Marvell Technology, Inc.: revenue accelerated to +36.5%, but the market expected more – shares down 8.8% after the report

On August 27, Marvell Technology, Inc. reported results for the second quarter of fiscal 2027 (ended August 1, 2026). Revenue rose 36.5% year over year to a record $2,739.3 million, net profit increased 58.1% to $308.0 million, yet the stock fell 1.5% on the release day and another 8.8% by September 4. At the current price, the share looks rather attractive: growth is accelerating, leverage is low, but valuation remains high.

Key takeaways

— Revenue accelerated to +36.5% driven by data center, which grew 46%

— Net profit rose 58.1%, but includes one-off items

— EBITDA margin declined from 26.6% to 24.6% due to higher expenses

— Leverage is low: net debt is 0.8x EBITDA for the last twelve months

— Shares are falling despite strong results due to high valuation

— The company raised guidance: expects revenue of $3.15 billion next quarter

Attractiveness

Key figures, USD bn

Revenue accelerated to +36.5% driven by data center, which grew 46%

In the second quarter of fiscal 2027, Marvell Technology, Inc. revenue reached $2,739.3 million, up 36.5% year over year. This is an acceleration from the previous quarter's 27.6% growth. The main driver remains the data center segment: its revenue jumped 46% year over year to $2,171.5 million, and its share of total revenue rose to 79%.

The communications and other segment grew more modestly – by 10% to $567.8 million. CEO Matt Murphy attributes the acceleration to strong demand for AI solutions and expects further growth in the second half of the year. The company raised its guidance for the third quarter: it expects revenue of $3,150 million plus or minus 5%, implying growth of about 52% year over year.

Net profit rose 58.1%, but includes one-off items

Net profit for the quarter was $308.0 million versus $194.8 million a year earlier – up 58.1%. However, profit was affected by non-operating items: the company recorded a loss from changes in the fair value of contingent consideration and a forward stock purchase contract of $52.0 million, as well as other expenses. Without these effects, non-GAAP net profit would have been $865.9 million.

In the first half, net profit was $342.5 million versus $372.7 million a year earlier – a decline of 8.1%, due to large one-off expenses in the second quarter, including changes in the fair value of liabilities. Nevertheless, operating profit for the half rose from $560.7 million to $799.1 million.

EBITDA margin declined from 26.6% to 24.6% due to higher expenses

EBITDA in the second quarter rose 26.4% year over year to $674.6 million, but slower than revenue, so the margin declined from 26.6% to 24.6%. Operating profit grew faster – by 58.5% to $459.7 million, reflecting higher gross profit and control over operating expenses.

GAAP gross margin was 53.1% versus 50.4% a year earlier, which helped offset higher research and development expenses ($741.1 million versus $519.0 million) and selling, general and administrative costs. The company continues to invest in developing new products for AI infrastructure, which pressures margin but should support future growth.

Leverage is low: net debt is 0.8x EBITDA for the last twelve months

At the end of the quarter, Marvell Technology, Inc.'s net debt was $2,151.5 million, equivalent to 0.8x EBITDA for the last twelve months (LTM EBITDA – $2,690.4 million). During the quarter, net debt decreased by $0.4 billion, and over the year by $2.5 billion, helped by strong operating cash flow.

Operating cash flow in the second quarter was $605.5 million, up 31% from a year earlier. Capital expenditures rose to $126.7 million from $47.5 million, but free cash flow remained positive. The company also paid dividends of $53.9 million and repurchased shares for $200 million.

Shares are falling despite strong results due to high valuation

The share price before the release was $245.11; it fell 1.5% on the release day and another 8.8% by September 4. The company beat expectations and raised guidance. The decline likely reflects investor disappointment that growth, while accelerating, did not reach the most optimistic expectations, as well as a broader correction in the semiconductor sector.

Current market capitalization is $192,476.55 million, P/E LTM is 72.9, EV/EBITDA LTM is 72.3. This is significantly above the three-year average, although exact historical averages are not available to us. According to the portal's model, upside to fair value is +5%, indicating limited upside potential at the current price.

The company raised guidance: expects revenue of $3.15 billion next quarter

Marvell Technology, Inc. expects third-quarter fiscal 2027 revenue of $3,150 million plus or minus 5%, implying an acceleration to about 52% year-over-year growth. The company also guides non-GAAP diluted EPS in the range of $1.10 plus or minus $0.05.

The CEO stated that AI-related bookings remain exceptionally robust, and the company expects further acceleration in the second half of the fiscal year. Investors will see a more detailed strategy at the Investor Day on October 6, 2026.

Valuation on the latest reported figures

Bottom line

Marvell Technology, Inc.'s second-quarter fiscal 2027 report is strong: revenue accelerated to +36.5% driven by data centers, the company raised guidance, and leverage remains low (net debt 0.8x LTM EBITDA). However, net profit includes one-off items, and EBITDA margin declined due to higher investments. At the current price, the stock is expensive (P/E LTM 72.9), but the portal's model shows +5% upside, making the share rather attractive than neutral. The key question for holders is whether the company can sustain double-digit revenue growth to justify the high valuation.