Marvell Technology, Inc. Q1 FY2026 earnings call

• Marvell delivered record revenue of $1.895 billion in Q1 FY2026, above guidance, with 4% sequential and 63% year-over-year growth.
• Data center end market grew strongly due to AI demand, with $1.44 billion in Q1, and mid-single-digit sequential growth expected in Q2.
• Announced sale of automotive Ethernet business to Infineon for $2.5 billion, expected to close in 2025.
• Second-quarter revenue forecasted at $2 billion midpoint.
• Custom silicon programs for AI are scaling, including partnerships with NVIDIA and new multi-die packaging platform.
• Interconnect portfolio, including PAM and DCI franchises, showcased at OFC 2025 with various advanced products.
• Enterprise networking and carrier infrastructure end markets showed ongoing recovery, with mid-single-digit sequential growth expected in Q2.
• Consumer revenue expected to grow ~50% sequentially in Q2 due to seasonality, and automotive/industrial end market revenue expected flat sequentially in Q2.

In the first quarter of fiscal 2026, Marvell's revenue was $1.895 billion. The data center end market was the largest, achieving revenue of $1.44 billion, which was 76% of total revenue, growing 76% year-over-year. Enterprise networking revenue was $178 million, carrier infrastructure revenue totaled $138 million, consumer revenue was $63 million (a 29% sequential decline), and automotive and industrial end market revenue was $76 million (a 12% sequential decline).

• Forecasted second-quarter revenue of $2 billion at midpoint of guidance.
• GAAP gross margin expected between 50-51% in Q2, non-GAAP gross margin between 59-60%.
• GAAP operating expenses projected at ~$735 million in Q2, non-GAAP operating expenses at ~$495 million.
• Anticipated non-GAAP tax rate of 10% for Q2.
• GAAP earnings per diluted share expected in range of $0.16 to $0.26, non-GAAP earnings per diluted share in range of $0.62 to $0.72.

• Macroscopic uncertainties that could impact actual results.
• Supply chain noise and incomplete views on certain aspects as mentioned in response to investor questions.

Q: What is the direction of content in next-generation programs and are you exclusive on three-nanometer XPUs?

A: Matt Murphy stated they don't share customer confidential info, they're the incumbent on current XPU program, have secured three-nanometer wafer and advanced packaging capacity for follow-on program with a large customer, and customers may pursue multiple paths but they expect revenue growth on multiyear basis.

Q: How does Marvell support a broader customer base beyond initial engagements?

A: Matt Murphy said Marvell has capacity engineering-wise, increased R&D spend, repurposed talent for data center/AI opportunity, and will detail at AI investor event on June 17.

Q: Talk about Marvell's SerDes positioning and NVLink fusion relationship?

A: Matt Murphy said SerDes technology is performing well, showcased at OFC, and NVLink fusion partnership demonstrates engagement with key partners and complementary role of custom silicon.

Q: Break down data center revenue and AI growth tracking?

A: Matt Murphy said AI is majority of data center revenue now, trajectory is AI becoming majority of whole company revenue in future, custom business has lower gross margin affecting quarterly margins but data center revenue growing year-over-year.

Q: Expectations for second half of year?

A: Matt Murphy said AI demand continuing, data center demand continuing, core business (enterprise networking, carrier) recovering and growing throughout year.

Q: How fast is AI business growing and impact of on-prem?

A: Matt Murphy said data center revenue grew significantly, Q2 guiding mid-single-digit growth, AI is fastest portion of data center business, on-prem is small and relatively stable now.

Q: Optical business health and Amazon agreement impact?

A: Matt Murphy said optical business growing, 1.6t solution ramping, Amazon agreement progressing well, AEC ramping and switching revenue growing.

Q: ASIC programs dual-sourcing and NVIDIA Fusion?

A: Matt Murphy said customer may pursue multiple paths, NVIDIA Fusion is chiplet solution planned, Marvell involved as partner with interest from customers.

Q: Optical market share and customer inventory?

A: Matt Murphy said strong market share in 800 gig, leading in 1.6t development, LPO adoption incremental, customer inventory looks good with strong sell-through last quarter.

Q: Potential customer exploring multiple tracks?

A: Matt Murphy said some discussion likely at AI Day on different business models and customer needs, but max color given on current call