Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marvell Technology Inc (MRVL, Financial) delivered record revenue of $1.895 billion for the first quarter of fiscal 2026, reflecting a 4% sequential increase and a strong 63% year-over-year growth.
- The data center end market achieved record revenue of $1.44 billion, growing 5% sequentially and 76% year-over-year, driven by robust AI demand.
- Marvell significantly increased stock repurchases in the first quarter, buying back $340 million, up from $200 million in the prior quarter.
- The company announced the sale of its automotive Ethernet business to Infineon for $2.5 billion, providing additional flexibility in capital allocation strategy.
- Marvell is forecasting second-quarter revenue of $2 billion at the midpoint of guidance, representing 57% year-over-year growth and setting another record revenue level.
Negative Points
- The consumer end market saw a 29% sequential decline in revenue, primarily driven by seasonality and gaming demand.
- The automotive and industrial end market experienced a 12% sequential decline in revenue, with industrial order patterns being lumpy.
- GAAP operating expenses were $682 million, including stock-based compensation and other costs, impacting overall profitability.
- Non-GAAP gross margin was 59.8%, slightly below expectations, partly due to the lower-margin custom silicon business.
- There are ongoing macroeconomic uncertainties that could impact future growth, requiring close monitoring of the broader environment.
Q & A Highlights
Q: What is the direction of content in Marvell's next-generation programs, and are you exclusive on these 3-nanometer XPUs?
A: Matt Murphy, CEO, clarified that Marvell is the incumbent for the current generation of AI XPUs and has secured 3-nanometer wafer and advanced packaging capacity for 2026. While acknowledging that customers may pursue multiple paths to meet their requirements, Marvell expects its custom silicon revenue to continue growing on a multiyear, multigenerational basis with its customers.
Q: How does Marvell plan to support a broader customer base beyond its initial engagements?
A: Matt Murphy, CEO, stated that Marvell has the capacity to expand its portfolio and engagements, supported by increased R&D spending and reallocation of resources towards data center and AI opportunities. Marvell is well-positioned to support multiple engagements across various programs, which will be detailed at their upcoming AI investor event.
Q: Can you discuss Marvell's positioning in 200 gig SerDes technology and the relationship with NVIDIA?
A: Matt Murphy, CEO, emphasized Marvell's best-in-class SerDes technology, with leadership in 200 gig and 400 gig per lane demonstrations. Regarding the NVLink fusion partnership with NVIDIA, Murphy highlighted the complementary role of custom solutions and Marvell's engagement in enabling customers to leverage NVIDIA's rack scale solutions.
Q: Can you break down data center revenue and provide insights into AI business growth?
A: Matt Murphy, CEO, noted that AI has become the majority of Marvell's data center revenue and is on track to become the majority of the company's overall revenue. While not providing specific quarterly breakdowns, Murphy indicated that AI continues to be the fastest-growing portion of their data center business.
Q: What are Marvell's expectations for the second half of the year, particularly for custom and enterprise businesses?
A: Matt Murphy, CEO, expects continued growth across the board, driven by AI demand and recovery in enterprise networking and carrier infrastructure. While not providing specific quarterly guidance, Murphy expressed optimism for fiscal 2027, supported by articulated growth drivers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
