Key Highlights

  • Marvell Technology (Nasdaq: MRVL) communications and other Revenue was $2,094M in FY26, up 31% year-on-year from $1,603M in FY25.
  • Q1 FY27 communications revenue was $585M, up 29% year-on-year and 3% quarter-on-quarter, confirming inventory normalisation.
  • Management expects FY27 communications and other revenue to grow approximately 10% year-on-year to approximately $2.3 billion.
  • Enterprise networking and carrier infrastructure customers continued to replenish inventory through Q4 FY26, indicating a healthy Demand environment.
  • Q2 FY27 communications revenue is guided to decline mid-single digits quarter-on-quarter but grow high single digits year-on-year, confirming a return to normal seasonal patterns.

Analysis

The difficulty with analysing a company that has a dramatically fast-growing primary Business is that the secondary businesses tend to be ignored. For Marvell Technology (NASDAQ: MRVL), the data centre story — $6.1 billion in FY26, growing at 46% year-on-year — commands virtually all analytical attention. The communications and other segment, which generated $2.1 billion in FY26 and is growing at a more measured 10% annually, is treated as background noise. This is a mistake, and not only because $2.1 billion of any revenue deserves attention.

 

What the Segment Contains

The communications and other end market, as newly consolidated from Q4 FY26, combines what were previously reported separately as enterprise networking, carrier infrastructure, consumer, and automotive/industrial segments. The consolidation reflects Marvell's decision to simplify its reporting structure around the two end markets that matter most to investors — data centre and everything else. But within the everything else category are businesses with genuinely different growth drivers and Margin characteristics.

 

Enterprise networking — the switches, routers, and security appliances used in corporate data centres and campus networks — went through a significant inventory correction cycle in FY24 and early FY25. Customers over-ordered during the Supply chain disruptions of the Pandemic era and then worked through elevated inventory rather than placing new orders. By Q4 FY26, management stated that enterprise networking customers were continuing to replenish inventory, confirming that the correction has passed and the business is returning to underlying demand growth.

 

The Inventory Cycle Completion

The inventory normalisation story is important because it creates a cleaner baseline from which to assess the communications segment's true earning power. In Q4 FY25, the last quarter before the data centre acceleration became the dominant narrative, communications and other revenue was $452M. By Q4 FY26, it was $567M — a 26% year-on-year increase that reflects both the inventory replenishment and genuine underlying demand growth in enterprise and carrier markets.

 

Q1 FY27 brought $585M, up 29% year-on-year. Management then guided Q2 FY27 to decline mid-single digits quarter-on-quarter, while growing high single digits year-on-year. This pattern — modest seasonal sequential decline, continued year-on-year growth — is the fingerprint of a normalised, cyclically stable business rather than one in structural decline. The FY27 guidance of approximately $2.3 billion implies approximately $575M per quarter on average, consistent with that picture.

 

The Strategic Relevance

From a quality investing perspective, the communications segment provides something that the data centre segment alone cannot: revenue Diversification and gross margin support. If custom silicon and DCI modules carry lower gross margins than Marvell's blended average, and the communications segment — with its more mature, standard-product character — carries higher margins, then the communications business is effectively subsidising the gross margin of the portfolio during the data centre ramp. Losing sight of this dynamic leads investors to undervalue the communications segment's contribution to the long-term Earnings quality of the combined company.

 

The AI-RAN opportunity, connected to the NVIDIA Partnership, could also create incremental growth within the carrier portion of this segment that is not yet reflected in the FY27 guidance of approximately 10% growth. If AI processing capabilities are adopted into mobile base station infrastructure at scale, Marvell's carrier infrastructure silicon — ethernet, PHY, and baseband components — would be well positioned to participate in an upgrade cycle that goes beyond the current inventory replenishment narrative.

Disclaimer

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. All data is sourced from Marvell Technology's official earnings presentations (FY26 Q4 and Q1 FY27). Investors should conduct their own Due Diligence before making Investment decisions.