Marvell Technology Group Ltd. (NASDAQ:MRVL) Q3 2018 Earnings Conference Call - Preliminary Transcript
Nov 28, 2017 • 04:45 pm ET
Good day, ladies and gentlemen, and welcome to the Q3 2018 Marvell Technology Group Ltd Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference Mr. Peter Andrew. Sir, you may begin.
Thank you and good afternoon everyone. Welcome to Marvell third quarter of fiscal year 2018 earnings call. Joining me on the call today is Marvell's President and CEO Matt Murphy, and CFO Jean Hu. Before I turn the call over to Matt, I wanted to remind everyone that certain comments today may include forward-looking statements which are subject to significant risk and uncertainties and which 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 make reference to certain non-GAAP financial measures or reconciliation between our GAAP and non-GAAP financial measures as available on our website in the Investor Relations section. With that, let me now turn the call over to Marvell's President and CEO, Matt Murphy.
Good afternoon everyone and thank you for joining us today. It has been a very busy past eight days for Marvell. Last Monday, we signed a definitive agreement to combine with Cavium uniting two great companies that together will deliver unmatched innovation and end-to-end communications infrastructure solutions. I am very excited about our combined future. But today, we are here to review Marvell's strong third quarter performance which was the result of improved execution across the company and growth in our core businesses of storage, networking and connectivity.
From a financial perspective, revenue in the quarter was $616 million, above the midpoint of our guidance. Our core businesses grew on a sequential basis and that together grown 7% year-to-date. This exceeds the target we set in March during our investor day. Our non-GAAP gross margin grew 400 basis points from a year ago to 61.6% today, as our world class engineering and improved execution continue to deliver tremendous value.
Operating expenses on a non-GAAP basis came in better than expected below the low end of our target range we set last November. As a result, non-GAAP operating margin grew nearly 900 basis points from a year ago to 28.4%. This demonstrates the power of our business model and we are making solid progress towards our target of 30%. Finally, free cash flow grew nearly 90% from last year to $194 million. Over the past five quarters, we have returned $860 million to shareholders, more than 140% of free cash flow.
On the operational front last quarter, Tom Lagatta, EVP of