Marvell Technology, Inc. (MRVL.US) $115 billion acquisition finalized; Lumentum (LITE.US) releases earnings early: Q1 results beat expectations, next-quarter guidance strong

Because it was simultaneously announced on the same day that Marvell Technology, Inc. (MRVL.US) would acquire it, optical communications component manufacturer Lumentum (LITE.US) moved the release of its fiscal 2027 first-quarter earnings report, originally scheduled for after the market close on November 5, to before the U.S. market open on November 2. The report showed quarterly revenue of US$1.263 billion, up 136.5% year over year and slightly above the market expectation of about US$1.25 billion; non-GAAP diluted earnings per share were US$4.57, above the expected approximately US$4.2. Non-GAAP gross margin was 53.2%, and non-GAAP operating margin was 42.3%; GAAP net income was US$360 million, compared with only US$4.2 million in the same period last year. By product, component business revenue was US$754 million, up 98.9% year over year; systems business revenue was US$508 million, up 228.8% year over year. Chief Executive Officer Michael Hurlston said pump lasers and optical circuit switching (OCS) were the largest growth drivers in the quarter; the company has secured a second large NPO/CPO (near-packaged optics/co-packaged optics) order, with related purchase commitments exceeding US$5 billion, and OCS demand visibility has expanded significantly in recent months, with the potential to become a revenue source worth several billion US dollars annually. The company expects second-quarter revenue of US$1.575 billion to US$1.625 billion, an increase of about US$350 million quarter over quarter; non-GAAP operating margin of 45% to 46%; and non-GAAP earnings per share of US$5.90 to US$6.20. On the same day, Marvell Technology, Inc. (MRVL.US) announced an all-stock acquisition of Lumentum: Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share, equivalent to about US$1,132 per share, a premium of about 23.9% to the closing price on October 28 unaffected by acquisition rumors, with the transaction implying an enterprise value of about US$115 billion. By equity value, this is the largest M&A transaction of the year and the largest ever in the global technology industry (excluding the merger of SpaceX and xAI). Lumentum's lasers and optical technology are used to transmit Beijing Vastdata Technology at high speed between data centers and are foundational support for AI infrastructure; Marvell had previously purchased laser technology from it and earlier this year acquired photonics technology company Celestial AI. NVIDIA Corporation (NVDA.US) also invested US$2 billion in Lumentum in March this year for an equity stake and entered into a photonics technology partnership. Marvell is also working with Amazon.com, Inc.'s (AMZN.US) cloud business and Microsoft Corporation (MSFT.US) to develop custom AI chips, and in August reached a TPU chip agreement with Alphabet Inc. Class C. Data showed that as of the close on October 30, Lumentum's stock price was US$840.70, up 128% year to date, with a market value of about US$76 billion; Marvell was up 131% year to date, with a market value of US$172.2 billion. The transaction is expected to be completed in the first half of 2028. The combined company's target market is expected to expand to US$550 billion, with the potential to achieve more than US$1 billion in annual cost synergies. Marvell Chairman and Chief Executive Officer Matt Murphy will lead the combined company.