Questionable Quality of Marvell Technology’s (MRVL) 4Q Results

Multiple accounting-related benefits in a quarter that just met expectations

We first looked at Marvell Technology ($MRVL) in our October piece Behind Marvell Technology’s (MRVL) Numbers which we recommend readers review for an overview of how the company’s accounting for revenue significantly impacts results.  We also highlighted its unrealistic non-GAAP adjustments and explored how its cash from operations is overstated.

In today’s issue, we will examine the company results for the fourth quarter ended in February. MRVL’s adjusted EPS of 46 cents for 4Q24 only met expectations and revenue of $1.43 billion beat guidance by only $3.1 million. After posting these results, the company guided to a 1Q25 (April 2024) of only 23 cents of adjusted EPS +/- 5 cents and revenue of only $1.15 billion +/- 5%. We saw several unusual benefits that may have allowed the company to simultaneously store up a “cookie jar” to help it in upcoming quarters.

If you haven’t done so already, we recommend that you check out our Red Flag Note reports on Autodesk ($ADSK), Cisco ($CSCO), and Itron ($ITRI). Subscribers will be seeing more of these notes as the 10-Qs keep rolling in. These reports are quick notes on unusual accounting-related benefits that turned up after our initial round of screening SEC filings. While these do not represent a complete earnings quality analysis of these names, these are problems we believe investors should be aware of. We may write more on these names if more problems turn up after we do more work on them.  

Now let’s get behind the numbers…