Good afternoon, and welcome to Marvell Technology Inc.'s Q3 of fiscal year 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mr. Ashish Saran, Senior Vice President of Investor Relations. Please go ahead. Thank you, and good afternoon, everyone. Welcome to Marvell's third fiscal quarter 2024 earnings call. Joining me today are Matt Murphy, Marvell's Chairman and CEO, and Willem Meintjes, our CFO. Let me remind everyone that certain comments made today include forward-looking statements, which are subject to significant risks and uncertainties that could cause our actual results to differ materially from management's current expectations. Please review the cautionary statements and risk factors contained in our earnings press release, which we filed with the SEC today and posted on our website, as well as our most recent 10-K and 10-Q filings. We do not intend to update our forward-looking statements. During our call today, we will refer to certain non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available in the investor relations section of our website. Let me now turn the call over to Matt for his comments on the quarter. Matt? Thanks, Ashish, and good afternoon, everyone. For Q3 of fiscal 2024, Marvell delivered revenue of $1.42 billion, growing 6% sequentially above the midpoint of guidance. In addition, on a non-GAAP basis, the Marvell team drove a sequential increase in gross margin, remained disciplined on operating expenses, and delivered EPS of $0.41 above the midpoint of our guidance. We are pleased with our results and execution. In our data center end market, revenue for Q3 was $556 million, well above our guidance, driven by stronger than forecasted AI revenue. We were also encouraged by revenue from cloud returning to year-over-year growth. On a sequential basis, overall data center revenue grew 21% in Q3, while cloud grew well in excess of 30%. As expected, revenue from the enterprise on-premise portion of our data center end market declined sequentially in Q3, reflecting weakening demand. Demand for data center storage also remains depressed, and industry expectations for a recovery have continued to push out. In cloud, revenue from both AI and standard cloud infrastructure grew sequentially, with AI growing significantly faster. Growth was broad-based, led by our PAM4 optical products, Teralynx Ethernet switches, as well as our data center interconnect or DCI products. Earlier today, we released a video highlighting our long-standing collaboration with NVIDIA. We're using Marvell's optical interconnect technology to enable the bandwidth, scale, and reliability required by generative AI. Marvell has built a broad product portfolio, which our customers are relying upon to power their accelerated computing infrastructure. We are benefiting from strong demand for our 800 gig PAM electro-optic products, tightly correlated to the growth of in deployment of AI accelerators. In fact, we are seeing the overall attach rate of our PAM products to accelerators being higher than 1-to-1 in high-performance AI systems currently shipping in the market. We are also seeing strong customer traction for our next generation 1.6 T, 200 gig per lane PAM platform that we started sampling this past April. Customer qualifications have begun, and we are looking forward to ramping our 1.6 T solution into production. Complementing our optical solutions, we expect our PAM DSPs for the active electrical cable, or AEC market, to start ramping in our next fiscal year in Tier One cloud deployments. We also demonstrated our 224 gigabits per second long-reach SerDes at the OCP Global Summit held in October. We expect that this technology will serve as a building block for our next generation 200 gig per lane AECs. In our switching portfolio, we are making great progress on our next generation 51.2 T cloud switching platform. At OCP, we demonstrated Marvell's 51.2 T solution operating at full capacity with very low industry-leading latency running on SONiC. Our enablement of SONiC, an agile open-source network operating system, is very important for cloud customers who value the flexibility, interoperability, and scalability of an open Ethernet switch ecosystem. Customers have started development on our 51.2 T solution, and we look forward to ramping this platform into production. In addition, earlier this week, we announced our membership in the Ultra Ethernet Consortium. This is another step in our commitment to driving continuous innovation on an open Ethernet-based cloud fabric, which can deliver the scale and performance required for next-generation workloads, including generative AI. As our 400 gig DCI modules continue to ramp, we are also seeing strong interest for our next-generation 800 gig products that we launched this past October. These modules are based on our new 5-nanometer, 800 gig coherent DSP and silicon photonics or SiPho platform, which integrates multiple discrete components within a single device. This level of integration enables the performance and packaging density required for small form factor pluggable modules to drive a high-bandwidth signal across long distances between data centers. Marvell SiPho platform has accumulated billions of operating hours over the past 7 years in DCI applications. In addition, we are starting to see emerging applications for our field-proven SiPho technology to power next-generation, higher bandwidth, and optical connections inside data centers. We look forward to updating investors as this opportunity unfolds over time. Cloud customers remain focused on enhancing their AI offerings by building custom compute solutions of their own, and we have already won a number of these designs. We have completed qualification on one key AI project and have started wafers into production. For another project, we have received first silicon back from the fab, and the initial testing is looking positive. As a result, we expect both of these custom compute programs to start volume production next year. Turning now to our guidance for overall data center end market. In Q4 of fiscal 2024, we expect revenue from our data center end market to grow in the mid-30% range on a sequential basis. In our last earnings call, we provided a forecast for AI revenue to cross a $200 million quarterly run rate exiting this year. Since then, demand has continued to grow, and we now expect our AI revenue in Q4 to come in significantly above our forecast. In addition to strong growth from AI, we also expect revenue from standard cloud infrastructure to grow sequentially in Q4. For the enterprise on-premise portion of our data center end market, we expect revenue to decline sequentially in Q4. Turning to our carrier infrastructure end market. Revenue for Q3 was $317 million, above guidance, growing 17% year-over-year and 15% sequentially. The overachievement in Q3 was driven entirely by the wireless portion of our carrier end market. Marvell-specific product cycles have enabled our wireless revenue to buck the trend of a soft end market for several quarters. However, we have been forecasting for some time that this wave of above-market wireless growth from Marvell would start to decline by Q4, as the initial wave of 5G rollouts near completion. Additionally, demand is continuing to soften as carriers are managing CapEx in a difficult macroeconomic environment. As a result, following an extended multi-year period of strong growth, we are expecting a period of digestion. In addition, we expect revenue from the wired portion of our carrier end market to continue to decline, reflecting weakening demand. As a result, for Q4, we expect revenue from our overall carrier end market to decline in the mid-40% range on a sequential basis. Looking longer term, as data traffic continues to grow, we expect that operators will need to continue to invest in adding capacity in both the wireless and wired end markets. We also expect to benefit from share gains, including significant 5-nanometer base station design wins, which we have won but are not in production. We are optimistic that carrier CapEx will normalize over time and our revenue from this end market will return to growth. Turning to our enterprise networking end market. Revenue for Q3 was $271 million, declining 28% year over year and 17% sequentially. As we have been signaling, we see weak demand in this end market. As a result, for Q4 of fiscal 2024, we project enterprise networking revenue to decline in the mid-single digits sequentially on a percentage basis. Turning to our automotive and industrial end market, revenue in Q3 was $107 million, growing 26% year over year and declining 3% sequentially. Looking to Q4 of fiscal 2024, we expect revenue from our overall auto and industrial end market to decline by approximately 20% on a sequential basis. We expect the sequential decline to come from our industrial end market, which includes aerospace and defense, where order patterns can be lumpy in any given quarter. Moving on to our consumer end market, revenue for Q3 was $169 million, declining 5% year-over-year and growing 1% sequentially. In Q4, we are expecting revenue from the consumer end market to sequentially decline in the mid-teens%. In summary, we delivered revenue and non-GAAP earnings above the midpoint of guidance for the fiscal Q3. The diversification in our end markets is serving us well, with strong growth from AI and cloud carrying us through a softening demand environment across other end markets. Through fiscal 2024, the Marvell team has continued to execute in a dynamic environment, remaining focused on driving continuous improvement on what we can control while dealing with inventory corrections and macroeconomic-induced demand headwinds in many end markets. We reprioritized our investments to align to the highest ROI opportunities in front of us. Our team drove efficiency improvements to reduce operating expenses, and we are well on track to meet our commitment. We have worked proactively with our customers and suppliers to best manage inventory across the combined supply chain. Our operations group has rapidly responded to the increase in demand from AI. At the midpoint of our guidance for Q4, we are forecasting that our revenue for the second half of this fiscal year should grow approximately 7% over the first half. In addition, we are forecasting a 300+ basis point sequential improvement in our non-GAAP gross margin in Q4. This projection reflects our expectation for an improving product mix, as well as a multi-quarter cross-functional effort to further optimize our cost structure. Heading into next year, while we don't typically guide beyond a quarter, we expect softness in demand to impact revenue from our enterprise and carrier markets in the first quarter. We also anticipate a significant reduction in consumer end market revenue due to seasonality and demand and the completion of deliveries for an end-of-life program in Q4. Although the enterprise and carrier markets are experiencing near-term headwinds, these large and long-lasting end markets are critical to the global economy, so we expect them to recover and turn into a revenue tailwind over time. In the meantime, our data center revenue is growing rapidly, reflecting our emergence as a key enabler of accelerated computing. We project data center revenue, driven by the ongoing strength in our connectivity solutions inside and between data centers, to grow to over 50% of our total revenue in Q4. Longer term, we expect additional tailwinds to data center growth from the ramp of multiple custom accelerated compute programs for AI. We are also looking forward to a number of new Marvell products entering the data center market, as I discussed earlier. With that, I'll turn the call over to Willem for more detail on our recent results and outlook. Thanks, Matt, and good afternoon, everyone. Let me start with a summary of our financial results for Q3 of fiscal 2024. Revenue in Q3 was $1.419 billion, exceeding the midpoint of our guidance, declining 8% year over year and growing 6% sequentially. Data center was our largest end market, driving 39% of total revenue. The next largest was carrier infrastructure with 22%, followed by enterprise networking at 19%, consumer at 12%, and auto industrial at 8%. GAAP gross margin was 38.9%. Non-GAAP gross margin was 60.6%, growing 30 basis points sequentially, driven by higher revenue and cost improvements. Moving on to operating expenses. GAAP operating expenses were $698 million, including stock-based compensation, amortization of acquired intangible assets, restructuring costs, and acquisition-related costs. Non-GAAP operating expenses were $437 million, in line with our guidance. GAAP operating margin was -10.3%. Non-GAAP operating margin was 29.8%. For Q3, GAAP loss per diluted share was $0.19. Non-GAAP income per diluted share was $0.41, $0.01 above the midpoint of guidance. Now, turning to our cash flow and balance sheet. Cash flow from operations in Q3 was $503 million, which grew by $391 million sequentially. The significant growth was driven by our relative improvement in DSO, lower inventory, along with better profitability. Our inventory at the end of Q3 was $942 million, decreasing by $74 million from the prior quarter. Our DSO was 78 days, reducing by 4 days from the prior quarter. Our CapEx was $54 million. We returned $52 million to shareholders through cash dividends, and we repurchased $50 million of our stock during Q3. Our total debt was $4.19 billion. Our gross debt-to-EBITDA ratio was 2.21 times, and net debt-to-EBITDA ratio was 1.83 times. During the quarter, we issued new bonds and used the proceeds to pay down our upcoming debt maturities. With our investment-grade credit rating, we were able to execute this refinancing while decreasing our average interest rate on our outstanding debt balance. In addition, we increased our average debt maturity from 3.9 years to 5.3 years. As of the end of the third fiscal quarter, our cash and cash equivalents were $726 million, increasing by $302 million from the prior quarter. Turning to our guidance for Q4 of fiscal 2024. We are forecasting revenue to be in the range of $1.42 billion ±5%. We expect our GAAP gross margin to be in the range of 48.2%-50.7%. We expect our non-GAAP gross margin to be in the range of 63.5%-64.5%, with the midpoint projected to be back to the low end of our long-term target model. Our forecast for this large sequential improvement is driven by expectations of a significantly stronger product mix and our ongoing cost optimization activities. Looking forward, we expect that product mix, as well as the overall level of revenue, will remain key determinants of our gross margin in any given quarter. For Q4, we project our GAAP operating expenses to be approximately $680 million. We anticipate our non-GAAP operating expenses to be approximately $430 million. This level of operating expense reflects the completion of the cost reduction plan we communicated in our first fiscal quarter of this year. Looking ahead to the first quarter of fiscal 2025, we anticipate typical seasonality in payroll taxes and employee salary merit increases. As a result, we expect OpEx to increase by mid- to high-single digits on a percentage basis. For Q4, we expect other income and expense, including interest on our debt, to be approximately $50 million. We expect our non-GAAP tax rate of 6% for Q4, increasing to 7% in fiscal 2025. We expect our basic average shares outstanding to be 865 million and our diluted weighted average shares outstanding to be 874 million. We anticipate GAAP earnings per diluted share in the range of -$0.08 to $0.02 per share. We expect non-GAAP income per diluted share in the range of $0.41-$0.51. Operator, please open the line and announce Q&A instructions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. In the interest of time, please restrict yourself to one question only. If you have additional questions, please rejoin the question queue. At this time, we will pause momentarily to assemble the roster. Our first question will come from Toshiya Hari of Goldman Sachs. Please go ahead. Hi, good afternoon. Thank you so much for taking the question. Matt, I had a multi-part question on your data center business. Sounds like the outlook has improved since 90 days ago. Just curious how, you know, if you can size the AI business for us, where you landed in the October quarter. Sounds like you'll be in excess of $200 million in Q4, but the outlook there. And then, more importantly, into calendar 2024, if you can speak to visibility you have across your optical business as well as the compute business, that would be helpful. Thank you. Yeah. Thanks, Toshiya, for the question. We're very pleased with the performance of our data center business. It grew over 20% in Q3. We're guiding it up 35% in Q4. As you noted, that is driven by AI, and Q4 exit rate is well north now of $200 million. What's very encouraging as well is that the traditional cloud infrastructure piece of it is also growing nicely. That's come back very strong for us, and those two will be, you know, growth drivers for us into next year. We see continued weakness and softness, and this is a broader market statement in the on-premise piece, and that probably persists for some time, but the mix now of cloud and AI is so much higher that it's driving the overall segment in a very positive trajectory, both in Q3 and into Q4. And then as we head into next year, as you've seen, you know, most of the strong growth we saw in the current fiscal year in AI and in cloud infra, for that matter, has been in the optics area. But we are tracking well for growth there next year, as well as the ramp of our custom silicon programs. In my prepared remarks, I talked about the strong progress we made on new product development and starting to plan for ramps there. So while we're not resizing those specifically, you know, those, the performance clearly in Q4, as well as what you would, how you think about next year is, you know, much, much stronger than when we first signaled these, the AI, AI opportunity for Marvell a couple of quarters back. So I think things are tracking nicely, and as you said, compared to 90 days ago, I think the overall aggregate data center business, as you can see from our results, is doing quite well. Thank you. Yep. The next question comes from Tim Arcuri of UBS. Please go ahead. Thanks a lot. Matt, I also had, you know, a multi-part question. So, enterprise networking is going to be down about 35% from the peak in, you know, fiscal Q4. And the customers are still, though, reporting that their inventory levels are actually going up. So is this Marvell product, is this product from another supplier? And can you talk about just the, you know, dynamics going on in that segment? And then also, for fiscal Q1, do you still think that revenue can grow? I know you said that networking is down and, you know, carrier is down, but data center would be up. Do you think that total revenue can be up? Thanks. Yeah. Thanks, Tim, and appreciate the creativity on the two-parter, but no problem. On the enterprise side, it's hard to comment. I mean, if you look, balance sheets are still pretty heavy from the OEMs out there. We've been saying, I think, since even going back to December of last year, that enterprise, you know, was going to come down this year, and it's just continued to come down. I think there's a combination of both, inventory management at the OEM level, as well as, you know, from some of the projections you see out there at the end market level, you know, a softer and more weakening demand environment. So we still feel very good about our position. We had grown this business significantly from where it was just a few years ago. We've had, we had great years the last couple of years and even in the first half of this year. So we're going through what would be kind of a normal inventory correction cycle. It's taking a little bit longer than we thought if you went back to the beginning of the year, but I also think the macro and the environment has deteriorated more than we would have anticipated at that time. And so we see it down and we see that having to work through that issue for the next couple of quarters. On Q1, you know, while we don't, you know, guide specifically, I understand what you're looking for. I think the way to think about it is that I guess I gave the information. You know, carrier is down after a really great run in Q4. That's going to stay weak. The telco environment and CapEx spending is very constrained out there, and the end customers seem to be having some trouble. We talked about enterprise being down, and then on consumer, which actually did a little bit better than we thought it would have this year. The last time buy program that we had is largely going to conclude now in Q4, and so we see it stepping down there. So you know, if you kind of add all that up, that's about half our revenue that's going to come down in Q1, and then the real question is the data center strength, and how does that continue? And it's too early to call, but just the way to think about it is it's a lot to offset, you know, at this juncture when you have that much of your revenue coming down. The last thing I would say, though, on carrier and enterprise is that these are a cyclical downturn on these, and the kind of design win strength we've had and the design position we had is such that these will recover, and they will come back to a normalized run rate over time. And when that happens, that'll be a tailwind to EPS and a tailwind to revenue growth as that kind of think of it as the base business of Marvell returns to growth. In the meantime, our diversified strategy is working well because we've got AI and cloud that's really firing on all cylinders. So a lot of information there. You guys are gonna have to come up with your own model, but hopefully that gave you some pieces on how to think about it. Wonderful. Thanks. Yep. The next question comes from Vivek Arya of Bank of America. Please go ahead. Thanks for taking my question. Matt, so I think in the data center, the value of the optics business, I think, is well understood and appreciated. The challenge is still for us to, you know, how we value your ASIC business. So is it one or two customers? Is it more customers? How's the visibility for the next one or two years? Like, are we talking $100-$200 million next year? Are we talking $300-$400 million next year? You know, because unless we have a good way of sizing what this business is and what the visibility and what the growth potential is, it's just very hard to value and, you know, give appropriate value to Marvell for this business. So could you just help us understand what is the right way you think about your ASIC business? You know, can the lumpiness here really swing your sales next year? Yeah. Thanks, Vivek. I think a couple of ways to think about it. The first is on the customer opportunity. It's just by design, it's highly concentrated, if you think about it. And there's just a handful of companies that can really drive the kind of silicon TAM opportunity that's out there. And you've probably seen in the last few weeks, there's just been a tremendous number of announcements, you know, across the industry around AI, whether it's strategic partnerships that are being announced, people doing their own silicon. You know, behind that, their own silicon, there's typically partners there, people like Marvell, who are gonna participate. So a lot of activity you can see, and I would say, you know, even one broader statement, then I'll get to your question. You know, we do see as the TAM is moving from traditional computing architectures to accelerated computing, it is really opening up the custom silicon piece of that, and so that, we believe, will be a larger portion of the TAM going forward. When we talked about sizing, if you remember, a couple of quarters back, our AI opportunity, we had signaled already that this year we would do about $400 million on the optical area. Well, said another way, we do about $400 million this year in total AI revenue, most of it driven by optics, and that next year would be about $800 million. That was the original sort of bogey we put out to help investors, to your point, size this. Then you would assume some optics growth, and so you could sort of do the math on what the difference might be. Now, AI's got a bigger head of steam than it was back then. The optics piece is higher, and we've made significant progress now on new product development in terms of getting the chips actually taped out and through the fab, and now starting to think about ramping. W hat I would say is, and I've been saying this to investors for about six months: We are not in a position to call the ball just yet on how big the custom silicon opportunity can be for next year. It's still early, Vivek. I understand the investor appetite for this. I would say between us and our customers, we're not fully, we don't fully know how big this can be yet, so I'm gonna need a little bit more time to probably size that for you. But what I can say is, from when we first talked about AI two quarters back and what the opportunity was looking out to next year, it's much, much higher, and that's both on the custom side as well as on the optics side. I hope that helps. I understand the question, but it's a pretty dynamic market as you see what's going on, but the good news is it's all moving in a very positive and upward direction. Thank you, Matt. Yep. The next question comes from Harsh Kumar of Piper Sandler. Please go ahead. Yeah, hey, thanks, guys. You know, great, tremendous execution and very choppy environment. Matt, question for you was, on the carrier side, you're guiding down, you know, significantly down mid-40s on a sequential basis, and I think you mentioned both the wired and the wireless pieces are down. I was curious if you could help us think about perhaps what is taking the bigger part of the hit, and which one do you have more confidence in, in terms of returning back to growth first? Yeah, thanks, Harsh. And it is a choppy environment, as you point out. Look, I think on carrier, we're coming off a very, very strong Q3. It was over $300 million, and I think if you just kind of infer the whole year, it's gonna be, have been like a billion-dollar business for Marvell. So I think that's been a success story for us. Clearly. And we've been trying to signal, if you go back over the last couple calls, we've attempted to signal to investors Q4 that there would be, that sort of Q3 would be the peak on some of the 5G stuff, and then it would take some time for that to digest through. We bucked the trend, if you remember, on our performance here. So both of those are or that carrier segment's a strong segment for Marvell. It will, you know, return over time, you know, back to a normalized run rate, but it's very lumpy and volatile, as carrier usually is. What I would say on the timing, I think they're both gonna come back. It's just hard to know exactly when on these. I think the predictability in this segment is tough, so I don't think I have an exact answer on which one comes back sooner. I'd say wired has been trending down for some time, as I think some of that pandemic-led infrastructure build has waned. The carrier 5G stuff has really performed extremely well for us this year. And by the way, when it does come back, both on the carrier, on the wireless and wired side, we have incremental design wins in those segments. One is incremental content and base stations with the layer two processor opportunity, and also our new 800 gig DSPs for carrier, for wired infrastructure. Those are gonna be new revenue drivers for us when we come back out of this. So timing is still unknown, but I would just say that this is a key, you know, a part of the base business of Marvell, kind of the core part of Marvell, that over time will return to a normalized run rate. Thanks, Matt. Yep. The next question comes from Tore Svanberg of Stifel. Please go ahead. Yes, thank you. Matt, you mentioned the NVIDIA and Marvell partnership, and I do appreciate the video on your website, but could you add a little bit more color on exactly what this means? I assume this is a multiyear partnership, but yeah, any additional color you could share with us would be great. Thanks. Yeah, thanks, Tore. I think, yeah, the video was posted today, but it really, I think, just sort of captures a very long-term working relationship between the two companies across a number of opportunities, by the way. I think we've had a complementary and very strong partnership with NVIDIA to really help enable them and their products. In the optical area, we've been working with them for some time, and this goes back even to working with Mellanox in some of their applications. T his was really a way just to, I think, highlight the years of work we've done together and also signify that there's a lot of opportunity for us to kinda double down together on this AI opportunity. We're proud to be a partner of them and support them in their growth. That's, that's really what's behind it. It's not a—there's not a new announcement or anything per se; it's just a recognition of a long-standing cooperation between the two companies. Great, thanks. Since that was kind of a soft question, I had a question on the enterprise networking business. It sounds like the sequential decline is gonna be a little bit better than what we've seen lately. Is that a sign that you're starting to see stability there, or are the order rates and the visibility still very limited? I'd say it's still, it's still limited. I think it's still coming down. I think we wanna see, one, the customer balance sheets get back in shape. Two, them talk a little bit more robustly about their end market demand strengthening before we, before we make a call there. So we'll have to see where enterprise IT spending really ends up, Tore, next year, given the macro. R ight now we're just sort of taking it week by week, and we're monitoring, you know, what products they need and looking at their forecast for next year, and we're trying to plan accordingly. But I'd say visibility is pretty limited at this point, for the full year. Great. Thank you very much. Yep. The next question comes from Ross Seymour of Deutsche Bank. Please go ahead. Thanks for letting me ask the question. Matt, I just wanted to ask about your business and perhaps a different way to split it. I think everybody is excited about the AI and the clouds part of it, and for good reason. But if I took that out of the revenues, everything else seems to be down in your guidance, you know, 30%-35% year-over-year, somewhere in that range. I really just wanted to get what percentage of that do you think is down just because of cyclicality? And it sounds like the first quarter might come down again, but should bounce back at some point, versus the businesses you are just deprioritizing. H ow much of a cyclical snapback, whenever that happens, should we expect out of Marvell versus a refocused away from some of those non-cloud areas? Yeah. Got you, Ross. Yeah. I think it... Maybe I'll start just super fast at the high level, and we'll just dive in. I'd say that this, this sort of supply/demand inventory, you know, cycle we've gone through in the industry, has taken a lot longer than historical to play out, and it's sort of the dynamic I would characterize this time is: you had various end markets resetting and correcting at different times in a pretty protracted manner. I f you go all the way back to last year, in 2022, it started early with PCs and went to smartphones and went to gaming, and then it started with data center and cloud, and it sort of had this, this kind of couple year series of resets, if you will. In our business, you know, we saw these sort of declines in that manner, as you talked about earlier this year in data center, as an example, and now you can see a few quarters later, it's like roaring back, as we work through some of those issues. T hat's the cyclicality part you're talking about, and you're asking the right question, which is, hey, over time, do these come back or not? Because maybe we pulled R&D or we, you know, we sort of have shifted our bets. So I'd say for our business, we are, you know, committed to a diversified portfolio. We invest R&D, you know, across those various segments, including enterprise, carrier, and then within the cloud, there's a number of opportunities in AI. The only one that we really have de-emphasized, and this goes back, you know, five or six years ago, is consumer. And we've always projected in our models, in our analyst days, that that would be a, you know, a declining business for us over time, both in revenue as, and as a percent of total. But then, you know, our investments in the other areas would more than offset that, a nd that's proven to be the case. I think when you think about and model us going forward, you know, we have R&D that's going in and will continue to be invested in kind of the core base business of Marvell, and we've been able to grow that very nicely over time if you look at it on a trend line. It's really the consumer piece that is not gonna come back. And just to give you an example, you know, this year, one reason it did better is one of the programs we had, which has been in last time buy mode for several quarters, it actually outperformed during the year. Now it looks like it's not gonna continue into next year, but, you know, that business was probably in, like, the $50 million a quarter range type of thing, and that was a design we won years and years ago, and that's just not gonna repeat, as an example. That's not gonna come back, a nd that's okay, 'cause that's not something what we're putting R&D into. But for the rest of the segments, you know, we still take a long-term view that we can grow them, at or above market, and then, of course, take advantage of the cloud AI opportunity, which is really the big growth driver for Marvell. Hope that's helpful. Thank you. The next question comes from Matt Ramsay of TD Cowen. Please go ahead. Thank you very much. Good afternoon, guys. Matt, I wanted to go back to some of the custom compute and ASIC programs and maybe ask a couple questions about that. One is, I mean, it's been a heck of a year from a Gen AI perspective, where you just go back 12 months, we're just starting to hear of ChatGPT, and then the whole thing's blown up. T he customer base all had to think about that, react to that. I wanted to think about the programs that you have in flight and the interactions that you have with the customers, and the limited set of customers in that space that are all gonna be large. Have you seen them lean more into merchant, more into using ASIC houses or maybe more into doing some of the silicon directly with the foundries themselves? There's been a change in that mix. That's the first part of the question. The second part is when you look at AI overall, the, the leader in that space, which you guys announced a partnership with today, leads not just because of, of the silicon, but hugely because of software. And I was curious as to whether, with the custom programs you're doing for AI compute, are you seeing the customers invest at the scale in software that can make those programs successful at volume over time? Thanks. Yeah, thanks, Matt. Yeah, I think it's—you're right to kind of reflect on how much things have changed in basically a year. I think it's a pretty simple answer. On the first one, I'd say every one of those different sort of segments, if you will, that you mentioned, all of them are up, you know, in terms of the activity. You know, you could see it from the leaders' numbers and their guide. You can see it from some of the other companies in the ecosystem talking about ASIC and custom. I mean, look at where we've come from, even on that, from having very kind of modest expectations to this being a, you know, significant revenue driver for us next year. Then there's various business models, I think, that all the large companies are trying to pursue to figure out how to, I think, do all, all the above, which is kind of have a nice mix of custom for things that are very, very specific to them, as well as take advantage of kind of the market unlock that's happening because of the work of, say, somebody like NVIDIA, right? That's actually helping to create a market. I think, I think all of that is gonna be. It's not a zero-sum game, you know, at all. And I'd say on the sort of customization side and working with those hyperscalers, the design activity is, you know, through the roof at this point. A lot of excitement in that area, both for the custom and then all the stuff we can do around it from an optics and networking perspective. And then I'm not probably the best person to comment, you know, on the second one, but clearly these are very, very well-capitalized, smart companies. They understand their customers, and they're gonna do what they need to do for their workloads and for their custom silicon to make sure, I'm sure, that the software and the service offerings are more than competitive. But you've got a great company that's also out there that's driving the market. I think both are gonna exist. And my last point would be to reiterate, you know, this is clearly not like in traditional computing, where it's more of a zero-sum game. It's just kind of hard to grow the pie. In fact, it may be hard to keep the pie even flat. In this area, there's gonna be a lot of winners, and there's gonna be a lot of opportunity created for the companies that have the right positioning, customer relationship, and IP portfolios... to support these emerging needs, but it's very dynamic at this juncture, and I think for us, that's what creates a lot of opportunity. Thanks. Appreciate the perspective. Yep. The next question comes from Ambrish Srivastava of BMO. Please go ahead. Hi, thank you very much. Matt, I had a question on gross margin. You know, you surprised us negatively early in the year, and then you gave us good counsel, don't panic, and you're back at 64%. So just wanted to think through for the next year, what's the right way to think about the gross margin profile, given you have customer coming in, which typically is lower margin than the corporate, and maybe it's not for you guys. But what's the right way to think about the margin profile for the company near to medium term, Matt? Thank you. Hey, I'll let Willem, I'll let Willem take a victory lap on this one. So, Willem, go ahead. Yeah. Hey, hey, Ambrish. Yeah, so, you know, thanks for the question. F irst of all, really pleased to be guiding back to 64% at the midpoint, right? I think, you know, the team internally has done a phenomenal job controlling what we can control in a pretty volatile environment. You know, when we look ahead to next year, you know, we, we've been discussing, you know, some of the uncertainty on the recovery on some of our core businesses, right? Enterprise networking and storage, and then also the timing and the scale of the ramp on custom. You know, I'll just remind you, prior to this last year, you know, we scaled our carrier and custom businesses very significantly while maintaining our gross margin, right? Looking ahead at next year, you know, if custom, you know, on a relative basis, grows significantly more, yeah, clearly that would put pressure on our gross margin. However, our view is that they'll be very accretive on operating margin and on EPS. So yeah, so that's how we're looking at it. Hopefully, that's helpful, Ambrish. It is. I had a quick clarification for you, Matt. Sorry. You mentioned something about 1-to-1 full attach rate for your business. I was just wondering, what was it before and kind of what has changed, what has changed in the dynamic to push it to greater than 1-to-1? Thank you. Yeah, thanks, Ambrish. It's been a little bit of a journey on this topic. I think, you know, if you go back 2 quarters ago, we were still building models out for how to think about the attach rate and help investors size the opportunity. And we ballparked it at one point, 1-to-1 initially, and subsequent to that, as we sort of looked at, you know, kind of all of the optics through, you know, up into the switch and in the network. And we've... I think we've updated, I think we were really reiterating this. We've updated this number before that it has grown to greater than 1. I think that was more of a clarification we were doing, but initially, it was a little bit of how do we actually get our hands around how big this could be? And people wanted to know, bounce that against how many GPUs they thought were going to ship. I wouldn't say that's really incrementally new news. I think that was more of a, more of a reiteration, if you will. Because it's not just the optics attaching from the accelerators to the switch, but also in between switch layers, and that was sort of the nuance that I think we needed to clarify. Got it. In aggregate, it's more than 1-to-1. Thank you. Yep. The next question comes from Harlan Sur of JP Morgan. Please go ahead. Yeah, good afternoon. Thanks for taking my question. After 6 quarters of sequential shipment declines in nearline or capacity-optimized HDDs by your customers, cloud and hyperscale excess inventory of drives appears to be normalizing, and then on top of that, you have cloud storage utilizations that keep on increasing. I think your storage customers are cautiously optimistic on sequential shipment improvements on their new 20-terabyte platforms. You guys are still shipping about half the rate of your pre-slowdown run rate on storage. I know you've been growing slightly sequentially last few quarters, but are you guys starting to see signs of a sustainable pickup in data center storage moving into next year? Yeah, thanks. I think this is one of those markets, Harlan, where any good news is good news. I mean, it's been very rough out there for that part of the electronics industry, and you certainly saw the impact on our revenues. Look, I'm encouraged to see those same reports of inventory coming down and some of the end customer commentary. You know, we I think aren't gonna call this till we really see the backlog build again. I mean, it's come off the bottom, and it's grown a little bit, but even if it's sort of improving off the bottom, at least the end market side, it's still kind of flattish units, right? I don't think it's necessarily off to the races. So we're staying pretty cautious on this. We got hit pretty hard on the downside here, and we're gonna cautiously kind of guide our way back into that market normalizing. But I will say the end market signs we're hearing and seeing are positive, and it certainly gives us some hope for next year, but we're not ready to call any kind of recovery in that area with any certainty or timing. But it has come off the bottom, and it's continued to grow, which is a good thing. Appreciate the color. Thanks, Matt. Yep. Yep. The next question comes from Christopher Rolland of Susquehanna. Please go ahead. Hey, guys. Thanks for the question. I'm kind of hearing mixed signals on the custom silicon opportunity, and I just wanted you guys to clarify on that. I guess, first of all, are you guys above or below the $200 million expectation you guys had for the year? Second, are you expecting this to kind of double off of that $200 million or even $600 million? Originally, that had been an $800 million number you had discussed. And then third, where are we on that $800 million long-term goal that you had? Is that like a 2025, 2026 opportunity, or is it something beyond that? Got you. Yeah, you're going back to the original, like, 2021 Investor Day. Hey, here's kind of the custom silicon opportunity, which couple quarters back, we had reset to $200 million this year, and then over time, getting to $800 million. I just wanted to clarify that's what you're asking about? Yeah, that's right. I think that was in March. Got you. You guys, you guys talked about that $200 million for this year. Yeah, exactly. So, yeah, so we're tracking close to the $200 million, okay, for this year. And then what we had said at the Investor Day and kind of the long term was this $800 million, and that was sometime between FY 2025 and 2026. That was what the... If you looked at the slide from a couple of years back. And what we had said, I think two quarters back or a quarter back, that number would be bigger over time now because of the AI piece of it, even though some of the stuff had shifted around that wasn't in AI. And I think that's still largely on track in that timeframe. We never gave an exact, you know, kind of, it's gonna happen in XYZ quarter, but in that FY 2024, 2025—FY 2025, 2026 timeframe, you know, it should be able to get towards to, to, you know, above that number we gave before, which is the $800 million. So yeah, I don't think there's any mixed signals. I don't think there's any update, which I think, you know, we're— you know, I think there's some enthusiasm around, but, nothing's changed from a quarter ago. I n fact, I think the thing that's, that's positive is that the chips are looking really good to go to production for next year, and that was always a risk. Chris, if you remember in our commentary, was, "Hey, these are extremely large die, very complex, and, you know, a re-spin, either by us or by our customer would—could cause some delay." And so far, knock on wood, both these programs look like they're in good shape. The real issue is, given the, the sort of growth that we've seen in GenAI, we just don't know the total magnitude, but it, it, it will be bigger than what we sized before, and I think we're, we're largely tracking to what we thought was gonna happen. Thank you for that, Matt. One last one on Carrier. Is Q4 gonna be the bottom, or do you think there could be some more yet to drop? And then I think you have some additional content coming at one of your customers at the end of the year. Is that gonna be a meaningful lift for the segment? Thanks. Yeah. So there's... Yeah, as I, I think I said in my remarks, there's gonna be continued softness into Q1 in, in Carrier, okay? It's gonna take, who knows how many quarters? And it really depends, I think. There'll be some inventory, and then you, you gotta also look at kind of where the CapEx ends up, you know, during next year and where carriers are actually gonna spend globally on, on their deployments. But, you know, over time, there is a lift. There's a, there's a, there's a, there's a content lift we get from the additional sockets. And, you know, we, we still don't know kind of where... Let's go a couple years out, over the next couple of years, where the market share is gonna go as well relative to the sort of Western suppliers versus the Chinese suppliers on a global basis. T here's a few factors in there that need to be considered. But yeah, over time, you know, the sort of number of base stations per year has been relatively well understood. Our content is gonna be larger, and you know, it's a solid business for us. I think that we built from a very kind of nascent position just a few years ago. But it will come back, and it'll have a little tailwind because of the content. Thanks so much, Matt. Yep. The next question comes from Srini Pajjuri of Raymond James. Please go ahead. Thank you. Hi, Matt. I have a couple of clarifications at this point. First, on the custom silicon, understanding that, you know, it's a little bit early to size the opportunity. Given the complexity of these chips and the supply chain issues that we've been hearing about on the HBM and the CoWoS side, I would think that, you know, the lead times from your customers are fairly long. So my question is: When do you expect to start building inventory? I guess, you know, in terms of wafer inventory and packaging inventory, et cetera, you know, what timeframe should we kind of expect that, you know, if you are looking to ramp next year? Well, the planning certainly is happening now, Srini, to your point, and I think between ourselves, our supply chain partners, and our end customers who have a vested interest to make sure this all goes well, I think we've been working, you know, quite well as a kind of combined team to make sure we've got the necessary capacity that's required from wafers, packaging, and kind of third-party component perspective, including HBM. I mean, all of those are either capacity that's reserved or we're in the process of starting wafers. I mean, it, again, there's multiple programs, so it's not sort of a, you know, each product is at a different point. But yeah, I think the answer is, well, and I think I was saying this even a quarter or two ago, is we'll have a lot better visibility kinda come, you know, call it March, you know, when, you know, what this is going to look like, 'cause at that point, given lead times and all the other factors, we'll just have much better visibility. So that's sort of the, I guess, the pro, if you will, of some of the complexity we're dealing with, is you do have to plan in advance, and you do have to, you do have to start wafers. But so, so all of that is kind of in motion, I would say. The capacity planning's been done some time ago, so we feel comfortable with where we are on that, even though it's tight. But yeah, we're in that process, but I don't think we're gonna get that granular on, you know, when exactly we're starting wafers and what... We're just gonna try to size the opportunity for investors when we have a better view in terms of what the revenue is. But the capacity side's looking to be in good shape for us. Makes sense. Then, my other follow-up, Matt, on your Q1 guidance, and obviously, you said, you know, half of your business is gonna be down, but I would have to imagine that the data center will continue to be, you know, healthy and strong. You know, especially, you know, kind of what, you know, your customers are talking about in terms of AI investments continuing, and also NVIDIA kind of sounded fairly positive about next year as well. My question is, you know, given the strength that you saw in the last two quarters, I mean, are you concerned about any inventory build in your components? Is that what's giving you pause about, you know, guiding for growth in the first quarter for the overall business? Because, you know, even if 50% of the business is down, because looking at how much this business has grown in the last two quarters, and if that trend continues, I would have to imagine that the, you know, total revenue should, you know, grow in Q1. So I'm just wondering what's giving you that pause, you know- Yeah. guiding for growth in Q1. Yeah, yeah. No problem. I'll maybe give you a little bit of a bad time here. I think we're trying to get through Q4 call first, and then we can do the Q1 call, okay? So, maybe first things first. So that being said, you know, I mean, look, I think I would agree with the market commentary you gave, which is, you know, year-over-year, you know, we do expect strong growth. I'd say on our side, you know, if you look at kind of the growth we've seen on AI, you know, we're having a very, very strong Q4, and some of that, we're catching up from the upsides we had. I mean, our supply chain team has done a phenomenal job, right? So I'd just say that we're not guiding Q1. It's dynamic at this point, and I need to really see where the orders flow in and what people really need. And right now, we're just focused on executing Q4. But yes, overall demand looks good. Overall growth next year should be good. But I think trying to guide two quarters now with this precision, Srini, is just not gonna be helpful for anybody, given how fast things are moving. So I'd prefer to give you my Q1 guide when we guide Q1. Got it. Thanks, Matt. Our last question will come from Chris Caso of Wolfe. Please go ahead. Yes, thank you. My question's on the cloud part of data center. It sounds like that was an area which may have surprised you a little bit coming back here. Can you talk about the driver of that, and to what extent you're seeing in kind of traditional cloud business? You know, is this cyclical or product cycle driven? Yeah, thanks. You know, our thesis earlier this year, which actually did play out. I think we had a lot of predictions, and in some cases, the market didn't cooperate. But one area it did was that we did not believe that our traditional cloud business was going to be really impacted by the shift to AI, and in fact, it might even provide a tailwind. O ur position was that, hey, because of our position in switching and in optics, that broader networking build was gonna be required in data centers, in particular, multi-tenant data centers, where you had to actually put in increased networking bandwidth to handle the AI capability that was being put in, and that's played out. I'd say there's been some on the product cycle in terms of, you know, new products kicking in at that time, but also, I'd just say that it's increased demand. Increased demand for products we had at 400 gig, increased demand for our 12.8 switches, things that had been a little bit depressed earlier in the year with inventory corrections. T hat's been a real positive. It's kind of a nice combination of strong growth on the products we have, as well as new products wrapping up, ramping up, sorry. So yeah, and that's played out, and that should be a nice driver and tailwind for us into next year as well, Chris. Got it. Thank you. All right. Fantastic. Hey, listen, I think we're pretty much at time. I'm gonna conclude the call. Maybe just a few words. First, I appreciate everybody's interest in the company. Couple final comments would be, you know, despite kind of the challenging macro out there, I'm very, very pleased with the Marvell team and our performance. And I think what it shows is that even when you have a lot of volatility from a cyclical perspective in some of these end markets, right now it's enterprise and carrier, as an example, the diversified business model that we've really put together at Marvell has been able to have some strong offsets to those things. And like right now, we're seeing, you know, our data center business come roaring back with, you know, strong growth in Q3 and then, you know, a very, very strong growth in Q4. And that's the commitment we made several years ago, right? Was to diversify the company by end market, focus on data infrastructure, which in our view, was gonna be probably the best, you know, TAM growth opportunity in semis, and we still believe that. And while we have some inventory digestion and end market weakness we're seeing in some segments, that's gonna, that's gonna revert over time in enterprise and carrier. And I would view that as and describe that as kind of the core foundation of Marvell. Then you have these nice growth driver with large TAMs, on top of it, in cloud, in AI, in things like automotive, that are gonna drive our growth over time. I think our model is working, and we're managing in a tough environment, and we're managing what we can control at this point. And with that, I will conclude the meeting. Thanks, everybody. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.