Marvell's Q1 Revenue Outdid Guidance, Despite Pandemic’s ‘Massive Disruption’
Marvell Technology achieved Q1 revenue of $693.6 million, about $14 million above the midpoint of its March 4 guidance, despite COVID-19's “massive disruption,” said CEO Matt Murphy on a Thursday investor call. Marvell’s Q1 ended May 3. The March forecast assumed the pandemic would deal Q1 revenue a 5% hit, said Murphy. “The impact of COVID-19 turned out to be greater than expected in our storage business and lower than expected in our networking business.” Marvell experienced stronger than expected demand from its data center and 5G infrastructure “end markets,” he said.
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Marvell is benefiting from the start of the 5G buildout in China, where two key base station customers have landed about half “the share of recently announced contracts,” said Murphy. It’s currently shipping those customers custom chips and “standard connectivity products,” he said.
The company also just started shipping its “full suite” of 5G solutions to Samsung. It expects Samsung’s 5G “success” in South Korea, Japan and the U.S. will drive Marvell growth “in the coming year,” he said. “We are still at the very beginning of the industry transition from 4G to 5G and look forward to driving significant revenue growth from this end market.”
Marvell expects the demand for bandwidth "to continue to grow stronger" even post-pandemic, said Murphy. "Major cloud and service providers are facing unprecedented demand for their services as a result of so many people working from home and are scrambling to add capacity to their networks. 5G has become a strategic priority for many nations and also an economic growth driver for economies worldwide."