Technology
Questionable quality of 4Q24 results - 1) Revenue had an extra six days but only rose by $8m or 0.6%. MRVL also picked up $13.7m from lower deferred revenues. 2) Ramped up Variable Considerations - a $10m change is worth 1 cent in EPS. Did MRVL load up this account to help sales and EPS going forward? 3) Accrued Warranty Expense fell - $26.9m potential boost in income or 3 cents in a quarter where MRVL only met estimates. 4) Adds back stock compensation - rose to 10.9% of sales - 2.6 cents to non-GAAP EPS. 5) Adjusted EPS also added back $42.3m in product claims that were paid out - 4.6 cents and is not expected to recur going forward. 6) Cuts to R&D spending.
Edition: 185
- 03 May, 2024
Technology
MRVL beats or misses forecasts by only 1-2 cents, but there appears to be several areas for concern: 1) Allowances for discounts and rebates are huge and driving +/- 7 cents of EPS per quarter. 2) Company adds 2.5 cents per quarter by boosting stock pay as a percentage of sales. 3) A new warranty charge appeared for first time last quarter. 4) AI growth is being swamped by weakness in other markets and inventory remains high. 5) It may not use all its contracted shipping and foundry capacity which hurts margins. 6) FCF is overstated because MRVL records technology licensing fees in the financing section of cash flow.
Edition: 171
- 13 October, 2023