Analyst(s): Futurum Research
Publication Date: December 4, 2025
Marvell’s Q3 FY 2026 update underscores accelerating AI-driven demand across custom silicon and optics, alongside a strategic move into photonics with Celestial AI. The company’s commentary points to improved order visibility, sequential growth into next year, and a clearer path to multi-year data center expansion.
What is Covered in this Article:
- Marvell’s Q3 FY 2026 financial results
- Custom silicon momentum and visibility
- Optical interconnect and rack-scale positioning
- Celestial AI acquisition and photonics roadmap
- Guidance and Final Thoughts
The News: Marvell Technology (NASDAQ: MRVL) reported Q3 FY 2026 revenue of $2.1 billion, up 37% year over year (YoY), versus Wall Street consensus of $2.1 billion. Data center revenue was $1.5 billion, up 38% YoY; enterprise networking was $237.2 million, up 57% YoY; carrier infrastructure was $167.8 million, up 98% YoY; consumer was $116.6 million, up 21% YoY; and automotive/industrial was $35.0 million, down 58% YoY. Non-GAAP gross margin was 59.7%, compared to 60.5% YoY. Non-GAAP operating income was 36.3% versus 29.7% a year ago. Non-GAAP net income was $655.0 million (Q3 FY 2025: $373 million) and non-GAAP diluted EPS was $0.76, up from $0.43 YoY.
“We are guiding for robust growth in the fourth quarter and are on track for a strong finish to the fiscal year, with full-year revenue growth forecasted to exceed 40%. Looking ahead, we see demand for our products continuing to accelerate, and as a result, our data center revenue growth forecast for next year is now higher than prior expectations,” said Matt Murphy, Marvell’s Chairman and CEO.
Marvell Q3 FY 2026 Posts Record Revenue, Higher Data Center Outlook
Analyst Take: Marvell’s quarter highlights durable AI-infrastructure demand translating into strength across custom silicon and optical interconnect. Management communicated sequential growth into next year, improved order visibility, and a base-case plan that avoids prior “air pockets” in custom. The Celestial AI acquisition extends Marvell’s portfolio into photonic fabrics for in-rack/intra-system connectivity, aligning with a broad industry shift to photonics inside the data center. With a lead hyperscaler engagement, secured purchase orders on next-gen programs, and concurrent 2-nanometer (nm) designs underway, the setup into FY 2027 and FY 2028 appears increasingly constructive.
Custom Silicon Momentum and Visibility
Management expects custom to grow at least 20% in FY 2027, with a stronger second half and higher exit rate as XPU attach ramps. The company confirmed secured purchase orders for its lead 3-nm XPU program through next year and reiterated a smooth transition to the next generation already incorporated into its outlook. Concurrent 2-nm designs are active now, with ramps beginning in FY 2028 and multiple programs in the funnel. A second major XPU customer is contemplated primarily in FY 2028, aligning with management’s view that custom can double from FY 2027 to FY 2028. The team emphasized sequential revenue growth every quarter next year and the intent to avoid prior custom-program “air pockets.” Together, these factors point to sustained visibility and a healthier cadence for custom into FY 2028.
Optical Interconnect and Rack-Scale Positioning
Marvell expects optics to outgrow cloud capital expenditures (CapEx), using 20% CapEx growth in FY 2028 as a conservative proxy while signaling customer forecasts support higher outcomes. The portfolio spans AECs, DSPs, retimers, low-power optics (LPO), photonic fabric, and scale-up/scale-out switching—supporting a rack-scale, end-to-end approach that customers can integrate. Management reiterated that optics growth is tied to AI accelerator proliferation and bandwidth intensity, not just aggregate CapEx. The company’s plan is to remain the “one-stop” interconnect shop as customers scale AI systems, aligning components, packaging, and system-level enablement. This breadth should help Marvell capture a larger share of per-rack silicon value as AI clusters densify. The strategic implication is continued share capture as optics content per AI rack expands.
Celestial AI Acquisition: Photonics Inside the Data Center
Marvell plans to acquire Celestial AI for approximately $3.25 billion (about $1.0 billion in cash and $2.25 billion in stock), with up to $2.25 billion in contingent stock tied to revenue milestones through FY 2029. Management targets Celestial to begin contributing meaningful revenue in H2 FY 2028 and to be accretive to non-GAAP earnings at that point. The company referenced a $500 million annualized run rate by Q4 FY2028 and a $1.0 billion annualized run rate by Q4 FY2029 for Celestial’s photonic fabric. A lead Tier 1 hyperscaler is engaged, and Marvell disclosed an expanded AWS warrant adding a Photonic Fabric “swim lane,” reinforcing customer pull-through. Integration benefits include combining Celestial’s photonics fabric with Marvell’s Inphi-based silicon photonics know-how, packaging, and data center switching. Net-net, this deal positions Marvell at the center of the industry’s photonics-inside transition.
Guidance and Final Thoughts
For Q4 FY 2026, Marvell guides revenue to $2.2 billion (+/- 5%), non-GAAP gross margin to 58.5%–59.5%, and non-GAAP diluted EPS to $0.79 (+/- $0.05), with FY 2026 revenue growth expected to exceed 40%. Management indicated FY 2027 data center revenue growth above 25%, sequential quarterly growth through the year, and a path toward approximately $10.0 billion in FY 2027 revenue on an organic basis. Looking ahead, data center growth is framed at roughly 25% in FY 2027 and about 40% in FY 2028, with custom doubling in FY 2028 and optics outgrowing CapEx. The Celestial AI transaction, expected to close in Q1 calendar 2026, is planned to be funded with cash and stock without new debt, while continuing dividends and buybacks. With multi-node custom programs, expanding rack-scale optics, and photonics fabric ramping in FY 2028–FY 2029, Marvell is aligning to AI infrastructure secular drivers.
See the full press release on Marvell’s Q3 FY 2026 financial results on the company website.
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Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
Other insights from Futurum:
Marvell Q2 FY 2026 Earnings: Data Center Growth Healthy but Overshadowed by Rising Competition
Marvell Expands AI Portfolio With 2nm Custom SRAM Launch
Marvell Unveils CPO Innovations Prepared to Drive XPU Architecture Breakthroughs
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