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Marvell Technology, Inc. (MRVL)·Q1 2026 Earnings Summary

Executive Summary

  • Record Q1 FY26 revenue $1.895B (+63% YoY, +4% QoQ) and non-GAAP EPS $0.62, both modestly above S&P Global consensus; strength was driven by AI in Data Center, notably custom silicon ramps and robust electro‑optics shipments . Q1 revenue beat consensus $1.879B* and EPS beat $0.613* by small margins. “Marvell delivered record revenue… momentum is being fueled by strong AI demand… rapid scaling of our custom silicon programs and robust shipments of our electro‑optics products.”
  • Q2 FY26 guidance midpoints: revenue $2.00B (+/-5%), GAAP GM 50–51%, non‑GAAP GM 59–60%, non‑GAAP EPS $0.67 (+/-$0.05) — revenue and EPS midpoints are roughly in line with consensus ($2.01B*, $0.673*), with mix‑driven GM near term capped by faster‑growing lower‑GM custom .
  • End‑market mix: Data Center $1.441B (76% of revenue, +76% YoY, +5% QoQ); enterprise and carrier continued recovery; consumer down seasonally; auto/industrial softer QoQ .
  • Capital allocation: $340M buybacks (step‑up from $200M in Q4) and $52M dividends; total debt ~$4.2B; net debt/EBITDA 1.42x, providing flexibility as auto Ethernet divestiture proceeds ($2.5B) approach expected 2025 close .

Values marked with * are from S&P Global consensus.

What Went Well and What Went Wrong

  • What Went Well

    • AI-driven Data Center momentum: “rapid scaling of our custom AI silicon programs to high‑volume production” and “robust shipments of our electro‑optics products” underpinned record revenue and EPS .
    • Custom platform validation and ecosystem: NVLink Fusion collaboration with NVIDIA broadens customer options for custom scale‑up solutions; advanced packaging platform entered production to lower cost/power and raise yields for custom AI accelerators .
    • Multi‑market recovery and capital returns: Enterprise networking and carrier revenue grew sequentially; buybacks increased to $340M and dividends paid $52M, reflecting confidence and operating leverage (non‑GAAP operating margin 34.2%) .

  • What Went Wrong

    • Mix pressure on margins: Non‑GAAP GM 59.8% (vs. 60.1% in Q4) as faster‑growing custom XPU runs below company average GM; management expects GM to remain around guided range given mix .
    • Consumer and Industrial softness: Consumer down 29% QoQ on seasonality; industrial drove a 12% sequential decline in auto/industrial despite auto growth .
    • Investor concern on dual‑sourcing/exclusivity for next‑gen XPU programs; management emphasized incumbency, secured 3nm wafer and advanced packaging capacity for 2026 production, and multi‑year revenue continuity but acknowledged customers may pursue “multiple paths” given volumes .

Financial Results

MetricQ3 FY25Q4 FY25Q1 FY26
Revenue ($B)$1.516 $1.817 $1.895
GAAP Gross Margin (%)23.0% 50.5% 50.3%
Non‑GAAP Gross Margin (%)60.5% 60.1% 59.8%
GAAP EPS$(0.78) $0.23 $0.20
Non‑GAAP EPS$0.43 $0.60 $0.62
Non‑GAAP Operating Margin (%)29.7% 33.7% 34.2%
Cash from Operations ($M)$536.3 $514.0 $332.9

Segment/end‑market mix and trends

End Market ($M)Q4 FY25Q1 FY26YoY (Q1)QoQ (Q1)
Data Center$1,365.8 $1,440.6 +76% +5%
Enterprise Networking$171.4 $177.5 +16% +4%
Carrier Infrastructure$105.8 $138.4 +93% +31%
Consumer$88.7 $63.1 +50% (29%)
Automotive/Industrial$85.7 $75.7 (2%) (12%)

KPIs and balance sheet

KPIQ3 FY25Q4 FY25Q1 FY26
Stock Repurchases ($M)$200.0 $200.0 $340.0
Dividends Paid ($M)$51.9 $51.9 $51.8
Inventory ($M)$859.4 $1,029.7 $1,071.4
Cash & Equivalents ($M)$868.1 $948.3 $885.9
Total Debt ($B)$4.095 (129.4+3,965.5) $4.064 (129.5+3,934.3) $4.232 (1,255.2+2,977.4)
Net Debt/EBITDA (x)——1.42x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 FY26$1.875B +/- 5% Actual $1.895B Beat prior guide
GAAP Gross MarginQ1 FY26~50.5% Actual 50.3% In line
Non‑GAAP Gross MarginQ1 FY26~60% Actual 59.8% In line
GAAP OpexQ1 FY26~$712M Actual $681.8M Lower
Non‑GAAP OpexQ1 FY26~$490M Actual $486.2M Lower
GAAP EPSQ1 FY26$0.19 +/- $0.05 Actual $0.20 Slightly above
Non‑GAAP EPSQ1 FY26$0.61 +/- $0.05 Actual $0.62 Slightly above
RevenueQ2 FY26—$2.00B +/- 5% New guide
GAAP Gross MarginQ2 FY26—50–51% New guide
Non‑GAAP Gross MarginQ2 FY26—59–60% New guide
GAAP OpexQ2 FY26—~$735M New guide
Non‑GAAP OpexQ2 FY26—~$495M New guide
OI&E (loss)Q2 FY26—~$49M New guide
Non‑GAAP Tax RateQ2 FY26—~10% New guide
Diluted SharesQ2 FY26—~874M New guide
GAAP EPSQ2 FY26—$0.21 +/- $0.05 New guide
Non‑GAAP EPSQ2 FY26—$0.67 +/- $0.05 New guide

Earnings Call Themes & Trends

TopicQ3 FY25 (prev‑2)Q4 FY25 (prev‑1)Q1 FY26 (current)Trend
AI/custom silicon rampCustom AI programs “now in volume production”; forecasting strong Q4 growth Custom AI entered volume; strong interconnect demand; setting up strong FY26 Rapid scaling to high‑volume; secured 3nm wafer & advanced packaging for 2026; multi‑gen visibility Accelerating
Electro‑optics (800G→1.6T)Noted interconnect strength in outlook Continued strength implied 1.6T at 5nm shipping; 3nm ramp expected next year; 800G remains dominant in 2025 Transition building
NVLink Fusion/eco——NVLink Fusion partnership offers custom scale‑up path; chiplet approach New catalyst
Enterprise/CarrierMeaningful YoY declines Sequential recovery underway Combined grew 14% QoQ; guide mid‑single digit QoQ growth Recovering
Mix/margins—Non‑GAAP GM ~60% Custom (lower GM) growing faster; GM to hover near guided range Mix‑limited
Portfolio actions——Divestiture of auto Ethernet ($2.5B) to boost flexibility De‑risking/capital

Management Commentary

  • “As the industry continues to move toward building custom AI infrastructure, Marvell is uniquely positioned at the center of this transformation… custom silicon business driving strong growth in the second quarter and beyond.” — Matt Murphy, CEO .
  • “Revenue… was $1.895 billion… Non‑GAAP EPS was $0.62… operating leverage… Non‑GAAP operating margin was 34.2%.” — Willem Meintjes, CFO .
  • On XPU continuity/dual‑sourcing noise: “We’re the incumbent… secured three‑nanometer wafer and advanced packaging capacity for 2026… it is certainly possible… customers may be pursuing multiple paths.” — CEO .
  • On optics roadmap: “We have commenced shipments on 1.6T at 5‑nanometer… big push… to 3‑nanometer… but 800G dominates this entire year.” — CEO .

Q&A Highlights

  • Custom XPU programs: Clarified incumbency, 3nm capacity booked for 2026, and multi‑gen roadmap; customers may pursue multiple paths but MRVL expects revenue continuity and growth .
  • Gross margin sustainability: Custom carries lower GM but strong operating leverage; expect GM similar to Q2 guide depending on mix; EPS growing > revenue as programs scale .
  • Optical trajectory: 1.6T DSP shipping at 5nm; 3nm to ramp with ecosystem; 800G remains majority in 2025; market share leadership maintained moving to 1.6T .
  • Enterprise/Carrier cadence: Combined mid‑single‑digit sequential growth guided for Q2, marking fifth straight quarter of sequential growth across these end markets .
  • NVLink Fusion mechanism: Intended as chiplet integrated with custom XPU via die‑to‑die IO, leveraging NVIDIA rack‑scale networking .

Estimates Context

  • Q1 FY26 actual vs consensus (S&P Global):

    • Revenue: Actual $1.895B vs $1.879B consensus* — slight beat .
    • Non‑GAAP EPS: Actual $0.62 vs $0.613 consensus* — slight beat .

  • Q2 FY26 guidance vs consensus (at guide midpoints):

    • Revenue: Guide $2.00B vs $2.01B consensus* — essentially in line .
    • Non‑GAAP EPS: Guide $0.67 vs $0.673 consensus* — essentially in line .

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • AI remains the growth engine: custom XPUs and electro‑optics drove another record quarter and are set to extend in Q2; MRVL is positioned for multi‑year custom program ramps (capacity secured at 3nm) .
  • Mix will shape margins: faster custom growth caps GM near ~60% but operating leverage remains strong (non‑GAAP Op Margin 34.2%); focus on EPS and cash generation over headline GM percent .
  • Optical cycle intact: 800G dominance persists through 2025 with 1.6T shipments underway and broader 1.6T ramp expected next year—sustaining interconnect tailwinds .
  • Recovering multi‑market: Enterprise and Carrier continue sequential recovery, adding diversification as AI scales; Consumer remains seasonal and volatile .
  • Capital flexibility rising: stepped‑up buybacks ($340M), stable dividends, moderating leverage (net debt/EBITDA 1.42x), and expected auto Ethernet sale proceeds create room for further returns and investment .
  • Near‑term catalysts: June 17 Custom AI Investor Event, continued custom and optics shipment momentum, and further large‑customer disclosures could re‑rate confidence in out‑year revenue trajectory .
  • Watch items: any signs of dual‑sourcing impact, gross‑margin variability from mix, and supply chain/lead‑time dynamics as 1.6T scales .