Aug 27, 2026 earnings call — Data center strength lifts revenue and outlook
Raised fiscal 2027 revenue outlook to roughly $12 billion, with record Q2 revenue of $2.739 billion.
Revenue $2.7B (est $2.7B) · EPS $0.94 (est $0.93) · Next-quarter revenue outlook $3.1B ±5%
Key quotes
"In our Data Center end market, we delivered record second quarter revenue of $2.17 billion, representing 18% sequential growth and 46% year-over-year growth."
"The warrant agreement encompasses custom programs already in execution that were awarded to Marvell over the past several years, new design wins and future potential programs."
"We remain on pace to make approximately $1 billion of capacity prepayments to suppliers in fiscal 2027."
Analyst Q&A 9
Google deal: which products drive revenue
Q (Thomas O'Malley · Barclays): He asked what parts of the Google warrant are generating revenue and which XPU attach types matter. He also asked for the percentage split between the inference accelerator and other attach types.
A: Management said the opportunity is very broad-based across many product lines. They listed inference accelerators, storage controllers, NICs, memory interface controllers and near-memory compute and declined to single out one product today. They said the total envelope of the opportunity is massive over the next 6, 6.5 years.
"It includes inference accelerators as you mentioned, also storage controllers, NICs, memory interface controllers, near-memory compute, a whole bunch of different products." — Matthew Murphy (CEO·CHAIR)
Timing and size of Google custom revenue
Q (Harlan Sur · JPMorgan): He asked whether the Google warrant revenue would show up in calendar '27 or be back-end loaded, and how the $10–11 billion custom target for fiscal '29 looks now.
A: Management said some warrant-related revenue is already comprehended in next year because some programs are already in flight or started. They said programs that are in execution or starting production will contribute much more significantly in fiscal '29 and custom will over double next year. They declined to size fiscal '29 specifically on the call and pointed to the upcoming Investor Day for detailed modeling.
"Now that's because some of these programs, obviously, are already in flight or have already started, but the programs ahead of us that are either in execution or just starting production, those will contribute much more significantly in fiscal '29." — Matthew Murphy (CEO·CHAIR)
Progress on another large XPU program
Q (Vivek Arya · BofA): He asked for an update on the other large XPU program planned next year and whether the modest assumptions for next year could grow larger over time. He asked if this program can become a meaningful long-term opportunity.
A: Management said they are encouraged and that the new program is part of the custom revenue increase next year. They are making quarterly progress on design execution, supply and commercial terms, and they view this as one of Marvell's largest revenue opportunities. They did not quantify exact future amounts but said it is tracking well.
"So without quantifying it, exactly what I would say is from the last call, if you look at the $1.5 billion raise we're doing for next year, just at a high level, it's broad-based." — Matthew Murphy (CEO·CHAIR)
CXL evolution and scale-up optics progress
Q (Aaron Rakers · Wells Fargo): He asked how CXL architecture is evolving, especially with Structera, and for an update on scale-up optics and the Celestial AI numbers versus initial targets.
A: Management said their organic CXL investment is proving ideal for memory expansion and inferencing, with deployments at multiple hyperscalers and additional design wins. On scale-up optics, they said the Celestial AI CPO photonic fabric is a key part but the overall category (including NPO) is larger than prior estimates and is accelerating. They expect to present a comprehensive memory expansion and optics discussion at Investor Day.
"As I said in my prepared remarks, all of that together, scale-up optics is accelerating even further from the number I gave you last quarter." — Matthew Murphy (CEO·CHAIR)
Do copper wins translate to optical success?
Q (Joseph Moore · Morgan Stanley): He asked whether initial copper scale-up successes are foundational for the optical transition or whether they are separate decisions. He wanted to know how copper progress informs optical execution.
A: Management said success with their Teralynx architecture has proven they can deliver complex switching in volume and that translates to scale-out and scale-up use cases. They emphasized that long-term wins require a clear, credible roadmap on optics (NPO and CPO) because customers want end-to-end solutions. They believe optics attach will materially increase the switching SAM and that having the full portfolio is essential.
"the next level of that, Joe, is that you then need to show a compelling clear roadmap that you can execute with credibility on the optics side, both NPO and then all the way to full integration on CPO." — Matthew Murphy (CEO·CHAIR)
How Google deal changes out-year custom revenue
Q (Benjamin Reitzes · Melius): He asked whether the Google warrant implies large step-ups in FY '29 and FY '30 and how to model incremental revenue and margins before the Analyst Day.
A: Management agreed the math implies a very large opportunity and that most of the immediate impact is already in next year, so the bigger effect is in FY '29 and beyond. They said custom revenues will be larger than most models had assumed prior to the warrant, but they would not quantify specifics on the call. They said margins would be in line with their existing custom financial model and that Investor Day will provide detailed ranges.
"you should assume starting in FY '29 and beyond whatever you've modeled previously prior to the warrant for custom numbers definitely goes higher." — Matthew Murphy (CEO·CHAIR)
Compute, networking, memory trade-offs and wins
Q (Christopher Muse · Cantor Fitzgerald): He asked how the fungibility of compute, networking and memory supports new design wins, and whether strength is focused on memory controllers/custom HBM or also on XPU.
A: Management said they see the same fungibility trend and that Marvell's rapid customization capability is a key competitive strength. They cited CXL and memory expansion and AI inference accelerators as concrete examples driving customer activity. They said the strength is broad and includes networking, storage, memory and compute, not just custom ASIC revenue.
"we've built a business around being able to customize quickly, and it's been in our DNA even from 2021 Investor Day." — Matthew Murphy (CEO·CHAIR)
Connectivity growth and drivers
Q (James Schneider · Goldman Sachs): He asked for an update on connectivity growth rates and where they are landing given incremental strength, and whether a subsegment is driving most of the increase.
A: Management said the $500 million raise this year and $1.5 billion next year are broad-based but that connectivity is a clear driver. They listed scale-up optics, transceivers for scale-out, optical DSPs and switching as parts of connectivity that are upsized versus prior expectations. They said connectivity is probably the largest net driver of the $1.5 billion raise and that execution there is strong.
"As I said, the way to think about it is the $500 million raise for this year and the $1.5 billion for next year is broad-based." — Matthew Murphy (CEO·CHAIR)
Why margins fall despite data center guide increase
Q (Quinn Bolton · Needham & Company): He asked whether the faster-growing custom segment within data center is driving the 90 basis point lower margin guidance, or whether another mix change is responsible.
A: Management said custom is ramping meaningfully in the second half and that mix is the primary driver of the acceleration and margin profile. They said the Q4 gross margin target range is similar to Q3, and their preliminary view is gross margins next year will be in a similar range as they exit this year. They plan to present updated long-term operating margin targets at the Analyst Day.
"Part of the acceleration story in Q3, as you point out, mix is the primary driver." — Daniel Durn (CFO)