Marvell raises FY27, FY28 revenue outlook on surging AI demand
- Marvell Q2 non-GAAP EPS of $0.94 beat estimates of $0.92; revenue reached $2.739 billion
- Fiscal 2027 revenue outlook raised to ~$12 billion (up from $11.5 billion), implying 45% YoY growth
- Fiscal 2028 revenue guidance increased to ~$18 billion (up from $16.5 billion), implying 50% YoY growth
- Data center segment drove growth with 46% YoY increase; custom silicon business expected to double in FY28
- Company secured expanded commercial agreement with key hyperscaler for custom silicon and XPU-attach products
*this image is generated using AI for illustrative purposes only.
Marvell Technology Inc (NASDAQ: MRVL) reported second-quarter fiscal 2027 non-GAAP diluted earnings per share of $0.94, beating analyst estimates of $0.92. Net revenue for the quarter ended August 1, 2026 reached $2.739 billion, surpassing the consensus estimate of $2.710 billion.
The company significantly raised its revenue outlook for fiscal 2027 and fiscal 2028, driven by accelerating demand in the data center segment and a new commercial agreement with a key hyperscaler.
Q2 Fiscal 2027 Financial Highlights
The following table summarises key income statement metrics for the quarter ended August 1, 2026, compared with the prior quarter and the year-ago period.
| Metric | Q2FY27 (Aug 1, 2026) | Q1FY27 (May 2, 2026) | Q2FY26 (Aug 2, 2025) | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Net Revenue ($M) | 2,739.3 | 2,417.8 | 2,006.1 | +37% | +13% |
| Gross Profit ($M) | 1,455.6 | 1,260.8 | 1,010.6 | — | — |
| GAAP Gross Margin | 53.1% | 52.1% | 50.4% | — | — |
| Non-GAAP Gross Margin | 58.9% | 58.9% | 59.4% | — | — |
| GAAP Operating Income ($M) | 459.7 | 339.4 | 290.1 | — | — |
| Non-GAAP Operating Income ($M) | 1,003.2 | 846.9 | 698.8 | — | — |
| GAAP Net Income ($M) | 308.0 | 34.5 | 194.8 | — | — |
| Non-GAAP Net Income ($M) | 865.9 | 718.0 | 585.5 | — | — |
| GAAP Diluted EPS | $0.33 | $0.04 | $0.22 | — | — |
| Non-GAAP Diluted EPS | $0.94 | $0.80 | $0.67 | — | — |
For the six months ended August 1, 2026, total net revenue was $5,157.1 million compared with $3,901.4 million for the six months ended August 2, 2025. Six-month GAAP net income was $342.5 million versus $372.7 million in the prior-year period, while non-GAAP net income was $1,583.9 million compared with $1,125.5 million.
Revenue by End Market
Data Center revenue was the primary growth driver, rising 46% year over year and 18% sequentially to $2,171.5 million in Q2FY27. Communications and other revenue was $567.8 million, up 10% year over year but down 3% sequentially.
| End Market | Q2FY27 ($M) | Q1FY27 ($M) | Q2FY26 ($M) | YoY | QoQ |
|---|---|---|---|---|---|
| Data Center | 2,171.5 | 1,832.7 | 1,490.5 | +46% | +18% |
| Communications and Other | 567.8 | 585.1 | 515.6 | +10% | (3%) |
| Total Net Revenue | 2,739.3 | 2,417.8 | 2,006.1 | +37% | +13% |
Data Center revenue represented 79% of total net revenue in Q2FY27, up from 76% in Q1FY27 and 74% in Q2FY26.
Updated Fiscal Outlook
Marvell increased its full-year revenue guidance for both fiscal 2027 and fiscal 2028. The company now expects fiscal 2027 revenue to grow approximately 45% year over year to roughly $12 billion, up from a prior outlook of approximately $11.5 billion. For fiscal 2028, Marvell expects revenue of approximately $18 billion, an increase of $1.5 billion from the previous $16.5 billion outlook. This represents expected growth of approximately 50% year over year for fiscal 2028.
The increase is driven by the data center business, which is now expected to grow by approximately 60% in fiscal 2027, up from a prior expectation of 50%. Data center revenue is projected to grow more than 60% year over year in fiscal 2028.
Q3 Fiscal 2027 Guidance
Marvell provided the following guidance for the third quarter of fiscal 2027, covering the three months ending October 31, 2026.
| Metric | Q3FY27 Outlook |
|---|---|
| Net Revenue | $3,150 million +/- 5% |
| GAAP Gross Margin | 52.9% – 53.9% |
| Non-GAAP Gross Margin | 57.5% – 58.5% |
| GAAP Operating Expenses | ~$1,015 million |
| Non-GAAP Operating Expenses | ~$655 million |
| GAAP Diluted EPS | $0.53 +/- $0.05 |
| Non-GAAP Diluted EPS | $1.10 +/- $0.05 |
| Basic Weighted-Avg Shares | 900 million |
| Diluted Weighted-Avg Shares | 921 million |
The company expects third-quarter revenue of $3.15 billion, plus or minus 5%, versus estimates of $3.03 billion. It also guided third-quarter adjusted earnings of $1.10 per share, plus or minus five cents per share, compared to estimates of $1.07 per share. Third-quarter adjusted gross margins are guided at 57.5% to 58.5%, versus 58.9% in the second quarter.
Strategic Developments and Custom Silicon
Marvell disclosed an expanded commercial agreement and associated warrant with a key hyperscaler, one of the largest adopters of custom silicon. The warrant agreement encompasses custom programs already in execution, new design wins, and future potential programs. This includes products attaching to the TPU ecosystem such as AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute.
CEO Matt Murphy noted that the custom business, including XPU and XPU-attached products, is expected to more than double in fiscal 2028. The company highlighted strong momentum in scale-up optics and switching technologies, positioning itself as a major enabler of next-generation AI infrastructure.
Balance Sheet and Cash Flow
As of August 1, 2026, Marvell held cash and cash equivalents of $3,932.8 million, up from $2,638.8 million as of January 31, 2026. Total assets stood at $27,554.6 million versus $22,285.3 million at fiscal year-end. Total liabilities were $9,023.0 million, and total stockholders' equity was $18,531.6 million.
Net cash provided by operating activities for Q2FY27 was $605.5 million, compared with $461.6 million in Q2FY26. For the six months ended August 1, 2026, operating cash flow was $1,244.3 million versus $794.5 million in the prior-year period. During the quarter, the company repurchased $200 million of common stock and returned $54 million through dividends. Total debt was $4.96 billion, with a gross debt-to-EBITDA ratio of 1.32 times and a net debt-to-EBITDA ratio of 0.27 times.
Management Commentary
Matt Murphy, Chairman and CEO of Marvell, attributed the record quarterly revenue to continued strong demand across the Data Center portfolio. He noted that AI-related bookings remain robust and that the company is raising its revenue outlook for both fiscal 2027 and fiscal 2028. Murphy highlighted broad-based strength in Connectivity and a significant acceleration expected in the Custom business beginning in the second half of fiscal 2027.
Dan Dern, who joined as CFO in mid-June replacing Willem Menke, stated that the company expects significant operating leverage, with non-GAAP operating margin likely to enter the 38% to 40% long-term target range in Q4 of fiscal 2027. The company plans to showcase these growth drivers at its Investor Day on October 6, 2026.
A non-GAAP tax rate of 11.0% was applied to non-GAAP financial results for Q2FY27. The company calculated EPS under the two-class method following the issuance of Series A Convertible Preferred Stock on March 31, 2026. Marvell will discuss its Q2FY27 results on a conference call on August 27, 2026 at 1:45 p.m. Pacific Time.
Stock Performance
Marvell shares were up approximately 186% year-to-date heading into the print. The stock was down 2.94% in after-hours trading on Thursday, trading at $234.36 at the time of publication.
How might the new commercial agreement with the key hyperscaler impact Marvell's competitive positioning against other custom silicon providers like AMD or NVIDIA?
What specific risks could prevent Marvell from achieving its aggressive 50% year-over-year revenue growth target for fiscal 2028?
Will the anticipated entry of non-GAAP operating margins into the 38-40% range in Q4 FY27 be sustainable given the capital intensity of custom silicon development?
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