(Updates with the latest stock move in the first paragraph and details on the Google deal in the fifth and sixth paragraphs)
Marvell Technology (MRVL) shares were down about 8% in Friday's premarket activity after the company's stronger-than-expected fiscal second-quarter results were overshadowed by investor concerns over the timing of revenue from its Google (GOOG) deal.
The company reported fiscal Q2 adjusted earnings of $0.94 per diluted share late Thursday, up from $0.67 a year earlier. Analysts polled by FactSet expected $0.93.
Revenue for the three months ended Aug. 1 was $2.74 billion, up from $2.01 billion a year earlier. Analysts expected $2.72 billion.
For fiscal Q3, the company expects adjusted EPS of $1.10, plus or minus $0.05, on revenue of $3.15 billion, plus or minus 5%. Analysts expect EPS of $1.08 on revenue of $3.04 billion.
Harlan Sur, an analyst at JPMorgan Securities, said during Marvell's earnings call that, at full performance, the Google agreement could represent about $120 billion in cumulative revenue over roughly 6.5 years, or about $18.5 billion annually when annualized.
However, Marvell CEO Matt Murphy said revenue from programs covered by the agreement through fiscal 2028 is already included in the company's outlook. He said the programs are expected to contribute much more significantly to custom revenue in fiscal 2029 and beyond.