Marvell Technology Inc (NASDAQ:MRVL) reported financial results for its fiscal third quarter of 2026 that largely met analyst expectations, yet the company’s shares experienced a notable decline in after-hours trading. The market’s reaction appears to reflect a nuanced assessment of the report, balancing solid current performance against a significant acquisition announcement and forward-looking guidance.
Quarterly Results Versus Expectations
The semiconductor designer reported net revenue of $2.075 billion for the quarter ended November 1, 2025. This figure represents a 36.8% increase compared to the same period last year and came in slightly above the midpoint of the company’s own guidance. When measured against the Wall Street consensus estimate of approximately $2.11 billion, however, the result was essentially in line, missing the average forecast by a narrow margin.
On the profitability front, Marvell’s non-GAAP earnings per share (EPS) of $0.76 surpassed the analyst consensus estimate of $0.75. The company’s GAAP results were significantly influenced by a one-time gain of $1.8 billion from the sale of its automotive ethernet business to Infineon Technologies AG in August 2025. This transaction resulted in a GAAP net income of $1.901 billion, or $2.20 per diluted share.
Key financial highlights from the quarter include:
- Revenue: $2.075 billion (vs. analyst est. ~$2.109 billion)
- Non-GAAP EPS: $0.76 (vs. analyst est. $0.75)
- Cash Flow from Operations: $582.3 million
- Year-over-Year Revenue Growth: 36.8%
Market Reaction and Strategic Acquisition
Despite the earnings beat, MRVL stock traded lower following the report. This movement suggests investor focus may have shifted to the company’s outlook and a major strategic announcement. Concurrently with its earnings, Marvell revealed an agreement to acquire Celestial AI, a company specializing in optical interconnect technology for artificial intelligence (AI) infrastructure. While the financial terms were not detailed in the earnings press release, separate news reports indicate the deal could be valued between $3.25 billion and $5.5 billion.
Chairman and CEO Matt Murphy framed the acquisition as a “transformational milestone” that strengthens Marvell’s position in AI data center infrastructure. The market’s initial reaction may reflect a combination of factors: the high valuation of the deal, integration execution risks, and a potential near-term dilution of earnings, offsetting the positive core quarterly results.
Forward Guidance and Analyst Estimates
Management provided an optimistic outlook for the current quarter. For Q4 of fiscal 2026, Marvell expects revenue of approximately $2.2 billion, plus or minus 5%. This guidance midpoint sits about 1% above the existing analyst consensus estimate of $2.218 billion for the quarter.
The company’s non-GAAP EPS guidance for Q4 is $0.79, plus or minus $0.05, which compares favorably to the current analyst estimate of $0.79. Furthermore, CEO Matt Murphy stated the company is on track for full-year revenue growth exceeding 40% and has raised its internal forecast for data center revenue growth in the coming year.
A comparison of forward projections:
- Q4 Revenue Guidance: ~$2.2 billion ±5% (vs. analyst est. $2.218 billion)
- Q4 Non-GAAP EPS Guidance: $0.79 ±$0.05 (vs. analyst est. $0.79)
- Full-Year Growth Outlook: >40% revenue growth
Press Release Summary
The earnings announcement centered on several key themes:
- Record Q3 Revenue: Driven by strong demand for data center products.
- Divestiture Impact: The quarter includes results from the sold automotive ethernet business through the August sale date, heavily inflating GAAP income.
- Robust Q4 Guidance: The company anticipates continued growth into the next quarter.
- Strategic Acquisition: The planned purchase of Celestial AI is positioned as a critical move to capture growth in AI data center interconnect solutions.
- Long-Term Confidence: Management expressed increased confidence in the demand trajectory for its products, particularly within the data center segment.
Conclusion
Marvell Technology delivered a quarter of strong growth that met or slightly exceeded profitability expectations. The subsequent stock price decline, however, underscores the market’s complex calculus, weighing solid execution and an upbeat forecast against the costs and risks associated with a major, transformative acquisition. Investors are now tasked with determining whether the long-term strategic benefits of bolstering its AI connectivity portfolio will outweigh the near-term financial implications of the Celestial AI deal.
For a detailed breakdown of Marvell’s historical earnings, future estimates, and analyst projections, visit the MRVL earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
