What changed in this filing

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Item 1. Financial Statements

2023-08-25 compared with 2023-05-26 · 150 added, 108 removed, 502 unchanged (34% of the section changed)

38 unchanged sentences

(In millions, except per share amounts)

Three Months Ended

2023 April 30,

Three Months Ended Six Months Ended

2023 July 30,

2022 July 29,

2023 July 30,

Net revenue $ 1,340.9 $ 1,516.9 $ 2,662.6 $ 2,963.8

4 unchanged sentences

Selling, general and administrative 210.0 211.7 409.0 432.4

Legal settlement — 85.0 — 100.0

Restructuring related charges 42.0 1.2 101.9 2.5

7 unchanged sentences

Provision (benefit) for income taxes ( 44.1 ) ( 0.5 ) ( 107.5 ) 204.4

Net loss $ ( 168.9 ) $ ( 165.7 )

Net loss per share - basic $ ( 0.20 ) $ ( 0.20 )

Net loss per share - diluted $ ( 0.20 ) $ ( 0.20 )

Net income (loss) $ ( 207.5 ) $ 4.3 $ ( 376.4 ) $ ( 161.4 )

Net income (loss) per share — basic $ ( 0.24 ) $ 0.01 $ ( 0.44 ) $ ( 0.19 )

Net income (loss) per share — diluted $ ( 0.24 ) $ 0.01 $ ( 0.44 ) $ ( 0.19 )

Weighted-average shares:

3 unchanged sentences

MARVELL TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

Three Months Ended

2023 April 30,

Net loss $ ( 168.9 ) $ ( 165.7 )

Other comprehensive income (loss), net of tax:

Net change in unrealized gain (loss) on cash flow hedges ( 0.9 ) —

Other comprehensive income (loss), net of tax ( 0.9 ) —

Comprehensive loss, net of tax $ ( 169.8 ) $ ( 165.7 )

Three Months Ended Six Months Ended

2023 July 30,

2022 July 29,

2023 July 30,

Net income (loss) $ ( 207.5 ) $ 4.3 $ ( 376.4 ) $ ( 161.4 )

Other comprehensive loss, net of tax:

Net change in unrealized loss on cash flow hedges ( 0.1 ) — ( 1.0 ) —

Other comprehensive loss, net of tax ( 0.1 ) — ( 1.0 ) —

Comprehensive income (loss), net of tax $ ( 207.6 ) $ 4.3 $ ( 377.4 ) $ ( 161.4 )

See accompanying notes to unaudited condensed consolidated financial statements

13 unchanged sentences

Balance at April 29, 2023 859.9 $ 1.7 $ 14,589.9 $ ( 0.9 ) $ 903.2 $ 15,493.9

Issuance of common stock in connection with equity incentive plans 3.4 — 52.1 — — 52.1

Tax withholdings related to net share settlement of restricted stock units — — ( 51.2 ) — — ( 51.2 )

Stock-based compensation — — 154.0 — — 154.0

Cash dividends declared and paid ($ 0.06 per share)

— — — — ( 51.7 ) ( 51.7 )

Net loss — — — — ( 207.5 ) ( 207.5 )

Other comprehensive loss — — — ( 0.1 ) — ( 0.1 )

Balance at July 29, 2023 863.3 $ 1.7 $ 14,744.8 $ ( 1.0 ) $ 644.0 $ 15,389.5

Common Stock Additional Paid-in Capital

9 unchanged sentences

Balance at April 30, 2022 850.5 $ 1.7 $ 14,188.5 $ 1,274.8 $ 15,465.0

Issuance of common stock in connection with equity incentive plans 2.9 — 48.9 — 48.9

Tax withholdings related to net share settlement of restricted stock units — — ( 34.1 ) — ( 34.1 )

Stock-based compensation — — 147.2 — 147.2

Repurchase of common stock ( 0.9 ) — ( 50.0 ) — ( 50.0 )

Cash dividends declared and paid ($ 0.06 per share)

— — — ( 51.1 ) ( 51.1 )

Net income — — — 4.3 4.3

Balance at July 30, 2022 852.5 $ 1.7 $ 14,300.5 $ 1,228.0 $ 15,530.2

See accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

(In millions)

Three Months Ended

2023 April 30,

Six Months Ended

2023 July 30,

Cash flows from operating activities:

30 unchanged sentences

Principal payments of debt ( 593.7 ) ( 151.9 )

Net cash provided by (used in) financing activities 11.6 ( 260.9 )

Net cash used in financing activities ( 588.8 ) ( 310.4 )

Net increase (decrease) in cash and cash equivalents ( 487.6 ) 3.6

6 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 months ended April 29, 2023, 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 six months ended July 29, 2023, have been prepared as required by the U.S.

Securities and Exchange Commission (the “SEC”).

18 unchanged sentences

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 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, assets acquired and liabilities assumed in connection with acquisitions, restructuring, income taxes, litigation and other contingencies.

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.

3 unchanged sentences

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

Three Months Ended

2023 % of Total April 30,

Three Months Ended Six Months Ended

2023 % of Total July 30,

2022 % of Total July 29,

2023 % of Total July 30,

2022 % of Total

9 unchanged sentences

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

Three Months Ended

2023 % of Total April 30,

Three Months Ended Six Months Ended

2023 % of Total July 30,

2022 % of Total July 29,

2023 % of Total July 30,

2022 % of Total

2 unchanged sentences

United States 202.8 15 % 185.0 12 % 390.1 15 % 334.5 11 %

Finland 115.3 9 % 39.1 3 % 195.4 7 % 77.9 3 %

Singapore 70.9 5 % 67.1 4 % 183.2 7 % 117.2 4 %

Malaysia 39.5 3 % 113.9 8 % 138.0 5 % 195.1 7 %

Finland 80.1 6 % 38.8 3 %

Taiwan 53.8 4 % 53.6 4 %

Thailand 76.0 6 % 74.9 5 % 121.4 5 % 174.2 6 %

Taiwan 59.1 4 % 61.3 4 % 112.9 4 % 114.9 4 %

Japan 44.0 3 % 71.1 5 % 87.8 3 % 138.1 5 %

Philippines 11.6 1 % 51.9 4 %

Other 164.0 13 % 210.9 13 % 348.8 13 % 474.3 15 %

3 unchanged sentences

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

Three Months Ended

2023 % of Total April 30,

Three Months Ended Six Months Ended

2023 % of Total July 30,

2022 % of Total July 29,

2023 % of Total July 30,

2022 % of Total

6 unchanged sentences

Contract liability balances are comprised of deferred revenue.

The amount of revenue recognized during the three months ended April 29, 2023 that was included in deferred revenue balance at January 28, 2023 was not material.

The amount of revenue recognized during the six months ended July 29, 2023 that was included in deferred revenue balance at January 28, 2023 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.

6 unchanged sentences

Summary of Borrowings and Outstanding Debt

The following table summarizes the Company’s outstanding debt at April 29, 2023 and January 28, 2023 (in millions):

The following table summarizes the Company’s outstanding debt at July 29, 2023 and January 28, 2023 (in millions):

2023 January 28,

16 unchanged sentences

Non-current portion $ 3,134.5 $ 3,907.7

(1) As of April 29, 2023, the current portion of outstanding debt that is due within twelve months includes the 2024 Term Loan - 3-Year Tranche, the MTG/MTI 2023 Senior Notes, the outstanding balance of the 2023 Revolving Credit Facility and a portion of the 2026 Term Loan - 5-Year Tranche.

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

The weighted average interest rate on short-term debt outstanding at April 29, 2023 and January 28, 2023 was 5.618 % and 4.448 %, respectively.

(1) As of July 29, 2023, the current portion of outstanding debt that is due within twelve months includes the 2024 Term Loan - 3-Year Tranche, the outstanding balance of the 2023 Revolving Credit Facility and a portion of the 2026 Term Loan - 5-Year Tranche.

The Company intends to repay the amount with operating cash flo w or opportunistically refinance such debt.

The weighted average interest rate on short-term debt outstanding at July 29, 2023 and January 28, 2023 was 6.663 % and 4.448 %, respectively.

In December 2020, the Company executed a debt agreement to obtain a 3-year $ 875.0 million term loan and a 5-year $ 875.0 million term loan.

17 unchanged sentences

Pursuant to the amended 2024 and 2026 Term Loan Agreement, the 3-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted SOFR + 135 bps.

The effective interest rate for the 3-Year Tranche Loan was 4.205 % as of April 29, 2023.

The effective interest rate for the 3-Year Tranche Loan was 4.292 % as of July 29, 2023.

The 5-Year Tranche Loan has a stated floating interest rate which equates to reserve-adjusted SOFR + 147.5 bps.

The effective interest rate for the 5-Year Tranche Loan was 4.937 % as of April 29, 2023.

The effective interest rate for the 5-Year Tranche Loan was 5.093 % as of July 29, 2023.

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.

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 April 29, 2023, the Company repaid $ 21.9 million of the principal outstanding of the 5-Year Tranche Loan.

During the six months ended July 29, 2023, the Company repaid $ 43.7 million of the principal outstanding of the 5-Year Tranche Loan.

As of July 29, 2023, the Company has $ 1.5 billion 2024 and 2026 Term 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.

As of April 29, 2023, the Company has $ 1.5 billion 2024 and 2026 Term Loan borrowings outstanding and was in compliance with its debt covenants.

2023 Revolving Credit Facility

5 unchanged sentences

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 April 29, 2023.

During the quarter ended April 29, 2023, the Company drew down $ 200.0 million on the 2023 Revolving Credit Facility that remained outstanding at April 29, 2023.

The Company intends to repay the outstanding amount during fiscal 2024.

As of April 29, 2023, $ 800.0 million of the $ 1 billion of the 2023 Revolving Credit Facility was undrawn and will be available for draw down through April 14, 2028.

This annual rate was 0.175 % at July 29, 2023.

During the quarter ended April 29, 2023, the Company drew down $ 200.0 million on the 2023 Revolving Credit Facility.

During the quarter ended July 29, 2023, the Company drew down an additional $ 50.0 million on the 2023 Revolving Credit Facility and repaid $ 50.0 million in the same quarter.

The Company intends to repay the outstanding amount of $ 200.0 million during fiscal 2024.

As of July 29, 2023, $ 800.0 million of the $ 1.0 billion of the 2023 Revolving Credit Facility was undrawn and will be 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 covenants discussed above.

As of July 29, 2023, the Company was in compliance with its debt covenants for the credit agreements discussed above.

MARVELL TECHNOLOGY, INC.

11 unchanged sentences

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 April 29, 2023, the Company had $ 2.0 billion Senior Notes borrowings outstanding.

As of July 29, 2023, the Company had $ 2.0 billion Senior Notes borrowings outstanding.

2023 and 2028 Senior Unsecured Notes

10 unchanged sentences

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 mature on June 22, 2023 and the MTI 2028 Notes mature on June 22, 2028.

The stated and effective interest rates for the MTI 2023 Notes are 4.200 % and 4.502 %, respectively.

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

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.

2 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 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 April 29, 2023, the Company had $ 1.0 billion MTG/MTI Senior Notes borrowings outstanding.

As of July 29, 2023, 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 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 term loans and senior notes.

During the three months ended April 30, 2022, the Company recognized $ 32.9 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 term loans and senior notes.

As of April 29, 2023, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, were as follows (in millions):

During the three and six months ended July 29, 2023, the Company recognized $ 51.9 million and $ 102.4 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 debt.

During the three and six months ended July 30, 2022, the Company recognized $ 37.4 million and $ 70.3 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 debt.

As of July 29, 2023, the aggregate future contractual maturities of the Company’s outstanding debt, at face value, were as follows (in millions):

Fiscal Year Amount

4 unchanged sentences

Warranty Obligations

The Company’s products carry a standard one-year warranty with certain exceptions in which the warranty period can extend to more than one year based on contractual agreements.

The Company’s warranty expense has not been material in the periods presented.

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.

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.

Total future unconditional purchase commitments as of April 29, 2023, are as follows (in millions):

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Total future unconditional purchase commitments as of July 29, 2023, are as follows (in millions):

Fiscal Year Purchase Commitments to Foundries and Test & Assembly Partners

7 unchanged sentences

Total unconditional purchase commitments $ 2,873.4 $ 458.3

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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

13 unchanged sentences

Such Legal Matters, even if not meritorious, could result in the expenditure of significant financial and managerial resources.

During the third quarter of fiscal 2023, the Company entered into a settlement agreement with a customer in relation to a contractual dispute pursuant to which the Company agreed to pay the customer $ 100.0 million in cash over several quarters, for which $ 85.0 million of the settlement balance was accrued in the second quarter of fiscal 2023.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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 any Legal Matter involves judgments, estimates and inherent uncertainties.

In the second quarter of fiscal 2024, the Company recognized approximately $ 90.0 million of charges for product related claims;

such claims remain unresolved as of the second quarter ended July 29, 2023.

The ultimate outcome of these product related claims and other Legal Matters 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.

8 unchanged sentences

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.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Intellectual Property Indemnification

9 unchanged sentences

The purpose of the acquisitions was to expand engineering resources staff to address customer design opportunities, access additional intellectual property and support expansion of the Company’s networking solutions.

The carrying value of goodwill as of April 29, 2023 and January 28, 2023 is $ 11.6 billion.

The carrying value of goodwill as of July 29, 2023 and January 28, 2023 is $ 11.6 billion.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Acquired Intangible Assets, Net

As of April 29, 2023 and January 28, 2023, net carrying amounts excluding fully amortized intangible assets are as follows (in millions, except for weighted-average remaining amortization period):

April 29, 2023

As of July 29, 2023 and January 28, 2023, net carrying amounts excluding fully amortized intangible assets are as follows (in millions, except for weighted-average remaining amortization period):

July 29, 2023

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

13 unchanged sentences

Total acquired intangible assets $ 8,002.0 $ ( 2,900.0 ) $ 5,102.0

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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.

2 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 months ended April 29, 2023 and April 30, 2022 was $ 270.0 million and $ 272.5 million, respectively.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of April 29, 2023 (in millions):

Amortization expense for acquired intangible assets for the three and six months ended July 29, 2023 was $ 271.8 million and $ 541.8 million , respectively.

Amortization expense for acquired intangible assets for the three and six months ended July 30, 2022 was $ 271.8 million and $ 544.3 million, respectively.

The following table presents the estimated future amortization expense of acquired amortizable intangible assets as of July 29, 2023 (in millions):

Fiscal Year Amount

1 unchanged sentence

Thereafter 210.7

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Fair Value Measurements

9 unchanged sentences

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.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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 millions):

Fair Value Measurements at April 29, 2023

Fair Value Measurements at July 29, 2023

Level 1 Level 2 Level 3 Total

9 unchanged sentences

Total liabilities $ — $ 1.1 $ — $ 1.1

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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

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 April 29, 2023 and January 28, 2023, non-marketable equity investments had a carrying value of $ 36.0 million and $ 36.1 million, respectively, and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.

As of July 29, 2023 and January 28, 2023, non-marketable equity investments had a carrying value of $ 35.7 million and $ 36.1 million, respectively, and are included in other non-current assets in the Company’s unaudited condensed consolidated balance sheets.

Fair Value Measurements at January 28, 2023

8 unchanged sentences

Fair Value of Debt

The Company classified the 2024 and 2026 Term Loans, the 2023 Revolving Credit Facility, the 2023 Senior Notes, the 2026 Senior Notes, 2028 Senior Notes, and 2031 Senior Notes as Level 2 in the fair value measurement hierarchy.

The Company classified the 2024 and 2026 Term Loans, the 2023 Revolving Credit Facility, the 2026 Senior Notes, 2028 Senior Notes, and 2031 Senior Notes as Level 2 in the fair value measurement hierarchy.

The carrying value of the 2024 and 2026 Term Loans and the 2023 Revolving Credit Facility approximate their fair value as each is carried at a market observable interest rate that resets periodically.

The estimated aggregate fair value of the unsecured senior notes was $ 2.7 billion at April 29, 2023 and January 28, 2023, 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 $ 2.2 billion at July 29, 2023 and $ 2.7 million at January 28, 2023, and were classified as Level 2 as there are quoted prices from less active markets for the notes.

See “Note 3 – Debt” for additional information.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Restructuring

During the quarter ended April 29, 2023, the Company initiated a restructuring plan and incurred $ 59.9 million restructuring related charges to streamline the organization and optimize resources.

The Company continuously evaluates its existing operations to increase operational efficiency, decrease costs and increase profitability.

In the first quarter of fiscal 2024, the Company initiated a restructuring plan to streamline the organization and optimize resources.

The charges are mainly comprised of severance and other one-time termination benefits, impairment and write-off of purchased IP licenses and equipment, and other costs.

The Company recorded restructuring and other related charges of $ 42.0 million and $ 101.9 million for the three and six months ended July 29, 2023, respectively.

The Company expects these restructuring actions to be substantially completed by the end of fiscal 2024.

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

April 29, 2023 April 30, 2022

Three Months Ended Six Months Ended

July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Employee severance $ 18.7 $ 0.3 $ 66.1 $ 0.9

3 unchanged sentences

Other 2.8 0.9 5.9 1.6

$ 42.0 $ 1.2 $ 101.9 $ 2.5

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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):

4 unchanged sentences

Non-cash items — ( 13.1 ) ( 13.1 )

Balance at April 29, 2023 36.0 5.6 41.6

Balance at July 29, 2023 16.1 17.7 33.8

non-current portion — 1.0 1.0

Current portion $ 16.1 $ 16.7 $ 32.8

The current and non-current portions of the restructuring liability at April 29, 2023 of $ 40.9 million and $ 0.7 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 July 29, 2023 of $ 32.8 million and $ 1.0 million are included as a component of accrued liabilities and other non-current liabilities respectively in the accompanying unaudited condensed consolidated balance sheets.

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.

1 unchanged sentence

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 our 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 benefit of $ 63.4 million for the three months ended April 29, 2023.

The Company recorded income tax benefit of $ 44.1 million and $ 107.5 million for the three and six months ended July 29, 2023, respectively.

The Company’s estimated effective tax rate for the year differs from the U.S.

2 unchanged sentences

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.

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 net income per share was approximately $ 0.01 per share and $ 0.01 per share for the three months ended April 29, 2023 and April 30, 2022, respectively.

The benefit of the tax incentives on net income per share was approximately $ 0.01 per share for the six months ended July 29, 2023.

No tax incentive was recorded for the three months ended July 29, 2023, as the benefit was recognized upfront during the first three months ended April 29, 2023.

No tax incentive benefits were recorded for the three and six months ended July 30, 2022.

In the first quarter of fiscal 2023, the Singapore Economic Development Board (“EDB”) agreed to extend the Company’s Development and Expansion Incentive (“DEI”) by five years until June 30, 2029.

As a result of the DEI extension, the Company remeasured its Singapore net deferred tax assets that are scheduled to reverse during these future periods at the new incentive tax rate that the Company expects to apply during these periods, which resulted in a net reduction to our Singapore deferred tax assets of $ 213.6 million and a corresponding deferred income tax expense during the first quarter of fiscal 2023.

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.

5 unchanged sentences

The Company believes that it has adequately provided for the expected outcomes related to these tax audits and that any settlements with respect to these audits will not have a material effect on its results or financial position at this time.

The Company’s principal source of liquidity as of April 29, 2023 consisted of approximately $ 1.0 billion of cash and cash equivalents, of which approximately $ 592.3 million was held by subsidiaries outside of the United States.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

The Company’s principal source of liquidity as of July 29, 2023 consisted of approximately $ 423.4 million of cash and cash equivalents, of which approximately $ 352.1 million was held by subsidiaries outside of the United States.

The Company has not recognized a deferred tax liability on $ 110.3 million of assets held by subsidiaries 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.

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

2023 April 30,

Net loss $ ( 168.9 ) $ ( 165.7 )

Net Income (Loss) Per Share

The Company reports both basic net income (loss) per share, which is based on the weighted-average number of common stock outstanding during the period, and diluted net income (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 income (loss) per share are presented in the following table (in millions, except per share amounts):

Three Months Ended Six Months Ended

2023 July 30,

2022 July 29,

2023 July 30,

Net income (loss) $ ( 207.5 ) $ 4.3 $ ( 376.4 ) $ ( 161.4 )

Weighted-average shares — basic 860.9 850.9 858.8 849.4

2 unchanged sentences

Weighted-average shares — diluted 860.9 857.9 858.8 849.4

Net loss per share:

Net income (loss) per share:

Basic $ ( 0.24 ) $ 0.01 $ ( 0.44 ) $ ( 0.19 )

2 unchanged sentences

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.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

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

Three Months Ended

2023 April 30,

Three Months Ended Six Months Ended

2023 July 30,

2022 July 29,

2023 July 30,

Weighted-average shares outstanding:

1 unchanged sentence

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 April 29, 2023 and April 30, 2022 due to the net losses reported in those periods.

Anti-dilutive potential shares from stock-based awards are excluded from the calculation of diluted earnings per share for the three and six months ended July 29, 2023, and the six months ended July 30, 2022 due to the net losses reported in those periods.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Supplemental Financial Information (in millions)

22 unchanged sentences

Other non-current assets $ 1,441.1 $ 1,508.8

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

2023 January 28,

4 unchanged sentences

Accrued legal reserve 67.0 102.0

Accrued warranty expense 58.9 2.4

Deferred revenue 44.6 45.2

2 unchanged sentences

Accrued interest payable 19.0 22.1

Deferred non-recurring engineering credits 16.2 20.0

Other 54.3 62.0

Accrued liabilities $ 1,068.5 $ 1,092.0

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

(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.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

2023 January 28,

14 unchanged sentences

Other comprehensive income (loss), net of tax ( 1.0 )

Balance at April 29, 2023 $ ( 0.9 )

For the three months ended April 30, 2022, there were no reconciling differences between net loss and comprehensive loss.

MARVELL TECHNOLOGY, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Balance at July 29, 2023 $ ( 1.0 )

For the three and six months ended July 30, 2022, there were no reconciling differences between net loss and comprehensive loss.

Stock Repurchase Program

2 unchanged sentences

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.

As of April 29, 2023, $ 449.5 million remained available for future stock repurchases.

As of July 29, 2023, $ 449.5 million 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 April 29, 2023, the Company did not repurchase shares of its common stock.

During the three months ended April 30, 2022, the Company repurchased 0.3 million shares of its common stock for $ 15.0 million.

During the three and six months ended July 29, 2023, the Company did not repurchase shares of its common stock.

During the three months ended July 30, 2022, the Company repurchased 0.9 million shares of its common stock for $ 50.0 million pursuant to a 10b5-1 trading plan.

During the six months ended July 30, 2022, the Company repurchased 1.2 million shares of its common stock for $ 65.0 million, including 0.9 million shares of its common stock repurchased for $ 50.0 million pursuant to a 10b5-1 trading plan.

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.

Subsequent to quarter end through August 18, 2023, the Company repurchased 0.8 million shares of its common stock for $ 50.0 million pursuant to a 10b5-1 trading plan.

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