Marvell Tech Q4 2026 Earnings Call Transcript

Marvell Technology's Strong Performance in Q4 2026 and Outlook for Fiscal 2027

Marvell Technology, Inc. (NASDAQ: MRVL) delivered impressive results in the fourth quarter of fiscal 2026, surpassing earnings expectations with an EPS of $0.80 compared to the expected $0.792. The company reported a record revenue of $2.219 billion, reflecting 7% sequential growth. This performance was driven by strong demand in the data center end market, which contributed significantly to the overall growth.

Key Highlights from the Earnings Call

During the call, Matt Murphy, Chairman and CEO of Marvell, highlighted the successful completion of two strategic acquisitions—Celestial AI and XConn. These acquisitions are expected to strengthen Marvell’s position in the rapidly growing AI scale-up networking market. Murphy also emphasized that the recent acquisitions are not expected to contribute meaningfully until fiscal 2028, and the current revenue growth is primarily driven by Marvell’s organic businesses.

For the full fiscal year 2026, Marvell achieved remarkable growth, with revenue increasing by 42% year-over-year to approximately $8.2 billion. The data center segment was a major driver, with revenue surpassing $6 billion, growing 46% year-over-year. This growth was fueled by robust demand for interconnect, switching, and storage products, along with a strong ramp in the custom business, which doubled in fiscal 2026.

Looking ahead, Marvell has raised its revenue forecast for fiscal 2027, projecting more than 30% year-over-year growth, which would bring total revenue close to $11 billion. This outlook represents a significant increase from previous forecasts, with the company now expecting data center revenue to grow by 40% year-over-year in fiscal 2027. The company anticipates continued strong growth in all key product lines within the data center segment, including interconnect, switching, and custom solutions.

Growth Drivers in the Data Center Segment

The data center end market delivered record fourth-quarter revenue of $1.65 billion, representing 9% sequential growth and 21% year-over-year growth. This performance was driven by increased demand across the interconnect portfolio, with all key product lines showing sequential growth.

Marvell is leading in several areas within the data center segment:

Interconnect: Demand for 800-gig products remains robust, and the company expects strong bookings for 1.6T solutions. Marvell is positioned to maintain leadership in the PAM market at 1.6T and is already developing 400-gig per lane technology for future transitions.
Scale Across Interconnects: Marvell continues to lead with Coherent 400-gig and 800-gig solutions, winning new customers and expecting to supply DCI modules to all five major U.S. hyperscalers this year.
Scale-Up Interconnects: With the acquisition of Celestial AI, Marvell is entering the scale-up interconnect market, which it believes could exceed $10 billion by 2030. The company is on track to achieve a $500 million annualized run rate in CPO revenue by Q4 of fiscal 2028.

Data Center Switching and Custom Business

Data center switching revenue exceeded $300 million in fiscal 2026, driven entirely by scale-out applications. Marvell expects this segment to surpass $600 million in fiscal 2027, up from $500 million previously. The company is seeing strong engagement with both existing and new customers for its next-generation 51.2T and 100T platforms.

In the custom business, Marvell has seen exponential growth, scaling from zero revenue to $1.5 billion in fiscal 2026. The company expects custom revenue to grow more than 20% year-over-year in fiscal 2027, with continued growth from existing programs and new engagements.

Communications and Other End Markets

In the communications and other end markets, Marvell delivered fourth-quarter revenue of $567 million, up 2% sequentially and 26% year-over-year. The company expects low single-digit sequential growth in the first quarter of fiscal 2027, with approximately 30% year-over-year growth.

Financial Results and Guidance

Fiscal 2026 ended with strong financial results, with revenue reaching $8.195 billion, growing 42% year-over-year. On a non-GAAP basis, gross margin was 59.5%, operating margin was 35.3%, and earnings per diluted share was $2.84, growing 81% year-over-year.

For the first quarter of fiscal 2027, Marvell expects revenue to be in the range of $2.4 billion, with non-GAAP earnings per diluted share projected between $0.74 and $0.84. The company plans to continue returning capital to stockholders through share repurchases and dividends.

Conclusion

Marvell Technology is well-positioned for continued growth in the coming years, driven by strong demand in the data center market, strategic acquisitions, and a focus on innovation. The company’s ability to deliver consistent execution and strong operating leverage has enabled it to achieve record results and capitalize on the massive AI opportunity ahead.