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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-40357
marvell_logo.jpg
MARVELL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 85-3971597
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1000 N. West Street, Suite 1200
Wilmington, Delaware 19801
(302) 295-4840
(Address of principal executive offices, zip code and registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
 
     
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.002 per share MRVL The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes      No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
¨  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No
The number of shares of common stock of the registrant outstanding as of May 24, 2024 was 865.6 million.


TABLE OF CONTENTS
 
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
1

PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value per share)
 
May 4,
2024
February 3,
2024
ASSETS
Current assets:
Cash and cash equivalents$847.7 $950.8 
Accounts receivable, net881.9 1,121.6 
Inventories826.4 864.4 
Prepaid expenses and other current assets91.7 125.9 
Total current assets2,647.7 3,062.7 
Property and equipment, net758.0 756.0 
Goodwill11,586.9 11,586.9 
Acquired intangible assets, net3,739.2 4,004.1 
Deferred tax assets327.0 311.9 
Other non-current assets1,432.2 1,506.9 
Total assets$20,491.0 $21,228.5 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$320.9 $411.3 
Accrued liabilities861.0 1,032.9 
Accrued employee compensation167.5 262.7 
Short-term debt118.3 107.3 
Total current liabilities1,467.7 1,814.2 
Long-term debt4,027.6 4,058.6 
Other non-current liabilities517.0 524.3 
Total liabilities6,012.3 6,397.1 
Commitments and contingencies (Note 5)
Stockholders’ equity:
Common stock, $0.002 par value
1.7 1.7 
Additional paid-in capital14,760.7 14,845.3 
Accumulated other comprehensive income0.4 1.1 
Accumulated deficit(284.1)(16.7)
Total stockholders’ equity14,478.7 14,831.4 
Total liabilities and stockholders’ equity$20,491.0 $21,228.5 

See accompanying notes to unaudited condensed consolidated financial statements
2

MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
 
 Three Months Ended
 May 4,
2024
April 29,
2023
Net revenue$1,160.9 $1,321.7 
Cost of goods sold633.1 764.5 
Gross profit527.8 557.2 
Operating expenses:
Research and development476.1 480.7 
Selling, general and administrative199.9 199.0 
Restructuring related charges4.1 59.9 
Total operating expenses680.1 739.6 
Operating loss(152.3)(182.4)
Interest expense(48.8)(52.7)
Interest income and other, net3.3 2.8 
Interest and other loss, net(45.5)(49.9)
Loss before income taxes(197.8)(232.3)
Provision (benefit) for income taxes17.8 (63.4)
Net loss$(215.6)$(168.9)
Net loss per share — basic$(0.25)$(0.20)
Net loss per share — diluted$(0.25)$(0.20)
Weighted-average shares:
Basic865.0 856.7 
Diluted865.0 856.7 
See accompanying notes to unaudited condensed consolidated financial statements
3

MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In millions)
 
 Three Months Ended
May 4,
2024
April 29,
2023
Net loss$(215.6)$(168.9)
Other comprehensive loss, net of tax
Net change in unrealized loss on cash flow hedges(0.7)(0.9)
Other comprehensive loss, net of tax(0.7)(0.9)
Comprehensive loss, net of tax$(216.3)$(169.8)

See accompanying notes to unaudited condensed consolidated financial statements
4

MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per share amounts)

Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive IncomeAccumulated Deficit
SharesAmountTotal
Balance at February 3, 2024865.5 $1.7 $14,845.3 $1.1 $(16.7)$14,831.4 
Issuance of common stock in connection with equity incentive plans2.2 — 2.2 — — 2.2 
Tax withholdings related to net share settlement of restricted stock units— — (74.1)— — (74.1)
Stock-based compensation— — 137.3 — — 137.3 
Repurchase of common stock(2.2)— (150.0)— — (150.0)
Cash dividends declared and paid ($0.06 per share)
— — — — (51.8)(51.8)
Net loss— — — — (215.6)(215.6)
Other comprehensive loss— — — (0.7)— (0.7)
Balance at May 4, 2024865.5 $1.7 $14,760.7 $0.4 $(284.1)$14,478.7 

Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive LossRetained Earnings
SharesAmountTotal
Balance at January 28, 2023856.1 $1.7 $14,512.0 $ $1,123.5 $15,637.2 
Issuance of common stock in connection with equity incentive plans3.8 — 8.3 — — 8.3 
Tax withholdings related to net share settlement of restricted stock units— — (72.6)— — (72.6)
Stock-based compensation— — 142.2 — — 142.2 
Cash dividends declared and paid ($0.06 per share)
— — — — (51.4)(51.4)
Net loss— — — — (168.9)(168.9)
Other comprehensive loss— — — (0.9)— (0.9)
Balance at April 29, 2023859.9 $1.7 $14,589.9 $(0.9)$903.2 $15,493.9 

See accompanying notes to unaudited condensed consolidated financial statements
5

MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Three Months Ended
 May 4,
2024
April 29,
2023
Cash flows from operating activities:
Net loss$(215.6)$(168.9)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization72.6 78.4 
Stock-based compensation136.5 143.2 
Amortization of acquired intangible assets264.9 270.0 
Restructuring related impairment charges 0.7 10.1 
Deferred income taxes(22.2)(139.1)
Other expense, net21.8 12.8 
Changes in assets and liabilities:
Accounts receivable239.7 191.3 
Prepaid expenses and other assets85.8 7.9 
Inventories38.8 41.2 
Accounts payable(58.3)(104.8)
Accrued employee compensation(92.2)(60.1)
Accrued liabilities and other non-current liabilities (148.0)(73.6)
Net cash provided by operating activities324.5 208.4 
Cash flows from investing activities:
Purchases of technology licenses(0.5)(2.8)
Purchases of property and equipment(91.5)(99.8)
Other, net(9.9)(0.1)
Net cash used in investing activities(101.9)(102.7)
Cash flows from financing activities:
Repurchases of common stock(150.0) 
Proceeds from employee stock plans2.3 7.5 
Tax withholding paid on behalf of employees for net share settlement(74.1)(72.6)
Dividend payments to stockholders(51.8)(51.4)
Payments on technology license obligations(30.2)(50.0)
Proceeds from borrowings 200.0 
Principal payments of debt(21.9)(21.9)
Net cash provided by (used in) financing activities(325.7)11.6 
Net increase (decrease) in cash and cash equivalents(103.1)117.3 
Cash and cash equivalents at beginning of period950.8 911.0 
Cash and cash equivalents at end of period$847.7 $1,028.3 

See accompanying notes to unaudited condensed consolidated financial statements
6

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Basis of Presentation

The unaudited condensed consolidated financial statements of Marvell Technology, Inc. (“MTI”), a Delaware corporation, and its wholly owned subsidiaries (the “Company”), as of and for the three months ended May 4, 2024, have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted as permitted by the SEC. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s fiscal 2024 audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024. In the opinion of management, the financial statements include all adjustments, including normal recurring adjustments and other adjustments, that are considered necessary for fair presentation of the Company’s financial position and results of operations. All inter-company accounts and transactions have been eliminated. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These financial statements should also be read in conjunction with the Company’s critical accounting policies included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024 and those included in this Quarterly Report on Form 10-Q below. All dollar amounts in the financial statements and tables in these notes, except per share amounts, are stated in millions of U.S. dollars unless otherwise noted.

The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2024 had a 53-week year. Fiscal 2025 is a 52-week year.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, provisions for sales returns and allowances, inventory excess and obsolescence, goodwill and other intangible assets, restructuring, income taxes, litigation and other contingencies. Actual results could differ from these estimates and such differences could affect the results of operations reported in future periods. In the current macroeconomic environment, these estimates could require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.

Note 2. Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Effective

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) to improve reportable segment disclosures. The update requires disclosure of incremental segment information on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) to improve income tax disclosures to enhance transparency and decision usefulness of income tax disclosure. The ASU is effective for fiscal years beginning after December 15, 2024 with updates to be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.
7

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Note 3. Revenue

Disaggregation of Revenue

The majority of the Company’s revenue is generated from sales of the Company’s products.

The following table summarizes net revenue disaggregated by end market (in millions, except percentages):

Three Months Ended
May 4,
2024
% of TotalApril 29,
2023
% of Total
Net revenue by end market:
Data center$816.4 70 %$435.8 33 %
Enterprise networking153.1 13 %364.6 27 %
Carrier infrastructure71.8 6 %289.9 22 %
Consumer42.0 4 %142.1 11 %
Automotive/industrial77.6 7 %89.3 7 %
$1,160.9 $1,321.7 

The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in millions, except percentages):

Three Months Ended
May 4,
2024
% of TotalApril 29,
2023
% of Total
Net revenue based on destination of shipment:
China$529.6 46 %$515.7 39 %
United States216.5 19 %187.3 14 %
Singapore111.3 9 %112.3 8 %
Thailand65.0 5 %45.4 3 %
Malaysia53.0 5 %98.5 7 %
Taiwan42.6 4 %53.8 4 %
Finland22.4 2 %80.1 6 %
Japan17.3 1 %43.8 3 %
Other103.2 9 %184.8 16 %
$1,160.9 $1,321.7 

These destinations of shipment are not necessarily indicative of the geographic location of the Company’s end customers or the country in which the Company’s end customers sell devices containing the Company’s products. For example, a substantial majority of the shipments made to China relate to sales to non-China based customers that have factories or contract manufacturing operations located within China.

The following table summarizes net revenue disaggregated by customer type (in millions, except percentages):

Three Months Ended
May 4,
2024
% of TotalApril 29,
2023
% of Total
Net revenue by customer type:
Direct customers$608.1 52 %$890.8 67 %
Distributors552.8 48 %430.9 33 %
$1,160.9 $1,321.7 

8

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Contract Liabilities

Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. Contract liability balances are comprised of deferred revenue. The amount of revenue recognized during the three months ended May 4, 2024 that was included in deferred revenue balance at February 3, 2024 was not material.

As of the end of a reporting period, some of the performance obligations associated with contracts will have been unsatisfied or only partially satisfied. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

Note 4. Debt

Summary of Borrowings and Outstanding Debt

The following table summarizes the Company’s outstanding debt at May 4, 2024 and February 3, 2024 (in millions):

May 4,
2024
February 3,
2024
Face Value Outstanding:
2026 Term Loan - 5-Year Tranche$678.1 $700.0 
     Term Loan Total678.1 700.0 
4.875% MTG/MTI 2028 Senior Notes
499.9 499.9 
1.650% 2026 Senior Notes
500.0 500.0 
2.450% 2028 Senior Notes
750.0 750.0 
5.750% 2029 Senior Notes
500.0 500.0 
2.950% 2031 Senior Notes
750.0 750.0 
5.950% 2033 Senior Notes
500.0 500.0 
     Senior Notes Total3,499.9 3,499.9 
Total borrowings$4,178.0 $4,199.9 
Less: Unamortized debt discount and issuance cost(32.1)(34.0)
Net carrying amount of debt$4,145.9 $4,165.9 
Less: Current portion (1)118.3 107.3 
Non-current portion$4,027.6 $4,058.6 

(1)As of May 4, 2024, the current portion of outstanding debt that is due within twelve months includes a portion of the 2026 Term Loan - 5-Year Tranche. The weighted-average interest rate on short-term debt outstanding at May 4, 2024 and February 3, 2024 was 6.793% and 6.830%, respectively.

2024 and 2026 Term Loans

On December 7, 2020, the Company entered into a term loan credit agreement with a lending syndicate led by JP Morgan Chase Bank, N.A (the “2024 and 2026 Term Loan Agreement”) in order to finance the acquisition of Inphi Corporation (“Inphi”). The 2024 and 2026 Term Loan Agreement provides for borrowings of $1.8 billion consisting of: (i) $875.0 million loan with a 3-year term from the funding date (the “3-Year Tranche Loan”) and (ii) $875.0 million loan with a 5-year term from the funding date (the “5-Year Tranche Loan” and, together with the 3-Year Tranche Loan, the “2024 and 2026 Term Loans”).

On April 14, 2023, the Company entered into an amendment to the 2024 and 2026 Term Loan Agreement. The amendment modifies the existing agreement to, among other things, adopt Secured Overnight Financing Rate (“SOFR”) interest rates and conform the maximum leverage ratio financial covenant with the amended and restated revolving credit agreement.

The 3-Year Tranche Loan, due on April 19, 2024, which had a remaining principal of $735.0 million, was repaid in full during the quarter ended October 28, 2023.

9

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Pursuant to the amended 2024 and 2026 Term Loan Agreement, the 5-Year Tranche Loan has a stated floating interest rate which equates to adjusted term SOFR + 137.5 bps. The effective interest rate for the 5-Year Tranche Loan was 5.111% as of May 4, 2024. The 5-Year Tranche Loan requires scheduled principal payments at the end of each fiscal quarter equal to (i) 1.25% of the aggregate principal amount on the term funding date for the first four full fiscal quarters following the term loan funding date, (ii) 2.50% of the aggregate principal amount on the term funding date for the fifth through twelfth full fiscal quarters following the term loan funding date, and (iii) 3.75% of the aggregate principal amount on the term funding date for each fiscal quarter following the twelfth full fiscal quarter following the term loan funding date. During the three months ended May 4, 2024, the Company repaid $21.9 million of the principal outstanding of the 5-Year Tranche Loan. As of May 4, 2024, the Company has $678.1 million of 5-Year Tranche Loan borrowings outstanding.

The 2024 and 2026 Term Loan Agreement requires that the Company and its subsidiaries comply with covenants relating to customary matters, including with respect to creating or permitting certain liens, entering into sale and leaseback transactions, and consolidating, merging, liquidating or dissolving. It also prohibits subsidiaries of the Company from incurring additional indebtedness, subject to certain exceptions, and requires that the Company maintain a leverage ratio financial covenant as of the end of any fiscal quarter.

2023 Revolving Credit Facility

On December 7, 2020, the Company entered into a revolving line of credit agreement with a lending syndicate led by JP Morgan Chase Bank, N.A for borrowings of up to $750.0 million. On April 14, 2023, the Company entered into an agreement to amend and restate the credit facility to increase the borrowing capacity to $1.0 billion (as so amended and restated, the “2023 Revolving Credit Facility”). The 2023 Revolving Credit Facility has a 5-year term and a stated floating interest rate which equates to an adjusted term SOFR plus an applicable margin. The borrowings from the Revolving Loans will be used for general corporate purposes of the Company. The Company may prepay any borrowings at any time without premium or penalty. An unused commitment fee is payable quarterly based on unused balances at a rate that is based on the ratings of the Company’s senior unsecured long-term indebtedness. This annual rate was 0.175% at May 4, 2024.

As of May 4, 2024, the 2023 Revolving Credit Facility was undrawn and available for draw down through April 14, 2028.

The 2023 Revolving Credit Facility requires that the Company and its subsidiaries comply with covenants relating to customary matters. The covenants are consistent with the 2024 and 2026 Term Loan Agreement covenants discussed above.

As of May 4, 2024, the Company was in compliance with its debt covenants for the credit agreements discussed above.

2029 and 2033 Senior Unsecured Notes

On September 18, 2023, the Company completed an offering of (i) $500.0 million aggregate principal amount of the Company’s 5.750% Senior Notes due 2029 (the “2029 Senior Notes”) and (ii) $500.0 million aggregate principal amount of the Company’s 5.950% Senior Notes due 2033 (the “2033 Senior Notes”, and, together with the 2029 Senior Notes, the “2029 and 2033 Senior Notes”).

The 2029 Senior Notes have a 5.5-year term and mature on February 15, 2029 and the 2033 Senior Notes have a 10-year term and mature on September 15, 2033. The stated and effective interest rates for the 2029 Senior Notes are 5.750% and 5.891%, respectively. The stated and effective interest rates for the 2033 Senior Notes are 5.950% and 6.082%, respectively. The Company may redeem the 2029 and 2033 Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in 2029 and 2033 Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the 2029 and 2033 Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the 2029 and 2033 Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the 2029 and 2033 Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. As of May 4, 2024, the Company had $1.0 billion borrowings outstanding from 2029 and 2033 Senior Notes.

10

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

2026, 2028, and 2031 Senior Unsecured Notes

On April 12, 2021, the Company completed an offering of (i) $500.0 million aggregate principal amount of the Company’s 1.650% Senior Notes due 2026 (the “2026 Senior Notes”), (ii) $750.0 million aggregate principal amount of the Company’s 2.450% Senior Notes due 2028 (the “2028 Senior Notes”) and (iii) $750.0 million aggregate principal amount of the Company’s 2.950% Senior Notes due 2031 (the “2031 Senior Notes”, and, together with the 2026 Senior Notes and the 2028 Senior Notes, the “2026, 2028 and 2031 Senior Notes”). On October 8, 2021, the 2026, 2028 and 2031 Senior Notes issued on April 12, 2021 were exchanged for new notes. The terms of the new notes issued in the exchange are substantially identical to the notes issued in April 2021, except that the new notes are registered under the Securities Act of 1933, as amended (the “Securities Act”) and the transfer restrictions and registration rights applicable to the 2026, 2028 and 2031 Senior Notes issued in April 2021 do not apply to the new notes.

The 2026 Senior Notes have a 5-year term and mature on April 15, 2026, the 2028 Senior Notes have a 7-year term and mature on April 15, 2028, and the 2031 Senior Notes have a 10-year term and mature on April 15, 2031. The stated and effective interest rates for the 2026 Senior Notes are 1.650% and 1.839%, respectively. The stated and effective interest rates for the 2028 Senior Notes are 2.450% and 2.554%, respectively. The stated and effective interest rates for the 2031 Senior Notes are 2.950% and 3.043%, respectively. The Company may redeem the 2026, 2028 and 2031 Senior Notes, in whole or in part, at any time prior to their respective maturity at the redemption prices set forth in the indenture governing the 2026, 2028 and 2031 Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the 2026, 2028 and 2031 Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the 2026, 2028 and 2031 Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the 2026, 2028 and 2031 Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. As of May 4, 2024, the Company had $2.0 billion borrowings outstanding from 2026, 2028 and 2031 Senior Notes.

2023 and 2028 Senior Unsecured Notes

On June 22, 2018, the Company’s Bermuda-based parent company Marvell Technology Group, Ltd. (“MTG”) completed a public offering of (i) $500.0 million aggregate principal amount of 4.200% Senior Notes due 2023 (the “MTG 2023 Notes”) and (ii) $500.0 million aggregate principal amount of 4.875% Senior Notes due 2028 (the “MTG 2028 Notes” and, together with the MTG 2023 Notes, the “MTG Senior Notes”).

In April 2021, in conjunction with the Company’s U.S. domiciliation, the Company commenced Exchange Offers on April 19, 2021 for the outstanding $1.0 billion in aggregate principal amount of the MTG Senior Notes outstanding in exchange for corresponding senior notes to be issued by the Company’s U.S. domiciled parent MTI. MTI made an offer to (i) exchange any and all of the outstanding MTG 2023 Notes for up to an aggregate principal amount of $500.0 million of new 4.200% Senior Notes due 2023 issued by MTI (the “MTI 2023 Notes”) and to (ii) exchange any and all of the outstanding MTG 2028 Notes for up to an aggregate principal amount of $500.0 million of new 4.875% Senior Notes due 2028 issued by MTI (the “MTI 2028 Notes” and, together with the MTI 2023 Notes, the “MTI Senior Notes”). Each new series of MTI Senior Notes have the same interest rate, maturity date, redemption terms and interest payment dates and are subject to substantially similar covenants as the corresponding series of the MTG Senior Notes for which they were offered in exchange.

The settlement of the Exchange Offers occurred on May 4, 2021 with $433.9 million aggregate principal amount of the MTG 2023 Notes and $479.5 million aggregate principal amount of the MTG 2028 Notes. The exchange was accounted for as a debt modification in accordance with applicable accounting guidance. On December 16, 2021, the MTI Senior Notes issued on May 4, 2021 were exchanged for new notes. The terms of the new notes issued in the exchange are substantially identical to the notes issued in May 2021, except that the new notes are registered under the Securities Act and the transfer restrictions and registration rights applicable to the MTI Senior Notes issued in May 2021 do not apply to the new notes.

The MTI 2023 Notes and MTG 2023 Notes with aggregate principal of $500.0 million matured on June 22, 2023 and was repaid.

11

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The MTI 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the MTI 2028 Notes are 4.875% and 4.988%, respectively. The Company may redeem the MTI Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in MTI Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the MTI Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the MTI Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the MTI Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions.

The MTG 2028 Notes mature on June 22, 2028. The stated and effective interest rates for the MTG 2028 Notes are 4.875% and 4.940%, respectively. The Company may redeem the MTG Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in MTG Senior Notes.

As of May 4, 2024, the Company had $499.9 million borrowings outstanding from MTI 2028 Notes and MTG 2028 Notes.

Interest Expense and Future Contractual Maturities

During the three months ended May 4, 2024, the Company recognized $46.8 million of interest expense in its unaudited condensed consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding debt.

During the three months ended April 29, 2023, the Company recognized $50.5 million of interest expense in its unaudited condensed consolidated statements of operations related to interest, amortization of debt issuance costs and accretion of discount associated with the outstanding debt.

As of May 4, 2024, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, are as follows (in millions):

Fiscal YearAmount
Remainder of 2025$87.5 
2026131.2 
2027959.4 
2028 
20291,249.9 
Thereafter1,750.0 
Total $4,178.0 

Note 5. Commitments and Contingencies

Warranty Obligations

The Company generally warrants that its products sold to its customers will conform to its approved specifications and be free from defects in material and workmanship under normal use and conditions for one year. The Company may offer a longer warranty period in limited situations based on product type and negotiated warranty terms with certain customers.

Commitments

The Company’s commitments primarily consist of wafer purchase obligations with foundry partners, supply capacity reservation payment commitments with foundries and test & assembly partners, and technology license fee obligations.

12

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Total future unconditional purchase commitments as of May 4, 2024, are as follows (in millions):

Fiscal Year
Purchase Commitments to Foundries and Test & Assembly Partners
Technology License Fees
Remainder of 2025$620.1 $104.3 
2026253.2 76.5 
2027132.3 40.9 
2028130.1 36.7 
2029128.0 38.7 
Thereafter402.7 118.2 
Total unconditional purchase commitments$1,666.4 $415.3 

Technology license fees include the liabilities under agreements for technology licenses between the Company and various vendors.

Under the Company’s manufacturing relationships with its foundry partners, cancellation of outstanding purchase orders is allowed but requires payment of all costs and expenses incurred through the date of cancellation, and in some cases, may result in incremental fees, loss of amounts paid in advance, or loss of priority to reserved capacity for a period of time.

The Company entered into manufacturing supply capacity reservation agreements with foundries and test & assembly suppliers in prior fiscal years. Under these arrangements, the Company agreed to pay capacity fees or refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements, which ranges from 4 to 10 years. In addition, the Company committed to certain purchase levels that were in line with the capacity reserved. During the first quarter of fiscal 2025, the Company worked with its foundry and test & assembly suppliers to amend certain manufacturing supply capacity reservation agreements, which resulted in reducing the Company’s related purchase level commitments. The Company currently estimates that it has agreed to purchase level commitments of at least $1.2 billion of wafers, substrates, and other manufacturing products for the remainder of fiscal 2025 through fiscal 2033 under the capacity reservation agreements. In addition, total fees and refundable deposits payable under these arrangements are $73.5 million for the remainder of fiscal 2025 through 2026. Such purchase commitments are summarized in the preceding table.

In September 2021, the Company entered into an IP licensing agreement with a vendor which provides complete access to the vendor’s IP portfolio for 10 years. The arrangement provides access to IP over the term of the contract, including existing IP, as well as IP in development, and to be developed in the future. The contract provides support and maintenance over the term of the contract as well. Aggregate fees of $354.0 million are payable quarterly over the contract term.

Contingencies and Legal Proceedings

The Company currently is, and may from time to time become, subject to claims, lawsuits, governmental inquiries, inspections or investigations and other legal proceedings (collectively, “Legal Matters”) arising in the course of its business. Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

The Company is currently unable to predict the final outcome of its pending Legal Matters and therefore cannot determine the likelihood of loss or estimate a range of possible loss, except with respect to amounts where it has determined a loss is both probable and estimable and has made an accrual. The Company evaluates, at least on a quarterly basis, developments in its Legal Matters that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. The ultimate outcome of a Legal Matter involves judgments, estimates and inherent uncertainties. An unfavorable outcome in a Legal Matter could require the Company to pay damages or could prevent the Company from selling some of its products in certain jurisdictions. While the Company cannot predict with certainty the results of the Legal Matters in which it is currently involved, the Company does not expect that the ultimate costs to resolve these Legal Matters will individually or in the aggregate have a material adverse effect on its financial condition, however, there can be no assurance that the current or any future Legal Matters will be resolved in a manner that is not adverse to the Company’s business, financial statements, results of operations or cash flows.
13

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Indemnities, Commitments and Guarantees

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities may include indemnities for general commercial obligations, indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease, and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of Delaware. In addition, the Company has contractual commitments to various customers, which could require the Company to incur costs to repair an epidemic defect with respect to its products outside of the normal warranty period if such defect were to occur. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Some of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential future payments that the Company could be obligated to make. In general, the Company does not record any liability for these indemnities, commitments and guarantees in the accompanying unaudited condensed consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and estimable.

Intellectual Property Indemnification

In addition to the above indemnities, the Company has agreed to indemnify certain customers for claims made against the Company’s products where such claims allege infringement of third-party intellectual property rights, including, but not limited to, patents, registered trademarks, and/or copyrights. Under the aforementioned indemnification clauses, the Company may be obligated to defend the customer and pay for the damages awarded against the customer as well as the attorneys’ fees and costs under an infringement claim. The Company’s indemnification obligations generally do not expire after termination or expiration of the agreement containing the indemnification obligation. Generally, but not always, there are limits on and exceptions to the Company’s potential liability for indemnification. Historically the Company has not made significant payments under these indemnification obligations and the Company cannot estimate the amount of potential future payments, if any, that it might be required to make as a result of these agreements. The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant.

Note 6. Goodwill and Acquired Intangible Assets, Net

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The carrying value of goodwill as of May 4, 2024 and February 3, 2024 was $11.6 billion.

Acquired Intangible Assets, Net

As of May 4, 2024 and February 3, 2024, net carrying amounts excluding fully amortized intangible assets were as follows (in millions, except for weighted-average remaining amortization period):

May 4, 2024
Gross Carrying AmountsAccumulated AmortizationNet Carrying AmountsWeighted-Average Remaining Amortization Period (Years)
Developed technologies$5,019.0 $(2,794.0)$2,225.0 3.6
Customer contracts and related relationships2,179.0 (1,273.4)905.6 3.1
Trade names50.0 (30.4)19.6 2.0
Total acquired amortizable intangible assets$7,248.0 $(4,097.8)$3,150.2 3.5
IPR&D589.0 — 589.0 n/a
Total acquired intangible assets$7,837.0 $(4,097.8)$3,739.2 

14

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

February 3, 2024
Gross Carrying AmountsAccumulated AmortizationNet Carrying AmountsWeighted-Average Remaining Amortization Period (Years)
Developed technologies$4,989.0 $(2,613.5)$2,375.5 3.8
Customer contracts and related relationships2,179.0 (1,191.5)987.5 3.3
Trade names50.0 (27.9)22.1 2.2
Total acquired amortizable intangible assets$7,218.0 $(3,832.9)$3,385.1 3.6
IPR&D619.0 — 619.0 n/a
Total acquired intangible assets$7,837.0 $(3,832.9)$4,004.1 

The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain Cavium customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives, which more closely align with the pattern of realization of economic benefits expected to be obtained. The IPR&D will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying projects reach technological feasibility and commercial production at which point the IPR&D will be amortized over the estimated useful life. Useful lives for these IPR&D projects are expected to range between 7 to 10 years. In the event the IPR&D is abandoned, the related assets will be written off.

Amortization expense for acquired intangible assets for the three months ended May 4, 2024 and April 29, 2023 was $264.9 million and $270.0 million, respectively.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of May 4, 2024 (in millions):

Fiscal YearAmount
Remainder of 2025$792.0 
20261,003.4 
2027835.9 
2028279.2 
2029113.1 
Thereafter126.6 
$3,150.2 

Note 7. Fair Value Measurements

Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
Level 2 — Other inputs that are directly or indirectly observable in the marketplace.
Level 3 — Unobservable inputs that are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

15

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The Company’s Level 1 assets include marketable equity investments that are classified as other non-current assets and which are valued primarily using quoted market prices. The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, forward contracts and the severance pay fund are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.
 
The tables below set forth, by level, the Company’s assets that are measured at fair value on a recurring basis. The tables do not include assets that are measured at historical cost or any basis other than fair value (in millions):

 Fair Value Measurements at May 4, 2024
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits 62.7  62.7 
Prepaid expenses and other current assets:
Foreign currency forward contracts 0.3  0.3 
Other non-current assets:
Marketable equity investments7.5   7.5 
Severance pay fund 0.5  0.5 
Total assets$7.5 $63.5 $ $71.0 

The carrying value of investments in non-marketable equity securities recorded to fair value on a non-recurring basis is adjusted for observable transactions for identical or similar investments of the same issuer or for impairment. These securities relate to equity investments in privately-held companies. These items measured at fair value on a non-recurring basis are classified as Level 3 in the fair value hierarchy because the value is estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights and obligations of the securities held. As of May 4, 2024 and February 3, 2024, non-marketable equity investments had a carrying value of $50.5 million and $45.8 million, respectively, and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.

 Fair Value Measurements at February 3, 2024
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits$ $2.6 $ $2.6 
Prepaid expenses and other current assets:
Foreign currency forward contracts 1.2  1.2 
Other non-current assets:
Marketable equity investments9.3   9.3 
Severance pay fund 0.5  0.5 
Total assets$9.3 $4.3 $ $13.6 

Fair Value of Debt

The Company classified the 2026 Term Loan, 2026 Senior Notes, 2028 Senior Notes, 2029 Senior Notes, 2031 Senior Notes, and 2033 Senior Notes as Level 2 in the fair value measurement hierarchy. The carrying value of the 2026 Term Loan approximates its fair value as the 2026 Term Loan is carried at a market observable interest rate that resets periodically. The estimated aggregate fair value of the unsecured senior notes was $3.3 billion at May 4, 2024 and February 3, 2024, and were classified as Level 2 as there are quoted prices from less active markets for the notes. See “Note 4 – Debt” for additional information.
16

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Note 8. Restructuring

The Company continuously evaluates its existing operations to increase operational efficiency, decrease costs and increase profitability. A restructuring plan was initiated during the first quarter of fiscal 2024 (the “Fiscal 2024 Plan”) to streamline the organization and optimize resources. Restructuring charges are mainly comprised of severance, other one-time termination benefits, impairment and write-off of purchased IP licenses, and other costs. The Company recorded restructuring and other related charges of $4.1 million for the three months ended May 4, 2024 related to the Fiscal 2024 Plan. The Company expects these restructuring actions to be substantially completed by the end of fiscal 2025.

The following table presents details related to the restructuring related charges as presented in the unaudited condensed consolidated statements of operations (in millions):

Three Months Ended
May 4,
2024
April 29,
2023
Employee severance$3.7 $47.4 
Impairment and write-off of assets
Purchased IP licenses 8.1 
Other0.4 4.4 
$4.1 $59.9 

The following table sets forth a reconciliation of the beginning and ending restructuring liability balances by major type of cost associated with the restructuring charges (in millions):

Employee SeveranceOtherTotal
Balance at February 3, 2024$15.5 $1.5 $17.0 
Charges3.7 0.4 4.1 
Net cash payments(10.1)(1.1)(11.2)
Non-cash items  0.7 0.7 
Balance at May 4, 20249.1 1.5 10.6 
Less: non-current portion 0.8 0.8 
Current portion$9.1 $0.7 $9.8 

The current and non-current portions of the restructuring liability at May 4, 2024 of $9.8 million and $0.8 million are included as a component of accrued liabilities and other non-current liabilities respectively in the accompanying unaudited condensed consolidated balance sheets.

Note 9. Income Tax

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, changes in tax laws, the applicability of special tax regimes, changes in how the Company does business, discrete items, and acquisitions, as well as the integration of such acquisitions.

The Company recorded income tax expense of $17.8 million for the three months ended May 4, 2024. The Company’s estimated effective tax rate for the year differs from the U.S. statutory rate of 21% primarily due to a substantial portion of its earnings, or in some cases, losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, and valuation allowance releases, as well as discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation, respectively.

17

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The Company operates under tax incentives in certain countries that may be extended and/or renewed if certain additional requirements are satisfied. The tax incentives are conditional upon meeting certain employment and investment thresholds. The benefit of the tax incentives on the Company’s earnings per share was approximately $0.01 per share and $0.01 per share for the three months ended May 4, 2024 and April 29, 2023, respectively.

The amount of unrecognized tax benefits could increase or decrease due to changes in tax law in various jurisdictions, the effects of income tax audits, and changes in the U.S. dollar as compared to foreign currencies within the next 12 months. Excluding these factors, the Company does not expect a material decrease to its uncertain tax positions as a result of the lapse of the statutes of limitations in various jurisdictions during the next 12 months.

Note 10. Net Loss Per Share

The Company reports both basic net loss per share, which is based on the weighted-average number of common stock outstanding during the period, and diluted net loss per share, which is based on the weighted-average number of common stock outstanding and potentially dilutive shares outstanding during the period.

The computations of basic and diluted net loss per share are presented in the following table (in millions, except per share amounts):

 Three Months Ended
 May 4,
2024
April 29,
2023
Numerator:
Net loss$(215.6)$(168.9)
Denominator:
Weighted-average shares — basic865.0 856.7 
Effect of dilutive securities:
Stock-based awards  
Weighted-average shares — diluted865.0 856.7 
Net loss per share:
       Basic$(0.25)$(0.20)
       Diluted$(0.25)$(0.20)

Potential dilutive securities include dilutive common stock from stock-based awards attributable to the assumed exercise of stock options, restricted stock units and employee stock purchase plan shares using the treasury stock method. Under the treasury stock method, potential common stock outstanding are not included in the computation of diluted net income per share if their effect is anti-dilutive.

Anti-dilutive potential shares are presented in the following table (in millions):

 Three Months Ended
 May 4,
2024
April 29,
2023
Weighted-average shares outstanding:
Stock-based awards11.5 18.9 

Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for all periods reported above because either their exercise price exceeded the average market price during the period or the stock-based awards were determined to be anti-dilutive based on applying the treasury stock method. Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for the three months ended May 4, 2024 and April 29, 2023 due to the net losses reported in those periods.

18

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Note 11. Supplemental Financial Information (in millions)

Consolidated Balance Sheets

Accounts Receivable, net

The Company sells certain of its trade accounts receivable on a non-recourse basis to a third-party financial institution pursuant to a factoring arrangement. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the unaudited condensed consolidated statements of cash flows. After the sale of its trade accounts receivable, the Company will collect payment from the customer and remit it to the third-party financial institution. Total trade accounts receivable sold under the factoring arrangement were $268.1 million for the three months ended May 4, 2024, of which $268.1 million remained subject to servicing by the Company as of May 4, 2024. Factoring fees for the sales of receivables were recorded in interest income and other, net and were not material.

May 4,
2024
February 3,
2024
Inventories:
Work-in-process$527.1 $523.8 
Finished goods299.3 340.6 
               Inventories$826.4 $864.4 

May 4,
2024
February 3,
2024
Property and equipment, net:
Machinery and equipment$1,397.2 $1,376.2 
Land, buildings, and leasehold improvements320.0 312.4 
Computer software122.1 116.5 
Furniture and fixtures31.8 31.7 
1,871.1 1,836.8 
Less: Accumulated depreciation(1,113.1)(1,080.8)
               Property and equipment, net$758.0 $756.0 

May 4,
2024
February 3,
2024
Other non-current assets:
Prepaid ship and debit$495.6 $547.6 
Technology licenses324.8 350.6 
Prepayments on supply capacity reservation agreements303.1 302.5 
Operating right-of-use assets203.6 203.6 
Non-marketable equity investments50.5 45.8 
Other54.6 56.8 
               Other non-current assets$1,432.2 $1,506.9 

19

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

 May 4,
2024
February 3,
2024
Accrued liabilities:
Variable consideration estimates (1)$493.7 $610.7 
Technology license obligations87.7 105.7 
Accrued legal reserve78.9 76.5 
Lease liabilities - current portion38.1 39.4 
Deferred revenue33.9 43.2 
Accrued interest payable23.8 41.3 
Accrued warranty expense21.9 25.5 
Accrued income taxes payable20.9 17.8 
Deferred non-recurring engineering credits15.3 21.7 
Other46.8 51.1 
               Accrued liabilities$861.0 $1,032.9 

(1) Substantially all of the variable consideration estimate is comprised of the ship & debit accrual reserve, but also includes estimated customer returns, price discounts, price protection, rebates, and stock rotation programs.

May 4,
2024
February 3,
2024
Other non-current liabilities:
Lease liabilities - non-current $196.6 $196.0 
Technology license obligations188.3 196.5 
Non-current income taxes payable 64.6 56.6 
Deferred tax liabilities51.5 58.7 
Other16.0 16.5 
               Other non-current liabilities $517.0 $524.3 

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of tax, by components for the comparative periods are presented in the following table (in millions):

Unrealized Gain
(Loss) on Cash
Flow Hedges
Balance at February 3, 2024$1.1 
Other comprehensive income (loss) before reclassifications(0.2)
Amounts reclassified from accumulated other comprehensive income (loss)(0.5)
Net current-period other comprehensive income (loss), net of tax(0.7)
Balance at May 4, 2024$0.4 

Unrealized Gain
(Loss) on Cash
Flow Hedges
Balance at January 28, 2023$ 
Other comprehensive income (loss) before reclassifications(1.4)
Amounts reclassified from accumulated other comprehensive income (loss)0.5 
Net current-period other comprehensive income (loss), net of tax(0.9)
Balance at April 29, 2023$(0.9)
20

MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Stock Repurchase Program

On November 17, 2016, the Company announced that its Board of Directors authorized a $1.0 billion stock repurchase plan with no fixed expiration. The stock repurchase program replaced in its entirety the prior $3.3 billion stock repurchase program. On October 16, 2018, the Company announced that its Board of Directors authorized a $700.0 million addition to the balance of its existing stock repurchase program. On March 7, 2024, the Company announced that its Board of Directors authorized a $3.0 billion addition to the balance of its existing stock repurchase program. As of May 4, 2024, $3.1 billion remained available for future stock repurchases. The Company intends to effect stock repurchases in accordance with the conditions of Rule 10b-18 under the Exchange Act, but may also make repurchases in the open market outside of Rule 10b-18 or in privately negotiated transactions. The stock repurchase program is subject to market conditions and other factors, and does not obligate the Company to repurchase any dollar amount or number of shares of its common stock and the repurchase program may be extended, modified, suspended or discontinued at any time.

During the three months ended May 4, 2024, the Company repurchased 2.2 million shares of its common stock for $150.0 million. During the three months ended April 29, 2023, the Company did not repurchase shares of its common stock. The Company records all repurchases, as well as investment purchases and sales, based on their trade date. The repurchased shares are retired immediately after repurchases are completed.
21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to differ materially from those implied by the forward-looking statements. Words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “seeks,” “estimates,” “forecasts,” “targets,” “may,” “can,” “will,” “would” and similar expressions identify such forward-looking statements.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ materially from those predicted include, but are not limited to:

risks related to changes in general macroeconomic conditions such as economic slowdowns, inflation, stagflation, high or rising interest rates, financial institution instability and recessions or political conditions, such as the tariffs and trade restrictions with China, Russia and other foreign nations, and specific conditions in the end markets we address, including the continuing volatility in the technology sector and semiconductor industry and the U.S. National Science and Technology Council’s designation of semiconductors as a critical and emerging technology;
risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;
risks related to our ability to design, develop and introduce new and enhanced products, in particular in the 5G, Cloud and Artificial Intelligence (“AI”) markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;
risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions or acquire fully developed solutions from third-parties;
risks related to our ability to successfully integrate and to realize anticipated benefits or synergies, on a timely basis or at all, in connection with our past, current, or any future acquisitions, divestitures, significant investments or strategic transactions;
risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;
risks related to our dependence on a few customers for a significant portion of our revenue including risks related to severe financial hardship or bankruptcy or other attrition of one or more of our major customers, particularly as our major customers comprise an increasing percentage of our revenue;
risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities;
risks related to our ability to maintain a competitive cost structure for our manufacturing, assembly, testing and packaging processes and our reliance on third parties to produce our products;
risks related to our ability to scale our business;
risks related to our debt obligations;
risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the costs and production of our products and kitting process, and constrained availability from other electronic suppliers impacting our customers’ ability to ship their products, which in turn may adversely impact our sales to those customers;
risks related to our ability to attract, retain and motivate a highly skilled workforce, especially engineering, managerial, sales and marketing personnel;
risks related to any current and future litigation, regulatory investigations, or contractual disputes with customers that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business;
risks related to gain or loss of a design win or key customer;
risks related to seasonality or volatility related to sales into the infrastructure, semiconductor and related industries and end markets;
22

risks related to failures to qualify our products or our suppliers’ manufacturing lines;
risks related to failures to protect our intellectual property, particularly outside the United States;
risks related to the potential impact of significant events or natural disasters, or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, sea level rise, and power outages), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third-party manufacturing partners or suppliers operate, such as Taiwan and elsewhere in the Pacific Rim;
risks related to our sustainability programs;
cybersecurity risks;
risks related to the impact of the COVID-19 pandemic or other future pandemics, on the global economy and on our customers, suppliers, employees and business; and
risks related to failures of our customers to agree to pay for NRE (non-recurring engineering) costs, failure to pay enough to cover the costs we incur in connection with NREs or non-payment of previously agreed NRE costs due to us.

Additional factors which could cause actual results to differ materially include those set forth in the following discussion, as well as the risks discussed in Part II, Item 1A, “Risk Factors,” and other sections of this Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date hereof. We undertake no obligation to update any forward-looking statements.

Overview

We are a leading supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge. We are a fabless semiconductor supplier of high-performance standard and semi-custom products with core strengths in developing and scaling complex System-on-a-Chip architectures, integrating analog, mixed-signal and digital signal processing functionality. Leveraging leading intellectual property and deep system-level expertise, as well as highly innovative security firmware, our solutions are empowering the data economy and enabling the data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial end markets.

Net revenue in the first quarter of fiscal 2025 was $1.2 billion and was 12% lower than net revenue of $1.3 billion in the first quarter of fiscal 2024. This was due to a decrease in sales from a majority of our end markets. Sales decreased from the carrier infrastructure end market by 75%, from the enterprise networking end market by 58%, from the consumer end market by 70% and from the automotive/industrial end market by 13%. The decreases were partially offset by an increase in sales from the data center end market by 87% compared to the three months ended April 29, 2023.

We have seen strong revenue growth from our data center end market, driven by demand for our electro-optics products from AI applications. In addition, starting in the first quarter of fiscal 2025, we have also started to benefit from initial shipments of our custom AI compute products. In our enterprise networking and carrier infrastructure end markets, in response to a period of inventory correction and soft industry demand, customers have decreased their demand for our products. In addition, we have continued to see low demand from our OEM customers in China.

To secure capacity over the long term, we have entered into and expect to continue to enter into capacity reservation arrangements with certain foundries and partners for substrates. See “Note 5 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

We expect that the U.S. government’s export restrictions on certain Chinese customers to continue to impact our revenue. Moreover, concerns that U.S. companies may not be reliable suppliers as a result of these and other actions has caused, and may in the future cause, some of our customers in China to amass large inventories of our products well in advance of need or cause some of our customers to replace our products in favor of products from other suppliers. Customers in China may also choose to develop indigenous solutions, as replacements for products that are subject to U.S. export controls. In addition, there may be indirect impacts to our business that we cannot easily quantify such as the fact that some of our other customers’ products which use our solutions may also be impacted by export restrictions. See also Part II, Item IA, “Risk Factors,” including, but not limited to, the risk detailed under the caption “Adverse changes in the political, regulatory and economic policies of governments in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business.”


23

Capital Return Program. We remain committed to delivering stockholder value through our stock repurchase and dividend programs. Under the program authorized by our Board of Directors, we may repurchase shares of our common stock in the open-market or through privately negotiated transactions. The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, legal rules and regulations, and other corporate considerations, as determined by our management team. On March 7, 2024, we announced that our Board of Directors authorized a $3.0 billion addition to the balance of its existing stock repurchase program. During the three months ended May 4, 2024, we repurchased 2.2 million shares of our common stock for $150.0 million. As of May 4, 2024, $3.1 billion remained available for future stock repurchases.

As of May 4, 2024, a total of 315.0 million shares have been repurchased since inception of our current and previous stock repurchase programs for an aggregate total of $4.7 billion in cash. We returned $201.8 million to stockholders in the three months ended May 4, 2024 through $150.0 million in repurchases of shares of our common stock and $51.8 million in cash dividends.

Cash and Short-Term Investments. Our cash and cash equivalents were $847.7 million at May 4, 2024, which were $103.1 million lower than our balance at February 3, 2024 of $950.8 million.

Sales and Customer Composition. Our accounts receivable was concentrated with two customers at May 4, 2024, who represented a total of 70% of gross accounts receivable, compared with four customers at April 29, 2023, who represented 55% of gross accounts receivable. During the three months ended May 4, 2024, there were two customers in addition to one distributor, whose revenue as a percentage of net revenue was 10% or greater of total net revenue. During the three months ended April 29, 2023, there was one customer, in addition to two distributors, whose revenue as a percentage of net revenue was 10% or greater of total net revenue. Net revenue attributable to significant customers and distributors whose revenue as a percentage of net revenue was 10% or greater of total net revenue is presented in the following table:

 Three Months Ended
May 4,
2024
April 29,
2023
Customer:
Customer A*15%
Customer B
15%*
Customer C
11%*
Distributor:
Distributor A39%16%
Distributor B*11%
*Less than 10% of net revenue.

We regularly monitor the creditworthiness of our customers and distributors and believe these distributors’ sales to diverse end customers and geographies further serve to mitigate our exposure to credit risk.

Most of our sales are made to customers with operations located outside of the United States, primarily in Asia, and a majority of our products are manufactured outside the United States. Sales shipped to customers with operations in Asia represented approximately 73% of our net revenue in the three months ended May 4, 2024, and approximately 69% of our net revenue in the three months ended April 29, 2023. Because many manufacturers and manufacturing subcontractors of our customers are located in Asia, we expect that most of our net revenue will continue to be represented by sales to our customers in that region. For risks related to our global operations, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We face additional risks due to the extent of our global operations since a majority of our products, and those of many of our customers, are manufactured and sold outside of the United States. The occurrence of any or a combination of the additional risks described below would significantly and negatively impact our business and results of operations.”

The development process for our products is long, which may cause us to experience a delay between the time we incur expenses and the time revenue is generated from these expenditures. We anticipate that the rate of new orders may vary significantly from quarter to quarter. For risks related to our sales cycle, see Part II, Item 1A, “Risk Factors,” including but not limited to the risk detailed under the caption “We are subject to order and shipment uncertainties. If we are unable to accurately predict customer demand, we may hold excess or obsolete inventory, which would reduce our gross margin. Conversely, we may have insufficient inventory or be unable to obtain the supplies or contract manufacturing capacity to meet demand, which would result in lost revenue opportunities and potential loss of market share as well as damaged customer relationships.”
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Critical Accounting Policies and Estimates

There have been no material changes during the three months ended May 4, 2024 to our critical accounting policies and estimates from the information provided in the “Critical Accounting Policies and Estimates” section of Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

In the current macroeconomic environment, our estimates could require increased judgment and carry a higher degree of variability and volatility. We continue to monitor and assess our estimates in light of developments, and as events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

Results of Operations

The following table sets forth information derived from our Unaudited Condensed Consolidated Statements of Operations expressed as a percentage of net revenue:

 Three Months Ended
May 4,
2024
April 29,
2023
Net revenue100.0 %100.0 %
Cost of goods sold54.5 57.8 
Gross profit45.5 42.2 
Operating expenses:
Research and development41.0 36.4 
Selling, general and administrative17.2 15.1 
Restructuring related charges0.4 4.5 
Total operating expenses58.6 56.0 
Operating loss(13.1)(13.8)
Interest and other loss, net(3.9)(3.8)
Loss before income taxes(17.0)(17.6)
Provision (benefit) for income taxes1.6 (4.8)
Net loss(18.6)%(12.8)%

Three months ended May 4, 2024 and April 29, 2023

Net Revenue
 Three Months Ended 
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Net revenue$1,160.9 $1,321.7 (12.2)%

Our net revenue for the three months ended May 4, 2024 decreased by $160.8 million compared to net revenue for the three months ended April 29, 2023. This was due to a decrease in sales from a majority of our end markets. Sales decreased from the carrier infrastructure end market by 75%, from the enterprise networking end market by 58%, from the consumer end market by 70% and from the automotive/industrial end market by 13%. The decreases were partially offset by an increase in sales from the data center end market by 87% compared to the three months ended April 29, 2023.

The overall decreases in net revenue of 12% for the three months ended May 4, 2024 was primarily driven by lower unit shipments across all of our end markets except the data center end market, partially offset by higher average selling prices for certain products as well as an increase in demand for our optical products, driven by AI applications.

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Cost of Goods Sold and Gross Profit
 Three Months Ended
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Cost of goods sold$633.1 $764.5 (17.2)%
% of net revenue54.5 %57.8 %
Gross profit$527.8 $557.2 (5.3)%
% of net revenue45.5 %42.2 %

Cost of goods sold as a percentage of net revenue decreased for the three months ended May 4, 2024 compared to the three months ended April 29, 2023, which was primarily due to a shift in product mix. As a result, gross margin for the three months ended May 4, 2024 increased by 3.3 percentage points compared to the three months ended April 29, 2023.

Research and Development
 Three Months Ended 
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Research and development$476.1 $480.7 (1.0)%
% of net revenue41.0 %36.4 %

Research and development expense was relatively flat in the three months ended May 4, 2024, compared to the three months ended April 29, 2023.

Selling, General and Administrative
 Three Months Ended 
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Selling, general and administrative$199.9 $199.0 0.5%
% of net revenue17.2 %15.1 %

Selling, general and administrative expense was relatively flat in the three months ended May 4, 2024, compared to the three months ended April 29, 2023.

Restructuring Related Charges
 Three Months Ended
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Restructuring related charges$4.1 $59.9 (93.2)%
% of net revenue0.4 %4.5 %

We recognized $4.1 million of total restructuring related charges in the three months ended May 4, 2024 as a result of our restructuring plan to streamline our organization and optimize resources. Refer to “Note 8 – Restructuring” in the Notes to Unaudited Condensed Consolidated Financial Statements for further information.

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Interest and Other Loss, Net
 Three Months Ended 
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Interest expense$(48.8)$(52.7)(7.4)%
Interest income and other, net
3.3 2.8 17.9%
Interest and other loss, net
$(45.5)$(49.9)(8.8)%
% of net revenue(3.9)%(3.8)%

Interest and other loss, net decreased by $4.4 million in the three months ended May 4, 2024, compared to the three months ended April 29, 2023. The decrease was primarily due to a decrease in interest expense driven by lower outstanding term loan balances, partially offset by interest expense associated with the 2029 and 2033 Senior Notes issued during the third quarter of fiscal 2024.

Provision (Benefit) for Income Taxes
 Three Months Ended 
May 4,
2024
April 29,
2023
%
Change
 (in millions, except percentage)
Provision (benefit) for income taxes$17.8 $(63.4)(128.1)%

Our income tax expense for the three months ended May 4, 2024 was $17.8 million compared to a tax benefit of $63.4 million for the three months ended April 29, 2023. Our income tax expense of $17.8 million for the three months ended May 4, 2024 differed from the U.S. federal statutory tax rate of 21%, primarily due to a substantial portion of earnings or losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, valuation allowance releases, and discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation, respectively. Our income tax benefit for the three months ended April 29, 2023 differed from the U.S. federal statutory tax rate of 21%, primarily due to a substantial portion of earnings or losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, valuation allowance releases, and discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation, respectively.

Our provision for incomes taxes may be affected by changes in the geographic mix of earnings with different applicable tax rates, acquisitions, changes in the realizability of deferred tax assets, accruals related to contingent tax liabilities and period-to-period changes in such accruals, the results of income tax audits, the expiration of statutes of limitations, the implementation of tax planning strategies, tax rulings, court decisions, settlements with tax authorities and changes in tax laws and regulations.

The ultimate realization of deferred tax assets depends upon the generation of future taxable income during the periods in which those assets become deductible or creditable. We evaluate the recoverability of these assets, weighing all positive and negative evidence, and provide or maintain a valuation allowance for these assets if it is more likely than not that some, or all, of the deferred tax assets will not be realized. If negative evidence exists, sufficient positive evidence is necessary to support a conclusion that a valuation allowance is not needed. We consider all available evidence such as our earnings history including the existence of cumulative income or losses, reversals of taxable temporary differences, projected future taxable income, and tax planning strategies. In future periods, it is possible that significant positive or negative evidence could arise that results in a change in our judgment with respect to the need for a valuation allowance, which could result in a tax benefit, or adversely affect our income tax provision, in the period of such change in judgment.

We also continue to evaluate potential changes to our legal structure in response to guidelines and requirements in various international tax jurisdictions where we conduct business. Additionally, please see the information in Part II, Item 1A, “Risk Factors” under the caption “Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results.”

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Liquidity and Capital Resources

Our principal source of liquidity as of May 4, 2024 consisted of approximately $847.7 million of cash and cash equivalents, of which approximately $603.1 million was held by subsidiaries outside of the United States, a portion of which are deemed to be indefinitely reinvested. We manage our worldwide cash requirements by, among other things, reviewing available funds held by our foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States.

As of May 4, 2024, we had total borrowings outstanding of $4.2 billion, consisting of $3.5 billion of senior notes outstanding and $678.1 million outstanding under our 5-Year Tranche Loan (“2026 Term Loan”).

During the three months ended May 4, 2024, we repaid $21.9 million of the principal outstanding of the 2026 Term Loan.

We have a revolving credit facility with a borrowing capacity of up to $1.0 billion and a 5-year term (“2023 Revolving Credit Facility”). As of May 4, 2024, the 2023 Revolving Credit Facility is undrawn and will be available for draw down through April 14, 2028.

For a description of our contractual obligations including debt and purchase commitments, see “Note 4 – Debt,” and “Note 5 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements. In addition, see “Note 9 – Income Tax” regarding tax related contingencies and uncertain tax positions in the Notes to Unaudited Condensed Consolidated Financial Statements. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities.

We may elect to factor trade accounts receivable from time to time as part of our overall liquidity and working capital management strategy. During the three months ended May 4, 2024, we generated cash from operations from the sale of certain trade accounts receivable on a non-recourse basis to a third-party financial institution pursuant to a factoring arrangement. See “Note 11 – Supplemental Financial Information” in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

We believe that our existing cash, cash equivalents, together with cash generated from operations, and funds from our 2023 Revolving Credit Facility will be sufficient to cover our working capital needs, capital expenditures, investment requirements, any declared dividends, repurchases of our common stock and commitments (including those discussed in “Note 5 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements) for at least the next twelve months. Our capital requirements will depend on many factors, including our rate of sales growth, market acceptance of our products, costs of securing access to adequate manufacturing capacity, the timing and extent of research and development projects and increases in operating expenses, all of which are subject to uncertainty.

To the extent that our existing cash and cash equivalents, together with cash generated by operations, and funds available under our 2023 Revolving Credit Facility are insufficient to fund our future activities, we may need to raise additional funds through public or private debt or equity financing. We may also acquire additional businesses, purchase assets or enter into other strategic arrangements in the future, which could also require us to seek debt or equity financing. Additional equity financing or convertible debt financing may be dilutive to our current stockholders. If we elect to raise additional funds, we may not be able to obtain such funds on a timely basis or on acceptable terms, if at all. In addition, the equity or debt securities that we issue may have rights, preferences or privileges senior to our common stock.

Future payment of a regular quarterly cash dividend on our common stock and our planned repurchases of common stock will be subject to, among other things, the best interests of the Company and our stockholders, our results of operations, cash balances and future cash requirements, financial condition, developments in ongoing litigation, statutory requirements under Delaware law, U.S. securities laws and regulations, market conditions and other factors that our Board of Directors may deem relevant. Our dividend payments and repurchases of common stock may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase stock at all or in any particular amounts.

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Cash Flows from Operating Activities

Net cash provided by operating activities for the three months ended May 4, 2024 was $324.5 million. We had a net loss of $215.6 million adjusted for the following non-cash items: amortization of acquired intangible assets of $264.9 million, stock-based compensation expense of $136.5 million, depreciation and amortization of $72.6 million, deferred income tax benefit of $22.2 million, and $21.8 million of net loss from other non-cash items. Cash inflow from working capital of $65.8 million for the three months ended May 4, 2024 was primarily driven by decreases in accounts receivable, prepaid expenses and other assets, and inventory, partially offset by decreases in accrued liabilities and other non-current liabilities, accrued employee compensation, and accounts payable. The decrease in accounts receivable was primarily due to decreased sales. The decrease in prepaid expenses and other assets was primarily driven by a decrease in prepaid ship and debits due to lower inventory balances at distributors, a decrease in prepaid corporate income tax, partially offset by payments on supply capacity reservation agreements, net of refunds. The decrease in inventory was primarily a result of managing the supply chain in a slower demand environment. The decrease in accrued liabilities and other non-current liabilities was primarily driven by lower ship and debit claims accrual due to lower inventory balances at distributors, interest payments net of accruals, and a decrease in stock rotation accruals. The decrease in accrued employee compensation was due to bonus payout of our annual employee bonus plan. The decrease in accounts payable was primarily due to the timing of payments.

Net cash provided by operating activities for the three months ended April 29, 2023 was $208.4 million. We had a net loss of $168.9 million adjusted for the following non-cash items: amortization of acquired intangible assets of $270.0 million, stock-based compensation expense of $143.2 million, deferred income tax benefit of $139.1 million, depreciation and amortization of $78.4 million, restructuring related impairment charges of $10.1 million, and $12.8 million of net loss from other non-cash items. Cash inflow from working capital of $1.9 million for the three months ended April 29, 2023 was primarily driven by decreases in accounts receivable, inventory, and prepaid expenses and other assets, partially offset by decreases in accounts payable, accrued liabilities and other non-current liabilities and accrued employee compensation. The decrease in accounts receivable was primarily due to timing of shipments and a reduction of revenue due to higher customer inventories. The decrease in inventory was primarily a result of managing the supply chain in a slower demand environment. The decrease in prepaid expenses and other assets was primarily driven by a decrease in prepaid ship and debits due to lower inventory balance at distributors resulting from lower shipments to and higher sales at distributors, partially offset by prepayments on supply capacity reservation agreements. The decrease in accounts payable was primarily due to the timing of payments. The decrease in accrued liabilities and other non-current liabilities was primarily driven by lower ship and debit claims accrual due to lower inventory balance at distributors resulting from lower shipments to and higher sales at distributors, partially offset by increases in restructuring accruals and income tax payable. The decrease in accrued employee compensation was due to bonus payout.

Cash Flows from Investing Activities

For the three months ended May 4, 2024, net cash used in investing activities of $101.9 million was primarily driven by purchases of property and equipment of $91.5 million.

For the three months ended April 29, 2023, net cash used in investing activities of $102.7 million was primarily driven by purchases of property and equipment of $99.8 million.

Cash Flows from Financing Activities

For the three months ended May 4, 2024, net cash used in financing activities of $325.7 million was primarily attributable to $150.0 million repurchases of common stock, $74.1 million for tax withholding payments on behalf of employees for net share settlements, $51.8 million for payment of our quarterly dividends, $30.2 million payments on technology license obligations, and $21.9 million repayment of debt principal, partially offset by $2.3 million in proceeds from the issuance of common stock under our employee stock plans.

For the three months ended April 29, 2023, net cash provided by financing activities of $11.6 million was primarily attributable to $200.0 million drawdown from our 2023 Revolving Credit Facility and $7.5 million in proceeds from the issuance of common stock under our employee stock plans, partially offset by $72.6 million for tax withholding payments on behalf of employees for net share settlements, $51.4 million for payment of our quarterly dividends, $50.0 million payments on technology license obligations, and $21.9 million repayment of debt principal.

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Capital Resources and Material Cash Requirements

A summary of our capital resources and material cash requirements is presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024. We also discuss updates of our significant commitments in “Note 5 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements. Other than as described above, there were no material changes to our capital resources and material cash requirements during the three months ended May 4, 2024.

Indemnification Obligations

See “Note 5 – Commitments and Contingencies” in the Notes to Unaudited Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk. With our outstanding debt, we are exposed to various forms of market risk, including the potential losses arising from adverse changes in interest rates on our outstanding 2026 Term Loan. See “Note 4 – Debt” in the Notes to Unaudited Condensed Consolidated Financial Statements for further information. A hypothetical increase or decrease in the interest rate by 1 percentage point could result in an increase or decrease in annual interest expense by approximately $6.1 million.

We maintain an investment policy that requires minimum credit ratings, diversification of credit risk and limits the long-term interest rate risk by requiring effective maturities of generally less than five years. We typically invest our excess cash primarily in highly liquid debt instruments including money market funds and time deposits. Investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than predicted if interest rates fall. There were no such investments on hand at May 4, 2024, aside from cash and cash equivalents.

Foreign Currency Exchange Risk. All of our sales and the majority of our expenses are denominated in U.S. dollars. Since we operate in many countries, a percentage of our international operational expenses are denominated in foreign currencies and exchange volatility could positively or negatively impact those operating costs. Increases in the value of the U.S. dollar relative to other currencies could make our products more expensive, which could negatively impact our ability to compete. Conversely, decreases in the value of the U.S. dollar relative to other currencies could result in our suppliers raising their prices to continue doing business with us. Additionally, we may hold certain assets and liabilities, including potential tax liabilities, in local currency on our consolidated balance sheet. These tax liabilities would be settled in local currency. Therefore, foreign exchange gains and losses from remeasuring the tax liabilities are recorded to interest and other income, net. We do not believe that foreign exchange volatility has a material impact on our current business or results of operations. However, fluctuations in currency exchange rates could have a greater effect on our business or results of operations in the future to the extent our expenses increasingly become denominated in foreign currencies.

We may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. However, we may choose not to hedge certain foreign exchange exposures for a variety of reasons, including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures.

To provide an assessment of the foreign currency exchange risk associated with our foreign currency exposures within operating expense, we performed a sensitivity analysis to determine the impact that an adverse change in exchange rates would have on our financial statements. If the U.S. dollar weakened by 10%, our operating expense could increase by approximately 2%.

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Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

Management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of May 4, 2024.

Changes in Internal Control Over Financial Reporting