What changed in this filing

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Item 1. Financial Statements

2021-12-03 compared with 2021-08-27 · 290 added, 199 removed, 655 unchanged (43% of the section changed)

37 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended Six Months Ended

2021 August 1,

2020 July 31,

2021 August 1,

Three Months Ended Nine Months Ended

2021 October 31,

2020 October 30,

2021 October 31,

Net revenue $ 1,211,245 $ 750,143 $ 3,119,405 $ 2,171,081

23 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

2021 August 1,

2020 July 31,

2021 August 1,

Three Months Ended Nine Months Ended

2021 October 31,

2020 October 30,

2021 October 31,

Net loss $ ( 62,532 ) $ ( 22,908 ) $ ( 427,202 ) $ ( 293,834 )

13 unchanged sentences

Share-based compensation — — 92,705 — 92,705

Common stock issued to Inphi common stockholders 128,030 256 5,871,869 — 5,872,125

Stock consideration for Inphi accelerated awards 1,192 3 39,058 — 39,061

Issuance of common stock in connection with acquisitions 129,222 259 5,910,927 — 5,911,186

Equity related issuance cost — — ( 8,177 ) — ( 8,177 )

10 unchanged sentences

Share-based compensation — — 122,322 — 122,322

Common stock issued to Inphi common stockholders 145 — 6,625 — 6,625

Issuance of common stock in connection with acquisitions 145 — 6,625 — 6,625

Conversion of convertible notes to common stock 3,865 8 84,387 — 84,395

3 unchanged sentences

Balance at July 31, 2021 823,377 $ 1,646 $ 13,090,669 $ 1,648,882 $ 14,741,197

Issuance of common shares in connection with equity incentive plans 1,677 3 2,087 — 2,090

Tax withholdings related to net share settlement of restricted stock units — — ( 52,851 ) — ( 52,851 )

Share-based compensation — — 121,249 — 121,249

Issuance of common stock in connection with acquisitions 16,484 33 954,254 — 954,287

Replacement equity awards attributable to pre-acquisition service

— — 33,224 — 33,224

Conversion of convertible notes to common stock 2 — 109 — 109

Cash dividends declared and paid ($ 0.06 per share)

— — — ( 50,429 ) ( 50,429 )

Net loss — — — ( 62,532 ) ( 62,532 )

Balance at October 30, 2021 841,540 $ 1,682 $ 14,148,741 $ 1,535,921 $ 15,686,344

MARVELL TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share amounts)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss)

18 unchanged sentences

Balance at August 1, 2020 670,017 $ 1,340 $ 6,225,242 $ 450 $ 2,190,505 $ 8,417,537

Issuance of common shares in connection with equity incentive plans 1,720 3 2,251 — — 2,254

Tax withholdings related to net share settlement of restricted stock units — — ( 25,911 ) — — ( 25,911 )

Share-based compensation — — 59,324 — — 59,324

Cash dividends declared and paid ($ 0.06 per share)

— — — ( 40,229 ) ( 40,229 )

Net loss — — — — ( 22,908 ) ( 22,908 )

Other comprehensive loss — — — ( 450 ) — ( 450 )

Balance at October 31, 2020 671,737 $ 1,343 $ 6,260,906 $ — $ 2,127,368 $ 8,389,617

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(In thousands)

Six Months Ended

2021 August 1,

Nine Months Ended

2021 October 31,

Cash flows from operating activities:

5 unchanged sentences

Amortization of inventory fair value adjustment associated with acquisitions 191,030 17,284

Amortization of deferred debt issuance costs and debt discounts 19,031 3,217

Restructuring related impairment charges 5,205 123,559

12 unchanged sentences

Purchases of property and equipment ( 130,483 ) ( 88,242 )

Cash payment for acquisition, net of cash and cash equivalents acquired ( 3,600,165 ) —

Acquisitions, net of cash acquired ( 3,539,729 ) —

Other, net ( 2,457 ) 223

21 unchanged sentences

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 and six months ended July 31, 2021, have been prepared as required by the U.S.

(“MTI”), a Delaware corporation, and its wholly owned subsidiaries (the “Company”), as of and for the three and nine months ended October 30, 2021, have been prepared as required by the U.S.

Securities and Exchange Commission (the “SEC”).

6 unchanged sentences

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 year ended January 30, 2021 and those included in this Form 10-Q below.

6 unchanged sentences

Inphi is a global leader in high-speed data movement enabled by optical interconnects.

The unaudited condensed consolidated financial statements include the operating results of Inphi for the period from the date of acquisition through the Company’s second quarter ended July 31, 2021.

See “Note 3 - Business Combination” for more information.

In conjunction with the acquisition transaction, Marvell Technology Group Ltd and Inphi became wholly owned subsidiaries of the new parent company, MTI, on April 20, 2021.

The unaudited condensed consolidated financial statements include the operating results of Inphi for the period from the date of acquisition through the Company’s third quarter ended October 30, 2021.

See “Note 3 - Business Combinations”, “Note 4 - Goodwill and Acquired Intangible Assets, Net” for more information.

In conjunction with the acquisition transaction, Marvell Technology Group Ltd.

and Inphi became wholly owned subsidiaries of the new parent company, MTI, on April 20, 2021.

The parent company is domiciled in and subject to taxation in the United States.

See “Note 12 - Income Taxes” for more information.

Subsequent to quarter end, on August 3, 2021, the Company announced its intent to acquire Innovium, Inc.

On October 5, 2021, the Company completed its acquisition of Innovium, Inc.

(“Innovium”), a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction.

The estimated acquisition price of $ 1.1 billion consists of approximately 19.05 million shares of the Company's common stock and is based on the Company's 10-day volume weighted average price as of July 30, 2021.

The acquisition price includes Innovium cash and exercise proceeds expected at closing of approximately $ 145 million, resulting in an estimated net cost to the Company of $ 955 million.

The transaction is expected to close by the end of calendar year 2021, subject to the satisfaction of customary closing conditions, including approval by Innovium’s stockholders and applicable regulatory approvals.

The unaudited condensed consolidated financial statements include the operating results of Innovium for the period from the date of acquisition through the Company’s third quarter ended October 30, 2021.

See “Note 3 - Business Combinations”, “Note 4 - Goodwill and Acquired Intangible Assets, Net” for more information.

Use of Estimates

5 unchanged sentences

As events continue to evolve and additional information becomes available, these estimates may change materially in future periods.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Recent Accounting Pronouncements

4 unchanged sentences

The new standard was adopted by the Company on January 31, 2021 on a prospective basis and did not have a material effect on the Company’s consolidated financial statements.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Accounting Pronouncements Not Yet Effective

3 unchanged sentences

The guidance is effective for the Company beginning in the first quarter of fiscal year 2023, with early adoption permitted and permits the use of either the modified retrospective or fully retrospective method of transition.

The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements.

In October 2021, the FASB issued an accounting standards update that requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers.

The guidance is effective for the Company beginning in the first quarter of fiscal year 2024, with early adoption permitted.

The guidance should be applied prospectively to acquisitions occurring on or after the effective date.

The Company is evaluating the impact that this new standard will have on the Company’s consolidated financial statements.

Business Combination

Business Combinations

On October 5, 2021, the Company completed the acquisition of Innovium, Inc.

(“Innovium”), a leading provider of networking solutions for cloud and edge data centers, in an all-stock transaction for total purchase consideration of $ 1.0 billion attributable to stock consideration of $ 994.2 million and the fair value of a previously held equity interest of $ 10.0 million.

The Innovium acquisition was primarily intended to allow the Company to immediately participate in the fastest growing segment of the switch market with a cloud-optimized solution.

In accordance with the terms of the Agreement and Plan of Merger dated August 2, 2021 (the “Innovium merger agreement”), the Company’s common stock was issued in exchange for all outstanding equity of Innovium, including shares of Innovium’s preferred and common stock, employee equity awards and warrants.

The factors contributing to the recognition of goodwill were based upon the Company’s conclusion that there are strategic and synergistic benefits that are expected to be realized from the acquisition.

Goodwill recorded for the Innovium acquisition is not expected to be deductible for tax purposes.

The following table summarized the total merger consideration (in thousands):

Common stock issued or to be issued $ 971,022

Stock consideration for replacement equity awards attributable to pre-combination service 33,224

Total merger consideration $ 1,004,246

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The merger consideration allocation set forth herein is preliminary and may be revised with adjustment to goodwill as additional information becomes available during the measurement period from the closing date of the acquisition to finalize such preliminary estimates.

Any such revisions or changes may be material.

In accordance with U.S.

GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including in-process research and development (“IPR&D”), generally based on their estimated fair values.

The excess purchase price over those fair values is recorded as goodwill.

IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter.

When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life.

The Company’s valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets.

Acquisition-related costs are expensed in the periods in which such costs are incurred.

See “Note 4 - Goodwill and Acquired Intangible Assets, Net” for additional information.

The purchase price allocation is as follows (in thousands):

Cash and cash equivalents $ 60,436

Inventories 69,991

Goodwill 470,000

Acquired intangible assets, net 433,000

Other, net ( 29,181 )

Total merger consideration $ 1,004,246

The Company incurred total acquisition related costs of $ 11.9 million during the three and nine months ended October 30, 2021, which were recorded in selling, general and administrative expense in the unaudited condensed consolidated statements of operations.

Post acquisition revenue and income (loss) on a standalone basis is impracticable to determine as the Company integrated Innovium into its existing financial systems and operations in the third quarter ended October 30, 2021.

On April 20, 2021, the Company completed the acquisition of Inphi (the “Inphi acquisition”).

4 unchanged sentences

See “Note 5 - Debt” for additional information.

Goodwill recorded for the Inphi acquisition is not expected to be deductible for tax purposes.

The following table summarized the total merger consideration (in thousands):

Cash consideration to Inphi common stockholders $ 3,639,559

Common stock ( 128,100,446 shares of the Company’s common stock at $ 45.84 per share)

Cash consideration for director and employee accelerated equity awards 33,658

Stock consideration for director and employee accelerated equity awards 45,686

Cash consideration $ 3,673,217

Common stock issued

Stock consideration for replacement equity awards attributable to pre-combination service 82,346

1 unchanged sentence

Total merger consideration $ 9,917,529

Any such revisions or changes may be material.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Any such revisions or changes may be material.

In accordance with U.S.

GAAP requirements for business combinations, the Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, including IPR&D, generally based on their estimated fair values.

The excess purchase price over those fair values is recorded as goodwill.

5 unchanged sentences

The purchase price allocation is as follows (in thousands):

Previously Reported

(Provisional) Measurement Period Adjustment July 31, 2021

Cash and cash equivalents $ 72,251

11 unchanged sentences

Total merger consideration $ 9,917,529

The provisional amounts presented in the table above pertained to the preliminary purchase price allocation reported in the Company’s Form 10-Q for the first quarter ended May 1, 2021.

The measurement period adjustment was associated with deferred tax liabilities on certain purchased intangible assets.

The Company does not believe that the measurement period adjustment had a material impact on its consolidated statements of operations, balance sheets, or cash flows in any periods previously reported.

The Company incurred $ 5.0 million and $ 50.8 million in acquisition related costs which were recorded in selling, general and administrative expense in the unaudited condensed consolidated statements of operations for the three and six months ended July 31, 2021, respectively.

The amounts presented in the table above is the purchase price allocation reported in the Company’s Form 10-Q for the second quarter ended July 31, 2021.

There were no measurement period adjustments during the third quarter ended October 30, 2021.

There were no acquisition costs incurred in the three months ended October 30, 2021.

The Company incurred $ 50.8 million in acquisition related costs which were recorded in selling, general and administrative expense in the unaudited condensed consolidated statements of operations for the nine months ended October 30, 2021.

The Company also incurred $ 39.8 million of aggregate debt financing costs.

As of July 31, 2021, $ 2.5 million is included in short-term debt, and $ 35.1 million is included in long-term debt on the accompanying unaudited condensed consolidated balance sheets.

As of October 30, 2021, $ 2.5 million is included in short-term debt, and $ 32.0 million is included in long-term debt on the accompanying unaudited condensed consolidated balance sheets.

See “Note 5 - Debt” for additional information.

Additionally, the Company incurred $ 8.2 million of equity issuance costs, which were recorded in additional paid-in capital in the unaudited condensed consolidated balance sheets.

Post acquisition revenue and income (loss) on a standalone basis is impracticable to determine as the Company integrated Inphi into its existing systems and operations in the second quarter ended July 31, 2021.

Post acquisition revenue and income (loss) on a standalone basis is impracticable to determine as the Company integrated Inphi into its existing financial systems and operations in the second quarter ended July 31, 2021.

Unaudited Supplemental Pro Forma Information

3 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The following unaudited supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Inphi had been acquired as of the beginning of fiscal year 2021.

The following unaudited supplemental pro forma information presents the combined results of operations for each of the periods presented, as if Innovium and Inphi had been acquired as of the beginning of fiscal year 2021.

The unaudited supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to share-based compensation expense, the purchase accounting effect on inventories acquired, interest expense, and transaction costs.

For fiscal year 2021, non-recurring pro forma adjustments directly attributable to the Inphi acquisition in the pro forma information presented below included (i) share-based compensation expense of $ 43.8 million, (ii) the purchase accounting effect of inventories acquired of $ 187.2 million, (iii) interest expense of $ 11.4 million, and (iv) transaction costs of $ 69.0 million.

For fiscal year 2021, non-recurring pro forma adjustments directly attributable to the Innovium and Inphi acquisitions in the pro forma information presented below included (i) share-based compensation expense of $ 46.7 million, (ii) the purchase accounting effect of inventories acquired of $ 233.0 million, (iii) interest expense of $ 11.4 million, and (iv) transaction costs of $ 77.4 million.

The unaudited supplemental pro forma information presented below is for informational purposes only and is not necessarily indicative of our unaudited condensed consolidated results of operations of the combined business had the Inphi acquisition actually occurred at the beginning of fiscal year 2021 or of the results of our future operations of the combined business.

The unaudited supplemental pro forma financial information for the periods presented is as follows (in thousands):

Six Months Ended

2021 August 1,

Nine Months Ended

2021 October 31,

Pro forma net revenue $ 3,295,498 $ 2,693,723

2 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired in a business combination.

The carrying value of goodwill as of July 31, 2021 and January 30, 2021 is $ 11.0 billion and $ 5.3 billion respectively.

See “Note 3 - Business Combination” for discussion of acquisitions and changes to the carrying value of goodwill.

The carrying value of goodwill as of October 30, 2021 and January 30, 2021 is $ 11.4 billion and $ 5.3 billion respectively.

See “Note 3 - Business Combinations” for discussion of acquisitions and changes to the carrying value of goodwill.

Acquired Intangible Assets, Net

In connection with the Innovium acquisition on October 5, 2021, the Company acquired $ 433.0 million of intangible assets as follows (in thousands, except for weighted-average useful life as of acquisition date):

Preliminary Estimated Asset Fair Value Weighted-Average Useful Life (Years)

Developed technology $ 274,000 8.00

Customer contracts and related relationships 66,000 8.00

IPR&D 93,000 n/a

In connection with the Inphi acquisition on April 20, 2021, the Company acquired $ 4.4 billion of intangible assets as follows (in thousands, except for weighted-average useful life as of acquisition date):

5 unchanged sentences

IPR&D 820,000 n/a

In connection with the Cavium acquisition on July 6, 2018, the Aquantia acquisition on September 19, 2019, and the Avera acquisition on November 5, 2019, the Company acquired a total of $ 3.3 billion of intangible assets.

As of July 31, 2021 and January 30, 2021, net carrying amounts are as follows (in thousands, except for weighted-average remaining amortization period):

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

July 31, 2021

As of October 30, 2021 and January 30, 2021, net carrying amounts are as follows (in thousands, except for weighted-average remaining amortization period):

October 30, 2021

Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted-Average Remaining Amortization Period (Years)

18 unchanged sentences

In the event the IPR&D is abandoned, the related assets will be written off.

Amortization expense for acquired intangible assets for the three and six months ended July 31, 2021 was $ 276.7 million and $ 405.3 million, respectively.

Amortization expense for acquired intangible assets for the three and six months ended August 1, 2020 was $ 111.6 million and $ 224.5 million, respectively.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of July 31, 2021 (in thousands):

Amortization expense for acquired intangible assets for the three and nine months ended October 30, 2021 was $ 279.3 million and $ 684.6 million, respectively.

Amortization expense for acquired intangible assets for the three and nine months ended October 31, 2020 was $ 109.4 million and $ 333.9 million, respectively.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of October 30, 2021 (in thousands):

Fiscal Year Amount

1 unchanged sentence

2023 1,050,897

2024 1,039,160

Thereafter 1,144,954

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The following table summarizes the Company’s outstanding debt at July 31, 2021 and January 30, 2021 (in thousands):

The following table summarizes the Company’s outstanding debt at October 30, 2021 and January 30, 2021 (in thousands):

2021 January 30,

5 unchanged sentences

4.200 % MTG/MTI 2023 Senior Notes

499,952 500,000

4.875 % MTG/MTI 2028 Senior Notes

499,915 500,000

1.650 % 2026 Senior Notes

2 unchanged sentences

Senior Notes Total 2,999,867 1,000,000

0.75% Inphi 2021 Convertible Notes 422 —

0.75% Inphi 2025 Convertible Notes 3 —

Inphi Convertible Notes Total 425 —

Total borrowings $ 4,598,930 $ 1,200,000

2 unchanged sentences

Current portion - Term Loan (1) 52,205 199,641

Current portion - Inphi Convertible Notes (2) 138 —

Non-current portion $ 4,504,321 $ 993,170

(1) As of July 31, 2021, the current portion of outstanding debt includes the 2020 Term Loan - 5 Year Tranche, which is due within twelve months.

The Company intends to repay the amount with operating cash flow.

(2) As of July 31, 2021, as the Inphi 2021 Convertible Notes are currently convertible, the Company has classified $ 0.1 million, which is the cash portion the Company would be required to pay upon conversion, as current.

(1) As of October 30, 2021, the current portion of outstanding debt includes the 2020 Term Loan - 5 Year Tranche, which is due within twelve months.

The Company intends to repay the amount with operating cash flow.

1 unchanged sentence

As part of the acquisition, the Company assumed $ 15.7 million principal amount of Inphi’s 0.75 % convertible senior notes due 2021 (the “Inphi 2021 Convertible Notes”) and $ 506.0 million principal amount of Inphi’s 0.75 % convertible senior notes due 2025 (the “Inphi 2025 Convertible Notes”, and together with the 2021 Notes, the “Inphi Convertible Notes”).

See “Note 3 - Business Combination” for more information.

As of October 30, 2021, the Inphi Convertible Notes have been settled.

See “Note 3 - Business Combinations” for more information.

In connection with the acquisition, the Company entered into a series of financing arrangements from December 2020 through April 2021 as summarized below.

10 unchanged sentences

Below is further discussion of the terms of the various debt agreements.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

2020 Term Loan Agreement

2 unchanged sentences

(i) $ 875.0 million loan with a three-year term from the funding date (the “3-Year Tranche Loan”) and (ii) $ 875.0 million loan with a five-year term from the funding date (the “5-Year Tranche Loan” and, together with the 3-Year Tranche Loan, the “2020 Term Loans”).

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The 3-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted LIBOR + 125 bps.

The effective interest rate for the 3-Year Tranche Loan was 1.687 % as of July 31, 2021.

The effective interest rate for the 3-Year Tranche Loan was 1.655 % as of October 30, 2021.

The 5-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted LIBOR + 137.5 bps.

The effective interest rate for the 5-Year Tranche Loan was 1.798 % as of July 31, 2021.

The 3-Year Tranche Loan does not require any scheduled principal payments prior to final maturity but do permit the Company to make early principal payments without premium or penalty.

The effective interest rate for the 5-Year Tranche Loan was 1.798 % as of October 30, 2021.

The 3-Year Tranche Loan does not require any scheduled principal payments prior to final maturity but does permit the Company to make early principal payments without premium or penalty.

During the quarter ended October 30, 2021, the Company repaid $ 140 million of the principal outstanding of the 3-Year Tranche Loan, and wrote off $ 1.1 million of associated unamortized debt issuance costs.

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 quarter ended October 30, 2021, the Company repaid $ 10.9 million of the principal outstanding of the 5-Year Tranche Loan.

The 2020 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.

As of July 31, 2021, the Company has $ 1.75 billion Term Loan borrowings outstanding, and is in compliance with its debt covenants.

As of October 30, 2021, the Company has $ 1.6 billion Term Loan borrowings outstanding, and is in compliance with its debt covenants.

2020 Revolving Credit Facility

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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 July 31, 2021.

This annual rate was 0.175 % at October 30, 2021.

On May 4, 2021, the Company drew down $ 75.0 million on the 2020 Revolving Credit Facility.

On July 6, 2021, the Company repaid the outstanding balance of the 2020 Revolving Credit Facility in full.

As of July 31, 2021, the 2020 Revolving Credit Facility is undrawn.

As of October 30, 2021, the 2020 Revolving Credit Facility is undrawn.

Subsequent to quarter end, on November 22, 2021, the Company drew down $ 90.0 million on the 2020 Revolving Credit Facility.

The Company intends to repay the drawn amount by the end of fiscal year 2022.

The 2020 Revolving Credit Facility requires that the Company and its subsidiaries comply with covenants relating to customary matters.

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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 “Senior Notes”).

The Senior Notes were sold pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), to purchasers in the United States and pursuant to Regulation S under the Securities Act to purchasers outside of the United States.

On October 8, 2021, the 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 and the transfer restrictions and registration rights applicable to the Senior Notes issued in April 2021 do not apply to the new notes.

MARVELL TECHNOLOGY, INC.

4 unchanged sentences

The stated and effective interest rates for the 2031 Senior Notes are 2.950 % and 3.043 %, respectively.

The Company may redeem the Senior Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in associated debt agreements.

The Company may redeem the 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 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 Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the 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 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 July 31, 2021, the Company has $ 2.0 billion Senior Notes borrowings outstanding.

As of October 30, 2021, the Company had $ 2.0 billion Senior Notes borrowings outstanding.

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 the Company’s 4.200 % Senior Notes due 2023 (the “MTG 2023 Notes”) and (ii) $ 500.0 million aggregate principal amount of the Company’s 4.875 % Senior Notes due 2028 (the “MTG 2028 Notes” and, together with the 2023 Notes, the “MTG Senior Notes”).

The proceeds of the MTG Senior Notes were used to fund a portion of the cash consideration for the Cavium acquisition, repay Cavium’s debt, and pay transaction expenses in connection with the Cavium acquisition.

(“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 2023 Notes, the “MTG Senior Notes”).

In April 2021, in conjunction with the Company’s U.S.

2 unchanged sentences

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 will have the same interest rate, maturity date, redemption terms and interest payment dates and will be subject to substantially similar covenants as the corresponding series of the MTG Senior Notes for which they are being 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 exchanged.

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 exchange was accounted for as a debt modification in accordance with applicable accounting guidance.

5 unchanged sentences

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.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The MTG 2023 Notes mature on June 22, 2023 and the MTG 2028 Notes mature on June 22, 2028.

The stated and effective interest rates for the MTG 2023 Notes are 4.200 % and 4.360 %, respectively.

The stated and effective interest rates for the MTI 2028 Notes are 4.875 % and 4.940 %, respectively.

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.

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 MTG Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the MTG 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 MTG 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 July 31, 2021, the Company has $ 1.0 billion MTG/MTI Senior Notes borrowings outstanding.

As of October 30, 2021, the Company had $ 1.0 billion MTG/MTI Senior Notes borrowings outstanding.

Inphi Convertible Notes

As a result of the Inphi acquisition, the Company assumed all of Inphi’s outstanding convertible notes.

Convertible debt is included in the aggregate short-term and long-term debt in the accompanying unaudited condensed consolidated balance sheet, as applicable.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Inphi 2021 Convertible Notes

1 unchanged sentence

The Inphi 2021 Convertible Notes are governed by the terms of an indenture dated September 12, 2016 (the “Inphi 2021 Convertible Notes Indenture”).

The Inphi 2021 Convertible Notes will mature September 1, 2021, unless earlier converted or repurchased.

Interest on the Inphi 2021 Convertible Notes is payable on March 1 and September 1 of each year.

The Inphi 2021 Convertible Notes matured on September 1, 2021, unless earlier converted or repurchased.

Interest on the Inphi 2021 Convertible Notes was payable on March 1 and September 1 of each year.

Under the Inphi 2021 Convertible Notes Indenture, on or after March 1, 2021, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time.

10 unchanged sentences

Based on the terms of the Inphi merger agreement, the holders of the Inphi 2021 Convertible Notes received 41.2384 shares of the Company’s common stock and $1,171.65 in cash per $1,000 in principal amount of such notes upon conversion.

The Inphi 2021 Convertible Notes are currently convertible into Inphi conversion units of 17.7508 per $1,000 in principal amount of such notes.

Based on the terms of the merger agreement, the holders of the Inphi 2021 Convertible Notes would receive 41.2351 shares of the Company’s common stock and $1,171.55 in cash per $1,000 in principal amount of such notes upon conversion.

From June 4, 2021 through August 31, 2021, the Inphi 2021 Convertible Notes were convertible into Inphi conversion units of 17.7508 per $1,000 in principal amount of such notes.

Based on the terms of the Inphi merger agreement, the holders of the Inphi 2021 Convertible Notes would receive 41.2351 shares of the Company’s common stock and $1,171.55 in cash per $1,000 in principal amount of such notes upon conversion.

The Company has elected to measure the Inphi 2021 Convertible Notes at fair value.

A total of $ 9.6 million in aggregate principal of the Inphi 2021 Convertible Notes was settled pursuant to the Exchange Agreements (discussed below).

Between April 20 and July 31, 2021, $ 6.0 million in aggregate principal of the Inphi 2021 Convertible Notes was converted into 0.2 million shares of the Company’s common stock and $ 7.0 million in cash pursuant to the contractual terms of the Inphi 2021 Convertible Notes Indenture.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Between April 2 0 and September 1, 2021, $ 6.1 million in aggregate principal of the Inphi 2021 Convertible Notes was converted into 0.2 million shares of the Company’s common stock and $ 7.1 million in cash pursuant to the contractual terms of the Inphi 2021 Convertible Notes Indenture.

The Inphi 2021 Convertible Notes matured on September 1, 2021 and the Company settled the remaining outstanding balance.

Inphi 2025 Convertible Notes

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Interest on the Inphi 2025 Convertible Notes is payable on April 15 and October 15 of each year.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Under the Inphi 2025 Notes Indenture, the Inphi 2025 Convertible Notes are convertible at the option of the holders at any time, prior to the close of business on the business day immediately preceding October 15, 2024, only under the following circumstances:

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The fair value of $ 750.2 million was accordingly allocated between debt for $ 506.0 million and stockholders’ equity for $ 244.2 million.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

As of October 30, 2021, there was no outstanding balance of Inphi 2025 Convertible Notes.

Inphi Capped Calls

1 unchanged sentence

Under the Inphi Capped Calls, Inphi purchased capped call options that in aggregate relate to 100 % of the total number of shares of the Company’s common stock underlying the Inphi Convertible Notes, with a strike price approximately equal to the conversion price of the Inphi 2021 Convertible Notes and the Inphi 2025 Convertible Notes, respectively, and with a capped price equal to $ 73.03 per Inphi share and $ 188.54 per Inphi share, respectively.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The purchased Inphi Capped Calls allowed Inphi to receive shares of its common stock and/or cash from counterparties equal to the amounts of common stock and/or cash related to the excess of the market price per share of the common stock, as measured under the terms of the Inphi Capped Calls, over the strike prices of the Inphi Capped Calls during the relevant valuation period.

9 unchanged sentences

In connection with the Exchange Agreements (discussed below), a portion of the remaining Inphi Capped Calls were settled for $ 35.5 million on April 29, 2021.

As of October 30, 2021, there was no outstanding balance of Inphi Capped Calls.

Exchange Agreements

6 unchanged sentences

Interest Expense and Future Contractual Maturities

During the three and six months ended July 31, 2021, the Company recognized $ 30.9 million and $ 53.0 million, respectively, 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 borrowings.

During the three and six months ended August 1, 2020, the Company recognized $ 14.1 million and $ 29.5 million, respectively, 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 borrowings.

During the three and nine months ended October 30, 2021, the Company recognized $ 33.6 million and $ 86.6 million, respectively, 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 borrowings.

During the three and nine months ended October 31, 2020, the Company recognized $ 14.1 million and $ 43.6 million, respectively, 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 borrowings.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

As of July 31, 2021, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, were as follows (in thousands):

As of October 30, 2021, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, were as follows (in thousands):

Fiscal Year Amount

5 unchanged sentences

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

Three Months Ended Six Months Ended

2021 % of Total August 1,

2020 % of Total July 31,

2021 % of Total August 1,

Three Months Ended Nine Months Ended

2021 % of Total October 31,

2020 % of Total October 30,

2021 % of Total October 31,

2020 % of Total

7 unchanged sentences

The Company classifies end market revenue by using estimates and assumptions based on historical experience and knowledge of current conditions, given available information.

The following table summarizes net revenue disaggregated by product group (in thousands, except percentages):

Three Months Ended Six Months Ended

2021 % of Total August 1,

2020 % of Total July 31,

2021 % of Total August 1,

2020 % of Total

Net revenue by product group:

Networking (1) $ 701,712 65 % $ 406,008 56 % $ 1,199,962 63 % $ 799,928 56 %

Storage (2) 341,713 32 % 290,495 40 % 644,631 34 % 549,183 39 %

Other (3) 32,456 3 % 30,794 4 % 63,567 3 % 71,827 5 %

$ 1,075,881 $ 727,297 $ 1,908,160 $ 1,420,938

(1) Networking products are comprised primarily of ethernet solutions, embedded processors, custom ASICs and electro-optics solutions.

(2) Storage products are comprised primarily of storage controllers and fibre channel adapters.

(3) Other products are comprised primarily of printer solutions.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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

Three Months Ended Six Months Ended

2021 % of Total August 1,

2020 % of Total July 31,

2021 % of Total August 1,

Three Months Ended Nine Months Ended

2021 % of Total October 31,

2020 % of Total October 30,

2021 % of Total October 31,

2020 % of Total

4 unchanged sentences

Malaysia 65,620 5 % 73,582 10 % 196,633 6 % 198,436 9 %

Singapore 58,420 5 % 30,520 4 % 109,930 5 % 69,226 5 %

Japan 68,195 6 % 32,811 4 % 168,427 5 % 104,676 5 %

Philippines 52,987 4 % 44,356 6 % 156,309 5 % 118,485 5 %

1 unchanged sentence

$ 1,211,245 $ 750,143 $ 3,119,405 $ 2,171,081

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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.

1 unchanged sentence

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

Three Months Ended Six Months Ended

2021 % of Total August 1,

2020 % of Total July 31,

2021 % of Total August 1,

Three Months Ended Nine Months Ended

2021 % of Total October 31,

2020 % of Total October 30,

2021 % of Total October 31,

2020 % of Total

5 unchanged sentences

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.

As of July 31, 2021, contract liability balances are comprised of variable consideration estimated based on a portfolio basis using the expected value methodology based on analysis of historical data, current economic conditions, and contractual terms.

Variable consideration estimates consist of the estimated returns, price discounts, price protection, rebates, and stock rotation programs.

Contract liability balances are comprised of deferred revenue.

The amount of revenue recognized during the nine months ended October 30, 2021 that was included in the deferred revenue balance at January 30, 2021 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.

Contract liabilities are included in accrued liabilities in the unaudited condensed consolidated balance sheets.

The opening balance of contract liabilities at the beginning of the first quarter of fiscal year 2022 was $ 181.0 million.

During the six months ended July 31, 2021, contract liabilities increased by $ 484.7 million associated with variable consideration estimates, offset by $ 475.2 million decrease in such reserves primarily due to credit memos issued to customers.

The ending balance of contract liabilities as of the second quarter of fiscal year 2022 was $ 190.5 million.

The amount of revenue recognized during the six months ended July 31, 2021 that was included in the contract liabilities balance at January 30, 2021 was not material.

Sales Commissions

1 unchanged sentence

These costs are recorded in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Restructuring

2 unchanged sentences

Restructuring charges are mainly comprised of severance and other one-time termination benefits, facility closures where sites may be redundant within the same region or no longer suitably sized for the local employee base, and other costs.

The Company recorded restructuring and other related charges of $ 12.3 million and $ 25.2 million for the three and six months ended July 31, 2021, respectively, which includes $ 10.1 million and $ 19.9 million of charges related to the Fiscal 2022 Plan.

The Company recorded restructuring and other related charges of $ 5.9 million and $ 31.0 million for the three and nine months ended October 30, 2021, respectively, which includes $ 1.2 million and $ 21.1 million of charges related to the Fiscal 2022 Plan.

The Company expects to complete these restructuring actions by the end of fiscal 2023.

2 unchanged sentences

These plans are substantially complete.

The Company recorded restructuring related charges of $ 120.6 million and $ 141.9 million for the three and six months ended August 1, 2020, respectively.

The Company recorded restructuring related charges of $ 19.3 million and $ 170.8 million for the three and nine months ended October 31, 2020, respectively.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The following table provides a summary of restructuring related charges, as presented in the unaudited condensed consolidated statements of operations (in thousands):

Three Months Ended Nine Months Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Cost of goods sold $ — $ — $ — $ 9,594

Restructuring related charges 5,861 19,312 31,041 161,189

$ 5,861 $ 19,312 $ 31,041 $ 170,783

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

4 unchanged sentences

Non-cash items — ( 2,661 ) ( 2,661 )

Liability at July 31, 2021

Liability at October 30, 2021

$ 7,503 $ 3,481 $ 10,984

The current and non-current portions of the restructuring liability at July 31, 2021 of $ 11.1 million and $ 1.6 million are included as a component of accrued liabilities and other non-current liabilities respectively in the accompanying unaudited condensed consolidated balance sheets.

The current and non-current portions of the restructuring liability at October 30, 2021 of $ 9.7 million and $ 1.3 million are included as a component of accrued liabilities and other non-current liabilities respectively in the accompanying unaudited condensed consolidated balance sheets.

Supplemental Financial Information (in thousands)

4 unchanged sentences

Inventories $ 628,600 $ 268,228

The inventory balance at July 31, 2021 includes $ 17.6 million related to the remaining inventory fair value adjustment from the Inphi acquisition.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The inventory balance at October 30, 2021 incl udes $ 41.9 million relat ed to the remaining inventory fair value adjustment from the Innovium acquisition.

2021 January 30,

7 unchanged sentences

Property and equipment, net $ 444,003 $ 326,125

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

2021 January 30,

1 unchanged sentence

Technology and other licenses $ 506,145 $ 242,244

Prepaid ship and debits 172,250 131,657

Operating right-of-use assets 153,780 101,411

Prepaid ship and debits 139,754 131,657

Prepayments on supply capacity reservation agreements 30,250 —

Non-marketable equity investments 26,751 7,646

3 unchanged sentences

Accrued liabilities:

Contract liabilities $ 190,498 $ 180,995

Variable consideration estimates (1) $ 197,217 $ 180,995

Technology license obligations 104,716 71,130

1 unchanged sentence

Lease liabilities - current portion 41,868 32,461

Accrued legal reserve 27,862 50,101

Deferred revenue 37,389 16,146

1 unchanged sentence

Accrued royalty 15,920 12,740

Accrued legal reserve 9,003 50,101

Other 37,886 26,034

Accrued liabilities $ 521,905 $ 435,616

(1) Variable consideration estimates consist of estimated customer returns, price discounts, price protection, rebates, and stock rotation programs.

2021 January 30,

Other non-current liabilities

Lease liabilities-non current $ 146,145 $ 104,417

Technology license obligations $ 308,287 $ 86,241

Non-current income tax payable 30,943 22,526

Lease liabilities-non current 150,847 104,417

Deferred tax liabilities 56,262 22,359

Non-current income tax payable 34,237 22,526

Other 41,007 23,310

3 unchanged sentences

Accumulated Other Comprehensive Income

As of July 31, 2021, there are no changes in accumulated other comprehensive income (loss) by components.

As of October 30, 2021, there are no changes in accumulated other comprehensive income (loss) by components.

The changes in accumulated other comprehensive income (loss) by components for the comparative period are presented in the following table:

5 unchanged sentences

Net current-period other comprehensive income, net of tax —

Balance at August 1, 2020 $ 450

Balance at Balance at October 31, 2020 $ —

Consolidated Statements of Cash Flows

Noncash consideration paid for the acquisition of Inphi was $ 6.2 billion during the six months ended July 31, 2021.

Noncash consideration paid for the acquisitions of Inphi and Innovium was $ 7.2 billion during the nine months ended October 30, 2021.

Share Repurchase Program

2 unchanged sentences

On October 16, 2018, the Company announced that its Board of Directors authorized a $ 700 million addition to the balance of its existing share repurchase program.

As of July 31, 2021, there was $ 564.5 million remaining available for future share repurchases.

As of October 30, 2021, there was $ 564.5 million remaining available for future share repurchases.

The Company intends to effect share 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 share repurchase program will be subject to market conditions and other factors, and does not obligate the Company to repurchase any dollar amount or number of its common shares and the repurchase program may be extended, modified, suspended or discontinued at any time.

The Company temporarily suspended the share repurchase program in late March 2020 to preserve cash during the COVID-19 pandemic and the program remains suspended as the Company focuses on reducing its debt and de-levering its balance sheet.

As a result, the Company did no t repurchase any shares during the three and six months ended July 31, 2021.

The Company repurchased 1.3 million of its common shares for $ 25.2 million during the six months ended August 1, 2020.

The Company temporarily suspended the share repurchase program in late March 2020 to preserve cash during the COVID-19 pandemic.

The Company is focused on reducing its debt and de-levering its balance sheet.

As a result, the Company did no t repurchase any shares during the three and nine months ended October 30, 2021.

The Company repurchased 1.3 million of its common shares for $ 25.2 million during the nine months ended October 31, 2020.

The Company records all repurchases, as well as investment purchases and sales, based on their trade date.

12 unchanged sentences

The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yields.

In addition, the convertible debt capped calls and the severance pay fund are classified as a Level 2 asset as the valuation inputs are based on quoted prices and market observable data of similar instruments.

In addition, the severance pay fund is classified as a Level 2 asset 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 and liabilities that are measured at fair value on a recurring basis.

The tables do not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):

Fair Value Measurements at July 31, 2021

Fair Value Measurements at October 30, 2021

Level 1 Level 2 Level 3 Total

2 unchanged sentences

Time deposits $ — $ 167,636 $ — $ 167,636

Prepaid expenses and other current assets:

Convertible debt capped calls — 33 — 33

Other non-current assets:

2 unchanged sentences

Total assets $ 1,234 $ 168,333 $ — $ 169,567

Short term debt:

Convertible notes $ — $ 135 $ — $ 135

Long term debt:

Convertible notes — 287 — 287

Total liabilities $ — $ 422 $ — $ 422

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.

1 unchanged sentence

They 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 July 31, 2021, non-marketable equity investments had a carrying value of $ 36.5 million and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.

As of October 30, 2021, non-marketable equity investments had a carrying value of $ 26.8 million and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.

Fair Value Measurements at January 30, 2021

6 unchanged sentences

Total assets $ — $ 115,268 $ — $ 115,268

Fair Value of Debt and Inphi Capped Calls

The Inphi 2021 Convertible Notes are carried in the unaudited condensed consolidated balance sheets at fair value.

As of July 31, 2021, the fair value of convertible notes was determined on the basis of market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy.

See “Note 5 - Debt” for information on the fair value of the Inphi 2021 Convertible Notes.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Fair Value of Debt

The Company classified the 2020 Term Loan, the 2023 Notes, the 2026 Notes, 2028 Notes, and 2031 Notes as Level 2 in the fair value measurement hierarchy.

The carrying value of the 2020 Term Loan approximates its fair value as the 2020 Term Loan is carried at a market observable interest rate that resets periodically.

The estimated aggregate fair value of the unsecured senior notes was $ 3.2 billion at July 31, 2021 and $ 1.1 billion at January 30, 2021, and were classified as Level 2 as there are quoted prices from less active markets for the notes.

The estimated aggregate fair value of the unsecured senior notes was $ 3.1 billion at October 30, 2021 and $ 1.1 billion at January 30, 2021, and were classified as Level 2 as there are quoted prices from less active markets for the notes.

Commitments and Contingencies

Purchase 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 payment obligations.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Total future unconditional purchase commitments as of October 30, 2021 are as follows (in thousands):

Fiscal Year Purchase commitments to foundries and test & assembly partners

Technology license fees

Remainder of 2022 $ 61,899 $ 41,562

2023 1,068,090 128,292

2024 498,975 96,842

2025 541,868 74,178

2026 498,569 32,533

Thereafter 539,972 227,992

Total unconditional purchase commitments $ 3,209,373 $ 601,399

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.

At July 31, 2021, the Company had approximately $ 775.6 million in outstanding purchase orders with foundries.

During the second quarter ended July 31, 2021 the Company entered into a wafer supply capacity reservation agreement with one of the Company’s foundry suppliers to reserve manufacturing supply capacity due to the current global supply shortage environment.

Under the agreement, the Company has agreed to pay certain fees as well as meet annual wafer purchase commitments in exchange for the foundry’s guarantee to produce a specific minimum quantity of wafers from 2022 through 2025.

Such wafers will be purchased by the Company at predetermined sales prices.

If the Company does not meet the annual wafer purchase commitment for any of these years, the Company will be required to pay a portion of the difference between the actual wafer purchases and the wafer purchase commitment for that calendar year.

The Company currently estimates that it is obligated to purchase at least $ 770 million of wafers for the calendar years 2022 through 2025 under the capacity reservation agreement.

Subsequent to quarter end, the Company entered into a capacity reservation agreement with another supplier to reserve additional materials, assembly, and test capacity.

Under the agreement, the Company is required to make five scheduled refundable deposits totaling $ 100 million between August 2021 and November 2022 as well as meet annual purchase commitments for calendar years from 2022 through 2026 in exchange for the supplier’s guarantee to produce material and reserve capacity for a minimum quantity of devices.

The Company currently estimates that it will purchase at least $ 1 billion during the five year period under the capacity reservation agreement.

The Company entered into manufacturing supply capacity reservation agreements with foundries and test & assembly suppliers this fiscal year due to the current global supply shortage environment.

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 four to ten years .

In addition, the Company committed to certain purchase levels that were in line with the capacity reserved.

If the Company does not meet the purchase level commitments, the agreements either require the Company to pay a fee for the difference between the actual purchases and the purchase commitment or lose priority to reserved capacity for a period of time.

The Company currently estimates that it has agreed to purchase level commitments of at least $ 2.4 billion of wafers, substrates, and other manufacturing products for the fiscal years 2022 through 2031 under the capacity reservation agreements.

In addition, t otal fees payable under these arrangements are $ 213.5 million in fiscal years 2022 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 million are payable quarterly over the contract term.

Contingencies and Legal Proceedings

23 unchanged sentences

The maximum potential amount of any future payments that the Company could be required to make under these indemnification obligations could be significant.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Stockholders ’ Equity

Innovium Acquisition-related Equity Awards and the Innovium 2015 EIP

Following the Innovium acquisition and in accordance with the Innovium merger agreement, certain outstanding options to purchase shares of Innovium common stock and certain restricted stock units with respect to Innovium common stock, each granted under the Innovium Amended and Restated 2015 Stock Incentive Plan (“Innovium 2015 EIP”), were assumed by the Company and converted into options to purchase common shares of the Company and restricted stock units with respect to common shares of the Company, respectively .

The Company filed a registration statement on October 5, 2021 to register 1,232,805 common shares of the Company, issuable under the Innovium 2015 EIP, comprised of 421,648 common shares issuable pursuant to outstanding but unexercised options under the Innovium 2015 EIP and 811,157 common shares issuable pursuant to outstanding unvested restricted stock units under the Innovium 2015 EIP.

The Innovium 2015 EIP was adopted by Innovium on January 2015 and amended and restated in September 2020.

The Innovium 2015 EIP provided for the grants of restricted stock, stock appreciation rights and stock unit awards to employees, non-employee directors, advisors and consultants.

Awards under the Innovium 2015 EIP generally vest over 3 to 4 years.

The awards under the Innovium 2015 EIP assumed by the Company in the Innovium acquisition were measured at the acquisition date based on the estimated fair value of $ 80.9 million.

A portion of that fair value, $ 39.8 million, which represented the pre-acquisition service provided by employees to Innovium, was included in the total consideration transferred as part of the acquisition.

As of the acquisition date, the remaining portion of the fair value of those awards was $ 41.1 million, representing post-acquisition share-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

During the three and nine months ended October 30, 2021, the Company recognized $ 4.1 million of share-based compensation expense in connection with the acquisition of Innovium, of which $ 2.9 million was due to the accelerated vesting of outstanding equity awards of certain Innovium employees.

During the three and nine months ended October 30, 2021, Innovium merger equity consideration related tax withholdings of $ 10.6 million were included as a component of tax withholdings for net share settlement of restricted stock units in the accompanying unaudited condensed consolidated statement of stockholders’ equity.

Inphi Acquisition-related Equity Awards and the Inphi 2010 EIP

Following the Inphi acquisition and in accordance with the Inphi merger agreement, certain outstanding options to purchase shares of Inphi common stock and certain restricted stock units with respect to Inphi common stock, each granted under the Inphi Amended and Restated 2010 Stock Incentive Plan (“Inphi 2010 EIP”), were assumed by the Company and converted into options to purchase common shares of the Company and restricted stock units with respect to common shares of the Company, respectively.

The Company filed a registration statement on April 20, 2021 to register 10,301,589 common shares of the Company, issuable under the Inphi 2010 EIP, comprised of 127,249 common shares issuable pursuant to outstanding but unexercised options under the Inphi 2010 EIP, 10,040,693 common shares issuable pursuant to outstanding unvested restricted stock units under the Inphi 2010 EIP, and 133,647 common shares issuable pursuant to outstanding unvested performance stock units under the Inphi 2010 EIP.

The Inphi 2010 EIP was adopted by Inphi on June 7, 2010.

The 2010 Plan provided for the grants of restricted stock, stock appreciation rights and stock unit awards to employees, non-employee directors, advisors and consultants.

Awards under the Inphi 2010 EIP generally vest over 3 to 4 years.

The awards under the Inphi 2010 EIP assumed by the Company in the Inphi acquisition were measured at the acquisition date based on the estimated fair value of $ 589.7 million.

A portion of that fair value, $ 161.7 million, which represented the pre-acquisition service provided by employees to Inphi, was included in the total consideration transferred as part of the acquisition.

As of the acquisition date, the remaining portion of the fair value of those awards was $ 428.0 million, representing post-acquisition share-based compensation expense that will be recognized as these employees provide service over the remaining vesting periods.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Summary of Share-based Compensation Expense

The following table summarizes share-based compensation expense (in thousands):

Three Months Ended Nine Months Ended

2021 October 31,

2020 October 30,

2021 October 31,

Cost of goods sold $ 9,370 $ 4,435 $ 21,838 $ 12,055

Research and development 75,514 36,856 184,577 114,349

Selling, general and administrative 34,206 18,496 136,373 55,656

Total share-based compensation $ 119,090 $ 59,787 $ 342,788 $ 182,060

Share-based compensation capitalized in inventory was $ 14.6 million at October 30, 2021 and $ 4.3 million at January 30, 2021.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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.

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tax jurisdictions with tax rates lower than 21%.

The income tax benefit of $ 25.6 million for the three months ended July 31, 2021 is primarily related to the recognition of a $ 10.0 million tax benefit for tax basis on the transfer of certain intellectual property from the Inphi acquisition to a subsidiary in Singapore, as well as discrete tax benefits related to stock-based compensation.

The income tax benefit of $ 53.3 million for the six months ended July 31, 2021 is primarily related to the recognition of the $ 10.0 million tax benefit attributable to the aforementioned Singapore tax basis in intellectual property, tax benefits related to stock-based compensation, and benefits from expirations of the statutes of limitations related to certain previously unrecognized tax benefits that were recorded in prior periods.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The Company’s gross unrecognized tax benefits were $ 322.0 million and $ 242.2 million on July 31, 2021 and January 30, 2021, respectively.

The net increase to the Company’s gross unrecognized tax benefits of $ 79.8 million is primarily the result of certain unrecognized tax benefits recorded in the Company’s accounting for the acquisition of Inphi.

If the gross unrecognized tax benefits as of July 31, 2021 were realized in a subsequent period, the Company would record a tax benefit of $ 201.5 million within its provision for income taxes at such time.

The amount of interest and penalties accrued as of July 31, 2021, and January 30, 2021 was $ 3.6 million and $ 4.0 million, respectively.

The income tax benefit of $ 5.0 million for the three months ended October 30, 2021 is primarily related to the recognition of discrete tax benefits related to stock-based compensation, in addition to the recognition of tax benefits related to the settlement of audits in certain jurisdictions, which were previously unrecognized tax benefits recorded in prior periods.

The income tax benefit of $ 58.4 million for the nine months ended October 30, 2021 is primarily related to the recognition of the $ 10 million tax benefit for tax basis on the transfer of certain intellectual property from the Inphi acquisition to a subsidiary in Singapore, tax benefits related to stock-based compensation, and the recognition of tax benefits related to the settlement of audits in certain jurisdictions and the expirations of the statutes of limitations both of which were previously unrecognized tax benefits recorded in prior periods.

The Company’s gross unrecognized tax benefits were $ 335.7 million and $ 242.2 million on October 30, 2021 and January 30, 2021, respectively.

The net increase to the Company’s gross unrecognized tax benefits of $ 93.5 million is primarily the result of certain unrecognized tax benefits recorded in the Company’s accounting for the acquisitions of Inphi and Innovium.

If the gross unrecognized tax benefits as of October 30, 2021 were realized in a subsequent period, the Company would record a tax benefit of $ 200.5 million within its provision for income taxes at such time.

The amount of interest and penalties accrued as of October 30, 2021, and January 30, 2021 was $ 3.7 million and $ 4.0 million, respectively.

It is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, the effects of income tax audits, and changes in the U.S.

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Similarly, there were no such tax benefits in the prior fiscal year.

The Company’s principal source of liquidity as of July 31, 2021 consisted of approximately $ 559.6 million of cash and cash equivalents, of which approximately $ 431.8 million was held by subsidiaries outside of the United States.

The Company’s principal source of liquidity as of October 30, 2021 consisted of approximately $ 523.5 million of cash and cash equivalents, of which approximately $ 437.0 million was held by subsidiaries outside of the United States.

The Company has not recognized a deferred tax liability on $ 268.4 million of these assets as those amounts are deemed to be indefinitely reinvested.

The Company manages its worldwide cash requirements by, among other things, reviewing available funds held by its foreign subsidiaries and the cost effectiveness by which those funds can be accessed in the United States.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Net Loss Per Share

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

Three Months Ended Six Months Ended

2021 August 1,

2020 July 31,

2021 August 1,

Three Months Ended Nine Months Ended

2021 October 31,

2020 October 30,

2021 October 31,

Net loss $ ( 62,532 ) $ ( 22,908 ) $ ( 427,202 ) $ ( 293,834 )

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Diluted $ ( 0.08 ) $ ( 0.03 ) $ ( 0.55 ) $ ( 0.44 )

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Potential dilutive securities include dilutive common shares from share-based awards attributable to the assumed exercise of stock options, restricted stock units and employee stock purchase plan shares using the treasury stock method.

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

Three Months Ended Six Months Ended

2021 August 1,

2020 July 31,

2021 August 1,

Three Months Ended Nine Months Ended

2021 October 31,

2020 October 30,

2021 October 31,

Weighted-average shares outstanding:

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Anti-dilutive potential shares from convertible debt are excluded from the calculation of diluted earnings per share for all periods reported above because the shares that would be issued upon conversion of the Company’s convertible debt were determined to be anti-dilutive based on applying the if-converted method.

Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share for the three and six months ended July 31, 2021 and August 1, 2020 due to the net losses reported in those periods.

Anti-dilutive potential shares from share-based awards are excluded from the calculation of diluted earnings per share for the three and nine months ended October 30, 2021 and October 31, 2020 due to the net losses reported in those periods.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements