$MRVL earnings report

This filing is principally a transaction announcement rather than a complete earnings release. Marvell announced an agreement to acquire Lumentum in an all-stock transaction. Lumentum stockholders are to receive a fixed exchange ratio of 4.500 shares of Marvell common stock for each Lumentum share. The filing assigns Lumentum an implied enterprise value of $115 billion and says current Marvell stockholders are expected to own approximately 67% of the combined company on a fully diluted basis.

Marvell said preliminary revenue for the fiscal third quarter 2027 was consistent with previously provided guidance. It maintained the midpoint of that guidance and narrowed the expected range to plus or minus 2% from the original plus or minus 5%. However, the filing provides no preliminary revenue dollar amount, no prior-period revenue, and no reported gross margin, operating income, net income, EPS, segment results, cash flow, cash, debt, or capital-return figures. The preliminary results are unaudited and remain subject to closing procedures and external review.

The strategic rationale centers on AI connectivity. The companies expect to combine Marvell’s electrical and optical interconnect, switching and custom silicon capabilities with Lumentum’s lasers, transceivers, optical circuit switching and compound semiconductor manufacturing. Management describes the opportunity as an expansion of the combined company’s total addressable market to $550 billion, driven by growing bandwidth needs, the limitations of copper-based connectivity and demand for deeper electrical and optical co-design.

Financial benefits cited are forward-looking. The companies expect enhanced long-term revenue growth, non-GAAP gross margin and non-GAAP operating margin, more than $1 billion in annual run-rate cost synergies, and accretion to Marvell non-GAAP earnings per share in year one after closing. The transaction is expected to close in the first half of calendar year 2028, subject to stockholder and regulatory approvals and other customary conditions. Investors will need the eventual complete fiscal third-quarter results and further transaction disclosures to assess the starting financial profile, financing implications, integration costs and the path to the stated synergy objective.

Marvell reported record second-quarter fiscal 2027 net revenue of $2,739.3 million, up 37% year over year and 13% sequentially. Revenue was $39.0 million above the mid-point of guidance provided on May 27, 2026. Data center was the principal source of growth, with revenue of $2,171.5 million, up 46% year over year and 18% sequentially. Its share of total revenue rose to 79%, from 76% in the prior quarter and 74% in the prior-year quarter. Communications and other revenue grew 10% year over year but declined 3% sequentially to $567.8 million.

Profitability improved on a GAAP basis. GAAP gross margin was 53.1%, versus 52.1% in the prior quarter and 50.4% in the prior-year quarter. GAAP operating income was $459.7 million and GAAP operating margin was 16.8%, compared with $339.4 million and 14.0% in the prior quarter and $290.1 million and 14.5% in the prior-year quarter. Non-GAAP operating income was $1,003.2 million, with a 36.6% operating margin. Non-GAAP gross margin was unchanged sequentially at 58.9% and below the 59.4% reported in the prior-year quarter.

GAAP net income was $308.0 million, or $0.33 per diluted share, compared with $34.5 million, or $0.04 per diluted share, in the prior quarter. Non-GAAP net income was $865.9 million, or $0.94 per diluted share, compared with $718.0 million, or $0.80 per diluted share, in the prior quarter. The GAAP-to-non-GAAP reconciliation includes $326.2 million of stock-based compensation, $214.9 million of amortization of acquired intangible assets, and $52.0 million related to the change in fair value of contingent consideration liability, net of the forward stock purchase contract.

Operating cash flow was $605.5 million, compared with $461.6 million in the prior-year quarter. Purchases of property and equipment were $(126.7) million. Marvell repurchased $(200.0) million of common stock and made $(53.9) million of dividend payments during the quarter. Cash and cash equivalents were $3,932.8 million at August 1, 2026, while long-term debt was $4,962.9 million.

For the third quarter of fiscal 2027, Marvell expects net revenue of $3.150 billion +/- 5%, GAAP gross margin of 52.9% to 53.9%, and non-GAAP gross margin of 57.5% to 58.5%. The company guided GAAP diluted net income per share to $0.53 +/- $0.05 and non-GAAP diluted net income per share to $1.10 +/- $0.05. Management attributed the outlook to exceptionally robust AI-related bookings, broad-based data center strength, and a significant acceleration in its Custom business beginning in the second half of fiscal 2027.