What is the revenue and EPS growth rate for Microchip Technology year over year?

What is the market's earnings forecast for Microchip Technology next quarter?

What were the key takeaways from Microchip Technology’s earnings call?

What is Microchip Technology's gross profit margin?

Did Microchip Technology beat or miss consensus estimates last quarter?

What does Microchip Technology do and what are its main business segments?

What is Microchip Technology's latest dividend and current dividend yield?

What were the key takeaways from Microchip Technology's earnings call?

- **Revenue beat**: $1.186B (+4% QoQ, +15.6% YoY), driven by networking, FPGA, and data center. 
- **Gross margin recovery**: 60.5% (non-GAAP), up 379bps QoQ, targeting 65%+ as factories ramp. 
- **Strategic wins**: $100M+ PCIe Gen 6 switch win for 2027, Hyundai automotive Ethernet collaboration. 
- **Q4 guidance**: $1.26B (6.2% QoQ growth), 60.5%-61.5% gross margin. 
- **Debt focus**: Reduce net debt/EBITDA from 4.18x to 1.5x+, pause buybacks. 
- **Demand signals**: Bookings >1, expedited shipments up 300% YoY, lead times tightening. 


**【CFO Financial Overview】**
- Q3 revenue: $1.186 billion (4% sequential growth, 15.6% YoY). Non-GAAP EPS: $0.44 (beat by $0.04). 
- Gross margin: 60.5% (non-GAAP), up 379bps sequentially. Operating margin: 28.5% (vs. 20.5% YoY). 
- Inventory: 201 days (17 days high-margin, 28 days distributor). Distributor sell-through vs. sell-in gap narrowed to $11.7M. 
- Free cash flow: $305.6M. Net debt: $250.7M (down $26M QoQ). 

**【CEO Business Update】**
- Networking, data center, FPGA, and licensing drove growth. FPGA and memory businesses saw strong demand. 
- 3 new PCIe Gen 6 switch design wins: $100M+ in CY2027, with long-term customer expansion. 
- Automotive Ethernet (T1S) collaboration with Hyundai for next-gen platforms. Industrial Ethernet solutions for IIoT. 
- Q4 guidance: $1.26B ±$20M (6.2% sequential growth, 29.8% YoY). Gross margin: 60.5%-61.5%. 

**【CFO Financial Outlook】**
- Underutilization charges: $51.7M (expected to decline but remain elevated). Inventory reserves: normalizing. 
- Gross margin target: 65%+ as factories ramp. OpEx: 31.3%-31.7% of sales (investing in talent for long-term growth). 
- Debt reduction priority: net debt/EBITDA ratio 4.18x (targeting 1.5x+). 

**【Q&A Highlights】**
- **Demand trends**: Strong bookings (book-to-bill >1), expedited shipments up 300% YoY. Lead times tightening on substrates, foundry capacity. 
- **Gross margin path**: 61% Q4, gradual improvement as underutilization charges decline. 
- **FPGA growth**: Gaining share, 100% foundry-based with >65% gross margin. 
- **Debt strategy**: Pause buybacks, focus on reducing leverage. 
- **A&D strength**: Defense spending, aerospace production, space exploration driving growth. 


Microchip Technology Incorporated (MCHP) Q3 2026 Earnings Call Transcript

- **Revenue Resilience**: Sequential growth of 6% despite macro challenges, driven by data center and AI product demand.
- **Innovation Lead**: Industry-first 3nm Gen 6 PCIe switch offers 64 GT/s bandwidth, positioning for hyperscale AI infrastructure wins.
- **Gross Margin Recovery**: Aiming to reduce inventory write-offs and underutilization charges, targeting 65% non-GAAP gross margin in future quarters.
- **Strategic Shifts**: Expansion into AI and FPGA markets with state-of-the-art products to drive long-term growth.
- **Cash Management**: Strong free cash flow ($38.3M) and plans to reduce debt, supporting financial flexibility.

**【CEO Summary Section】**
- **Revenue Growth**: Sequential growth of 6% in Q2 2026, driven by strong bookings in Gen 4 and Gen 5 data center products. MCU and analog businesses showed sequential growth of 9.7% and 1.7%, respectively.
- **AI and Data Center Strategy**: Launched industry-first 3nm Gen 6 PCIe switch with 64 GT/s bandwidth, targeting hyperscale and enterprise AI infrastructure. Expected to capture share in multi-gigawatt data center builds.
- **Gross Margin Dynamics**: Product gross margin at 67.4%, but non-GAAP gross margin of 56.7% due to $122.8 million in inventory write-offs and underutilization charges. Aiming to reduce these charges in future quarters.
- **Inventory Management**: Inventory days reduced to 199 days (down 15 days sequentially), with a focus on correcting distributor and customer inventory levels.

**【CFO Financial Commentary】**
- **Financial Performance**: Non-GAAP net income of $199.1 million, EPS of $0.35 (midpoint of guidance). Operating margin of 24.3%, with strong cash flow and free cash flow of $38.3 million.
- **Cost Control**: Operating expenses at 32.4% of sales, with a focus on reducing underutilization charges through factory ramping.
- **Liquidity**: Cash position of $236.8 million, with plans to use excess free cash flow to reduce debt.

**【Q&A Highlights】**
- **Demand Visibility**: Bookings for March 2026 quarter are strong, with customers scheduling purchases to meet year-end inventory targets. Expect sequential growth in March, June, and September quarters.
- **Supply Chain Challenges**: Constraints on substrates and advanced nodes (e.g., 3nm) are temporary but manageable. Long-term focus on state-of-the-art products to drive margin expansion.
- **Strategic Shifts**: Formation of AI business unit and FPGA product development to target high-growth markets. Closure of Fab 2 to reduce costs and improve efficiency.
- **Gross Margin Outlook**: Targeting 65% non-GAAP gross margin as inventory corrections and underutilization charges normalize. Product gross margin remains healthy at 67.4%.


Microchip Technology Incorporated (MCHP) Q2 2026 Earnings Call Transcript

- **Revenue Surge**: 10.8% sequential growth to $1.075B, driven by microcontrollers and analog products. Distributor sell-through gap narrows to $49.3M.
- **Inventory Cleanup**: $124M inventory reduction, days of inventory down to 214. Targeting 195-200 days by September. Gross margin recovery accelerates as write-offs drop to $77.1M.
- **AI & Defense Leadership**: AI coding assistant cuts development time by 40%, with FPGA solutions achieving 50% power savings. Aerospace/defense sales up 15% YoY, supported by post-quantum cryptography.
- **Q2 Outlook**: $1.13B sales (+5.1% QoQ), non-GAAP EPS $0.30-$0.36. Lead times extend to 6-12 weeks for constrained products, signaling demand normalization.
- **Debt Reduction**: Free cash flow to exceed dividend, with $350M debt reduction underway. Targeting 65% long-term gross margin as inventory normalizes.

**【CEO Summary Section】**
- **Revenue Growth**: Q1 FY26 net sales of $1.075B, up 10.8% sequentially, driven by double-digit growth in microcontrollers and analog products. Distributor sell-through exceeded sell-in by $49.3M, narrowing the gap from $103M in the prior quarter.
- **Inventory Management**: Reduced inventory by $124M to $1.169B, with days of inventory dropping from 266 to 214. Targeting 195-200 days by September. Inventory write-offs decreased to $77.1M (from $90.6M) and underutilization charges to $51.5M (from $54.2M).
- **Gross Margin Recovery**: Non-GAAP gross margin of 54.3%, with incremental margin of 76% on sequential sales growth. Long-term target of 65% gross margin achievable as inventory normalizes.
- **Employee Recognition**: Accrued $5.5M for employee bonuses, reflecting 18,000 employees' resilience through layoffs and pay cuts.

**【CFO Financial Commentary】**
- **Financial Performance**: Non-GAAP EPS of $0.27 (vs. $0.26 guidance), driven by $275.6M operating cash flow and $244.4M free cash flow. Non-GAAP operating margin improved to 20.7% (from 14.0% prior quarter).
- **Leverage Reduction**: Total debt decreased by $175M, with net debt up $30.2M. Targeting $100M+ annual free cash flow post-inventory normalization.
- **Tax Rate**: Non-GAAP tax rate of 11.25% in Q1, expected to remain low at 10.25% for FY26.

**【COO Product Updates】**
- **AI Innovation**: AI coding assistant reduces development time by 40%, with AI agents launching in September. FPGA solutions offer 50% power savings for defense and industrial applications.
- **Defense Growth**: Aerospace and defense sales up 15% YoY, with radiation-tolerant FPGAs and post-quantum cryptography solutions meeting NSA standards.
- **Data Center Expansion**: Design wins in AI infrastructure, including storage, networking, and edge computing. Connectivity products for 5G and IoT also growing.

**【Q&A Highlights】**
- **Seasonality & Guidance**: Q2 FY26 sales expected at $1.13B (+5.1% vs. Q1), well above typical 3% seasonal growth. Lead times extending to 6-12 weeks for certain products due to substrate and packaging constraints.
- **Tariff Impact**: Minimal ($7-9M) tariff-related pull-ins identified, with most demand driven by inventory correction rather than tariffs. U.S.-based manufacturing may qualify for tariff exemptions.
- **Auto Market Lag**: Automotive end market lagging recovery, while industrial, aerospace, and data center demand strong.
- **Utilization Ramp**: Wafer starts to increase in Q4 FY26 to avoid 30-40% step function growth in future quarters. Underutilization charges expected to decline modestly in Q2, accelerating as fabs ramp.


Microchip Technology Incorporated (MCHP) Q1 2026 Earnings Call Transcript

- **Inventory Turnaround**: 266 days → 251 days QoQ; targeting 130-150 days by FY26. 
- **Revenue Recovery**: Q1 FY26 guidance $1.045B (±$25M), up 7.7% from Q4 FY25. 
- **AI Growth Driver**: AI revenue 6% of sales, up from 4% prior year. 
- **Defense Surge**: Aerospace/Defense share jumps to 17% (vs. 11% prior year). 
- **Gross Margin Leverage**: 85% of incremental revenue flows to profit due to reduced write-offs. 
- **China Strategy Shift**: Moving production to Taiwan to avoid tariffs; 'China for China' strategy under review. 


**【CEO Opening Remarks】**
- **Nine-Point Recovery Plan Progress**: 
  - **Manufacturing Restructuring**: Tempe Fab 2 closed; Oregon (Fab 4) and Colorado (Fab 5) fabs reduced capacity. 
  - **Inventory Reduction**: 266 days (Dec 2024) → 251 days (Mar 2025), targeting 130-150 days by FY26. 
  - **Customer Relationships**: 78% of 12% strained accounts restored to approved/preferred status. 
  - **Operating Expense Reduction**: 10% global layoff; FY26 OpEx target <30% of sales. 
- **FY26 Guidance**: Q1 net sales $1.045B (±$25M), non-GAAP EPS $0.18-$0.26. 
- **Key Market Shift**: Aerospace/Defense share jumps to 17% (vs. 11% prior year), driven by U.S. and NATO defense spending. 

**【CFO Financial Highlights】**
- **Q4 FY25 Results**: 
  - Net Sales: $970.5M (-5.4% QoQ, -26.8% YoY) 
  - Non-GAAP EPS: $0.11 (vs. $0.10 guidance) 
  - Gross Margin: 52% (includes $54.2M underutilization charges) 
  - Inventory: $1.293B (-$62.8M QoQ), 251 days (down 15 days) 
- **FY25 Full Year**: 
  - Net Sales: $4.402B (-42.3% YoY) 
  - Non-GAAP Net Income: $708.8M 
- **Cash Flow**: Q4 free cash flow $182.6M; FY25 total free cash flow $771.7M. 

**【COO Product Updates】**
- **AI & Connectivity Innovations**: 
  - Switchtec PCIe switches for automotive/embedded systems 
  - ARM-based microprocessors with integrated analog peripherals 
  - MPLAB AI coding assistant (40% dev time reduction) 
  - PIC64 product line expansion into space/industrial/automotive 
- **10BASE-T1S Adoption**: Growing design funnel in industrial/medical markets. 

**【Business Environment & Guidance】**
- **Inventory Correction**: Distributor sell-through up $103M QoQ; June Q1 sell-in expected to rise. 
- **Gross Margin Leverage**: 85% of incremental revenue flows to bottom line due to reduced write-offs. 
- **Capital Return**: 100% of free cash flow returned via dividend; FY26+ to reduce debt. 

**【Q&A Key Themes】**
- **Tariff Impact**: Minimal direct impact; <4% of products made in China. 
- **Demand Signals**: Book-to-bill 1.07 (Mar Q4), strongest in aerospace/defense. 
- **AI Growth**: AI revenue 6% of sales (vs. 4% prior year), targeting 65%+ long-term gross margin. 
- **China Strategy**: Shifting to Taiwan-based fabs to avoid tariffs; 'China for China' strategy under review. 
- **Share Recovery**: MCU market share expected to rise as customers deplete inventory. 


Microchip Technology (MCHP)-8 May 25-2025 Q4 Earnings call transcript

- **Inventory Correction Intensifies**: Targeting $250M cash liberation by FY26, with fabs operating at reduced capacity.
- **Gross Margin Resilience**: Q3 non-GAAP margin 55.4% despite underutilization; Q4 guide midpoint 53% still above peers.
- **Customer Engagement Push**: Top 256 customers being prioritized to rebuild relationships and win new designs.
- **New Product Momentum**: RISC-V processors and Wi-Fi expansions driving design wins in industrial and automotive sectors.
- **Financial Stability**: 100% free cash flow to dividends, with debt refinancing secured for FY25 maturity.

**【CEO Opening Remarks】**
- Announced a 9-point restructuring plan to address inventory overhang and improve operational efficiency.
- Closed Tempe Fab (Fab 2) and transferred 70% of its production to other fabs, reducing capacity utilization to manage inventory.
- Targeted inventory reduction from 266 days (Dec 2024) to 130-150 days by FY26, with $250M cash liberation.
- Launched channel strategy changes: switching demand flags from creation to fulfillment after a set period, and lowering distributor margins.
- Engaged top 256 customers to rebuild relationships and win new designs.

**【CFO Financial Highlights】**
- Q3 FY25 net sales: $1.026B (-11.8% QoQ, -41.9% YoY) due to inventory destocking.
- Non-GAAP gross margin: 55.4% (incl. $42.7M underutilization charges).
- Non-GAAP EPS: $0.20 (vs. $1.08 in prior quarters due to higher opex).
- Inventory: $1.356B (266 days), distributor inventory: 37 days (down 3 days QoQ).
- Free cash flow: $244.6M, cash position: $586M post-commercial paper maturity.

**【COO Product Updates】**
- Introduced 64-bit RISC-V processors with AI capabilities, seeing strong design wins in industrial and aerospace.
- Expanded Wi-Fi portfolio with 20 new products, including plug-and-play modules.
- FPGA portfolio achieved space certification and integrated with NVIDIA Holoscan for medical imaging.

**【Q4 FY25 Guidance】**
- Net sales: $920M-$1B (midpoint -2.3% QoQ).
- Non-GAAP gross margin: 52%-54% (midpoint 53% vs. 55.4% in Q3).
- Opex: 37.7%-40.5% of sales (midpoint 39.1% vs. 34.9% in Q3).
- EPS: $0.05-$0.15 (vs. $0.20 in Q3).

**【Key Risks & Opportunities】**
- Inventory destocking continues at customers and distributors, with bookings running higher than prior quarter but visibility low.
- Gross margin expected to improve as fabs ramp capacity on short notice.
- Capital return policy: 100% free cash flow to dividends, with excess cash used to reduce debt post-inventory correction.
- China manufacturing strategy and CHIPS Act engagement to be detailed in March update.

Actual															0.73	0.78	0.78	0.81	0.925	0.99	1.07	1.2	1.35	1.37	1.46	1.56	1.64	1.64	1.62	1.08	0.57	0.53	0.46	0.2	0.11	0.27	0.35	0.44
Forecast															0.6766	0.7177	0.7149	0.792	0.8705	0.9532	1.0573	1.1728	1.2535	1.3388	1.4422	1.5502	1.6222	1.6409	1.6211	1.0399	0.5718	0.5214	0.4342	0.2774	0.1047	0.239	0.3382	0.4285
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+7.89%	+8.68%	+9.11%	+2.27%	+6.26%	+3.86%	+1.20%	+2.32%	+7.70%	+2.33%	+1.23%	+0.63%	+1.10%	-0.05%	-0.07%	+3.86%	-0.31%	+1.65%	+5.94%	-27.90%	+5.06%	+12.97%	+3.49%	+2.68%

Actual	--	--	--	--	--	--	--	--	--	--	--	--	--	--	1.33B	1.31B	1.31B	1.35B	1.47B	1.57B	1.65B	1.76B	1.84B	1.96B	2.07B	2.17B	2.23B	2.29B	2.25B	1.77B	1.33B	1.24B	1.16B	1.03B	970.50M	1.08B	1.14B	1.19B
Forecast	--	--	--	--	--	--	--	--	--	--	--	--	--	--	1.32B	1.28B	1.26B	1.35B	1.46B	1.55B	1.65B	1.75B	1.82B	1.95B	2.06B	2.16B	2.23B	2.29B	2.27B	1.77B	1.33B	1.24B	1.15B	1.05B	962.58M	1.06B	1.14B	1.18B
Surprise	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	+0.56%	+2.03%	+3.56%	+0.27%	+0.76%	+1.20%	+0.15%	+0.53%	+1.29%	+0.49%	+0.56%	+0.62%	+0.33%	-0.05%	-0.48%	-0.41%	-0.12%	-0.04%	+0.99%	-1.93%	+0.82%	+1.70%	+0.31%	+0.24%

MCHP

MCHP fundamentals

MCHP Q3 2026 Earnings

Earnings Call

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MCHP

MCHP fundamentals

MCHP Q3 2026 Earnings

Earnings Call

MCHP Earnings Call Summary for Q3/20265:00 PM on Feb 5, 2026

MCHP Earnings Call Summary for Q2/20265:00 PM on Nov 6, 2025

MCHP Earnings Call Summary for Q1/20265:00 PM on Aug 7, 2025

MCHP Earnings Call Summary for Q4/20255:00 PM on May 8, 2025

MCHP Earnings Call Summary for Q3/20255:00 PM on Feb 6, 2025

You can ask Aime