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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 29, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number: 001-40357
marvell_logo.jpg
MARVELL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 85-3971597
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1000 N. West Street, Suite 1200
Wilmington, Delaware 19801
(302) 295-4840
(Address of principal executive offices, zip code and registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
 
     
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.002 per share MRVL The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes      No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes      No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
¨  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No
The number of shares of common stock of the registrant outstanding as of August 18, 2023 was 862.8 million.


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

1

Table of Contents
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value per share)
 
July 29,
2023
January 28,
2023
ASSETS
Current assets:
Cash and cash equivalents$423.4 $911.0 
Accounts receivable, net1,209.2 1,192.2 
Inventories1,015.8 1,068.3 
Prepaid expenses and other current assets118.8 109.6 
Total current assets2,767.2 3,281.1 
Property and equipment, net693.8 577.4 
Goodwill11,586.9 11,586.9 
Acquired intangible assets, net4,560.2 5,102.0 
Deferred tax assets700.9 465.9 
Other non-current assets1,441.1 1,508.8 
Total assets$21,750.1 $22,522.1 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$412.8 $465.8 
Accrued liabilities1,068.5 1,092.0 
Accrued employee compensation185.3 244.5 
Short-term debt1,018.6 584.4 
Total current liabilities2,685.2 2,386.7 
Long-term debt3,134.5 3,907.7 
Other non-current liabilities540.9 590.5 
Total liabilities6,360.6 6,884.9 
Commitments and contingencies (Note 4)
Stockholders’ equity:
Common stock, $0.002 par value
1.7 1.7 
Additional paid-in capital14,744.8 14,512.0 
Accumulated other comprehensive loss(1.0) 
Retained earnings644.0 1,123.5 
Total stockholders’ equity15,389.5 15,637.2 
Total liabilities and stockholders’ equity$21,750.1 $22,522.1 

See accompanying notes to unaudited condensed consolidated financial statements
2

Table of Contents
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
 
 Three Months EndedSix Months Ended
 July 29,
2023
July 30,
2022
July 29,
2023
July 30,
2022
Net revenue$1,340.9 $1,516.9 $2,662.6 $2,963.8 
Cost of goods sold819.8 730.9 1,584.3 1,426.9 
Gross profit521.1 786.0 1,078.3 1,536.9 
Operating expenses:
Research and development474.8 449.0 955.5 893.1 
Selling, general and administrative210.0 211.7 409.0 432.4 
Legal settlement 85.0  100.0 
Restructuring related charges42.0 1.2 101.9 2.5 
Total operating expenses726.8 746.9 1,466.4 1,428.0 
Operating income (loss)(205.7)39.1 (388.1)108.9 
Interest income1.6 0.8 4.1 1.3 
Interest expense(53.8)(39.8)(106.5)(76.1)
Other income, net6.3 3.7 6.6 8.9 
Interest and other loss, net(45.9)(35.3)(95.8)(65.9)
Income (loss) before income taxes(251.6)3.8 (483.9)43.0 
Provision (benefit) for income taxes(44.1)(0.5)(107.5)204.4 
Net income (loss)$(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:
Basic860.9 850.9 858.8 849.4 
Diluted860.9 857.9 858.8 849.4 
See accompanying notes to unaudited condensed consolidated financial statements
3

Table of Contents
MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
 
 Three Months EndedSix Months Ended
July 29,
2023
July 30,
2022
July 29,
2023
July 30,
2022
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
4

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

Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Loss
SharesAmountRetained EarningsTotal
Balance at January 28, 2023856.1 $1.7 $14,512.0 $ $1,123.5 $15,637.2 
Issuance of common stock in connection with equity incentive plans3.8 — 8.3 — — 8.3 
Tax withholdings related to net share settlement of restricted stock units— — (72.6)— — (72.6)
Stock-based compensation— — 142.2 — — 142.2 
Cash dividends declared and paid ($0.06 per share)
— — — — (51.4)(51.4)
Net loss— — — — (168.9)(168.9)
Other comprehensive loss— — — (0.9)— (0.9)
Balance at April 29, 2023859.9 $1.7 $14,589.9 $(0.9)$903.2 $15,493.9 
Issuance of common stock in connection with equity incentive plans3.4 — 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, 2023863.3 $1.7 $14,744.8 $(1.0)$644.0 $15,389.5 

Common StockAdditional Paid-in Capital
SharesAmountRetained EarningsTotal
Balance at January 29, 2022846.7 $1.7 $14,209.0 $1,491.4 $15,702.1 
Issuance of common stock in connection with equity incentive plans4.1 — 2.4 — 2.4 
Tax withholdings related to net share settlement of restricted stock units— — (137.6)— (137.6)
Stock-based compensation— — 129.7 — 129.7 
Repurchase of common stock(0.3)— (15.0)— (15.0)
Cash dividends declared and paid ($0.06 per share)
— — — (50.9)(50.9)
Net loss— — — (165.7)(165.7)
Balance at April 30, 2022850.5 $1.7 $14,188.5 $1,274.8 $15,465.0 
Issuance of common stock in connection with equity incentive plans2.9 — 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, 2022852.5 $1.7 $14,300.5 $1,228.0 $15,530.2 

See accompanying notes to unaudited condensed consolidated financial statements
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MARVELL TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 Six Months Ended
 July 29,
2023
July 30,
2022
Cash flows from operating activities:
Net loss$(376.4)$(161.4)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization153.9 152.6 
Stock-based compensation296.0 275.6 
Amortization of acquired intangible assets541.8 544.3 
Amortization of inventory fair value adjustment associated with acquisitions 15.6 
Restructuring related impairment charges 31.4 1.9 
Deferred income taxes(226.7)178.4 
Other expense, net21.7 22.3 
Changes in assets and liabilities, net of acquisitions:
Accounts receivable(16.9)(239.7)
Prepaid expenses and other assets(39.3)(184.9)
Inventories52.5 (207.1)
Accounts payable(86.8)3.9 
Accrued employee compensation(59.0)(53.7)
Accrued liabilities and other non-current liabilities 28.7 178.5 
Net cash provided by operating activities320.9 526.3 
Cash flows from investing activities:
Purchases of technology licenses(3.0)(4.2)
Purchases of property and equipment(210.9)(109.5)
Acquisitions, net of cash acquired(5.5)(98.6)
Other, net(0.3) 
Net cash used in investing activities(219.7)(212.3)
Cash flows from financing activities:
Repurchases of common stock (65.0)
Proceeds from employee stock plans60.4 51.4 
Tax withholding paid on behalf of employees for net share settlement(123.8)(171.7)
Dividend payments to stockholders(103.1)(102.0)
Payments on technology license obligations(78.6)(71.2)
Proceeds from borrowings250.0 200.0 
Principal payments of debt(593.7)(151.9)
Net cash used in financing activities(588.8)(310.4)
Net increase (decrease) in cash and cash equivalents(487.6)3.6 
Cash and cash equivalents at beginning of period911.0 613.5 
Cash and cash equivalents at end of period$423.4 $617.1 

See accompanying notes to unaudited condensed consolidated financial statements
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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Note 1. Basis of Presentation

The unaudited condensed consolidated financial statements of Marvell Technology, Inc. (“MTI”), a Delaware corporation, and its wholly owned subsidiaries (the “Company”), as of and for the three and six months ended July 29, 2023, have been prepared as required by the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted as permitted by the SEC. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s fiscal year 2023 audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023. In the opinion of management, the financial statements include all adjustments, including normal recurring adjustments and other adjustments, that are considered necessary for fair presentation of the Company’s financial position and results of operations. All inter-company accounts and transactions have been eliminated. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. These financial statements should also be read in conjunction with the Company’s critical accounting policies included in the Company’s Annual Report on Form 10-K for the year ended January 28, 2023 and those included in this Quarterly Report on Form 10-Q below. All dollar amounts in the financial statements and tables in these notes, except per share amounts, are stated in millions of U.S. dollars unless otherwise noted.

The Company’s fiscal year is the 52- or 53-week period ending on the Saturday closest to January 31. Accordingly, every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the fourth quarter, making such quarter consist of 14 weeks. Fiscal 2023 had a 52-week year. Fiscal 2024 is a 53-week year.

Use of Estimates

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

Note 2. Revenue

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

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

Three Months EndedSix Months Ended
July 29,
2023
% of TotalJuly 30,
2022
% of TotalJuly 29,
2023
% of TotalJuly 30,
2022
% of Total
Net revenue by end market:
Data center$459.8 34 %$643.4 42 %$895.6 34 %$1,283.9 43 %
Enterprise networking327.7 24 %340.3 22 %692.3 26 %626.9 21 %
Carrier infrastructure275.5 21 %285.2 19 %565.4 21 %537.2 18 %
Consumer167.7 13 %164.4 11 %309.8 12 %342.9 12 %
Automotive/industrial110.2 8 %83.6 6 %199.5 7 %172.9 6 %
$1,340.9 $1,516.9 $2,662.6 $2,963.8 

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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
The following table summarizes net revenue disaggregated by primary geographical market based on destination of shipment (in millions, except percentages):

Three Months EndedSix Months Ended
July 29,
2023
% of TotalJuly 30,
2022
% of TotalJuly 29,
2023
% of TotalJuly 30,
2022
% of Total
Net revenue based on destination of shipment:
China$569.3 42 %$693.6 46 %$1,085.0 41 %$1,337.645 %
United States202.8 15 %185.0 12 %390.1 15 %334.511 %
Finland115.3 9 %39.1 3 %195.4 7 %77.93 %
Singapore70.9 5 %67.1 4 %183.2 7 %117.24 %
Malaysia39.5 3 %113.9 8 %138.0 5 %195.17 %
Thailand76.0 6 %74.9 5 %121.4 5 %174.26 %
Taiwan59.1 4 %61.3 4 %112.9 4 %114.94 %
Japan44.0 3 %71.1 5 %87.8 3 %138.15 %
Other164.0 13 %210.9 13 %348.8 13 %474.315 %
$1,340.9 $1,516.9 $2,662.6 $2,963.8

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

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

Three Months EndedSix Months Ended
July 29,
2023
% of TotalJuly 30,
2022
% of TotalJuly 29,
2023
% of TotalJuly 30,
2022
% of Total
Net revenue by customer type:
Direct customers$857.3 64 %$976.0 64 %$1,748.1 66 %$1,969.9 66 %
Distributors483.6 36 %540.9 36 %914.5 34 %993.9 34 %
$1,340.9 $1,516.9 $2,662.6 $2,963.8 

Contract Liabilities

Contract liabilities consist of the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration or the amount is due from the customer. Contract liability balances are comprised of deferred revenue. The amount of revenue recognized during the 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. In accordance with the practical expedients available in the guidance, the Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

Sales Commissions

The Company has elected to apply the practical expedient to expense commissions when incurred as the amortization period is typically one year or less. These costs are recorded in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.

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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Note 3. Debt

Summary of Borrowings and Outstanding Debt

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

July 29,
2023
January 28,
2023
Face Value Outstanding:
2024 Term Loan - 3-Year Tranche$735.0 $735.0 
2026 Term Loan - 5-Year Tranche743.8 787.5 
     Term Loan Total1,478.8 1,522.5 
2023 Revolving Credit Facility 200.0  
     Revolving Credit Facility Total200.0  
4.200% MTG/MTI 2023 Senior Notes
 500.0 
4.875% MTG/MTI 2028 Senior Notes
499.9 499.9 
1.650% 2026 Senior Notes
500.0 500.0 
2.450% 2028 Senior Notes
750.0 750.0 
2.950% 2031 Senior Notes
750.0 750.0 
     Senior Notes Total2,499.9 2,999.9 
Total borrowings$4,178.7 $4,522.4 
Less: Unamortized debt discount and issuance cost(25.6)(30.3)
Net carrying amount of debt$4,153.1 $4,492.1 
Less: Current portion (1)1,018.6 584.4 
Non-current portion$3,134.5 $3,907.7 

(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 flow 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. The Company also executed a debt agreement to obtain a 5-year $750.0 million revolving credit facility in December 2020, replacing its previous $500.0 million revolving credit facility. On April 12, 2021, the Company completed a debt offering and issued (i) $500.0 million of Senior Notes with a 5-year term due in 2026, (ii) $750.0 million of Senior Notes with a 7-year term due in 2028, and (iii) $750.0 million of Senior Notes with a 10-year term due in 2031.

On May 4, 2021, in conjunction with the U.S. domiciliation, the Company exchanged certain existing senior notes due in 2023 and 2028 that were previously issued by the Bermuda-domiciled Marvell Technology Group Ltd. (the “MTG Senior Notes”) with like notes that are now issued by the Delaware-domiciled Marvell Technology, Inc. (the “MTI Senior Notes”). Below is further discussion of the terms of the various debt agreements.

On April 14, 2023, the Company entered into an agreement to amend and restate the revolving credit facility to increase the borrowing capacity to $1.0 billion with a 5-year term and a stated floating interest rate which equates to an adjusted term Secure Overnight Financing Rate (“SOFR”) plus an applicable margin. The Company also entered into an agreement to amend the term loan to adopt SOFR interest rates and conform the maximum leverage ratio financial covenant with the amended and restated revolving credit facility agreement.

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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
2024 and 2026 Term Loans

On December 7, 2020, the Company entered into a term loan credit agreement with a lending syndicate led by JP Morgan Chase Bank, N.A (the “2024 and 2026 Term Loan Agreement”) in order to finance the acquisition of Inphi Corporation (“Inphi”). The 2024 and 2026 Term Loan Agreement provides for borrowings of $1.75 billion consisting of: (i) $875.0 million loan with a three-year term from the funding date (the “3-Year Tranche Loan”) and (ii) $875.0 million loan with a five-year term from the funding date (the “5-Year Tranche Loan” and, together with the 3-Year Tranche Loan, the “2024 and 2026 Term Loans”).

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

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 4.292% 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 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 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.

2023 Revolving Credit Facility

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

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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
2026, 2028, and 2031 Senior Unsecured Notes

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

The 2026 Senior Notes mature on April 15, 2026, the 2028 Senior Notes mature on April 15, 2028, and the 2031 Senior Notes mature on April 15, 2031. The stated and effective interest rates for the 2026 Senior Notes are 1.650% and 1.839%, respectively. The stated and effective interest rates for the 2028 Senior Notes are 2.450% and 2.554%, respectively. The stated and effective interest rates for the 2031 Senior Notes are 2.950% and 3.043%, respectively. The Company may redeem the Senior Notes, in whole or in part, at any time prior to their respective maturity at the redemption prices set forth in the indenture governing the Senior Notes. In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a ratings event involving the Senior Notes being rated below investment grade), the Company will be required to make an offer to repurchase the Senior Notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest to, but excluding, the repurchase date. The indenture governing the Senior Notes also contains certain limited covenants restricting the Company’s ability to incur certain liens, enter into certain sale and leaseback transactions and merge or consolidate with any other entity or convey, transfer or lease all or substantially all of the Company’s properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. As of July 29, 2023, the Company had $2.0 billion Senior Notes borrowings outstanding.

2023 and 2028 Senior Unsecured Notes

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

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

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

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

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

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

As of 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 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 YearAmount
Remainder of 2024$243.8 
2025844.4 
2026131.2 
2027959.4 
2028 
Thereafter1,999.9 
Total $4,178.7 


Note 4. Commitments and Contingencies

Warranty Obligations

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

Commitments

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

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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
Technology License Fees
Remainder of 2024$469.1 $57.9 
2025622.1 125.1 
2026613.9 45.4 
2027449.4 36.4 
2028185.4 36.5 
Thereafter533.5 157.0 
Total unconditional purchase commitments$2,873.4 $458.3 

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

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

The Company entered into manufacturing supply capacity reservation agreements with foundries and test & assembly suppliers during the current and prior fiscal year. Under these arrangements, the Company agreed to pay capacity fees or refundable deposits to the suppliers in exchange for reserved manufacturing production capacity over the term of the agreements, which ranges from 4 to 10 years. In addition, the Company committed to certain purchase levels that were in line with the capacity reserved. The Company currently estimates that it has agreed to purchase level commitments of at least $2.5 billion of wafers, substrates, and other manufacturing products for the remainder of fiscal 2024 through fiscal 2033 under the capacity reservation agreements. In addition, total fees and refundable deposits payable under these arrangements are $59.5 million for the remainder of fiscal 2024 through fiscal 2026. Such purchase commitments are summarized in the preceding table.

In September 2021, the Company entered into an IP licensing agreement with a vendor which provides complete access to the vendor’s IP portfolio for 10 years. The arrangement provides access to IP over the term of the contract, including existing IP, as well as IP in development, and to be developed in the future. The contract provides support and maintenance over the term of the contract as well. Aggregate fees of $354 million are payable quarterly over the contract term.

Contingencies and Legal Proceedings

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

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.

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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. 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. While the Company cannot predict with certainty the results of the Legal Matters in which it is currently involved, the Company does not expect that the ultimate costs to resolve these Legal Matters will individually or in the aggregate have a material adverse effect on its financial condition, however, there can be no assurance that the current or any future Legal Matters will be resolved in a manner that is not adverse to the Company’s business, financial statements, results of operations or cash flows.

Indemnities, Commitments and Guarantees

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

Intellectual Property Indemnification

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

Note 5. Goodwill and Acquired Intangible Assets, Net

Goodwill

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

During fiscal 2023, the Company completed acquisitions of several companies for total purchase consideration of $103.2 million, of which $73.6 million was allocated to goodwill. 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 July 29, 2023 and January 28, 2023 is $11.6 billion.

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

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 AmountsAccumulated AmortizationNet Carrying AmountsWeighted-Average Remaining Amortization Period (Years)
Developed technologies$5,015.0 $(2,320.9)$2,694.1 4.19
Customer contracts and related relationships2,179.0 (1,019.2)1,159.8 3.77
Trade names50.0 (22.7)27.3 2.73
Total acquired amortizable intangible assets$7,244.0 $(3,362.8)$3,881.2 4.05
IPR&D679.0 — 679.0 n/a
Total acquired intangible assets$7,923.0 $(3,362.8)$4,560.2 

January 28, 2023
Gross Carrying AmountsAccumulated AmortizationNet Carrying AmountsWeighted-Average Remaining Amortization Period (Years)
Developed technologies$5,078.0 $(2,014.5)$3,063.5 4.67
Customer contracts and related relationships2,179.0 (853.2)1,325.8 4.24
Trade names66.0 (32.3)33.7 3.11
Total acquired amortizable intangible assets$7,323.0 $(2,900.0)$4,423.0 4.53
IPR&D679.0 — 679.0 n/a
Total acquired intangible assets$8,002.0 $(2,900.0)$5,102.0 

The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain Cavium customer contracts and related relationships, which are amortized using an accelerated method of amortization over the expected customer lives, which more closely align with the pattern of realization of economic benefits expected to be obtained. The IPR&D will be accounted for as an indefinite-lived intangible asset and will not be amortized until the underlying projects reach technological feasibility and commercial production at which point the IPR&D will be amortized over the estimated useful life. Useful lives for these IPR&D projects are expected to range between 5 to 10 years. In the event the IPR&D is abandoned, the related assets will be written off.

Amortization expense for acquired intangible assets for the three 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 YearAmount
Remainder of 2024$551.7 
20251,043.3 
2026989.5 
2027821.4 
2028264.6 
Thereafter210.7 
$3,881.2 
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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)

Note 6. Fair Value Measurements

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

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

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

The Company’s Level 1 assets include marketable equity investments that are classified as other non-current assets and which are valued primarily using quoted market prices. The Company’s Level 2 assets include time deposits, as the market inputs used to value these instruments consist of market yield. In addition, forward contracts and the severance pay fund are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments.
 
The tables below set forth, by level, the Company’s assets 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 July 29, 2023
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits$ $9.6 $ $9.6 
Other non-current assets:
Marketable equity investments12.6   12.6 
Severance pay fund 0.7  0.7 
Total assets$12.6 $10.3 $ $22.9 
Liabilities
Accrued liabilities:
Foreign currency forward contracts$ $1.1 $ $1.1 
Total liabilities$ $1.1 $ $1.1 

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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. These securities relate to equity investments in privately-held companies. These items measured at fair value on a non-recurring basis are classified as Level 3 in the fair value hierarchy because the value is estimated based on valuation methods using the observable transaction price at the transaction date and other unobservable inputs such as volatility, rights and obligations of the securities held. As of 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
 Level 1Level 2Level 3Total
Items measured at fair value on a recurring basis:
Assets
Cash equivalents:
Time deposits$ $150.7 $ $150.7 
Other non-current assets:
Marketable equity investments3.2   3.2 
Severance pay fund 0.7  0.7 
Total assets$3.2 $151.4 $ $154.6 

Fair Value of Debt

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 $2.2 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.

Note 7. Restructuring

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 Six Months Ended
July 29, 2023July 30, 2022July 29, 2023July 30, 2022
Employee severance$18.7 $0.3 $66.1 $0.9 
Impairment and write-off of assets
Purchased IP licenses20.5  28.6  
Equipment  1.3  
Other2.8 0.9 5.9 1.6 
$42.0 $1.2 $101.9 $2.5 

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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):

Employee SeveranceOtherTotal
Balance at January 28, 2023 $3.6 $1.4 $5.0 
Charges66.1 35.8 101.9 
Net cash payments(53.6)(6.4)(60.0)
Non-cash items  (13.1)(13.1)
Balance at July 29, 202316.1 17.7 33.8 
Less: 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 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.

Note 8. Income Tax

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including variability in accurately predicting 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 $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. statutory rate of 21% primarily due to a substantial portion of its earnings, or in some cases, losses being taxed or benefited at rates lower than the U.S. statutory rate, net of the impact of U.S. taxation of foreign operations, benefits from tax credits, and valuation allowance releases, as well as discrete tax benefits and expenses for excess deductions and deficiencies on stock-based compensation, respectively.

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 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 six months ended July 30, 2022.

The amount of unrecognized tax benefits could increase or decrease due to changes in tax law in various jurisdictions, the effects of income tax audits, and changes in the U.S. dollar as compared to foreign currencies within the next 12 months. It is reasonably possible that our uncertain tax positions may be reduced by as much as $24.4 million within the next 12 months as a result of the lapses of statutes of limitation. The Company is currently under audit in certain U.S. state and non-U.S. taxing jurisdictions. 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.

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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.

Note 9. 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 EndedSix Months Ended
 July 29,
2023
July 30,
2022
July 29,
2023
July 30,
2022
Numerator:
Net income (loss)$(207.5)$4.3 $(376.4)$(161.4)
Denominator:
Weighted-average shares — basic860.9 850.9 858.8 849.4 
Effect of dilutive securities:
Stock-based awards 7.0   
Weighted-average shares — diluted860.9 857.9 858.8 849.4 
Net income (loss) per share:
       Basic$(0.24)$0.01 $(0.44)$(0.19)
       Diluted$(0.24)$0.01 $(0.44)$(0.19)

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

Anti-dilutive potential shares are presented in the following table (in millions):
 Three Months EndedSix Months Ended
 July 29,
2023
July 30,
2022
July 29,
2023
July 30,
2022
Weighted-average shares outstanding:
Stock-based awards13.7 11.8 12.1 13.8 

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 and six months ended July 29, 2023, and the six months ended July 30, 2022 due to the net losses reported in those periods.

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MARVELL TECHNOLOGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ‑ (Continued)
Note 10. Supplemental Financial Information (in millions)

Consolidated Balance Sheets
July 29,
2023
January 28,
2023
Inventories:
Work-in-process$632.7 $756.3 
Finished goods383.1 312.0 
               Inventories$1,015.8 $1,068.3 

July 29,
2023
January 28,
2023
Property and equipment, net:
Machinery and equipment$1,254.4 $1,083.9 
Land, buildings, and leasehold improvements313.8 306.2 
Computer software118.1 114.5 
Furniture and fixtures31.2 30.9 
1,717.5 1,535.5 
Less: Accumulated depreciation(1,023.7)(958.1)
               Property and equipment, net$693.8 $577.4 

July 29,
2023
January 28,
2023
Other non-current assets:
Prepaid ship and debits$498.7 $481.3 
Technology licenses343.0 439.5 
Prepayments on supply capacity reservation agreements291.3 282.3 
Operating right-of-use assets205.0 211.3 
Non-marketable equity investments35.7 36.1 
Other67.4