Marvell Technology, Inc. Q3 FY2026 earnings call

• Marvell achieved record revenue of $2.075 billion in Q3 FY2026, with 37% year-over-year growth and 3% sequential growth. Data center revenue grew 38% YOY, driven by AI demand. Communications and other end market revenue grew 34% YOY. • Announced the strategic acquisition of Celestial AI, which brings a photonic fabric platform for next-generation scale-up interconnect. The acquisition is expected to close in Q1 FY2027 and will contribute meaningfully to revenue from the second half of FY2028. • Data center business momentum remains strong with interconnect, custom, switching, and storage segments showing growth. Interconnect business has broad high-speed connectivity portfolio with strong demand for 1.6T products and plans for 3.2T. Custom business expects accelerated growth with multiple design wins. Switching business sees increasing demand for 12.8T and 51.2T products, with scale-up switch efforts underway. Communications and other end market saw revenue growth with normalization of customer inventory levels in enterprise networking.

In the third quarter of fiscal 2026, Marvell delivered record revenue of $2.075 billion. The data center end market was the largest, contributing 73% of total revenue with $1.52 billion in Q3 revenue, showing 38% year-over-year growth. The communications and other end market contributed 27% of revenue, with $557 million in Q3 revenue, growing 34% year-over-year.

• Q4 FY2026 revenue forecast is $2.2 billion at midpoint. • Expect data center revenue to grow over 25% in FY2027. Interconnect business to grow faster than cloud CapEx, custom business to grow at least 20% in FY2027, and storage, switching, etc., segment to grow at least 15% in FY2027. • Celestial AI expected to start contributing meaningfully to revenue from the second half of FY2028, with revenue reaching $500 million annualized run rate in Q4 FY2028 and $1 billion run rate in Q4 FY2029.

Q: Ross Seymore from Deutsche Bank asked about next year's revenue alignment to long-term targets.

A: Matt Murphy responded that the revenue numbers are in the ballpark, sequential revenue growth is expected next year with the second half stronger, and detailed how custom, interconnect, and other segments contribute to the growth trajectory towards long-term targets.

Q: Harlan Sur from JPMorgan inquired about sub-3 nanometer design wins and timelines.

A: Matt Murphy stated that product transitions are baked into the numbers, there are multiple programs in 2 nanometer, and the team is executing well with strong product ramps expected in FY2028.

Q: Tore Svanberg from Stifel asked about Celestial AI revenue ramp breadth.

A: Matt Murphy said engagement is broad, driven by PF chiplet initially, but the earnout is based on Celestial AI's totality.

Q: Chris Caso from Wolfe Research asked about Celestial AI revenue stream diversification.

A: Matt Murphy mentioned strong industry engagement, a lead Tier 1 hyperscaler collaboration, and broad adoption potential beyond initial phases.

Q: Harsh Kumar from Piper Sandler questioned custom growth normalization and visibility.

A: Matt Murphy said to model 20% growth for FY2027 as a base case, with the second half of FY2027 and FY2028 seeing higher growth due to program ramps and customer planning, and emphasized visibility from customer planning.

Q: Blayne Curtis from Jefferies asked about Amazon's warrant and expanding relationship.

A: Matt Murphy noted the Form 8-K filing indicates an extension of the warrant agreement, adding a swim lane for photonic fabric products, and expressed excitement about the expanding relationship.

Q: Vivek Arya from Bank of America asked about optics correlation to cloud CapEx and custom second customer.

A: Matt Murphy explained optics is driven by AI (faster than CapEx) and the custom growth next year is tied to current business with product transitions and XPU attach kicking in later, with rational base planning.

Q: Christopher Rolland from Susquehanna asked about moving to systems and rack-level solutions.

A: Matt Murphy stated Marvell has a rack-scale vision, with Celestial AI fitting in, and is working on providing end-to-end solutions from XPU chips to retimers, but no system-level revenues in the next 2 years.