Marvell posts third straight quarter of revenue acceleration
The chip designer raised its second-quarter revenue outlook to $2.7 billion, a 35% year-over-year increase.
Marvell Technology (MRVL) reported revenue growth that accelerated for the third consecutive quarter, driven by surging demand for its data-center chips. The semiconductor maker posted first-quarter revenue of $2.418 billion, up 28% from a year earlier, compared with 22% growth in the prior quarter. Non-GAAP earnings held steady at $0.80 a share, matching the previous period despite higher operating expenses.
The results marked a notable inflection for Marvell, which had faced margin pressure and mixed segment performance in prior quarters. Revenue growth in its core data-center business accelerated to 27% year-over-year in the latest quarter, reaching $1.833 billion, while the broader communications and other segment grew 29% to $585 million. The data-center unit now accounts for 76% of total revenue, up from 74% in the prior quarter, reflecting the company’s pivot toward artificial-intelligence infrastructure.
Non-GAAP gross margin remained resilient at 58.9%, defying earlier guidance that had anticipated a slight decline. However, operating margin continued to compress, falling to 35.0% from 35.7% in the prior quarter, as higher research and development costs and recent acquisitions weighed on profitability. Non-GAAP operating expenses rose to $576.9 million, up from $517 million in the prior quarter, driven by a 22% sequential increase in R&D spending.
Cash flow from operations surged to a record $638.8 million, up 71% sequentially, as the company benefited from stronger revenue conversion. On a GAAP basis, net income fell sharply to $34.5 million from $396.1 million in the prior quarter, primarily due to a $256.1 million net interest and other loss, compared with a $22.8 million loss in the prior period.
Marvell significantly raised its outlook, projecting second-quarter revenue of $2.7 billion at the midpoint, representing 35% year-over-year growth—well above the 22% growth implied by its prior guidance. The company also lifted its full-year revenue expectations for fiscal 2027 and 2028, citing strong AI-related bookings. The revised outlook reflects confidence in sustained demand for its data-center solutions, though management flagged ongoing margin pressure from elevated R&D investments.
The quarter also included the first disclosures of two acquisitions—Celestial AI and XConn Technologies—both closed in February 2026. The deals underscore Marvell’s push to expand its portfolio in high-growth areas like optical connectivity and AI acceleration. Meanwhile, the company’s segment reporting structure shifted in the prior quarter, consolidating enterprise networking, carrier infrastructure, consumer, and automotive/industrial into a single “communications and other” unit. The automotive/industrial segment’s revenue share fell to 2% from 5% in the prior year following the divestiture of its automotive ethernet business in August 2025.