Executive Summary
Marvell reported a record QQ1 2026 revenue of $1.895 billion, up 63% year over year and 4% quarter over quarter, led by AI-driven data center demand. Data center revenue of $1.44 billion accounted for 76% of total revenue, with year-over-year growth of 76% and continued sequential expansion. The results reflect a meaningful shift toward AI-centric workloads and a broadening custom silicon program.
Management highlighted strong progress in custom AI XPUs, including three-nanometer production readiness for calendar 2026, and announced strategic integrations such as NVIDIA’s NVLink Fusion, multi-die packaging, and co-package optics. The company also advanced its interconnect and optical roadmap (PAM, DCI, 400G per lane PAM, and 1.6T/800G capabilities), positioning Marvell to monetize the AI and cloud scale-out cycle through higher-value, differentiated silicon and packaging solutions. Marvell completed the quarter with a solid balance sheet and aggressive capital allocation, including stock repurchases of $340 million and a $52 million cash dividend, while guiding to roughly $2.0 billion in revenue for Q2.
Looking ahead, management reiterated AI’s growing contribution to the data center and signaled multi-year, multi-program revenue prospects in custom XPUs for hyperscalers. The company expects continued margin expansion and robust cash generation, supported by a disciplined approach to capital deployment and ongoing portfolio optimization (including the Infineon automotive Ethernet divestiture). Key risks include macroeconomic uncertainty and semiconductor cycle timing, though the company’s roadmap and customer engagements provide multiple avenues for sustained growth through fiscal 2027 and beyond.
Key Performance Indicators
QoQ: 21.51% | YoY:282.59%
QoQ: -11.14% | YoY:182.51%
QoQ: -8.70% | YoY:184.00%
Key Insights
Revenue: $1.8953B; YoY +63.26%; QoQ +4.29%
GrossProfit: $952.4M; YoY +80.45%; QoQ +3.82%
OperatingIncome: $270.6M; YoY +282.59%; QoQ +21.51%
NetIncome: $177.9M; YoY +182.51%; QoQ -11.14%
EPS (GAAP basic): $0.21; EPS (GAAP diluted): $0.20
FreeCashFlow: $213.0M; Cash Flow from Operations: $333.0M; CapEx: $119.9M
Cash and Cash Equivalents: $885.9M; Total Debt: $4.512B; Net Debt: $3.626B; EBITDA proxy not disclosed in press release but implied leverage improved to NetDebt/EBITDA ~1.42x and GrossDebt...
Financial Highlights
Revenue: $1.8953B; YoY +63.26%; QoQ +4.29%
GrossProfit: $952.4M; YoY +80.45%; QoQ +3.82%
OperatingIncome: $270.6M; YoY +282.59%; QoQ +21.51%
NetIncome: $177.9M; YoY +182.51%; QoQ -11.14%
EPS (GAAP basic): $0.21; EPS (GAAP diluted): $0.20
FreeCashFlow: $213.0M; Cash Flow from Operations: $333.0M; CapEx: $119.9M
Cash and Cash Equivalents: $885.9M; Total Debt: $4.512B; Net Debt: $3.626B; EBITDA proxy not disclosed in press release but implied leverage improved to NetDebt/EBITDA ~1.42x and GrossDebt/EBITDA ~1.8x
Stock repurchases: $340M; Dividends Paid: $52M
Inventory: $1.07B; End-Q Cash Position: $886M
End-market mix (Q1 2026): Data Center $1.44B (76% of revenue); Enterprise Networking $178M; Carrier Infrastructure $138M; Consumer $63M; Automotive & Industrial $76M. End-market growth: Data Center up 76% YoY; Enterprise/Carrier recovering sequentially; Consumer seasonally down ~29% QoQ; Auto/Industrial roughly flat to down modestly sequentially.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.90B |
63.26% |
4.29% |
| Gross Profit |
952.40M |
80.45% |
3.82% |
| Operating Income |
270.60M |
282.59% |
21.51% |
| Net Income |
177.90M |
182.51% |
-11.14% |
| EPS |
0.21 |
184.00% |
-8.70% |
Management Commentary
Key management themes from the QQ1 2026 earnings call:
- AI-driven data center momentum and AI share: “AI now represents the majority of our data center revenue, and we expect the relative proportion of AI-related revenue to grow further in the coming years, driven in large part by our custom silicon business.” This underscores Marvell’s pivot toward AI-focused revenue and the strategic importance of XPUs.
- Custom silicon programs and 3nm progression: “we have now secured three-nanometer wafer and advanced packaging capacity and expect to start production in calendar 2026.” This signals a concrete glidepath to volume production for next-generation XPUs and longer-term multigenerational growth.
- NVLink Fusion partnership and ecosystem strategy: “the partnership with NVIDIA, adding their NVLink fusion technology to our expanding custom platform” highlights collaboration with ecosystem leaders to broaden custom compute options for hyperscalers.
- Packaging and interconnect innovations: discussions of multi-die packaging, Vault interposers, and co-package optics demonstrate Marvell’s strategy to improve performance-per-watt and memory integration for AI workloads.
- Outlook and capital allocation: the company reiterated Q2 revenue guidance of about $2.0B and highlighted a capital-return strategy including stock buybacks and dividends; management also signaled ongoing optimization through assets (e.g., sale of automotive Ethernet to Infineon for $2.5B).
- Market tailwinds and risk signals: management remains constructive on AI and data center demand driven by hyperscaler capex, while acknowledging macroeconomic and supply-chain risks that could influence near-term performance.
"AI now represents the majority of our data center revenue, and we expect the relative proportion of AI-related revenue to grow further in the coming years, driven in large part by our custom silicon business."
— Matt Murphy
"we have now secured three-nanometer wafer and advanced packaging capacity and expect to start production in calendar 2026."
— Matt Murphy
Forward Guidance
Second-quarter (fiscal 2026) forecast: revenue $2.0B +/- 5%; GAAP gross margin 50-51%; non-GAAP gross margin 59-60%; GAAP OPEX around $735M; non-GAAP OPEX around $495M; other income/expense about $49M; non-GAAP tax rate 10%; basic shares ~864M; diluted shares ~874M. GAAP EPS guidance: $0.16-$0.26; Non-GAAP EPS guidance: $0.62-$0.72.
Assessment: The guide implies mid-to-high single-digit revenue growth for Q2 versus QQ1, supported by continued data center momentum and a recovering enterprise/carrier mix. The robust AI demand backdrop and the upcoming AI Day event (June 17) bolster visibility into the custom silicon opportunity, including upcoming production ramps and broader customer engagements. The guidance appears achievable given the sequential data-center strength and the ongoing ramp of XPUs, optics, and interconnects. Risks to the outlook include macro volatility, potential supply chain disruptions, and execution risk around the 3nm/XPU ramp and customer program durations. Key catalysts to monitor: AI capex trajectory, NVIDIA/NVLink-related ecosystem adoption, continued gains in 800G/1.6T interconnects, and the timing of the Infineon automotive Ethernet sale closing.