Marvell Reports Thursday. Here's Where the Google Contract Would Actually Show Up in the Numbers.

Marvell Technology (NASDAQ:MRVL) reports its fiscal second-quarter 2027 results on Thursday, Aug. 27, with the conference call set for 4:45 p.m. ET. The chipmaker arrives at the date hot.

The growth stock trades near $243 as of this writing, close to four times its 52-week low of $61.44. The latest leg came a week ago, when Marvell disclosed an expanded custom chip agreement with Google -- the search giant owned by Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), plus a warrant that could eventually hand Google stock equal to about 7% of the company.

Some investors may go looking for that agreement in Thursday's numbers. But most of it isn't there yet. And Marvell's own filing says exactly where it will be.

Image source: Getty Images.

The Google revenue has barely started counting

The agreement was signed on July 29, which falls inside the quarter Marvell is about to report -- the fiscal second quarter of 2027, which ended in early August. I'd guess plenty of investors assume the report will start showing what Google means to the business.

But the agreement's paperwork points somewhere else. Nearly all of the warrant's shares vest in 240 tranches, one for each $500 million of custom product revenue Marvell recognizes from Google and its affiliates -- purchases the filing describes as discretionary. And that revenue counts from Aug. 1, 2026 through Jan. 29, 2033, according to the warrant. That start date is the last day of the quarter being reported Thursday, so all but one day of the measuring period lies ahead of it.

The custom programs are also in their early innings. The agreement covers silicon Marvell is developing for the ecosystem around Google's in-house TPU chips, from artificial intelligence (AI) inference accelerators to storage and memory interface controllers. Development revenue comes long before volume shipments.

Put together, Thursday's reported revenue should say very little about Google. The first number the agreement can really move is the outlook management gives for the current quarter and beyond.

And a guidance number is the one thing the report can't postpone. Custom chips ramp on their own schedule, but a quarterly outlook is due on the call.

The bar for Thursday

The reported quarter has its own test, and management set it. Marvell guided fiscal second-quarter revenue to $2.7 billion, plus or minus 5%, which at the midpoint would be about 35% year-over-year growth -- an acceleration from the 28% growth the company delivered in the fiscal first quarter.

Guidance also calls for earnings per share of $0.37 on a GAAP basis and $0.93 on a non-GAAP (adjusted) basis, each plus or minus $0.05.

The line to watch inside the report is the data center end market, the home of the custom chip work. That end market brought in $1.83 billion in the fiscal first quarter, up 27% year over year, and accounted for 76% of everything Marvell sold.

"We expect revenue growth to continue accelerating each quarter throughout fiscal 2027, driven by continued strength in our data center business," CEO Matt Murphy said with the fiscal first-quarter report in May.

That sentence is the standard Thursday gets held to. After all, it requires the fiscal second quarter to land near the guide, and it requires a fiscal third-quarter outlook above 35% -- the first outlook covering a full quarter whose Google purchases count toward the warrant.

The price already assumes a bigger guide

The market hasn't waited. Marvell's market value sits near $213 billion, and the stock costs about 39 times its expected earnings for the coming fiscal year. A meaningful slice of that price arrived in the past week, on an agreement whose purchases are discretionary. Google controls the pace, and nothing obligates it to reach any particular total.

Worth noting, too, is what the warrant costs the shareholders who already own Marvell. The warrant covers just under 59 million shares at an exercise price of $206.58, enough to grow the share count by about 7% if fully vested and exercised. The upside case and the dilution arrive together.

Marvell also has an investor day scheduled for Oct. 6, where a longer-term outlook seems likely. But that is six weeks away.

In the meantime, investors can see whether management hits its guidance (or, better yet, exceeds it) -- and look for any forward-looking commentary from management providing more insight into the Google agreement.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Marvell Technology. The Motley Fool has a disclosure policy.