Financial Data and Key Metrics Changes - Marvell reported record revenue of $2.075 billion for Q3 FY2026, reflecting a 3% sequential increase and a 37% year-over-year growth [6][39] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with a year-over-year growth of 77% [6][40] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, showing a sequential increase of 30 basis points [39] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [41] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [19][39] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [33][39] - Excluding the automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [33] Market Data and Key Metrics Changes - The data center market is expected to grow year-over-year by more than 25% in FY2027, driven by increased demand for switching products and custom solutions [19][36] - The communications end market is projected to grow approximately 25% year-over-year in Q4 FY2026, with an annualized revenue run rate of about $1 billion [34][39] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio with disruptive photonic technology [8][9] - The company is focusing on data center growth, having divested its automotive Ethernet business and made several strategic acquisitions since 2019 [9][10] - Marvell anticipates significant revenue contributions from Celestial AI starting in the second half of FY2028, with a forecast of reaching a $500 million annualized run rate by Q4 FY2028 [16][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center business, with expectations of strong demand for AI-related infrastructure [17][36] - The company expects to see a strong finish to FY2026 and anticipates revenue growth to accelerate in FY2027 and FY2028 [36][37] - Management highlighted the importance of partnerships with hyperscalers and the expected increase in Cloud CapEx, which is projected to grow over 30% next year [17][36] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [35][41] - The company plans to fund the acquisition of Celestial AI through a combination of stock and cash on hand, without taking on additional debt [44] Q&A Session Summary Question: Revenue expectations for next year - Management confirmed that the implied revenue target for next year is around $10 billion, based on organic growth without M&A contributions [48][49] Question: Update on sub-3-nanometer design win pipeline - Management indicated strong visibility on the transition to next-generation products, with several programs in the pipeline for 2-nanometer designs [58][60] Question: Revenue targets for Celestial AI - Management clarified that the $500 million and $1 billion targets for Celestial AI include all potential revenue streams, primarily driven by the PF chiplet products [65][66] Question: Breadth of revenue stream from Celestial AI - Management noted that while there is strong engagement across the industry, initial revenue will likely come from a few large customers, including a tier-one hyperscaler [70][71]

Financial Data and Key Metrics Changes - For the third quarter of fiscal 2026, Marvell reported record revenue of $2.075 billion, reflecting a 3% sequential increase and a 37% year-over-year growth [6][39] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with a year-over-year growth of 77% [6][40] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, an increase of 30 basis points sequentially [39][40] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [41] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [19][39] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [33][39] - Excluding the divested automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [33] Market Data and Key Metrics Changes - The company expects total revenue for the fourth quarter to be around $2.2 billion, representing a 6% sequential and 21% year-over-year growth [35][42] - Data center revenue is projected to grow year-over-year by more than 25% in fiscal 2027, while communications and other end market is expected to grow by 10% [19][34] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio with disruptive photonic fabric technology [8][9] - The acquisition is expected to close in the first quarter of next year and is anticipated to generate meaningful revenue contributions starting in the second half of fiscal 2028 [16][44] - The company is focusing on data center growth, divesting non-core businesses, and investing in high-growth areas such as AI and optical interconnects [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center market, driven by strong demand for AI and cloud infrastructure [17][36] - The outlook for fiscal 2027 is stronger than previously expected, with anticipated growth in interconnect and custom businesses [17][19] - Management highlighted the importance of strategic acquisitions and product innovation in driving future growth [37][44] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [35][41] - The company has a strong balance sheet with cash and cash equivalents of $2.7 billion, reflecting robust operating cash flow [41] Q&A Session Summary Question: Revenue expectations for next year - Analyst inquired if the implied revenue for next year is around $10 billion and how it aligns with long-term targets [48] - Management confirmed the $10 billion target is motivational and based on organic growth without M&A contributions [49] Question: Update on sub-3-nanometer design win pipeline - Analyst asked for an update on the design win pipeline for sub-3-nanometer products [58] - Management indicated strong visibility and execution on design programs, with significant product ramps expected [60] Question: Revenue targets for Celestial AI - Analyst questioned if the $500 million and $1 billion targets for Celestial AI include PFLink products and potential memory businesses [65] - Management clarified that the targets encompass all of Celestial AI's activities, with initial revenue driven by PF chiplets [66] Question: Breadth of revenue stream from Celestial AI - Analyst asked about the customer base for Celestial AI's revenue ramp [67] - Management noted strong engagement across the industry, with a tier-one hyperscaler as a key partner [68] Question: Growth rate for custom business - Analyst sought clarification on the growth rate for the custom business in fiscal 2027 [75] - Management indicated expectations for at least 20% growth next year, with potential for higher rates in subsequent years [75]

Financial Data and Key Metrics Changes - Marvell reported record revenue of $2.075 billion for Q3 2026, reflecting a 3% sequential increase and a 37% year-over-year growth [5][35] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with year-over-year growth of 77% [5][36] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, an increase of 30 basis points sequentially [35][36] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [36] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [17][35] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [29][35] - Excluding the automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [29] Market Data and Key Metrics Changes - The data center market is expected to grow year-over-year by more than 25% next fiscal year, driven by increased demand for switching products [17] - The communications end market is expected to grow in line with enterprise IT spending, with an annualized revenue run rate of approximately $1 billion in Q4 [30] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio and capitalizing on the scale-up interconnect market [6][14] - The company is focusing on data center growth, having divested its automotive Ethernet business and made several strategic acquisitions since 2019 [6][7] - The acquisition of Celestial AI is expected to close in Q1 of the next fiscal year and is projected to contribute significantly to revenue starting in the second half of fiscal 2028 [14][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center business, with strong demand signals and bookings across the portfolio [32][33] - The company anticipates a strong fiscal 2027, with total revenue forecasted at $2.2 billion for Q4 2026, representing 6% sequential and 21% year-over-year growth [31][38] - Management highlighted the importance of AI in reshaping data center architecture and the significant opportunities in the optical interconnect market [9][10] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [31][36] - The company expects to continue returning capital to shareholders while funding the acquisition of Celestial AI through a combination of stock and cash [41][42] Q&A Session All Questions and Answers Question: Revenue expectations for next year - Management indicated that the revenue target for next year is around $10 billion, based on organic growth without M&A contributions [43][44] Question: Update on sub-3-nanometer design win pipeline - Management confirmed strong visibility on the transition to next-generation products, with several programs in the pipeline for 2-nanometer designs [50][52] Question: Revenue targets for Celestial AI - The revenue targets for Celestial AI include contributions from the PF chiplet and other potential businesses, with a focus on broad engagement across the industry [53][54] Question: Diversification of revenue stream from Celestial AI - Management noted that while there is strong engagement with a tier-one hyperscaler, the revenue stream is expected to diversify over time as the product enters volume production [55][56] Question: Growth rate for custom business - Management confirmed a base case growth rate of at least 20% for the custom business next year, with potential for higher growth depending on program success [58][59]