Marvell Technology (MRVL) Q4 FY26 earnings call: guidance and Q&A

Asked about the profile of revenue growth, specifically if the customer base is broadening and concerns about concentration in the custom business.

Matt Murphy stated that Marvell is deeply engaged with the top four U.S. hyperscalers and diversified across them, with different product mixes for each. He clarified that custom business is a piece of the equation but not the sole driver of concentration, and diversification will improve over time with 20+ design wins layering in. Acquisitions of Celestial AI and XConn further round out the portfolio.

“We're quite diversified across each of them. And some of them we sell a different mix, obviously, of product to. But in the case of all four, within our portfolio, which I just went through the laundry list of all the different types of products that we provide, we're highly diversified within each of these customers.”

asked by Ross Seymore · answered by Matthew Murphy

Asked about the linearity of the custom XPU program ramp (stronger H2 vs. linear) and the expected exit run rate for custom business, given strong market validation for AI compute.

Matt Murphy confirmed strong market validation for AI compute and custom XPUs. He stated that the custom business still anticipates a stronger second-half step-up due to a program transition, and the previously discussed exit run rate (around $2 billion annualized) is still intact, likely with an upward bias. He noted that the company's overall Q4 exit rate is projected north of $3 billion, with custom contributing significantly.

“custom, we have said was going to be a stronger second half due to a program transition. That's still the case. And that -- the type of exit rate you're talking about is certainly still intact and probably has an upward bias to it.”

asked by Harlan Sur · answered by Matthew Murphy

Asked if the electro-optics business can grow at the 60%+ rate seen in CapEx spend and the durability of that growth into FY28.

Matt Murphy confirmed that the electro-optics portfolio is now growing more like accelerated CapEx growth, specifically "50% plus this year now." He expects this momentum to continue into FY28 and beyond, driven by increased attach rates of optics with new XPU/GPU generations and the ramp of 1.6T products.

“But now it's clearly growing more like -- more like accelerator growth and more like this sort of accelerated CapEx growth. So yes, it's growing like 50% plus this year now. And that momentum is going to continue, okay, into fiscal '28.”

asked by Aaron Rakers · answered by Matthew Murphy

Asked for clarification on FY27 custom business growth (e.g., 30%?) and the confidence level in the timing and ramp of the second major XPU customer for the FY28 doubling target.

Matt Murphy stated that FY27 custom growth is biased upwards from the previously indicated 20% but didn't give a new specific number. For the second major XPU customer, he expressed high confidence due to past experience with large custom programs, detailed discussions on manufacturing plans, and firm volume requirements for FY28. He noted that their current budget for this program is conservative compared to planned capacity reservations.

“For fiscal '27 we had been indicating after the double from last year, it would grow 20% this year. So we're just saying that's north of that... And then the reason we're confident is we have line of sight in terms of -- well, first of all, we have history, right? We've built these large scale custom programs before.”

asked by Blayne Curtis · answered by Matthew Murphy

Asked to unpack what specifically improved the FY28 outlook by $2 billion since December and what signs could carry into the next calendar year.

Matt Murphy attributed the improved outlook to progression in visibility, firm requirements, particularly in the interconnect business (which was conservatively modeled before), and extremely strong bookings and backlog. He emphasized that the company is on track to achieve ambitious targets set years ago, including $15 billion in data center revenue by calendar '28 (fiscal '29), which now seems achievable.

“But on top of that, I mean, one, we've now got very firm requirements and understand the profile, in particular the interconnect business. And that is, I think we had called it very conservatively, to be frank... And then I'd say this is all underwritten Ben, by extremely strong bookings and backlog layering in and then the detailed conversations with our customers around supply planning.”

asked by Ben Reitzes · answered by Matthew Murphy

Asked for perspective on the base revenue of the AEC and retimer business and its potential contribution to future growth.

Matt Murphy stated that the AEC and retimer business is still emerging, currently in the "probably in the $200 million range" for FY27, but expected to keep doubling. He highlighted that it leverages Marvell's DSP and PAM technology and is part of their strategy to be an end-to-end interconnect provider.

“Yes. Tom. Yes, this is still an emerging area for us. So we're -- it's doubling -- over doubling this year, but it's probably in the $200 million range is what I would say.”

asked by Tom O'Malley · answered by Matthew Murphy

Asked about the exclusivity of Marvell's position with the new large XPU customer ramping next year, and the contribution of XPU attach revenue in FY27/FY28.

Matt Murphy expressed high confidence in their position with the new XPU customer, citing deep, multi-generational engagements. He noted that XPU attach revenue (NIC and CXL) is on a "massive trajectory upward," likely reaching a "billion dollar type business" by next year (FY28), doubling or more each year from a couple hundred million ballpark in FY26.

“we feel very good about our position. These are very deep engagements we have with our customers. We're two hands on the steering wheel on this. This is multi-generational in nature." and "XPU attached probably in the couple of hundred million ballpark say like this last year, doubling this year, maybe over doubling again the year after. So I think by next year, this thing is probably a $1 billion type business.”

asked by Vivek Arya · answered by Matthew Murphy

Asked if connectivity is a bigger bottleneck than processors in AI systems, and if so, why Marvell doesn't shift more resources to connectivity given its lead and higher margin potential, instead of the "noisy" processor business.

Matt Murphy stated that Marvell is "all in" on interconnect, but also sees strategic advantages in the custom processor business. He explained that the custom business, which grew from zero to $1.5 billion and is expected to double again, puts Marvell at the "bleeding edge" of technology (nodes, packaging, IP), acting as a "tip of the spear" to keep Marvell best-in-class. He emphasized that the custom business receives significant NRE funding from customers and he will continue to follow customer demand.

“I mean I never envisioned it would be this significant business for us... And one of the strategic rationales that I had for that deal was that it would put Marvell in a product area where we had to be at the bleeding edge.”

asked by Mark Lipacis · answered by Matthew Murphy