# Marvell Technology, Inc. (NASDAQ: MRVL) — Narrative

Fiscal period covered: second quarter of fiscal 2027, ended August 1, 2026.
Marvell's fiscal year is the 52- or 53-week period ending on the Saturday closest to
January 31; fiscal 2027 therefore ends January 30, 2027.

Sources: Annual Report on Form 10-K for fiscal 2026 (year ended January 31, 2026), filed
March 11, 2026, accession 0001835632-26-000011; Quarterly Report on Form 10-Q for the
quarter ended August 1, 2026, filed August 28, 2026, accession 0001835632-26-000025;
Current Report on Form 8-K furnished August 27, 2026, accession 0001835632-26-000022;
Current Report on Form 8-K filed August 19, 2026, accession 0001193125-26-356217.

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## Business

*From the fiscal 2026 Form 10-K, accession 0001835632-26-000011.*

Marvell is a fabless supplier of data infrastructure semiconductors, spanning what it
calls "the data center core to network edge." Its core competence is designing and
scaling complex System-on-a-Chip architectures that combine analog, mixed-signal and
digital signal processing, and it outsources all wafer fabrication, assembly, test and
packaging.

**One reportable segment, two end markets.** Marvell reports a single segment — the
design, development and sale of integrated circuits — and disaggregates revenue into two
end markets: **data center** and **communications and other**. Beginning in the fourth
quarter of fiscal 2026 the company collapsed what had previously been four separate
markets (enterprise networking, carrier infrastructure, consumer, and
automotive/industrial) into the single "communications and other" line; the composition
of the data center market was unchanged. The end-market split is the most important
structural fact about the company, and the three-year history shows an outright inversion
of the business:

| Net revenue by end market ($M) | FY2026 | % | FY2025 | % | FY2024 | % |
|---|---|---|---|---|---|---|
| Data center | 6,100.3 | 74% | 4,164.2 | 72% | 2,216.7 | 40% |
| Communications and other | 2,094.3 | 26% | 1,603.1 | 28% | 3,291.0 | 60% |
| **Total** | **8,194.6** | | **5,767.3** | | **5,507.7** | |

In two years data center went from 40% of revenue to 74%, and grew from $2.2 billion to
$6.1 billion, while the legacy carrier, enterprise, consumer and automotive/industrial
businesses shrank in aggregate from $3.3 billion to $2.1 billion. Data center demand is
AI-driven: cloud and on-premise AI systems and AI servers, ethernet switching, storage
area networks and network-attached storage, general-purpose servers, and data center
interconnect. Communications and other covers campus/SME routers, switches and wireless
access points, network appliances and workstations; broadband access, optical transport,
routers and wireless RAN systems; consumer gateways, gaming consoles, home storage, PCs,
printers and set-top boxes; and industrial ethernet, U.S. military and government
solutions and video surveillance.

**Portfolio.** Marvell sells both standard products and "optimized" solutions customized
to a single customer, and says demand has been shifting toward the latter. The product
families are:

- **Custom ASICs** — customer-specific silicon for AI, data center, compute, networking,
  carrier, storage and aerospace/defense, built on Marvell IP including ultra-high-speed
  SerDes, ARM compute, security, storage, silicon photonics and advanced packaging (die-to-die
  interconnect, chiplets, co-packaged optics, custom HBM). Multiple 5nm designs executed;
  3nm designs in progress; a 2nm platform in development.
- **Interconnects** — PAM, coherent and coherent-lite DSPs, laser drivers, TIAs, silicon
  photonics, co-packaged optics (CPO), linear pluggable optics (LPO) chipsets, data center
  interconnect, active electrical cable (AEC) DSPs and PCIe retimers. Coherent products
  reach hundreds to thousands of kilometers in carrier networks; coherent-lite addresses
  campus DCI up to 20 km.
- **Photonic Fabric** — added with the Celestial AI acquisition; an optical scale-out
  fabric for large AI clusters, first product a chiplet integrating drivers, TIAs,
  equalizers, SerDes, microcontrollers, modulators, photodiodes and waveguides.
- **Ethernet solutions** — Prestera switches (12Gbps to 12.8Tbps), Teralynx cloud/AI
  switches (up to 51.2Tbps and beyond), Alaska physical-layer transceivers (10Mbps to
  1.6Tbps), controllers and network adapters.
- **Scale-up switches** — UALink and Ethernet for Scale-Up Networking (ESUN) fabrics in
  development, leveraging Teralynx architecture and 224G SerDes.
- **PCIe and CXL switches** — added with XConn; high-radix switches supporting multi-level
  switching and mesh/dragonfly/3D-torus topologies for memory pooling and rack-scale
  accelerator expansion.
- **Fibre Channel** (QLogic HBAs and controllers), **processors** (OCTEON DPUs, OCTEON
  Fusion wireless baseband, NITROX security, LiquidSecurity, LiquidIO), and **storage
  controllers** (Bravera HDD and SSD controllers, preamplifiers).

**Portfolio reshaping.** On August 14, 2025 Marvell completed the sale of its automotive
ethernet business to Infineon Technologies AG for $2.5 billion in cash, recording a
pre-tax gain on sale of $1.8 billion in the third quarter of fiscal 2026. Two acquisitions
closed just after the fiscal 2026 year end and are described in the current-quarter section
below.

**Customers and concentration.** Marvell sells to OEMs, ODMs and distributors, and expects
a significant percentage of sales to continue coming from direct sales to key customers.
Concentration is high and rising: in fiscal 2026 one direct customer ("Customer A")
accounted for 14% of net revenue and one distributor ("Distributor A") for 37%, versus 13%
and 34% respectively in fiscal 2025; the ten largest customers together represented 82% of
fiscal 2026 net revenue. Distributor A was 24% of revenue as recently as fiscal 2024.
Geographically, sales shipped to customers with operations in Asia were approximately 77%
of fiscal 2026 net revenue, 75% in fiscal 2025 and 70% in fiscal 2024.

**Manufacturing and supply.** The vast majority of Marvell's circuits are fabricated by
third-party foundries using CMOS processes, and packaging and test are outsourced to
subcontractors primarily in Taiwan, Canada, Korea, Singapore and China. Marvell typically
places firm orders with suppliers up to 26 weeks before delivery and may commit up to 52
weeks to secure capacity, and it enters capacity reservation arrangements with foundry and
substrate partners. A portion of the business acquired from Avera requires facility
security clearances under the National Industrial Security Program, and Marvell operates
under foreign ownership, control or influence mitigation agreements with the U.S.
Department of Defense (partially released after its domestication).

**People.** Marvell employed 7,480 people as of January 31, 2026 — 49% in the Americas,
42% in APAC (including India), 9% in EMEA. Global voluntary turnover in fiscal 2026 was
approximately 7%.

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## Risk factors

*From the fiscal 2026 Form 10-K, accession 0001835632-26-000011, as updated by Part II,
Item 1A of the Form 10-Q for the quarter ended August 1, 2026, accession
0001835632-26-000025.*

**Customer concentration is the dominant company-specific risk.** Marvell states plainly
that its sales are concentrated in a few large customers and that a loss, a significant
reduction, a market-share decline or financial distress at any one of them could
substantially decrease revenue. Two customers (one distributor, one direct) each exceeded
10% of fiscal 2026 revenue and the top ten were 82% of the total. Most sales are on a
purchase-order basis, allowing cancellation, change or deferral on short notice. Marvell
also flags that large customers "may begin developing and making their own semiconductor
solutions," and that customers in jurisdictions such as China may vertically integrate or
buy fully developed third-party solutions. Separately, it warns that its revenue is now
concentrated in the data center end market specifically, and that a significant reduction
in that market alone would greatly reduce revenue.

**AI demand may not develop as the market assumes — and AI may disrupt Marvell itself.**
The 10-Q risk factors are unusually specific here. Marvell notes AI data center deployment
may happen more slowly than customers or the market anticipate because of labor shortages,
supply chain bottlenecks, power and water procurement constraints, permitting delays, and
intensifying community opposition to data center siting (rezoning denials, litigation, and
state and local legislative action). It adds that the current level of AI infrastructure
capital expenditure "may not be sustainable over the long term," that a dramatic drop in
training and inference costs could change the market, and that bipartisan AI oversight
legislation introduced in July 2026 could encompass its products. In a separate risk
factor, Marvell argues AI-driven design tools may lower barriers to entry, accelerate
customer insourcing and vertical integration, compress product cycles and shorten the
commercial life of existing products.

**Manufacturing dependence and regional concentration.** Marvell owns no fabs. Most of its
products are made by third-party foundries in Taiwan, with other sources in China, Germany,
South Korea, Singapore and the United States, and most assembly, test and packaging is in
China, Malaysia, Singapore, Taiwan and Canada. Most products are manufactured at only one
foundry in a single process, making a transition slow and expensive; assembly and test
partners may be single-sourced. Vendors are generally not obligated to supply specified
quantities at specified prices outside a purchase order, and may reallocate capacity to
larger or better-margin customers. Marvell also cites a recent tight supply environment for
AI-related components — advanced wafer fabrication, advanced packaging and large body
substrates — producing longer lead times and higher costs. Securing capacity can itself be
costly: nonrefundable deposits, loans in exchange for capacity commitments, and take-or-pay
penalties.

**China, tariffs and export controls.** Export restrictions, entity-list additions and
successive BIS rules (October 2022, October 2023, November 2024, January 2025) have
dampened demand and required licenses that have at times been delayed or denied. Marvell
notes 2025 U.S. government interactions implying a 15% remittance on China-related sales as
a condition of certain export licenses, and a January 2026 BIS licensing policy including a
25% tariff and other requirements; it states these actions did not impact Marvell, but that
such revenue sharing, if imposed, could erode gross margins and pricing flexibility and
could prompt it to curtail China sales. A Section 232 national-security investigation into
semiconductor imports, initiated April 14, 2025, may result in additional tariffs. Marvell
also warns of indirect effects: Chinese customers stockpiling inventory well ahead of need,
or replacing Marvell products with alternatives.

**Acquisition, earnout and hedge risk.** Marvell warns that acquired businesses may
underperform, that stock consideration dilutes existing holders, and — specific to Celestial
AI — that it may be required to issue **up to 24.4 million additional shares** if specified
cumulative revenue milestones are met through the end of fiscal 2029, creating dilution and
overhang. The earnout's fair value depends on forecast revenue, milestone probability,
volatility and Marvell's own stock price, so it produces material non-cash gains and losses
and increased volatility in reported results. To offset part of the earnout obligation
Marvell entered a cash-settled forward stock purchase transaction on its own shares
maturing roughly one year from March 31, 2026, exposing it to market, liquidity,
operational and counterparty risk, including a potentially significant cash payment at
settlement or early termination if the stock declines relative to the forward price.

**The NVIDIA preferred stock.** Marvell adds a risk factor covering the Series A
Convertible Preferred Stock issued to NVIDIA on March 31, 2026. The preferred is
convertible into up to 21,778,000 common shares at an initial conversion price of
approximately $91.8355; holders receive dividends on an as-converted basis and generally
vote with common holders except on director elections; the terms cannot be adversely
altered without majority consent of the preferred. Marvell warns that conversion could
cause significant dilution, that the Hart-Scott-Rodino waiting period makes conversion
timing uncertain, and that concentrating this position in a single significant holder could
increase NVIDIA's influence and make Marvell's securities less attractive to other
investors.

**Debt.** Total borrowings were $5.0 billion of senior notes as of August 1, 2026, with a
$1.5 billion revolving credit facility undrawn. The credit agreement and note indentures
restrict liens, additional indebtedness, mergers, dividends, asset transfers and restricted
payments, and the credit agreement carries a leverage ratio. Noteholders may require
repurchase on a change-of-control repurchase event, which Marvell may lack the funds to
satisfy.

**Design-win economics and margins.** Marvell incurs substantial expense before any
customer commitment; six months to three years can elapse between design-win selection and
commercial shipment, and a lost competitive bid can forfeit a customer's product line for
its life. Custom and semi-custom products — a rising share of sales — tie Marvell's revenue
directly to a single customer's market success, with no alternative buyer. The ASIC model
carries structurally lower gross margin and depends on customers paying non-recurring
engineering (NRE) costs. Average selling prices have historically declined.

**Other named risks.** Impairment exposure on $11.1 billion of goodwill and $1.8 billion of
acquired intangibles as of January 31, 2026, tested as a single reporting unit against
market capitalization; tax risk from Pillar Two global minimum tax, the One Big Beautiful
Bill Act of 2025, and reliance on foreign incentive agreements subject to clawback if
investment or headcount commitments are missed; cybersecurity (Marvell reports no material
breach in the last three years and has chosen not to purchase cyber insurance); competition
from larger, better-resourced rivals and industry consolidation; intellectual property
protection and infringement litigation; concentration of employees in Israel amid regional
armed conflict; and the risks of owning its Santa Clara real property.

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## Management's discussion and analysis — fiscal 2026

*From the fiscal 2026 Form 10-K, accession 0001835632-26-000011.*

**Results.** Fiscal 2026 net revenue was $8,194.6 million, up 42.1% from $5,767.3 million
in fiscal 2025, driven by a 46% increase in data center sales on AI-related demand for
custom products and the electro-optics portfolio, and a 31% increase in communications and
other as customer inventory levels normalized after a correction — partly offset by the
loss of automotive ethernet revenue from the beginning of the third quarter.

Gross profit was $4,180.7 million, or 51.0% of revenue, against 41.3% in fiscal 2025. The
9.7-point improvement came mainly from the absence of $357.9 million of fiscal 2025
impairment charges in cost of goods sold (acquired intangibles, inventories, property and
equipment and other non-current assets tied to restructuring) plus better cost absorption
on higher revenue, partly offset by product mix.

Research and development rose 6.4% to $2,075.2 million on advanced IP development and
customer design-win activity — but fell as a share of revenue from 33.9% to 25.3%. Selling,
general and administrative fell 3.9% to $767.1 million (9.4% of revenue, from 13.8%),
mainly on lower amortization of acquired intangibles. Stock-based compensation was
essentially flat at $590.8 million versus $597.4 million.

Operating income was $1,322.9 million in fiscal 2026, against an operating loss of $720.3
million in fiscal 2025.

Net income was $2,670.1 million, or 32.6% of revenue, against a net loss of $885.0 million
in fiscal 2025 and a net loss of $933.4 million in fiscal 2024. Roughly $1.8 billion of
that $2,670.1 million was the one-time pre-tax gain on the Infineon divestiture, recorded
in interest income and other, net — below the operating line, and therefore no part of the
$1,322.9 million operating result. Fiscal 2026 was not an operating result of that size.

**Cash flow.** Operating activities provided $1.8 billion in fiscal 2026 versus $1.7
billion in fiscal 2025. Net income of $2.7 billion was adjusted for the $1.8 billion gain
on the automotive ethernet sale, $942.0 million of acquired-intangible amortization, $590.8
million of stock-based compensation, $348.6 million of depreciation and amortization,
$42.2 million of deferred income tax, $14.0 million of restructuring-related gains and
$109.5 million of net loss from other non-cash items. Working capital consumed $1.1
billion, driven by higher receivables (stronger sales in the last two months), inventories
(aligned with expected revenue growth) and prepaid expenses (prepaid ship-and-debit on
higher distributor inventory, and government incentive receivables), partly offset by
higher accrued liabilities (mainly income taxes payable on the divestiture gain) and
accounts payable.

Investing provided $2.1 billion, driven by $2.5 billion of net proceeds from the automotive
ethernet sale less $354.1 million of capital expenditure. Financing used $2.2 billion:
$2.0 billion of buybacks, $790.6 million of debt principal repayment, $240.7 million of
employee tax-withholding on net share settlements, $205.1 million of dividends and $128.3
million of technology license payments, against $1.2 billion of borrowing proceeds and
$78.7 million from equity plans.

**Liquidity and capital structure.** Cash and cash equivalents ended fiscal 2026 at $2.6
billion, up $1.7 billion from $948.3 million a year earlier, of which roughly $642.0
million sat in foreign subsidiaries. Total borrowings were $4.5 billion of senior notes,
$499.8 million of it due within twelve months. During fiscal 2026 Marvell repaid $590.6
million of the 2026 Term Loan; amended and restated its revolver on June 30, 2025 to a $1.5
billion, five-year facility (repaying the $200.0 million drawn in the first quarter and
ending the year undrawn); and on the same date issued $500.0 million of 2030 senior notes
and $500.0 million of 2035 senior notes.

**Capital return.** Marvell repurchased 26.6 million shares for $2.0 billion in fiscal
2026, including a $1.0 billion accelerated share repurchase executed September 24, 2025,
and paid $205.1 million of dividends — $2.2 billion returned in total, with $5.5 billion of
authorization remaining at January 31, 2026.

**Government incentives.** On May 1, 2025 Marvell received approval of an application for
government incentives in a foreign jurisdiction; for the incentive period running February
2, 2025 through February 1, 2030, qualifying expenditures and purchases generate credits
that reduce qualifying cost of sales and operating expenses and may offset income taxes
payable or be refunded in cash. Realization depends on meeting minimum investment levels
and surviving agency review, and failure could trigger clawback.

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## Current quarter — Q2 fiscal 2027 (quarter ended August 1, 2026)

*From the Form 10-Q for the quarter ended August 1, 2026, accession 0001835632-26-000025,
except the guidance and non-GAAP figures noted, which are from the Form 8-K furnished
August 27, 2026, accession 0001835632-26-000022.*

**Revenue.** Net revenue was $2,739.3 million for the three months, up 36.5% from
$2,006.1 million a year earlier — a quarterly record. For the six months, revenue was
$5,157.1 million, up 32.2% from $3,901.4 million.

| Net revenue by end market ($M) | Q2 FY27 | % | Q2 FY26 | % | 6M FY27 | % | 6M FY26 | % |
|---|---|---|---|---|---|---|---|---|
| Data center | 2,171.5 | 79% | 1,490.5 | 74% | 4,004.2 | 78% | 2,931.1 | 75% |
| Communications and other | 567.8 | 21% | 515.6 | 26% | 1,152.9 | 22% | 970.3 | 25% |
| **Total** | **2,739.3** | | **2,006.1** | | **5,157.1** | | **3,901.4** | |

Data center sales rose 46% year over year in the quarter (37% for six months) on AI-related
demand across electro-optics, custom, storage and switching. Communications and other rose
10% in the quarter (19% for six months) as customer inventory levels normalized, partly
offset by the absence of automotive ethernet revenue divested at the start of Q3 FY26. Data
center is now 79% of revenue, up five points year over year.

**Margins and expenses.** Gross profit was $1,455.6 million, 53.1% of revenue, up 2.7
points from 50.4%, on better cost absorption and better product mix; six-month gross margin
was 52.7%, up 2.4 points. Research and development rose $222.1 million to $741.1 million
(27.0% of revenue) on higher headcount including employees added through the acquisitions;
selling, general and administrative rose $64.8 million to $257.6 million (9.4%). The
six-month increases include $21.9 million of higher acquisition-related costs in R&D and
$44.8 million in SG&A. Restructuring produced a $2.8 million net gain in the quarter and a
$7.9 million net charge for six months. Operating income was $459.7 million, 16.8% of
revenue, up from 14.5%.

**Below the line.** Interest and other loss, net was $81.4 million, up $25.0 million year
over year: interest expense of $61.6 million plus other expense of $19.8 million, the latter
driven by a $101.9 million increase in the fair value of the Celestial contingent
consideration liability partly offset by a $49.9 million unrealized gain on the forward
stock purchase contract. For six months the same two items were far larger — a $433.7
million contingent-consideration increase against a $131.0 million forward-contract gain —
which is why six-month interest and other loss, net of $337.5 million tripled the prior
year's $111.1 million.

Income tax expense was $70.3 million for the quarter and $119.1 million for six months, up
on higher pre-tax earnings. The effective rate differs from the 21% U.S. statutory rate
mainly because a substantial portion of earnings is taxed at lower rates, offset by U.S.
taxation of foreign operations, tax credits, non-deductible adjustments to the contingent
consideration liability (net of the tax effect of the forward stock purchase contract),
valuation allowance releases and stock-compensation discrete items.

**Bottom line.** Net income was $308.0 million, or $0.33 per diluted share, against $194.8
million and $0.22 a year earlier. Six-month net income was $342.5 million, or $0.38 per
diluted share — below the prior year's $372.7 million and $0.43, because the first quarter
absorbed most of the contingent-consideration remeasurement. Diluted weighted-average
shares were 921.2 million for the quarter. EPS is computed under the two-class method
following the Series A Convertible Preferred issuance. On a non-GAAP basis the company
reported 58.9% gross margin and $0.94 of diluted earnings per share for the quarter.

**Acquisitions completed in the first quarter of fiscal 2027.**

- **Celestial AI, Inc.** — closed February 2, 2026 under an Agreement and Plan of
  Reorganization dated December 2, 2025. Total purchase consideration $3,533.7 million:
  $1,276.0 million cash, 24.5 million Marvell common shares valued at $1,929.0 million,
  $12.9 million of replacement equity awards attributable to pre-combination service, and
  $315.8 million of contingent consideration. Net of $302.8 million of cash acquired,
  $3,230.9 million. The preliminary allocation records $2,394.2 million of goodwill (not
  tax-deductible) and $951.0 million of acquired intangibles; a $3.7 million measurement
  period adjustment in Q2 reduced cash consideration on final settlement of a holdback.
  Contingent on specified revenue milestones, Marvell may pay additional cash and issue
  additional shares through fiscal 2029. Acquisition-related transaction costs were $1.0
  million in the quarter and $30.1 million for six months. Celestial's revenue and earnings
  since acquisition were not material; on a pro forma basis (as if acquired at the start of
  fiscal 2026) six-month net income would have been $402.7 million versus $242.7 million.
- **XConn Technologies Holdings, Ltd.** — closed February 10, 2026 under an agreement dated
  January 5, 2026. Total purchase consideration $469.0 million: $272.1 million cash, 2.1
  million common shares valued at $168.9 million, $20.5 million of replacement equity awards
  and $7.5 million to settle a pre-existing contractual relationship. Preliminary allocation:
  $394.9 million of goodwill (not tax-deductible) and $81.0 million of acquired intangibles.
  Transaction costs, revenue and earnings since acquisition were not material.

Goodwill rose to $13.9 billion at August 1, 2026 from $11.1 billion at January 31, 2026,
with roughly $2.8 billion added by Celestial, XConn and one immaterial acquisition. The
non-cash portion of consideration for the two deals was $2.5 billion for the six months.

**NVIDIA partnership and preferred stock; Google custom-silicon agreement.** During the
first quarter of fiscal 2027 Marvell and NVIDIA announced a strategic partnership to
connect Marvell's custom XPUs and
compatible scale-up networking with NVIDIA's AI infrastructure ecosystem. On March 31, 2026
Marvell completed the issuance and sale of 2.0 million shares of Series A Convertible
Preferred Stock to NVIDIA for an aggregate purchase price of $2.0 billion in cash. Each
share has a $1,000 stated value and is initially convertible at the holder's option at
approximately $91.84 per share, into an aggregate maximum of about 21.8 million common
shares, subject to applicable regulatory waiting periods. Holders receive dividends on an
as-converted basis, participate pro rata on liquidation, and have no redemption or
preemptive rights. No shares had been converted as of August 1, 2026. Marvell is authorized
to issue 8.0 million preferred shares and 1.3 billion common shares. Late in the second
quarter, on July 29, 2026, Marvell entered a commercial agreement with Google LLC covering
the development of custom semiconductor products attaching to Google's TPU ecosystem
(Form 8-K, accession 0001193125-26-356217); the warrant issued in connection with that
agreement falls after quarter end and is described under subsequent events below.

**Customer and geographic concentration tightened further.** Customer A was 16% of net
revenue for both the quarter and six months (16% in both prior-year periods), while
Distributor A rose to 44% of quarterly revenue from 34%, and to 45% for six months from
35%. Accounts receivable were concentrated with four customers representing 72% of gross
receivables at August 1, 2026, versus five customers at 73% a year earlier. Distributors
were 50% of revenue, up from 41%. By destination of shipment, China was $1,161.5 million or
42% of quarterly revenue (up from 29%), Taiwan 17%, Singapore 12% and the United States 7%
(down from 15%); Marvell notes a substantial majority of China shipments relate to
non-China-based customers with factories or contract manufacturing there. Sales to
customers with Asian operations were approximately 84% of revenue in both the quarter and
six months, up from 76% and 75%.

**Customer warrants.** Marvell has issued warrants to customers that vest on qualifying
revenue milestones and are recognized as a reduction to revenue as those revenues are
recognized: a fiscal 2025 warrant for up to 4.2 million shares at $87.77 (grant-date fair
value $54.44 per share, $227.6 million total; 1.2 million shares vested as of August 1,
2026), and a fiscal 2026 warrant for up to 1.0 million shares at $87.00 (grant-date fair
value $53.02 per share, $55.4 million total; none vested).

**Liquidity, debt and capital return.** Cash and cash equivalents were $3,932.8 million at
August 1, 2026, up $1.3 billion from $2.6 billion at January 31, 2026, with roughly $1.7
billion held by non-U.S. subsidiaries. Total borrowings were $5.0 billion of senior notes:
on April 15, 2026 Marvell issued $1.0 billion of ten-year senior notes due 2036 and used
part of the proceeds to repay the $500.0 million 2026 senior notes at maturity. The $1.5
billion revolving credit facility was undrawn and is available through June 30, 2030.
Marvell repurchased 1.1 million shares for $200.0 million in the quarter and 2.5 million
shares for $400.0 million for six months, with $5.1 billion of the $9.7 billion total
authorization remaining at August 1, 2026 (the board added $5.0 billion to the program on
September 24, 2025). Including $107.7 million of dividends, $507.7 million was returned to
stockholders in the six months. Management states existing cash, operating cash flow and the
revolver will be sufficient for at least the next twelve months, including the income tax
due on the automotive ethernet sale.

**Cash flow — note the period lengths.** The 10-Q presents cash flows for the six months
only. For the **six months** ended August 1, 2026, operating activities provided $1.2
billion (versus $794.5 million a year earlier): net income of $342.5 million adjusted for
$533.8 million of stock-based compensation, $440.1 million of acquired-intangible
amortization, the $433.7 million contingent-consideration fair value change, $188.5 million
of depreciation and amortization, the $131.0 million unrealized forward-contract gain,
$38.7 million of deferred income tax and $58.3 million of other non-cash net loss, less
$660.3 million of working capital outflow (higher prepaid expenses from capacity fee
payments, and lower accounts payable on payment timing). Six-month investing used $1.6
billion, mainly $1.3 billion for acquisitions net of cash acquired and $282.4 million of
capital expenditure. Six-month financing provided $1.6 billion: $2.0 billion of preferred
stock proceeds and $1.0 billion of borrowings, against $500.0 million of debt repayment,
$400.0 million of buybacks, $365.2 million of employee tax withholding, $107.7 million of
dividends and $56.6 million of technology license payments. For the **three months** alone,
the company reported cash flow from operations of $605.5 million in its August 27, 2026
earnings release; that figure does not appear in the 10-Q, which has no three-month cash
flow statement.

**Outlook.** For the third quarter of fiscal 2027 Marvell guided to net revenue of $3.150
billion +/- 5%, GAAP gross margin of 52.9% to 53.9% (non-GAAP 57.5% to 58.5%), GAAP
operating expenses of approximately $1.015 billion (non-GAAP approximately $655 million),
921 million diluted weighted-average shares, and GAAP diluted earnings per share of $0.53
+/- $0.05 (non-GAAP $1.10 +/- $0.05). The implied sequential revenue step-up of roughly
15% at the midpoint is steeper than the 13% step from the first to the second quarter, and
the guided GAAP operating expense would be a further increase on the $995.9 million
recorded in the second quarter. Marvell does not reconcile
forward-looking non-GAAP measures beyond the third quarter of fiscal 2027, citing items it
cannot estimate — restructuring and other related charges, asset impairments, stock-based
compensation and other non-recurring expenses.

**Controls and accounting.** Disclosure controls were concluded effective as of August 1,
2026, with no material changes in internal control over financial reporting during the
quarter, and no material changes to critical accounting policies from the fiscal 2026
10-K.

---

## Subsequent events

*From Note 15, "Subsequent Event," to the unaudited condensed consolidated financial
statements in the Form 10-Q for the quarter ended August 1, 2026, accession
0001835632-26-000025, and the Current Report on Form 8-K filed August 19, 2026, accession
0001193125-26-356217.*

Subsequent to quarter end, Marvell issued a warrant to a customer to purchase an aggregate
of up to **59.0 million shares of Marvell common stock at an exercise price of $206.58 per
share**, over a **seven-year term expiring in August 2033**. The warrant is eligible for
vesting from Marvell's third quarter of fiscal 2027 through the end of fiscal 2033, upon
the customer meeting certain **revenue milestone conditions or time-based conditions**.

The note does not name the customer, but a Current Report on Form 8-K filed August 19,
2026, accession 0001193125-26-356217, does: the warrant was issued on August 18, 2026 to
**Google LLC** — 58,970,907 shares at an exercise price of $206.58, exercisable through
August 18, 2033 — in connection with a commercial agreement dated July 29, 2026 relating to
Marvell's development of custom semiconductor products for Google. Against the 876.8
million common shares outstanding at August 1, 2026, the full 59.0 million shares are
equivalent to roughly 6.7% of the share count.

This is the only event disclosed in the subsequent-events note. Marvell's existing
customer warrants are recognized as a reduction to revenue as qualifying revenue is
recognized over the vesting term; this warrant is materially larger than either of the two
already outstanding — 59.0 million shares against 4.2 million and 1.0 million — and its
exercise price of $206.58 is more than double the $87.77 and $87.00 strikes on those
earlier grants.