then we see growth resuming in the second half across enterprise networking, carrier, and consumer. So, yeah, really just trying to make sure that we put this behind us really quickly and see growth in the second half.
spk03: Thank you.
spk02: The next question will come from Vivek Araya with Bank of America. Please go ahead.
spk07: Thanks for taking my question. Matt, one more on electro-optics. I think near-term it seems in Q1 there's probably a little bit of a breather after several strong quarters. But the more important question is that should we assume that your electro-optics that is related to AI should grow somewhat proportional to the growth in accelerators? So, for example, if you look at accelerator growth this year, you know, I've seen various numbers between 50% to 100% kind of year-on-year growth. So should the AI part of your electro-optics grow, you know, kind of commensurate with that, or is there something different? And then when does 1.62, 1.16, 1.60, sorry, when does that start to play a role in your electro-optics business?
spk11: Yeah, thanks, Vivek. Well, I think it depends on how you, the definition of breather you use. I mean, basically it's ramped up just so significantly, right, the electro-optics business. Q2 to Q3, Q3 to Q4, and staying strong in Q1. Maybe it's a breather from the sequential growth point of view, but we still have not seen that slow down. And then on the, let's see, I got your second one. Your third one was on 1.6T. I'm going to come back to your second one in a second. That is going to ramp later this year. That's gone really well, the quals and the product bring up. We announced it at OFC last year. and a lot of demand and interest. And then, sorry, your second question on AI.
spk07: Yeah. So should your electro optics grow kind of proportionally to the growth and accelerate? Yeah.
spk11: Yeah. Yeah. Sorry. Yeah. The accelerator way. Yes. So I, yeah, for sure. The, the way we think about it is the, that business year over year should grow in line with accelerator growth, accelerator unit growth. We think it's, we view it as very correlated. Obviously there's some timing issues in terms of supply chain and things like that, but that's a, That's a simple way to think about it, and everyone's got a little bit of a different model at this point about what that number is, but our view is we're highly correlated to accelerator shipments in our optics business.
spk03: The next question will come from Gary Mobley with Wells Fargo.
spk02: Please go ahead.
spk10: Hey, guys. Thanks for taking my question. As a way to think about the win or hit rate or your custom basic business when engaging with prospective customers in the future, how should we think about the increasing competitive environment from the ARM ecosystem, ARM specifically with more versions of Neoverse, its total design ecosystem, its compute subsystems, and as well,
spk11: all the asic design community you know first of all how do you feel about arm essentially becoming more of a competitor and then as well you know how do you think about the way in which you'll you'll compete against that and succeed thank you yeah thanks gary i think like i think there's a there in this market today there's there's obviously a lot of excitement because of the um the opportunity in front of us i mean the way that we we're working is there's a number of companies that are our partners, solution providers, et cetera, that may or may have their own offering or not, whether it gets taken up or not is we'll have to see. Where we come together really is we pull it all together. We're able to actually deliver with Marvell intellectual property, design methodology and techniques, our IP and our know-how pulled together with our customers, RTL and IP and partners the total solution, which means we actually lay the chip out, we package it up, we manufacture it in high volume, we QA it, we test it, we yield it, we drive reliability, we drive cost improvement, and we drive it through the cycle. And that is a very different business model than providing a piece that goes in. And so Arm has been our partner for a long time. We use them in our products kind of all over the place. And as they evolve and others evolve, we'll figure that out too. But in the end, it comes down to, we believe for these large volume, mission critical, big compute silicon chips, it's going to require somebody like a Marvell with the manufacturing scale, the technique, design techniques and know-how to really execute it. And so we haven't seen any change there. And in fact, I think, at the sort of three nanometer node we're at and beyond, it's going to be even more critical to have a partner who's got your back, who can help you get to production quickly and spin derivatives quickly, which is now increasingly looking like what's going to be needed. More SKUs, faster beat rate in terms of when products are released, and then obviously ramping them very hard and quickly given the competitive environment.
spk03: Thanks, Matt.
spk02: The next question will come from Harlan Sir with JP Morgan. Please go ahead.
spk12: Good afternoon. Thanks for taking my question. Matt, you mentioned initial shipments of your AI ASIC programs. Can you just clarify, because I know last you updated us, these programs were in qualification. So have you guys passed qual on both these programs? And this is sort of the initial start of the full production ramp or Maybe you're still in qual, but you've got enough line of sight to passing the quals, just given you're at the tail end of this process. And maybe more importantly, have you guys secured the follow-on AI programs for these two initial projects?
spk11: Yeah, thanks for the question, Harlan. So yeah, we are in the initial start of the production ramp on both products. And then as far as the follow-ons, like I said, the opportunity funnel we see across all of the various um opportunities right now is significant and we're involved in we believe we think every single one of them so um so yeah and they'll and there'll be more to come sort of at our at our ai day but i would just say our our three nanometer funnel and our three nanometer hit rate and design win rate is very encouraging and it really um gives us just tremendous confidence in where this business is headed It also has a side benefit by driving this advanced technology for the custom ASIC side is it's pulling along the technology development that benefits all the other businesses in Marvell, like our high-performance switching, our DSPs for optics, et cetera. So there's actually kind of a virtuous cycle happening where being at that bleeding edge is now we're able to show our other solutions that interoperate with this custom silicon, really a best-in-class roadmap there. But more on the overall strategy and opportunity side of the AI there. Got to give you something to look forward to.
spk04: Thank you, Matt. Yeah.
spk02: The next question will come from Tor Stanberg with Stifel. Please go ahead.
spk08: Yes, thank you. Matt, I had a question on the 800 gig upgrade cycle. So you mentioned that ramping, but you also mentioned 1.6 terabit, the ramping later this year. My understanding is that we're still in the early stages of the 800 gig, and I'm just wondering if you expect a more broad-based 800 gig upgrade cycle before 1.6 really starts to take off, or will we potentially see kind of both ramping at the same time?
spk11: Yeah, I think there's three different pieces we should talk about. So the first is 1.6T. I would just call that, you know, early shipments, you know, first volumes type of thing, you know, in the second half, you know, end of the year, and then more next year. And that's really, you know, I'd call the early adoption of that technology. But it's very promising because that's obviously what's going to follow. The 800 gig for AI has still got tons of legs, right? And it's going to be very, very strong this year, very, very strong next year. And then there'll be some transition over time. And then I think what you're also indicating is at some point, you're going to see an 800 gig transition on traditional cloud infrastructure from either 200 or 400 gig to 800 gig. And that is also true in something we're planning for. So I think they're going to end up happening kind of all of them in parallel a little bit, right? You're going to have bleeding edge people adopting One6. You're going to have the bulk of the volume on AI still driving 800 gigs for the next few years. And then you're going to have a transition on the traditional PAM side as well that's going to upgrade. So I think they're all going to be in production in parallel for different reasons, which is great because it just ends up being multiple customers, multiple SKUs, and kind of a rich portfolio of solutions that we're offering so that people can optimize their systems for the best TCO and the best performance that they need. Thanks, Tori.
spk03: Excellent. Thank you.
spk02: We will take our last question today from Srini Pajari with Raymond James. Please go ahead.
spk00: Thank you. Hi, Matt. Just a follow-up to one of the previous questions, Matt, about the custom silicon opportunity going forward. Obviously, there are four big cloud customers, hyperscale customers, and based on what we know so far, most of them seem to be investing in custom silicon, either one or two chips. So it does feel like the number of opportunities are relatively small. Of course, these are very large opportunities. Just curious, how do you see that evolving? Do you see this continuing? with one or two programs for each customers, which are, you know, multi-billion opportunities? Or are you seeing, you know, spreading out or kind of, you know, more diverse opportunities as we, you know, I guess, you know, as AI becomes, you know, bigger and broader? Just want to hear your thoughts on that.
spk11: Yeah, certainly. The way I think about it is, if you go back just a couple years, when AI was emerging, there was, you know, kind of one chip, one program that would sort of, happen, it would take several years, then you gear up for the next one, and there was definitely a serial type of approach, and that was probably fine. I think what we've seen, to your point, is really multiple programs now across all the key customers, and that's kind of where I'd leave it. I think getting more specific, you know, I don't really want to do that with respect to my customers, but I would just say what we hear is very much a need for Each of them needing their own very differentiated unique solutions, needing more SKUs and at a much more rapid rate by far than we've seen so far. And so I just think it's creating, I think, I know it's creating just a very significant now opportunity in custom silicon that really wasn't there before in terms of the total dollars that are available, the number of chips, and then the speed that they want to go. And that's why earlier I had said, you know, if you look at this kind of three nanometer cycle we're in, you know, it's significantly larger than we saw back at five nanometer. Even if you account for the fact that some of these five nanometer TAMs have gone up a lot because the market went up. Even if you sort of factor that in, what we're looking at is a lot more. And I think that's just going to continue for the next few years. But sure, by design, I think any of these high volume data center applications are always going to, in any product line, by the way, always concentrate down to a few key partners. That's just the way the business works. But super exciting time. There's a lot of activity here.
spk04: Thanks, Srini. Thanks, Matt. All right.
spk02: Was that the last question operator? Yes, sir. Yeah, I was going to make some closing.
spk04: Oh, perfect. Yeah, thank you.
spk02: Go ahead, sir. Take the floor.
spk11: Excellent. Thanks. All right. So first, everybody, appreciate the participation of the call today. It's a Very exciting time in the semiconductor industry relative to sort of the opportunity that's in front of us. We see a huge transformation underway right now with fundamentally a complete overhaul of data centers and data center architectures. And Marvell, we've been on this journey for the last four or five years to really transition and transform ourselves into a data center company. And as you've seen from our recent results now, that is our largest end market. It's where we're putting the majority of our R&D effort, and we're positioning the company to win big here. We chose a strategy years ago to be really levered to the accelerated computing and infrastructure part of the market, which includes in the most prominent piece being AI. It's become much larger of an opportunity than we thought a few years ago, but it's a market we clearly chose to invest in. We're expecting a lot of growth in the coming year in our data center business. We're very excited about that. And some of these programs, as I indicated, they're just getting started. And some of them are ramping in the second half. Some of them are ready to ramp now. But it really gives us a great setup for our fiscal 26. And kind of final couple comments. I get a lot of thought about, you know, And we did a lot of work with our customers over the break this past December. And early January, I did a fireside chat with Harlan at JPM. And there was a lot of excitement after that call because we had gained confidence at that point about some of the production ramps. I would say just a couple months later now, sitting here on this call, our confidence in our growth this year and the robustness of these programs has only gotten stronger and only increased. So we're very excited about where the company's positioned. I appreciate everybody's support and interest in Marvell, and I look forward to seeing everybody at the AI Day. Team is working extremely hard, and they will not disappoint. So thanks, everybody. We'll see you soon. Bye.
spk02: Thank you for attending today's presentation. You may now disconnect.
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