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Marvell Technology, Inc. (MRVL)·Q4 2025 Earnings Summary

Executive Summary

  • Record Q4 revenue of $1.817B (+27% YoY, +20% QoQ) and non-GAAP EPS of $0.60; data center was 75% of revenue driven by AI, with data center revenue up 78% YoY. Non-GAAP operating margin expanded to 33.7% from 29.7% in Q3, underscoring leverage as custom AI ramps and optics remain strong .
  • Q4 results landed modestly above the Q4 guidance midpoints issued in December: revenue $1.817B vs $1.800B midpoint, non-GAAP gross margin 60.1% vs ~60% guided, non-GAAP EPS $0.60 vs $0.59 midpoint. Non-GAAP OpEx was in line at ~$479M vs prior guide ~$480M .
  • Q1 FY26 outlook calls for revenue of $1.875B ±5% and non-GAAP EPS of $0.61 ±$0.05, implying >60% YoY growth at the midpoint; management expects the cloud/AI portion of data center to drive double-digit sequential growth, partially offset by on-prem seasonality .
  • Strategic drivers: custom AI silicon programs now in high-volume production; strong bookings and shipments in electro‑optics (800G; 1.6T ramping with 3nm DSP offering ~20% power savings); multi-market recovery (enterprise/carrier) continues into FY26, while consumer is seasonal .
  • Catalysts: visibility into multi‑year custom XPU ramps (growth expected in FY26 and FY27), new design wins including additional hyperscalers, and Investor Day (June 10) to update model; the setup supports sustained revenue and margin expansion through AI cycle .

What Went Well and What Went Wrong

  • What Went Well

    • Data center strength and AI ramp: “record revenue of $1.37B [data center], growing 78% YoY and 24% sequentially,” fueled by custom AI silicon and optics; company achieved GAAP profitability in Q4 and expects it to continue in FY26 .
    • Operating leverage: non-GAAP EPS grew 40% QoQ to $0.60, “double the pace of revenue growth,” reflecting significant model leverage; non‑GAAP operating margin improved to 33.7% .
    • Custom momentum and multi-year visibility: “custom XPUs… to grow in fiscal ’26 and continue to grow in fiscal ’27 and beyond;” multiple hyperscaler engagements, with a new AI XPU for an additional US hyperscaler on track for 2026 production .

  • What Went Wrong

    • Mixed end-market picture outside data center: enterprise networking (-35% YoY) and carrier infrastructure (-38% YoY) still below end-market consumption despite sequential recovery; consumer down 8% QoQ and 38% YoY with expected ~35% sequential decline in Q1 due to gaming seasonality .
    • Gross margin mix headwind risk: management targets ~60% non‑GAAP gross margin but notes mix sensitivity; upside in custom faster than optics could pressure GM, though FY26 view is to remain ~60% .
    • Inventory build to support growth: inventory rose to ~$1.03B (+$170M QoQ) to support custom and optics ramps; while days were flat, elevated inventory remains a watch item as the company scales .

Financial Results

Overall financials (USD, GAAP/Non-GAAP as noted):

MetricQ2 FY25 (Aug 3, 2024)Q3 FY25 (Nov 2, 2024)Q4 FY25 (Feb 1, 2025)
Revenue ($USD Millions)$1,272.9 $1,516.1 $1,817.4
GAAP Gross Margin %46.2% 23.0% 50.5%
Non‑GAAP Gross Margin %61.9% 60.5% 60.1%
GAAP Diluted EPS ($)$(0.22) $(0.78) $0.23
Non‑GAAP Diluted EPS ($)$0.30 $0.43 $0.60
Non‑GAAP Operating Margin %26.1% 29.7% 33.7%

End‑market revenue mix (USD Millions):

End MarketQ4 FY24 (Feb 3, 2024)Q3 FY25 (Nov 2, 2024)Q4 FY25 (Feb 1, 2025)
Data center$765.3 $1,101.1 $1,365.8
Enterprise networking$265.0 $150.9 $171.4
Carrier infrastructure$170.0 $84.7 $105.8
Consumer$143.9 $96.5 $88.7
Automotive/industrial$82.3 $82.9 $85.7
Total$1,426.5 $1,516.1 $1,817.4

KPIs (Q4 FY25, USD unless noted):

  • Cash from Operations: $514.0M .
  • Cash & Equivalents: $948.3M .
  • Inventory: $1,029.7M; DSO: 51 days (down 9 days QoQ) .
  • Total Debt: ~$4.06B; Gross debt/EBITDA 2.06x; Net debt/EBITDA 1.58x .
  • Capital returns: Share repurchases $200M; dividends $52M in Q4 .
  • Weighted‑avg diluted shares: 879.9M (GAAP/Non‑GAAP) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
RevenueQ4 FY25$1.800B ±5% $1.817B Delivered above midpoint
GAAP Gross MarginQ4 FY25~50% 50.5% Slightly above
Non‑GAAP Gross MarginQ4 FY25~60% 60.1% In line
Non‑GAAP OpExQ4 FY25~$480M $479.4M In line
Non‑GAAP Diluted EPSQ4 FY25$0.59 ±$0.05 $0.60 Slightly above midpoint
RevenueQ1 FY26n/a$1.875B ±5% New
GAAP Gross MarginQ1 FY26n/a~50.5% New
Non‑GAAP Gross MarginQ1 FY26n/a~60% New
GAAP OpExQ1 FY26n/a~$712M New
Non‑GAAP OpExQ1 FY26n/a~$490M New
OI&E (Other income/expense)Q1 FY26n/a~$43M New
Non‑GAAP Tax RateQ1 FY26n/a~10% New
GAAP Diluted EPSQ1 FY26n/a$0.19 ±$0.05 New
Non‑GAAP Diluted EPSQ1 FY26n/a$0.61 ±$0.05 New
Diluted SharesQ1 FY26n/a~880M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25, Q3 FY25)Current Period (Q4 FY25)Trend
AI/custom silicon rampsQ2: custom AI “began to ramp.” Q3: “significant step-up… high‑volume production;” 5‑yr AWS agreement covering custom and networking .Two leading AI custom programs in high‑volume; revenue expected to grow in FY26 and again in FY27; additional US hyperscaler AI XPU on track for 2026 production .Accelerating, multi‑year visibility
Electro‑optics (800G/1.6T)Q2: strong electro‑optics growth. Q3: strong 800G bookings; shipped 1.6T (5nm); launched 3nm 1.6T DSP with ~20% power savings .800G demand “very strong” in 2025; 1.6T transition underway; 3nm product gaining traction with ~20% per‑link power savings .Strong; transitioning to 1.6T
Enterprise & CarrierQ2: return to growth expected in Q3 . Q3: +4% QoQ combined; guided mid‑teens QoQ for Q4 .Continued recovery; combined enterprise & carrier expected ~+10% QoQ in Q1 FY26 .Recovering
ConsumerQ3: forecast decline in Q4 due to seasonality .Q4 down 8% QoQ; Q1 FY26 expected ~35% QoQ decline (gaming seasonality) .Seasonal/weaker near term
Auto/IndustrialQ3: +9% QoQ; modest growth expected Q4 .Q4 +3% QoQ; Q1 FY26 high‑single‑digit decline expected (industrial lumpiness) .Mixed/modest
Margins & leverageQ2/Q3: ~60% non‑GAAP GM run‑rate; non‑GAAP OM 29.7% in Q3 .~60% non‑GAAP GM; non‑GAAP OM 33.7% in Q4; path to maintain ~60% GM in FY26, with OM progressing toward 38–40% long‑term .Improving leverage
Technology roadmapQ3: 2nm platform progress; accelerated cadence in optics .2nm silicon IP demonstrated (TSMC N2) for next‑gen AI/cloud; continued CPO/LPO development .Advancing

Management Commentary

  • “Record fourth‑quarter revenue of $1.817 billion – an increase of 20% sequentially and 27% year‑over‑year,” driven by data center (+78% YoY) and recovery in multi‑market; “we expect first‑quarter revenue growth of over 60 percent year‑over‑year at the mid‑point of guidance” .
  • “Our record non‑GAAP earnings per share of $0.60… growing 40% sequentially… underscores the substantial operating leverage in our business model” .
  • On custom silicon: “Our 2 leading AI custom programs are in high volume production… revenue… to grow in fiscal ’26… and continue to grow… in fiscal ’27 and beyond” .
  • On mix within data center: “Today, AI is… the majority [of data center]. About half of [data center] is electro‑optics and… custom has grown to about 25%… the balance is made up of everything else” .
  • CFO on leverage and outlook: “We delivered over 1,000 bps improvement in… non‑GAAP operating margin through fiscal 2025… We expect… ~60% non‑GAAP gross margin and significant progress towards our long‑term non‑GAAP operating margin target of 38% to 40% [in FY26]” .

Q&A Highlights

  • Custom XPU visibility and competitive debate: Management emphasized first‑pass silicon success, strong volume production ahead, and multi‑year growth at a lead customer; declined to comment on competitor socket share, focusing on what Marvell will build and ship .
  • AI mix and composition: AI now majority of data center; within data center, roughly half electro‑optics and ~25% custom, with the remainder other data center products; sequential cloud/AI double‑digit growth expected into Q1 FY26 .
  • Optics health and node transition: 800G demand remains very healthy; 1.6T transition is progressing; 3nm 1.6T DSP offers ~20% power savings per link; company investing in CPO/LPO for scale‑up fabrics over a multi‑year adoption arc .
  • Inventory and supply planning: Inventory build supports custom and optics ramps with days flat QoQ; management cited robust supply planning with customers and partners given rapid scaling of AI programs .
  • Multi‑market trajectory: Enterprise/carrier combined grew sequentially in Q4 and expected to grow ~10% sequentially in Q1 FY26; consumer to decline ~35% sequentially on seasonality; auto/industrial to decline high single digits (industrial lumpiness) .

Estimates Context

  • Wall Street consensus (S&P Global/Capital IQ) was unavailable at time of analysis due to data access limits. As a proxy, Q4 actuals were compared to the company’s prior Q4 guidance midpoints from Dec 3, 2024 (revenue $1.800B ±5%, non‑GAAP GM ~60%, non‑GAAP EPS $0.59 ±$0.05), and Q4 non‑GAAP results modestly exceeded these midpoints (revenue $1.817B; non‑GAAP GM 60.1%; non‑GAAP EPS $0.60) .
  • The company’s Q1 FY26 guide implies >60% YoY growth at the midpoint, led by cloud/AI sequential double‑digit growth; estimate models may need to reflect sustained AI‑led revenue and operating leverage into FY26 .

Key Takeaways for Investors

  • AI remains the primary engine: data center is 75% of revenue with AI now the majority within data center; custom and optics both scaling, supporting sustained high growth into FY26 .
  • Operating leverage is material and building: non‑GAAP OM expanded to 33.7% in Q4; management targets ~60% non‑GAAP GM and OM progressing toward 38–40% over time as NRE/scale benefits accrue .
  • Multi‑year custom visibility lowers cycle risk: management expects custom XPU revenue growth in FY26 and FY27; additional hyperscaler AI XPU slated for 2026 production provides further runway .
  • Watch gross margin mix: faster‑than‑expected custom mix could pressure GM versus optics‑led growth; management still plans to hold ~60% non‑GAAP GM in FY26 given product mix and scale benefits .
  • Monitor multi‑market normalization: enterprise/carrier are recovering into FY26; consumer/industrial remain more volatile; uplift here augments data center‑led profitability .
  • Inventory stance is proactive for growth: elevated inventories support ramps; watch conversion to revenue and working capital discipline as shipments scale .
  • Near‑term trading setup: “beat and raise” with >60% YoY Q1 guide and multi‑year custom visibility are positive catalysts; June 10 Investor Day could reset long‑term model and TAM/share expectations higher .

Additional details and source materials:

  • Q4 FY25 press release and financials .
  • Form 8‑K Item 2.02 (press release attachment) .
  • Q4 FY25 earnings call transcript (prepared remarks and Q&A) .
  • Prior quarter context (Q3/Q2 press releases, Q3 transcript) .

Non‑GAAP adjustments: Marvell’s non‑GAAP results exclude stock‑based compensation, amortization of acquired intangibles, restructuring and certain other items; the non‑GAAP tax rate applied in Q4 FY25 was 7% .