Marvell Technology (MRVL 3.52%), a major supplier of semiconductor solutions for data infrastructure and networking, released its Q2 FY2026 results on August 28, 2025. The headline news was record GAAP revenue of $2.006 billion, up 58.0% from a year earlier and $6.0 million above the mid-point of prior guidance. The company also reported non-GAAP earnings per share (EPS) of $0.67, more than double the previous year's $0.30 and at the top end of its guided range. With operating margin expansion and robust results in data center and networking, this quarter showed record-setting sales, AI-driven demand, and strong execution, while also making note of margin pressures and customer concentration as risks to monitor.
| Metric | Q2 FY26(Ended Aug 2, 2025) | Q2 FY26 Guidance (mid) | Q2 FY25(Ended Aug 3, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.67 | $0.67 (mid) | $0.30 | 123.3 % |
| Revenue | $2.01 billion | $2.00 billion | $1.27 billion | 58.3 % |
| Revenue vs. Guidance Midpoint (Non-GAAP) | $6.0 million above midpoint | — | — | — |
| Gross Margin (Non-GAAP) | 59.4 % | 59-60 % | 61.9 % | (2.5 pp) |
| Operating Margin (Non-GAAP) | 34.8 % | — | 26.1 % | 8.7 pp |
| Cash Flow from Operations | $461.6 million | — | $306.4 million | 50.6 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report.
Company Overview and Business Focus
Marvell Technology designs and sells semiconductor devices used to move, store, and process data. Its products help power cloud computing, artificial intelligence (AI), networking, storage, and connectivity platforms in data centers and networks worldwide.
In recent years, Marvell has heavily focused on the data center and enterprise networking markets. Success for Marvell hinges on ongoing innovation in custom silicon, signal processing, and interconnect products, as well as expanding its presence with cloud and AI customers. Key priorities have included rapid R&D investments, building a strong intellectual property (IP) portfolio, and maintaining robust relationships in a competitive landscape.
Quarter Highlights and Segment Performance
During the period, Marvell delivered its highest GAAP revenue on record. The data center segment was the primary engine, generating $1.49 billion, or 74% of total GAAP revenue, a 69% increase from the previous year. Most of this segment's gains were driven by demand for AI-related custom silicon and advanced electro-optics products, as stated by management: ““Marvell’s growth this quarter is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets. Our custom AI design activity is at an all-time high, with the Marvell team now engaged in over 50 new opportunities across more than 10 customers.””
Revenue in this group rose 28% year over year to $193.6 million, making up 10 % of total sales. Carrier infrastructure, which supports wireless and telecom networks, grew by 71% year over year to $130.1 million (GAAP). While the consumer segment showed a large quarterly increase, this business is known for lower average margins. Automotive and industrial revenue (GAAP) was $76.0 million, compared to $76.2 million in Q2 FY2025 but will shrink in coming quarters following the sale of the Automotive Ethernet business, divested on August 14, 2025.
With GAAP research and development investment increasing to $519.0 million, Marvell’s commitment to maintaining its technology leadership is clear. Non-GAAP operating margin climbed to 34.8%, up 8.7 percentage points from Q2 FY2025. Non-GAAP gross margin slipped to 59.4%, down from 61.9% a year ago, consistent with previous statements that a higher share of custom AI silicon programs carries structurally lower gross margins but remains accretive at the operating margin level due to larger revenue contributions.
Inventory levels grew only moderately in Q1 FY2026. The company noted a sizeable increase in accounts receivable, to $1.45 billion (GAAP) as of Q2 FY2026. Security of Marvell’s intellectual property portfolio continues to play a vital role.
However, Marvell did complete the divestiture of its Automotive Ethernet business in August, which will result in a significant one-time gain in Q3 FY2026.
Looking Ahead
For the third quarter of fiscal 2026, management expects GAAP revenue in the range of $2.06 billion plus or minus 5%. Non-GAAP earnings per share are guided at $0.74, while GAAP earnings per share will show an inflated jump due to a one-time $2.10 per share gain on the completed automotive business divestiture. Underlying business earnings are therefore expected to grow only modestly from this quarter’s level.
Key areas for investors to watch include the pace of AI-related product adoption and the evolving mix of custom silicon, which directly impacts margins. Customer concentration in high-volume programs remains a potential risk, as does competition from large chipmakers with overlapping portfolios. The management team has highlighted innovation in next-generation chip architectures and continued investment in IP as important success factors, especially as new design wins with AI and hyperscale customers ramp. Marvell Technology does pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
