Marvell Technology (NASDAQ: MRVL) reported record second-quarter fiscal 2027 revenue of 2.739 billion dollars, up 37 percent year over year and 13 percent sequentially, as demand for data-center connectivity and custom AI chips continued to accelerate. The chipmaker also lifted its full-year revenue outlook for both fiscal 2027 and fiscal 2028 for the second consecutive quarter, signaling sustained momentum in its most profitable segment.
Data Center Drives the Beat
Data-center revenue reached a record 2.17 billion dollars, representing 79 percent of total sales, up 46 percent from the prior-year quarter and 18 percent sequentially. Chief Executive Officer Matt Murphy said the growth reflected broad demand across AI interconnect, switching, optical interconnects and custom silicon. Non-GAAP diluted earnings per share came in at 0.94 dollars, up 40 percent year over year and exceeding the midpoint of guidance. Non-GAAP operating margin stood at 36.6 percent, up 180 basis points year over year and 160 basis points sequentially. Cash flow from operations totaled 606 million dollars during the quarter, despite higher capacity prepayments to suppliers, according to Chief Financial Officer Dan Durn.
Custom Silicon Ramps With Google Partnership
The centerpiece of the results was Marvell's custom silicon business, which is expected to ramp significantly in the second half of fiscal 2027 and more than double year over year in fiscal 2028. Murphy highlighted an expanded commercial agreement with a hyperscaler — identified by analysts as Google — tied to a warrant for up to 7 percent of outstanding shares, linked to revenue milestones. The partnership covers AI inference accelerators, storage controllers, network interface controllers and near-memory compute products connected to the TPU ecosystem. Revenue from programs covered by the agreement through fiscal 2028 is already included in Marvell's forecast, and management said the deal increases confidence that custom-silicon revenue can reach a "significantly larger scale" in fiscal 2029 and beyond. Murphy told analysts that bookings for AI were "exceptionally robust" and that growth would accelerate further in the second half of the fiscal year.
Raised Guidance and Third-Quarter Outlook
Marvell now expects fiscal 2027 revenue of approximately 12 billion dollars, representing roughly 45 percent year over year growth, up from prior guidance. Fiscal 2028 revenue was raised to about 18 billion dollars from 16.5 billion dollars, implying approximately 50 percent growth. For the fiscal third quarter, the company forecast revenue of 3.15 billion dollars, plus or minus 5 percent, corresponding to more than 50 percent year over year growth at the midpoint. Non-GAAP diluted EPS for Q3 was guided in the range of 1.05 to 1.15 dollars, with non-GAAP gross margin expected between 57.5 percent and 58.5 percent as custom-product mix creates a sequential headwind. The company announced an Investor Day for October 6, 2026.
Competitive Context
The results come one day after Nvidia's own blowout quarterly report, underscoring that demand for AI infrastructure is broadening beyond GPU leaders into custom silicon, networking and optical interconnect — areas where Marvell has built a growing position. The Google warrant agreement in particular marks a shift from Nvidia-centric AI chip narratives and positions Marvell as a credible alternative provider of bespoke accelerator silicon for hyperscalers.
What the Numbers Do Not Show
Despite the strong top-line and outlook, the custom-silicon ramp remains heavily concentrated in a small number of hyperscaler customers. Gross margin pressure from the mix shift to custom products is expected to persist in the near term, with non-GAAP gross margin declining from 58.9 percent in Q2 to a midpoint of 58 percent in Q3. Outside data centers, communications and other revenue totaled 568 million dollars, down 3 percent sequentially but up 10 percent year over year, and is expected to decline by a low-to-mid-teens percentage rate in Q3 before recovering. Total debt stood at 4.96 billion dollars. The company repurchased 200 million dollars in common stock and returned 54 million dollars in dividends during the quarter.
Sources
- MarketBeat, "Marvell Technology Q2 Earnings Call Highlights," August 27, 2026. https://www.marketbeat.com/instant-alerts/transcript-marvell-technology-q2-earnings-call-highlights-2026-08-27/
- Quartz, "Marvell Q2 FY2027 earnings: record revenue, raised guidance," August 27, 2026. https://qz.com/marvell-record-revenue-ai-chips-guidance-raise-082726
- 24/7 Wall St., "Marvell Technology Q2 2027: Data Center Surge Powers Record Revenue," August 28, 2026. https://247wallst.com/cards/marvell-technology-q2-2027-earnings-mrvl-01m12dqfpmpvkj1c3vff35aetq
