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Marvell Technology, Inc. (MRVL)·Q2 2026 Earnings Summary

Executive Summary

  • Record revenue of $2.006B (+58% YoY, +6% QoQ) and non-GAAP EPS of $0.67; data center revenue hit $1.491B (+69% YoY) with strong AI demand in custom silicon and electro-optics .
  • Q3 FY26 guidance: revenue $2.060B ±5%, non-GAAP EPS $0.74 ±$0.05; GAAP EPS ~$2.03 due to ~$1.8B other income from the automotive Ethernet divestiture gain; non-GAAP opex ~$$485M and non-GAAP GM 59.5–60.0% .
  • Consensus vs actual: Q2 revenue slightly below ($2.006B vs $2.010B*) and EPS in line ($0.67 vs $0.673*); Q3 Street implies $2.064B* revenue and $0.737* EPS near the company midpoint, suggesting limited estimate risk into Q3* [Values retrieved from S&P Global].
  • Strategic catalysts: completed $2.5B sale of automotive Ethernet (reduces non–data center mix) , announced new $5B buyback and $1B ASR , and highlighted >50 new custom AI opportunities with multi-billion lifetime potential .

What Went Well and What Went Wrong

What Went Well

  • Record Q2 revenue ($2.006B) and strong operating leverage: non-GAAP operating margin 34.8% and non-GAAP EPS $0.67, up 123% YoY .
  • AI-led momentum: “Marvell’s growth is being fueled by strong AI demand for our custom silicon and electro-optics products… custom AI design activity is at an all-time high, … over 50 new opportunities across more than 10 customers.” — Matt Murphy, CEO .
  • End-market recovery: enterprise networking ($193.6M) and carrier infrastructure ($130.1M) up 43% YoY combined; management guides ~30% sequential growth in these two end markets for Q3 .

What Went Wrong

  • Custom silicon “lumpiness”: data center revenue guided flat QoQ in Q3 as lower custom revenue offsets double-digit growth in electro-optics; custom expected stronger in Q4 .
  • Slight top-line miss vs consensus: Q2 revenue $2.006B vs $2.010B*, despite segment strength; EPS was in line* [Values retrieved from S&P Global].
  • Consumer seasonality: Q2 consumer up sharply QoQ ($115.9M), but guided down low single digits sequentially for Q3 .

Financial Results

Headline Metrics vs Prior Periods

MetricQ4 FY2025 (Feb 1, 2025)Q1 FY2026 (May 3, 2025)Q2 FY2026 (Aug 2, 2025)
Revenue ($USD Billions)$1.817 $1.895 $2.006
GAAP Diluted EPS ($)$0.23 $0.20 $0.22
Non-GAAP Diluted EPS ($)$0.60 $0.62 $0.67
GAAP Gross Margin (%)50.5% 50.3% 50.4%
Non-GAAP Gross Margin (%)60.1% 59.8% 59.4%
Non-GAAP Operating Margin (%)33.7% 34.2% 34.8%

Q2 FY2026 Actual vs Consensus

MetricActualConsensusBeat/Miss
Revenue ($USD Billions)$2.006 $2.010*Miss (−$0.004B)*
Primary EPS ($, non-GAAP)$0.67 $0.673*In line*
EBITDA ($USD Millions)$626.6*$784.0*Miss*

Values retrieved from S&P Global.

End Market Revenue Mix (Revenue $USD Millions)

End MarketQ4 FY2025Q1 FY2026Q2 FY2026
Data center$1,365.8 $1,440.6 $1,490.5
Enterprise networking$171.4 $177.5 $193.6
Carrier infrastructure$105.8 $138.4 $130.1
Consumer$88.7 $63.1 $115.9
Automotive/Industrial$85.7 $75.7 $76.0
Total$1,817.4 $1,895.3 $2,006.1

KPIs

KPIQ4 FY2025Q1 FY2026Q2 FY2026
Operating Cash Flow ($USD Millions)$514.0 $332.9 $461.6
Inventories ($USD Millions)$1,029.7 $1,071.4 $1,051.6
Cash & Equivalents ($USD Millions)$948.3 $885.9 $1,224.4
Total Debt ($USD Billions)~$4.06 LT + $0.13 ST ≈ $4.19 ~$2.98 LT + $1.26 ST ≈ $4.24 ~$3.97 LT + $0.50 ST ≈ $4.47
Debt RatiosGross debt/EBITDA 1.63x; Net debt/EBITDA 1.19x ——
Share Repurchases ($USD Millions)$200 $340 $200

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)Q3 FY2026N/A$2.060 ±5% New
GAAP Gross Margin (%)Q3 FY2026~50.5% (Q2 guide) 51.5–52.0% Raised vs Q2 guide
Non-GAAP Gross Margin (%)Q3 FY2026~59.5% (Q2 guide) 59.5–60.0% Maintained to slightly raised
GAAP Opex ($USD Millions)Q3 FY2026~$735 (Q2 guide) ~$719 Lowered
Non-GAAP Opex ($USD Millions)Q3 FY2026~$495 (Q2 guide) ~$485 Lowered
GAAP EPS ($)Q3 FY2026$0.21 ±$0.05 (Q2 guide) $2.03 ±$0.05 Raised (divestiture gain)
Non-GAAP EPS ($)Q3 FY2026$0.67 ±$0.05 (Q2 guide) $0.74 ±$0.05 Raised
Other income/expense (GAAP)Q3 FY2026N/A≈$1.8B income (gain on divestiture) New
Other income/expense (non-GAAP)Q3 FY2026N/A≈$33M expense New
Tax rate (non-GAAP)Q3 FY202610% (Q2) 10% Maintained
DividendQ3 FY2026$0.06 declared Jun quarter $0.06 payable Oct 30, 2025 Maintained
Capital ReturnsQ3 FY2026~$2B remaining authorization at Q2 end New $5B authorization + $1B ASR; $300M repurchased in current quarter Expanded

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY2025, Q1 FY2026)Current Period (Q2 FY2026)Trend
AI/custom silicon momentumEntered volume production; >60% YoY growth expected Q1 18 XPU/XPU-attach sockets progressing; >50 new opportunities; strong H2 with Q4 stronger Accelerating pipeline and visibility
Electro-optics (PAM DSP)Strong interconnect growth 800G strong; 1.6T (200G/lane) shipping; 400G/lane demo for 3.2T future Next-gen ramping
Scale-up networkingEarly positioning Investing in Ethernet and UA Link scale-up switches; first products within ~2 years Building toward revenue
Enterprise/carrier recoveryRecovery starting; low point ~$0.9B run-rate Q3 implied ~$1.7B annualized; target ~$2.0B over time Strong sequential recovery
Supply chain/tariffsGeneral watch items Tight supply managed via strong execution; no material tariff impact to date Manageable
Capital allocationReturning cash; repurchases/dividends $2.5B auto divestiture closed; buybacks ongoing; $5B new authorization & $1B ASR Increased returns

Management Commentary

  • “Marvell delivered record revenue of $2.006 billion… we expect continued growth into the third quarter, accompanied by operating margin and earnings per share expansion.” — Matt Murphy, CEO .
  • “Custom AI design activity is at an all-time high… engaged in over 50 new opportunities across more than 10 customers.” — Matt Murphy .
  • “We expanded our non-GAAP operating margin… and delivered record non-GAAP EPS… robust cash flow generation… $540,000,000 of stock repurchases in the first half.” — Matt Murphy .
  • “We completed the divestiture of our automotive Ethernet business in a $2,500,000,000 all cash transaction… aligns with our strategy to focus… massive AI opportunity.” — Matt Murphy .
  • “For Q3… GAAP other income… ~$1.8B; non-GAAP other income and expense… ~$33M expense; non-GAAP tax rate 10%.” — Willem Meintjes, CFO .

Q&A Highlights

  • Custom business lumpiness: Q3 digestion in custom programs; recovery expected in Q4; second-half custom up vs first-half .
  • Design wins pipeline: “18… sockets” in progress and new wins added since June; multi-billion lifetime revenue potential; confidence in 20% DC market share target .
  • Supply chain/tariffs: Tight but managed; no significant tariff impact seen .
  • Scale-up fabrics: Investing in Ethernet and UA Link; scale-up switches and interconnect (AEC/AOC DSPs, retimers, silicon photonics) positioned for adoption over next two years .
  • Optical ecosystem: LPO emerging in niche use cases; DSP pluggables remain majority, with Marvell participating in both .

Estimates Context

  • Q2 FY26: Revenue $2.006B vs Street $2.010B* (minor miss); non-GAAP EPS $0.67 vs Street $0.673* (in line); EBITDA $626.6M vs Street $784.0M* (miss)*.
  • Q3 FY26: Street revenue $2.064B* and EPS $0.737* are broadly aligned with company midpoint ($2.060B, $0.74), suggesting limited near-term revision pressure; upside likely hinges on custom re-acceleration in Q4 and electro-optics strength into Q3*.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue/EPS durability: AI-driven data center strength plus recovering enterprise/carrier drove record Q2 and support Q3 guide with margin expansion .
  • Near-term setup: Q3 data center flat QoQ as custom digests while optics grow double digits; look for custom rebound in Q4 to re-accelerate total growth .
  • Mix shift and reporting change: Auto Ethernet divestiture reduces non–data center mix; from Q4, Marvell will report “Data Center” and “Communications & Other,” aiding clarity on core AI trajectory .
  • Capital returns: $5B new authorization, $1B ASR, and ongoing buybacks reinforce confidence and help offset dilution while free cash flow scales .
  • Margin profile: Non-GAAP GM guided to 59.5–60.0% and non-GAAP opex lowered to ~$485M in Q3, driving EPS growth above revenue growth .
  • Strategic optionality: >50 custom opportunities, scale-up networking products in development, and advanced interconnect roadmap (1.6T now, 3.2T path) broaden AI infrastructure TAM capture .
  • Watch items: Custom concentration and timing, consumer seasonality, and supply-chain tightness; management execution and diversified wins mitigate risk .

Sources

  • Q2 FY26 8-K and Exhibit 99.1: financials and guidance .
  • Earnings call transcript: commentary, guidance details, segment outlook .
  • Related press: $2.5B auto Ethernet sale ; new $5B buyback + $1B ASR ; $0.06 dividend ; product/IP updates .
  • Consensus estimates: EPS, revenue, EBITDA, target price and counts* [Values retrieved from S&P Global].