Marvell Technology (MRVL) — Earnings Preview Memo
Key Points Table
| Factor | Details |
|---|---|
| Next Reported Quarter | Q2 FY2027 (ending July 31, 2026) |
| Consensus Revenue Estimate | $2,703M |
| Company Guidance (Q2 FY27) | Revenue: $2,700M +/- 5%; Non-GAAP EPS: $0.93 +/- $0.05 |
| Prior Year Q2 Actual Revenue | $2,010M (+43% YoY consensus growth for Q2 FY27) |
| Recent Results | Q1 FY27 revenue: $2,418M (+28% YoY); Q1 FY27 non-GAAP EPS: $0.80 |
| FY2027 Revenue Guidance | ~$11.5B (company), +40% YoY; consensus: $11,530M |
| FY2028 Preliminary Outlook | ~$16.5B (company), +45% YoY |
| Most Important Factors | Data center segment growth, interconnect business trajectory, custom silicon ramp, supply chain execution, margin expansion, scale-up optics/switching, XPU attach/NIC/CXL adoption, NVIDIA partnership impact |
Summary and Conclusions
- Marvell is entering Q2 FY27 with strong momentum, having just delivered Q1 revenue of $2,418M (+28% YoY) and guiding Q2 to $2,700M at the midpoint (+35% YoY).
- Guidance and consensus are tightly aligned, with both expecting Q2 revenue around $2.7B and non-GAAP EPS near $0.93.
- The company has raised its full-year FY27 revenue outlook multiple times in recent quarters, now targeting nearly $11.5B (+40% YoY), and is signaling a further acceleration to $16.5B (+45% YoY) in FY28.
- Marvell is coming off a very strong prior year (FY26 revenue +42% YoY), so the current quarter faces a tough but not insurmountable comparable.
- Key watch items for the upcoming print include: continued outperformance in the data center segment (especially interconnect and custom silicon), execution on supply chain and capacity, margin trajectory, and early signals from new product ramps (scale-up optics, switching, XPU attach).
- Management commentary and intra-quarter updates have emphasized exceptional AI-related bookings, robust demand across all major product lines, and increasing customer diversification.
Most Important Factors to Watch This Quarter
| Factor | What to Watch For | Why It Matters |
|---|---|---|
| Data Center Revenue Growth | Sequential and YoY growth, especially vs. guidance and consensus | Data center is >75% of revenue and the main growth engine |
| Interconnect Business | Growth rate (guided +70% YoY for FY27), 800G/1.6T optics, DCI, scale-up optics ramp | Interconnect is the fastest-growing and most profitable segment |
| Custom Silicon (XPU/XPU Attach) | Progress on >20% YoY growth in FY27, doubling in FY28, new Tier 1 customer ramp, XPU attach/NIC/CXL | Custom is diversifying and key to long-term $10B+ revenue targets |
| Supply Chain & Capacity | Ability to secure wafers, substrates, lasers; prepayments; any constraints or bottlenecks | Supply is tight industry-wide; upside depends on execution |
| Margins | Non-GAAP gross margin (guide: 58.25–59.25%), operating leverage, OpEx discipline | Margin expansion is critical for EPS growth and valuation |
| Scale-Up Optics/Switching | Initial revenue contribution, customer adoption, integration of Celestial AI/XConn | New TAM, greenfield opportunity, potential for $1B+ businesses |
| NVIDIA Partnership | Early revenue impact, cross-selling, NVLink Fusion, AI-RAN, silicon photonics collaboration | Strategic validation, ecosystem positioning, incremental TAM |
| Customer Diversification | Breadth of hyperscaler and emerging customer wins, mix of XPU, XPU attach, and networking | Reduces risk of over-concentration, supports multi-year growth |
Quarterly Financials — Actuals and Guidance
Quarterly Results and Guidance (Revenue, Non-GAAP EPS)
| Quarter | Actual Revenue ($M) | YoY Growth | Non-GAAP EPS | Company Guidance (Revenue, $M) | Company Guidance (Non-GAAP EPS) | Consensus Revenue ($M) | Consensus EPS |
|---|---|---|---|---|---|---|---|
| Q1 FY27 (Apr 26) | 2,418 | +28% | $0.80 | 2,400 +/- 5% | $0.79 +/- $0.05 | 2,408 | $0.80 |
| Q2 FY27 (Jul 26)* | 2,700 +/- 5% | $0.93 +/- $0.05 | 2,703 | $0.93 | |||
| Q3 FY27 (Oct 26)* | 3,022 | $1.08 | |||||
| Q4 FY27 (Jan 27)* | 3,360 | $1.22 |
*Guidance and consensus only; actuals not yet reported.
Annual Results and Guidance
| Fiscal Year | Actual Revenue ($M) | YoY Growth | Non-GAAP EPS | Company Guidance (Revenue, $M) | Company Guidance (Non-GAAP EPS) | Consensus Revenue ($M) | Consensus EPS |
|---|---|---|---|---|---|---|---|
| FY2026 (Jan 26) | 8,195 | +42% | $2.84 | 8,185 | $2.97 | ||
| FY2027 (Jan 27)* | ~11,500 | 11,530 | $1.85 | ||||
| FY2028 (Jan 28)* | ~16,500 | >$5.00 |
*Guidance and consensus only; actuals not yet reported.
Last Year's Performance (Q2 FY26)
| Metric | Q2 FY26 Actual | YoY Growth |
|---|---|---|
| Revenue ($M) | 2,006 | +58% |
| Non-GAAP Gross Margin | 59.4% | +130 bps |
| Non-GAAP EPS | $0.67 | +123% |
- Q2 FY26 was a very strong quarter, with revenue up +58% YoY and non-GAAP EPS more than doubling.
- The company benefited from a surge in AI/data center demand and a recovery in enterprise/carrier markets.
- This sets a high bar for YoY comparables in Q2 FY27, but current guidance and consensus imply another +35–43% YoY revenue growth, indicating continued acceleration.
Management Commentary and Intra-Quarter Color
On Demand and Bookings:
- "We are seeing exceptional AI-related bookings, and as a result, we are significantly raising Marvell’s revenue outlook for both fiscal 2027 and fiscal 2028 compared with the guidance we provided last quarter."
- "Our data center business is on fire, and we're projecting accelerating revenue growth for this year and next year already from a strong base."
On Segment Drivers:
- "The increase in our revenue outlook continues to be driven by our data center business, which we now expect to grow approximately 50% this fiscal year. Notably, we expect our interconnect business to grow more than 70% year-over-year, well above our prior expectation of 50% growth."
- "Custom revenue remains on track to grow more than 20% year-over-year in fiscal 2027... Looking ahead to fiscal 2028, we now expect custom revenue to more than double year-over-year, which is higher than our prior outlook."
On Supply Chain:
- "Our investments in securing supply are paying off, enabling us to scale the business every quarter."
- "We are forecasting approximately $1 billion in prepayments during this fiscal year with the first payments beginning in the second quarter. These prepayments will be applied against future material purchases."
On Margins and Profitability:
- "We expect to achieve the upper end of our target operating margin model of 38% to 40% as we progress through fiscal 2028."
- "We have now delivered 6 consecutive quarters of positive GAAP net income and expect to continue to drive strong GAAP profitability going forward."
On Product and Customer Diversification:
- "We have all the pieces that can help our customers architect their fully optimized AI infrastructure, and that can be built on Marvell end-to-end technology."
- "By the time we get to 2028, you're going to have 15, 18 products in production, some are XPU, some are XPU attached, none of them is going to break the bank here."
What Changed / Recent Developments
- Guidance Raised Multiple Times: FY27 revenue outlook increased from $10B to $11.5B in the last two quarters; FY28 outlook now $16.5B.
- Interconnect Growth Accelerating: FY27 interconnect growth now guided to +70% YoY, up from +50% previously.
- Custom Silicon Doubling in FY28: Custom business expected to more than double in FY28, with three roughly equal drivers: existing programs, XPU attach, and new Tier 1 XPU program.
- NVIDIA Partnership Formalized: Expanded collaboration on optics, NVLink Fusion, and AI-RAN, with NVIDIA also making a strategic investment.
- Supply Chain Prepayments: $1B in prepayments planned to secure capacity for continued growth.
- Scale-Up Optics Ramping: Scale-up optics revenue for FY28 now expected at $300M (up from $150M), with Celestial AI and other solutions contributing.
- Customer Diversification: More than 10 XPU attach programs reaching high volume in FY28; custom business less concentrated.
Conclusion
Marvell enters Q2 FY27 with strong momentum, robust demand, and a raised outlook for both FY27 and FY28. The company is coming off a very strong prior year, but is still guiding to +35–43% YoY revenue growth for the current quarter and +40% for the full year. The most important factors to watch are continued outperformance in the data center/interconnect/custom segments, execution on supply chain and capacity, margin expansion, and early signals from new product ramps and partnerships (notably with NVIDIA). The company is well positioned for multi-year growth, but faces high expectations and tough comparables.
