Marvell Technology, Inc.
MRVL · Nasdaq
Next quarter
Expected to report Dec 1, 2026 — estimated from last year’s reporting date.
Consensus is $0.79 EPS for Oct 2026 across 9 estimates, ranging $0.74 to $0.81.
MRVL Jul 2026
- 4.62%
- -10.28%
- $0.65
- $0.62
- —
- $2.74B
Reported results
- $2.74B
- $459.70M
- $308.00M
- $0.33
Highlights
- Record revenue: Q2 FY2027 revenue reached $2.739 billion, up 37% year over year and 13% sequentially, $39 million above the midpoint of guidance.
- Data center acceleration: Data center revenue rose 46% year over year and 18% sequentially to $2.172 billion, representing 79% of total revenue.
- AI-led outlook: Management said AI-related bookings remained exceptionally robust and expects revenue growth to accelerate through the rest of FY2027, raising its FY2027 and FY2028 revenue outlooks.
- Next-quarter guide: Q3 revenue is expected at $3.150 billion plus or minus 5%, with GAAP diluted EPS of $0.53 plus or minus $0.05 and non-GAAP diluted EPS of $1.10 plus or minus $0.05.
- Earnings and margins: GAAP net income was $308 million, or $0.33 per diluted share, while non-GAAP net income was $865.9 million, or $0.94 per diluted share; GAAP gross margin was 53.1% and non-GAAP gross margin was 58.9%.
- Expectation gap: The supplied consensus was $0.65 EPS versus a reported $0.62, a 4.62% negative surprise; the release separately reports $0.33 GAAP EPS and $0.94 non-GAAP EPS.
- Custom and connectivity growth: Management cited broad-based data center strength, including connectivity, electro-optics, storage and custom products, with a significant acceleration in the Custom business expected beginning in the second half of FY2027.
- Cash generation and commitments: Operating cash flow was $605.5 million in the quarter; cash was $3.9 billion at quarter-end, against $5.0 billion of debt and $8.5 billion of foundry and assembly purchase commitments.
- Acquisition and dilution overhang: Celestial AI and XConn were acquired for total consideration of roughly $4.0 billion, adding $2.8 billion of goodwill; Marvell also carries a $749.5 million Celestial contingent consideration liability.
Analysis
Marvell’s quarter was defined by another sharp step-up in AI infrastructure demand rather than by its EPS scorecard. Revenue reached a record $2.739 billion, up 37% from $2.006 billion a year ago and 13% from $2.418 billion in the prior quarter, exceeding the guidance midpoint by $39 million. Against the supplied consensus, reported EPS of $0.62 was below the $0.65 expectation by 4.62%; the earnings release separately presents GAAP diluted EPS of $0.33 and non-GAAP diluted EPS of $0.94. GAAP net income rose to $308 million from $194.8 million a year ago and $34.5 million in the prior quarter.
The central operating story was data center concentration and acceleration. Data center revenue grew 46% year over year to $2.172 billion, or 79% of sales, while communications and other revenue increased 10% year over year to $568 million but declined 3% sequentially. Better absorption and mix lifted GAAP gross margin to 53.1% from 50.4% a year ago, while non-GAAP gross margin held at 58.9%. Management’s confidence extended beyond the quarter: Q3 revenue is guided to $3.150 billion plus or minus 5%, and the company again raised its FY2027 and FY2028 revenue outlooks, citing strong bookings, connectivity demand and an expected second-half custom-business ramp.
AI data center demand
AI demand was the quarter’s decisive growth engine, expanding both the scale and mix of Marvell’s business toward data center infrastructure.
- Data center revenue: Sales increased 46% year over year to $2.172 billion and 18% sequentially, reaching 79% of company revenue versus 74% a year ago and 76% in the prior quarter.
- Product breadth: Management cited strength across electro-optics, custom, storage and switching, rather than a single product category.
- Custom ramp: Marvell expects a significant acceleration in its Custom business beginning in the second half of FY2027, alongside continued demand for connectivity products.
- Concentration risk: China represented 42% of revenue by shipment destination, while the company’s largest distributor represented 44% of quarterly revenue and its largest direct customer represented 16%.
Revenue and margin expansion
The reported operating model continued to improve as revenue growth absorbed fixed costs and shifted the mix toward data center products.
- Revenue progression: Q2 revenue of $2.739 billion compared with $2.006 billion in Q2 FY2026 and $2.418 billion in Q1 FY2027.
- Gross margin: GAAP gross margin was 53.1%, up 270 basis points year over year and 100 basis points sequentially; non-GAAP gross margin was 58.9%, unchanged sequentially and down 50 basis points year over year.
- Operating leverage: GAAP operating income increased to $459.7 million from $290.1 million a year ago and $339.4 million in the prior quarter, lifting operating margin to 16.8% from 14.5% and 14.0%, respectively.
- Investment intensity: Research and development expense rose 43% year over year to $741.1 million, or 27.0% of revenue, reflecting higher headcount and the addition of employees from recent acquisitions.
Forward outlook
Marvell’s forward message was more constructive than the quarter’s mixed EPS comparison, with management pointing to accelerating growth rather than normalization.
- Q3 revenue guide: Revenue is expected at $3.150 billion plus or minus 5%, implying roughly 15% sequential growth from Q2 at the midpoint.
- Q3 profitability guide: GAAP gross margin is expected at 52.9% to 53.9%, non-GAAP gross margin at 57.5% to 58.5%, GAAP diluted EPS at $0.53 plus or minus $0.05 and non-GAAP diluted EPS at $1.10 plus or minus $0.05.
- Raised longer-term view: Management said it was raising its revenue outlook for both FY2027 and FY2028 compared with the prior quarter’s guidance.
- Capacity constraint: The filing says advanced wafer fabrication, advanced packaging and large-body substrates remain supply constrained, limiting Marvell’s ability to fully satisfy demand for some products.
Acquisitions and earnout
The quarter also showed the financial footprint of Marvell’s strategy to build a broader AI connectivity platform through acquisitions.
- Celestial AI: Acquired on February 2 for total consideration of $3.534 billion, including $1.276 billion of cash, $1.929 billion of Marvell stock and $315.8 million of initial contingent consideration.
- XConn: Acquired on February 10 for $469 million, including $272.1 million of cash and $168.9 million of Marvell stock.
- Accounting burden: The two acquisitions added approximately $2.8 billion of goodwill and $1.0 billion of acquired intangible assets; quarterly acquired-intangible amortization was $214.9 million.
- Earnout volatility: The Celestial contingent consideration liability rose to $749.5 million at quarter-end after a $101.9 million quarterly fair-value increase, partly offset by a $49.9 million gain on the related forward stock purchase contract.
Cash flow and capital
Marvell generated substantial operating cash, but capacity investments, acquisitions, debt and shareholder returns remain significant uses of capital.
- Operating cash flow: Quarterly operating cash flow was $605.5 million, up from $461.6 million in the year-ago quarter; six-month cash flow was $1.244 billion.
- Liquidity: Cash and cash equivalents were $3.933 billion at August 1, 2026, up from $2.639 billion at January 31, 2026, with approximately $1.7 billion held outside the United States.
- Debt and commitments: Total debt was $5.0 billion, while unconditional foundry, test and assembly purchase commitments totaled $8.519 billion and capital expenditure commitments were approximately $351.6 million.
- Capital returns: Marvell repurchased $200 million of stock and paid $53.9 million of dividends during the quarter; $5.1 billion remained available under its repurchase authorization.
