Earnings Recap — Q2 FY2027
CY Q3 2026 · Reported August 27, 2026 · Beat 6 of last 7 quarters
Marvell Technology, Inc. reported Q2 FY2027 revenue of $2.74B, a beat of 0.7% against consensus, and EPS of $0.94, a beat of 0.6%.
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Marvell's results and raised outlook reinforce that AI infrastructure demand is broadening beyond compute into networking, optics, switching and custom silicon, with data center now 79% of revenue. The acceleration in scale-out, scale-across and emerging scale-up networking, plus a custom business expected to more than double, points to sustained multi-year content growth per AI cluster. The $1 billion in capacity prepayments signals that supply chain constraints, not demand, may be the key gating factor for the buildout.
Marvell reported record Q2 FY2027 revenue of $2.739 billion, up 13% sequentially and 37% year-over-year, with non-GAAP EPS of $0.94, both above the midpoint of guidance. Data center revenue reached a record $2.17 billion, or 79% of total revenue, growing 46% year-over-year, while communications and other revenue was $568 million, down 3% sequentially but up 10% year-over-year. Non-GAAP gross margin was 58.9% and non-GAAP operating margin was 36.6%, expanding 180 basis points year-over-year. The company raised its fiscal 2027 revenue outlook to approximately $12 billion and its fiscal 2028 outlook to approximately $18 billion, citing broad-based data center strength across interconnect, switching, custom and scale-up optics. Marvell also disclosed an expanded commercial agreement and warrant with a key hyperscaler covering custom programs including inference accelerators, storage controllers, NICs, memory interface controllers and near-memory compute.
Management raised its fiscal 2027 revenue outlook to approximately $12 billion, up from roughly $11.5 billion a quarter ago, implying ~45% year-over-year growth, and lifted its fiscal 2028 outlook to approximately $18 billion from $16.5 billion, implying ~50% growth. Data center revenue growth expectations were increased to approximately 60% for fiscal 2027 (from ~50%) and to more than 60% for fiscal 2028, with custom expected to more than double in fiscal 2028 and accelerate significantly in fiscal 2029. Q3 FY2027 revenue guidance was set at $3.15 billion at the midpoint, representing 15% sequential and more than 50% year-over-year growth, with growth expected to further accelerate in Q4. Non-GAAP gross margin is guided to 57.5%–58.5% in Q3, with a sequential headwind from the custom ramp, and management expects to maintain that range in Q4 FY2027. Operating margin is expected to enter the 38%–40% long-term target range in Q4 FY2027 and reach the upper end of that range as fiscal 2028 progresses. Management also disclosed an expanded commercial agreement and warrant with a key hyperscaler, and said it is aggressively securing supply with approximately $1 billion of capacity prepayments planned for fiscal 2027.
“As a result, we now expect overall Marvell revenue in fiscal 2027 to grow approximately 45% year-over-year to roughly $12 billion, up from our prior outlook of approximately $11.5 billion just 1 quarter ago.”
on FY2027 guidance raise
“Putting it all together, we now expect fiscal 2028 revenue of approximately $18 billion, up $1.5 billion from the $16.5 billion outlook we provided just 1 quarter ago.”
on FY2028 guidance raise
“We remain on pace to make approximately $1 billion of capacity prepayments to suppliers in fiscal 2027.”
on Supply capacity prepayments
Can you give color on what's contributing to the Google warrant revenue, particularly the XPU attach products, and any color on the percentage contribution between the inference accelerator and attach?
Matt Murphy said the engagement and warrant are significant and broad-based, covering inference accelerators, storage controllers, NICs, memory interface controllers and near-memory compute. He said Marvell defined the XPU attach category years ago and that all projections to date have been under-called, with the total opportunity envelope being massive over the next six-plus years.
Given the expanded commercial agreement and warrant with a key hyperscaler, what does the custom revenue trajectory look like now, particularly into fiscal 2029?
Murphy said revenue from programs covered by the warrant through fiscal 2028 is already reflected in the custom target, with more significant contributions in fiscal 2029. He said custom will more than double next year without capping it, and that more detail will come at the October 6 Investor Day.
Can you discuss what you're seeing architecturally in CXL and how the Structera product is evolving, and provide an update on scale-up optics relative to initial targets?
Murphy said the CXL investment has become a home run, now deployed at multiple hyperscalers in high volumes for memory expansion and inferencing, with additional design wins in recent quarters. On scale-up optics, he said the opportunity is accelerating beyond prior expectations, driven by both CPO and NPO, and is a significant driver of the $1.5 billion fiscal 2028 raise.