Marvell announced second-quarter fiscal 2027 results on August 27, posting record revenue of $2.739 billion, representing 37% year-over-year growth. Data center sales climbed 46% year over year to reach $2.17 billion, accounting for 79% of total company revenue. The chipmaker raised its full-year outlook for the second consecutive quarter, signaling accelerating momentum in its core business segments.
Management increased fiscal 2027 revenue expectations to approximately $12 billion from the prior $11.5 billion guidance, and raised fiscal 2028 revenue projections to about $18 billion, up $1.5 billion from earlier estimates. Growth rates are accelerating despite the expanding revenue base, with fiscal 2028 growth now estimated near 50% compared to approximately 45% previously expected. Data center growth guidance was elevated to 60% for fiscal 2027 and more than 60% for fiscal 2028, up from an earlier 50% projection. Third-quarter revenue guidance of $3.15 billion at the midpoint implies better than 50% year-over-year growth.
Custom silicon agreements with hyperscalers represent a significant growth driver, with an expanded deal carrying potential cumulative revenue of $120 billion over roughly six years. The custom business is expected to more than double in fiscal 2028 with further acceleration anticipated in fiscal 2029. On connectivity products, 800 gigabit optical demand remains robust while 1.6 terabit products are ramping quickly. Management also noted that 51.2 terabit switching gear is positioned to more than double scale-out switching revenue this year. Non-GAAP operating margin reached 36.6%, up 180 basis points year over year, approaching the company’s 38% to 40% long-term target.
Challenges persist despite strong headline results. Management acknowledged dependence on securing additional chip supply amid persistent industry-wide constraints, indicating growth relies partly on capacity beyond its direct control. Cash flow from operations declined slightly to $606 million as the company made roughly $1 billion in planned capacity prepayments to suppliers. Third-quarter gross margin guidance of 57.5% to 58.5% is expected to decline from the prior 58.9% due to custom silicon product mix shifts. Communications and other segment revenue is projected to decline in the low-to-mid teens percentage range both sequentially and year over year in the third quarter. Total debt stood at $4.96 billion at quarter end, though the net debt-to-EBITDA ratio of 0.27x indicates manageable leverage. Hedge fund ownership increased to 96 funds from 79 in the prior quarter, while short interest remained at 3.79% of float. The stock traded at a forward P/E of 59.52 as of August 31.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI