In Marvell Technology Group's (MRVL 2.11%) third-quarter earnings report, the chipmaker beat expectations on both the top and bottom lines, and issued terrific guidance that easily bested Wall Street forecasts.

Marvell reported adjusted earnings of $0.34 per share on revenue of $616 million. Though revenue fell 1% year over year thanks to the weakness in the storage business, adjusted net income shot up 53% from the prior-year period because of an aggressive cost-cutting plan.

The good news for Marvell investors is that it expects to resume its top-line growth from the current quarter. The midpoint of company guidance puts the company's fourth-quarter revenue at $610 million, an increase of almost 7% from the year-ago quarter, pushing its adjusted earnings to $0.31 per share from last year's $0.22.

Let's take a closer look at what's working for Marvell, and if the company has enough catalysts to maintain its upward trajectory in the long run.

Man hanging on an arrow rising upward.

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Networking and connectivity present solid catalysts

Marvell's networking and connectivity businesses together supply 41% of its total business, and both of them recorded impressive growth during the latest quarter. The connectivity business, in particular, was the driving force behind Marvell's robust performance as strong demand from the automotive and enterprise segments led to 19% year-over-year growth in revenue.

Marvell's connectivity products include Wi-Fi, Bluetooth, and Wi-Fi/Bluetooth combo solutions, catering to several verticals such as video gaming consoles, security cameras, connected homes, and automotive. Growth is expected here.

For instance, the connected car market is expected to grow at 35% a year through 2022, as per Research and Markets. Wi-Fi is expected to be the most widely used standard to help vehicles communicate with each other and with other elements such as highway infrastructure to bolster safety.

As a result, demand for Wi-Fi chips will grow at the fastest rate in the automotive space when compared to other connectivity standards. Not surprisingly, Marvell is trying to cover as much ground as possible in this space.

During the second quarter, Marvell launched a chip that integrated Wi-Fi, Bluetooth, vehicle-to-vehicle (V2V), and vehicle-to-infrastructure (V2I) on a single platform. This was followed by a secure automotive gigabit Ethernet switch to enable safe data transmission in connected cars.

The good news is that these products have evinced interest from the automotive industry, as Marvell claims that it is actively engaged with "leading automotive OEMs and tier 1 suppliers." The company will provide more clarity about the revenue potential of its automotive business sometime next year, but it has assured investors that the business is moving in the right direction thanks to recent product launches.

On the other hand, Marvell's networking business grew 3% year over year last quarter, but it could turn out to be a solid catalyst in the long run once the acquisition of Cavium is completed in mid-2018. Marvell recently announced that it will be acquiring Cavium in a $6 billion deal, and the move is going to add new dimensions to the former's networking business.

Currently, Marvell's networking business covers verticals such as enterprise switches. The Cavium acquisition will give Marvell access to markets for Ethernet adapters and data center switches. In fact, Cavium is expected to expand Marvell's addressable market by $8 billion, creating an annual addressable opportunity worth $16 billion.

By comparison, the two companies currently generate annualized revenue of $3.4 billion, indicating that there is a lot of room for growth.

The storage business has exciting prospects

Storage is Marvell's biggest business, supplying 51% of its total revenue last quarter. However, the company faced challenges in this segment as revenue declined 4% year over year because of the secular decline in hard-disk drive (HDD) shipments that's hurting demand for Marvell's controllers.

But investors can overlook this weakness as Marvell's storage business could turn out to be a big catalyst because of the increasing demand for solid-state drives (SSDs). The company's SSD revenue has ramped up impressively so far this year, and it contributed close to 30% of total storage revenue during the third quarter.

Looking ahead, its contribution could get even bigger as the SSD market's revenue is expected to exceed $60 billion in 2023 as compared to $26 billion this year, according to Markets and Markets.

Therefore, Marvell enjoys solid prospects across all its business lines. So it is not surprising to see why analysts expect its earnings to grow at more than 22% a year for the next five years, a massive turnaround when compared to the annual earnings erosion of 12% a year seen in the last half-decade.