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The call conveys a strongly positive operational and financial momentum: record quarterly revenue, robust non-GAAP profitability, sizable upgrades to fiscal 2027–2028 revenue outlooks, and accelerating data center and interconnect growth driven by new products, partnerships (notably NVIDIA), and strategic M&A. Management also highlighted cash generation and proactive steps to secure capacity. Key near-term negatives are a temporary GAAP EPS hit from acquisition accounting, elevated debt/share count from recent deals, modest sequential softness in the communications end market, and execution/timing risk tied to multi-year ramps and sustained customer CapEx. Overall, the positive achievements, upgrades, and clear tailwinds in the core data center and interconnect businesses significantly outweigh the transitory and execution-related lowlights.
Marvell guided Q2 FY27 revenue at $2.7 billion (+/‑5%), implying roughly 12% sequential and 35% year‑over‑year growth at the midpoint, with GAAP gross margin of 52.1–53.1% and non‑GAAP gross margin of 58.25–59.25%; GAAP operating expense of ~ $960M and non‑GAAP op expense of ~ $600M; GAAP other expense ~ $68M (non‑GAAP ~ $35M), a non‑GAAP tax rate of 11%, basic shares ~899M / diluted ~915M, GAAP EPS $0.32–$0.42 and non‑GAAP EPS $0.88–$0.98. For FY27 management now expects revenue ≈ $11.5B (~40% YoY) with data center ~50% growth and interconnect >70% YoY (communications ≈10% growth), Q3 quarterly revenue of ~ $3.0B and Q3/Q4 growth of at least 10% sequentially (data center ~50% of company revenue by Q4); for FY28 they forecast revenue ≈ $16.5B (~45% YoY) with data center ~55% growth and custom revenue more than doubling, FY27 non‑GAAP op expense ≈ $2.45B, FY28 op expense growth mid‑to‑high‑teens, and about $1B of supplier prepayments planned this fiscal year to secure capacity.
Q1 revenue of $2.418B, up 9% sequentially and 28% year-over-year. Q2 guidance midpoint $2.7B (≈+12% sequential, +35% YoY). Fiscal 2027 revenue outlook raised to ~ $11.5B (≈+40% YoY) and fiscal 2028 outlook to ~$16.5B (≈+45% YoY).
Record data center revenue of $1.8B in Q1 (76% of total), +11% sequential and +27% YoY. Management expects data center revenue to grow ~50% in fiscal 2027 and ~55% in fiscal 2028.
Interconnect growth outlook increased to >70% YoY for fiscal 2027 (up from prior 50%). Drivers include strong demand for 800G, ramping 1.6T (200G per lane) solutions, DCI transitions to 1.6T, and scale-out/scale-up networking needs.
Leadership in pluggable DCI with first secure 1.6T ZR/ZR+ modules (2nm coherent DSP) sampling this year. Management sees line of sight to a $1B annualized DCI module business in fiscal 2028 (≈2x fiscal 2026 ~$500M).
Q1 non-GAAP gross margin 58.9% and non-GAAP operating margin 35%. Non-GAAP EPS of $0.80 (beat midpoint by $0.01) representing ~29% YoY growth. Q2 non-GAAP EPS guidance $0.88–$0.98.
Record cash flow from operations of $639M in Q1. Returned capital via $200M share repurchase and $54M dividends in the quarter. Inventory stable at $1.4B.
Expanded collaboration with NVIDIA (optics, NVLink fusion, AI RAN). Acquisitions: Polariton (plasmonic silicon photonics; demonstrated plasmonic modulator bandwidth >1 THz), Celestial AI (photonic fabric & low-power analog SerDes), and XConn — all cited as accelerating scale-up optics, custom, and switching efforts.
Broad portfolio wins and ramps: TIAs/drivers expected to exceed $1B annualized run rate in coming quarters; shipping 1.6T and next-gen PAM/400G-per-lane demonstrations; 6.4T light engine engagements and multiple photonics approaches (MZM, EAM, MRM, plasmonics).
Custom revenue on track to grow >20% in fiscal 2027 and to more than double in fiscal 2028. Management retains line of sight to >$10B custom (XPU + attached) in fiscal 2029 driven by flagship XPU program, multiple XPU-attached ramps (NIC, CXL) and new tier-1 wins.
Company is locking in supply via strategic actions — including planned ~$1B in supplier prepayments for FY27 — to secure capacity and support aggressive revenue ramps, funded by strong cash flow.
Good afternoon, and welcome to Marvell Technology First Quarter Fiscal Year 27 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Mr. Ashish Saran, Senior Vice President of Investor Relations. Thank you. You may begin.
Thank you, and good afternoon, everyone. Welcome to Marvell's First fiscal quarter 27 earnings call. Joining me today are Matthew J. Murphy, Marvell's Chairman and CEO Willem A. Meintjes, CFO Christopher Koopmans, President and COO and Sandeep Bharathi, president, data center growth. Let me remind everyone that certain comments made today include forward looking statements which are subject to significant risks and uncertainties could cause our actual results to differ materially from management's current expectations. Please review the cautionary statements and risk factors contained in our earnings press release, which we filed with the SEC today, and posted on our website. As well as our most recent 8 k 10-K, 10-Q, and other documents filed by us from time to time with the SEC.
We do not intend to update our forward looking statements. During our call today, we will refer to certain non GAAP financial measures, A reconciliation between our GAAP and non GAAP financial measures is available in our earnings press release. Let me now turn the call over to Matthew for his comments on the quarter. Matthew?
Yes. Thanks Ashish and good afternoon everyone. For the first quarter of fiscal 27 Marvell delivered record revenue of $2.418 billion refl...