Marvell Technology reported first-quarter fiscal 2027 earnings on May 27 after U.S. market close, with revenue reaching a record $2.418 billion for the quarter ended May 2, 2025, up 28% year-over-year. The semiconductor design company raised its full-year fiscal 2027 revenue guidance to approximately $11.5 billion, up 40% year-over-year, from the previous guidance of approximately $11 billion provided three months earlier. Chairman and CEO Matt Murphy attributed the upward revision to exceptionally strong AI-related orders, stating the company expects revenue growth to accelerate each quarter throughout fiscal 2027 driven by continued strength in data center business. Marvell is considered a bellwether for AI infrastructure investment trends due to its role in helping major technology companies design and manufacture custom AI processors.
Q1 Fiscal 2027 Financial Results
Marvell reported non-GAAP diluted earnings per share of $0.80 for the first quarter, meeting market expectations, with non-GAAP gross margin at 58.9%. GAAP net income totaled $34.5 million, down significantly from $177.9 million in the prior-year period, primarily due to one-time expenses and non-cash amortization related to the acquisitions of Celestial AI and XConn. The company's revenue of $2.418 billion slightly exceeded the market expectation of $2.41 billion.
Q2 and Full-Year Guidance Raised
For the second fiscal quarter, Marvell projects revenue of $2.7 billion (plus or minus 5%), non-GAAP gross margin between 58.25% and 59.25%, and non-GAAP EPS of $0.93 (plus or minus $0.05). The company raised its fiscal 2028 revenue target to approximately $16.5 billion, representing year-over-year growth of about 45%, which is approximately $1.5 billion higher than the guidance provided last quarter. CEO Matt Murphy stated on the earnings call that the more optimistic outlook is driven by strong demand for multiple Marvell solutions.
Data Center Business Performance
Marvell's data center segment generated revenue of $1.833 billion in the first quarter, up 27% year-over-year and accounting for 76% of total revenue. The data center interconnect (DCI) business, which covers optical interconnect, DCI modules, and coherent optics product lines, represents the largest component of Marvell's data center operations, with its annual growth rate now exceeding 70% after being raised in consecutive quarters. Murphy stated that network interconnect importance has increased significantly as deployment of more complex architectures such as inference models and mixture-of-experts (MoE) models drives sharp increases in data transmission volumes within AI clusters.
Custom Chip Business Projections
For the custom chip (Custom/XPU) business, Marvell stated it expects revenue to grow more than 20% year-over-year in fiscal 2027, double in fiscal 2028, and exceed $10 billion in fiscal 2029, up from the previous target of $8 billion, due to increasing numbers of design orders and contracted customer projects. The communications and other business segment recorded revenue of $585 million in the first quarter, up 28% year-over-year and representing 24% of total revenue.
Stock Performance
Marvell stock (Nasdaq: MRVL) closed down 4.59% at $198.70 per share on May 27, with a total market capitalization of $173.97 billion. The company's stock has gained more than 122.28% year-to-date in 2025.
