Marvell FY26 Q4 corresponds to the actual period of November/December 2025 through January 2026.
Marvell FY26 Q4 Earnings:
Revenue was $2.22B, up 22% year over year and 3% sequentially, below the consensus estimate of $2.26B. Q1 guidance: revenue of $2.4B, up 27% year over year.
GAAP gross margin was 51.7%, up 1.2 percentage points year over year. Non-GAAP gross margin was 59%, down 1.1 percentage points year over year and 0.7 percentage points sequentially. FY27 Q1 non-GAAP gross margin guided at 59.3%, down 0.5 percentage points year over year.
Non-GAAP net income was $685M, up 29% year over year, above the consensus estimate of $678M. Non-GAAP net margin was 30.9%. FY27 Q1 non-GAAP net income guided at $698M, up 29% year over year, with a net margin of 29.1%.
GAAP days in inventory was 117 days, up 26 days sequentially.
The company repurchased $200M in shares and paid $50.8M in dividends this quarter.
By Business, Q4:
Data center revenue was $1.65B, up 21% year over year and 9% sequentially, slightly above the consensus estimate of $1.64B, representing 74% of revenue and remaining the largest business. Growth was primarily driven by the optical interconnect business, with ASIC business second.
The company's ASIC business is primarily custom XPUs (Amazon Trainium2/3 XPU + Google Axion CPU) and XPU Attach products. Despite the AWS Trainium3 loss controversy, XPU revenue doubled year over year in FY26. FY27 XPU revenue is expected to grow over 20% year over year; FY2028 XPU revenue is expected to double year over year, driven by a new Tier 1 XPU project entering high-volume production and several XPU attach projects ramping in FY27. On the previously overlooked XPU attach business, management noted CXL demand is accelerating, partly due to tight memory supply; custom CXL extenders help customers reuse prior-generation DRAM on new XPU/GPU and CPU platforms while supporting near-memory compute. XPU attach FY26 revenue is expected around $200M, doubling to $500M in FY27, doubling to $1B in FY28, and doubling to $2B in FY29, becoming a new growth driver.
The full optical interconnect portfolio includes DSPs for AEC and AOC, retimers for PCIe, Ethernet, and UALink, and silicon photonics for NPO and CPO XPU optics. In the scale-out PAM product line this quarter, 800G product demand remains very strong, with multiple Tier 1 customers showing very strong bookings for 1.6T solutions; these products entered volume production in FY2026 H2.1.6T product revenue is expected to ramp rapidly in FY2027 and continue significant growth in FY2028, but 800G will be stronger and longer-lived, with 800G still accounting for the majority of shipments this year. In the scale-across interconnect product line, the company expects to supply DCI modules to all five US hyperscalers this year. In the scale-up interconnect product line, Celestial AI's Photonic Fabric technology is driving CPO large-scale deployment starting next year. FY28 Q4 run-rate revenue guided at $500M (unchanged); FY29 Q4 run-rate revenue guided at $1B (unchanged). The 2030 scale-up interconnect market TAM is expected to exceed $10B. In the AEC market, the company has secured design wins from three US Tier 1 hyperscalers; retimer product demand is also strong. FY27 AEC and retimer combined revenue is expected to double.
Data center switching revenue exceeded $300M in FY2026, driven entirely by scale-out applications. Current 12.8T product demand remains strong, and the next-gen 51.2T product is ramping rapidly. FY2027 data center switching revenue is expected to exceed $600M (previous guidance was $500M). 100T switching chips are expected to begin sampling in FY27 H1.
Carrier and other revenue was $567M, up 26% year over year and 2% sequentially, representing 26% of revenue.
Since 2019, the company has continuously acquired to build its data center portfolio, divesting Wi-Fi and automotive Ethernet businesses while acquiring Avera, Aquantia, Inphi, Innovium, Celestial AI, and Xconn. This resulted in large intangible amortization, once exceeding 20% of revenue. As revenue has scaled significantly, intangible amortization as a percentage of revenue has steadily declined to 10%.
Outlook:
Q1 data center revenue guided at $1.82B, up 26% year over year and 10% sequentially, above the consensus estimate of $1.72B. On-premise data center business is expected to decline seasonally sequentially. Carrier and other revenue guided at $580M, up 28% year over year.
FY27 revenue guided at $11B (previous guidance $10B), with sequential quarterly growth expected; FY27 Q4 revenue expected above $3B. FY27 data center revenue growth guided at 40% year over year (previous guidance 25%); interconnect revenue growth guided at 50% year over year (previous guidance 30%); ASIC revenue growth guided at 20% year over year (unchanged), weighted toward H2; carrier and other revenue growth guided at 10% year over year.
FY28 revenue guided above $15B, up 40% year over year. Data center revenue growth guided at 50% year over year (previous guidance 25%). Interconnect growth will significantly outpace cloud capex growth. ASIC revenue expected to at least double year over year (unchanged). Ethernet switching will continue to ramp significantly. Celestial AI and Xconn acquisitions expected to contribute combined revenue of ~$250M in FY28. Carrier and other revenue growth guided at low-single-digits year over year. EPS expected above $5. All guidance upside comes from the data center business.
Overall, the market previously worried about a prolonged earnings vacuum for Marvell before FY28. Management responded with sequential quarterly growth guidance and provided more FY28 details, highlighting strong growth across scale-out, scale-across AI, and XPU-attach, while also rapidly advancing into the emerging AI scale-up market.
Based on management's latest guidance, FY27 full-year revenue of ~$11B+ implies ~$3B+ net income; FY28 full-year revenue of ~$15B+ and EPS of $5+ implies ~$4.5B net income. Current market cap implies ~24x FY27 P/E and ~18x FY28 P/E.