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Company Overview - MACOM Technology Solutions Inc. is a leading supplier of semiconductor products, focusing on high-performance solutions for telecommunications, industrial, defense, and data center industries [4] - The company serves over 6,000 customers annually and has a broad product portfolio that includes RF, microwave, analog, mixed signal, and optical semiconductor technologies [4] - MACOM has achieved various certifications, including IATF16949, AS9100D, ISO9001, and ISO14001, indicating its commitment to quality and environmental management [4] Product Offerings - MACOM's connectivity portfolio includes a wide range of optical and copper-based technologies designed to support high data speeds, such as lasers, modulators, linear equalizers, and optical clock recovery modules [2] - The company is showcasing next-generation solutions enabling 400G per lane data rates over single mode fiber, along with 200G per lane solutions, PCIe 6.0 optical solutions, and a complete DSP-free 100G per lane solution [5] Event Participation - MACOM will showcase its latest analog connectivity solutions at the European Conference on Optical Communication (ECOC) in Copenhagen, Denmark, from September 29 to October 1, 2025 [1][3] - The event will feature live demonstrations of advanced semiconductor solutions aimed at enhancing high-speed connectivity [3]

Company Overview - MACOM Technology Solutions Inc. is a leading supplier of semiconductor products, focusing on RF, microwave, and millimeter wave solutions, and foundry services [1][9] - The company serves over 6,000 customers annually across various industries, including Telecommunications, Industrial and Defense, and Data Center [9] Event Participation - MACOM will participate in European Microwave Week (EuMW) 2025, held in Utrecht, Netherlands from September 23 to 25, 2025, showcasing its product portfolio at Booth D068 [1][6] - The event will feature demonstrations of MACOM's expanding product capabilities for applications in space, radar, RF-over-Fiber (RFoF), and high reliability [2] Product Demonstrations - Demonstrations will include: - SATCOM Applications featuring the MAAP-011410 10 W Power Amplifier and MAAL-FR1245 Low Noise Amplifier [7] - Linearized Q-Band Power Amplifier and V-Band Low Noise Amplifier for SATCOM applications [7] - RFoF transceiver portfolio covering L-, S-, C-, X-, and Ku-Bands [7] - Space and high reliability components for free space optics systems [7] - Ultra Low Noise Amplifier for E-Band applications designed for aerospace environments [7] - SP2T High Power Switch supporting continuous wave power up to +53 dBm [7] - C-Band 700W RF Power Pallet designed for pulsed radar systems [7] Presentations - MACOM will host presentations during EuMW 2025, including: - "EuMIC-15-5 Stability Envelope Using Nodal Transfer Functions" by Dr. Thomas Winslow on September 23, 2025 [5] - "EuMIC/EuMC03-4 GaN/Si 26 – 30 GHz T/R Chip MMIC for 5G Communications" by a team of engineers on September 23, 2025 [5] Certifications and Standards - MACOM has achieved certifications to various standards, including IATF16949 for automotive, AS9100D for aerospace, ISO9001 for quality, and ISO14001 for environmental management [9]

Core Insights - MACOM Technology Solutions Inc. has launched a new chipset designed to enhance PCI Express (PCIe) and Compute Express Link (CXL) connectivity over optical fiber, addressing distance limitations and enabling high-speed, low-latency communication [1][2]. Product Overview - The new chipset includes the MATA-38794 transimpedance amplifier (TIA) and the MALD-38795 VCSEL driver, which together maintain signal integrity and reduce latency by consolidating sideband signaling into a single fiber pair [1][2]. - The chipset supports PCIe extension up to 100 meters over multimode fiber, facilitating eight PCIe 6.0 lanes at 64 Gbps PAM4, while also transporting essential sideband signals such as clock, reset, wake, and communication channels like USB and Ethernet [2]. Industry Context - PCIe is crucial for disaggregated computing, providing high bandwidth connections between components like GPUs and CPUs, and enabling a more efficient computing model by using photonic interconnects [3]. - The extension of PCIe over fiber is deemed essential for the next generation of disaggregated computing infrastructure, as stated by MACOM's CEO, Stephen G. Daly [4]. Company Information - MACOM designs and manufactures high-performance semiconductor products for various industries, including Telecommunications, Industrial and Defense, and Data Centers, serving over 6,000 customers annually [5]. - The company has achieved multiple certifications, including IATF16949, AS9100D, ISO9001, and ISO14001, and operates facilities across the United States, Europe, and Asia, with headquarters in Lowell, Massachusetts [5].

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, access to the Zacks Rank List, and Equity Research reports [1][2] - The Zacks Style Scores provide a rating system for stocks based on value, growth, and momentum characteristics, helping investors identify securities with high potential for market outperformance [2][3] Group 2 - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E and Price/Cash Flow, appealing to value investors [3] - The Growth Score assesses a company's future earnings and sales potential, targeting stocks with sustainable growth [4] - The Momentum Score capitalizes on price trends and earnings outlook changes, guiding investors on when to enter high-momentum stocks [5] Group 3 - The VGM Score combines the three Style Scores, providing a comprehensive rating that highlights stocks with attractive value, strong growth forecasts, and promising momentum [6] - The Zacks Rank model uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.75% since 1988 [7][9] Group 4 - MACOM Technology Solutions Holdings, Inc. (MTSI) is identified as a stock to watch, currently rated 3 (Hold) with a VGM Score of B [11] - MTSI is particularly appealing to growth investors, with a Growth Style Score of A and a projected year-over-year earnings growth of 35.6% for the current fiscal year [12] - Recent analyst revisions have increased MTSI's earnings estimate for fiscal 2025 to $3.47 per share, alongside an average earnings surprise of +0.9% [12]

Core Insights - M/A-Com's international operations are crucial for assessing its financial strength and growth potential, given the interconnected nature of the global economy [2][3] - The company's total revenue for the quarter ending June 2025 was $252.08 million, reflecting a 32.3% increase year-over-year [4] International Revenue Analysis - Other Countries contributed 18.4% of total revenue, amounting to $46.28 million, which was a surprise of +7.8% compared to expectations [5] - China generated $70.97 million, representing 28.2% of total revenue, exceeding projections by +8.68% [6] - Asia Pacific (excluding China) accounted for $29.54 million, or 11.7% of total revenue, also surpassing analyst expectations by +3.78% [7] Future Revenue Projections - Analysts forecast total revenue of $258.33 million for the current fiscal quarter, indicating a 28.7% increase from the prior year [8] - For the full year, expected total revenue is $961.17 million, marking a 31.7% increase compared to last year [9] Market Performance - M/A-Com's stock has declined by 11.2% over the past month, contrasting with a 2.7% increase in the Zacks S&P 500 composite [14] - Over the last three months, the company's shares have decreased by 2%, while the S&P 500 has increased by 13.2% [14]

Core Insights - MACOM Technology Solutions Holdings, Inc. (MTSI) reported third-quarter fiscal 2025 earnings of 90 cents per share, exceeding the Zacks Consensus Estimate by a penny, and up from 66 cents per share a year ago [1][9] - The company posted revenues of $252 million in the third quarter, surpassing the Zacks Consensus Estimate by 0.81%, and showing growth from $190.5 million in the same quarter last year [2][9] Revenue Breakdown - Telecom Market: Generated revenues of $68.1 million, accounting for 27% of total revenues, reflecting a year-over-year increase of 34.6%, driven by demand for products supporting U.S. 5G infrastructure [3] - Data Center Market: Contributed $75.8 million, or 30.1% of total revenues, with a robust year-over-year growth of 54.7%, fueled by demand for advanced optical solutions [4] - Industrial & Defense Market: Delivered $108.2 million, representing 42.9% of total revenues, up 19% year over year, supported by increased demand for electronic warfare and secure communications solutions [5] Operating Performance - Non-GAAP gross margin for the third quarter was 57.6%, an increase of 10 basis points from the previous year [6] - Non-GAAP operating expenses were $81.7 million, up 27.9% year over year, but as a percentage of revenues, they improved to 32.4%, a contraction of 110 basis points from the prior year [6] - Non-GAAP operating margin expanded to 25.2%, up 120 basis points from 24% in the prior year [6] Balance Sheet Highlights - As of July 4, 2025, cash equivalents and short-term investments were $735.2 million, an increase from $681.5 million in the previous quarter [7] - Inventories rose to $215.4 million from $194.5 million reported in the year-ago quarter [7] - Long-term debt was $339.4 million, slightly up from $339.1 million in the previous quarter [7] Future Guidance - For the fiscal fourth quarter, MACOM expects revenues between $256 million and $264 million, with adjusted earnings per diluted share projected in the range of 91 to 95 cents [9][10] - The Zacks Consensus Estimate for Q4 revenues is pegged at $257.5 million, and for adjusted earnings per share at 92 cents [10]

Group 1 - M/A-Com reported $252.08 million in revenue for the quarter ended June 2025, a year-over-year increase of 32.3% [1] - The EPS for the same period was $0.90, compared to $0.66 a year ago, indicating a positive trend in earnings [1] - The reported revenue exceeded the Zacks Consensus Estimate of $250.06 million by +0.81% [1] Group 2 - The consensus EPS estimate was $0.89, resulting in an EPS surprise of +1.12% [1] - M/A-Com's stock has returned -6.9% over the past month, while the Zacks S&P 500 composite increased by +1.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - Revenue from Telecommunications was $68.05 million, surpassing the average estimate of $65.82 million, reflecting a year-over-year change of +34.6% [4] - Revenue from Industrial & Defense was $108.21 million, slightly below the average estimate of $108.44 million, with a year-over-year change of +19% [4] - Revenue from Data Center was $75.82 million, close to the average estimate of $75.84 million, showing a year-over-year increase of +54.7% [4]

Group 1 - MACOM Technology Solutions Holdings, Inc. announced the retirement of Director Susan Ocampo from its Board of Directors, effective August 31, 2025, after a fifteen-year tenure [1][2] - Susan Ocampo has been a significant contributor to MACOM's development since joining the Board in August 2010, following the acquisition of MACOM by her and her late husband in 2009 [1][2] - The company provides high-performance semiconductor products for various industries, including Industrial and Defense, Data Center, and Telecommunications, serving over 6,000 customers annually [2] Group 2 - MACOM has achieved multiple certifications, including IATF16949 for automotive, AS9100D for aerospace, ISO9001 for quality, and ISO14001 for environmental management [2] - The company operates facilities across the United States, Europe, and Asia, with its headquarters located in Lowell, Massachusetts [2]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for July 4, 2025, show significant revenue growth and a net loss, primarily due to a one-time debt extinguishment loss Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 4, 2025 | September 27, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $125,466 | $146,806 | | Short-term investments | $609,760 | $435,082 | | Inventories | $215,388 | $194,490 | | Total current assets | $1,127,355 | $903,078 | | Total assets | $2,003,272 | $1,755,640 | | **Liabilities & Equity** | | | | Short-term debt | $160,844 | $— | | Total current liabilities | $294,647 | $108,184 | | Long-term debt | $339,351 | $448,281 | | Total liabilities | $739,921 | $629,297 | | Total stockholders' equity | $1,263,351 | $1,126,343 | Condensed Consolidated Statements of Operations Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2025 | Q3 2024 | YoY Change | Nine Months 2025 | Nine Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $252,079 | $190,486 | +32.3% | $706,088 | $528,868 | +33.5% | | Gross Profit | $139,436 | $101,409 | +37.5% | $386,701 | $283,931 | +36.2% | | Income from Operations | $37,660 | $19,716 | +91.0% | $90,057 | $46,132 | +95.2% | | Net Income (Loss) | $36,534 | $19,939 | +83.2% | $(99,330) | $47,445 | N/A | | Diluted EPS | $0.48 | $0.27 | +77.8% | $(1.35) | $0.65 | N/A | - The nine-month net loss was primarily driven by a **$193.1 million loss** on the extinguishment of debt[12](index=12&type=chunk) Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Nine Months Ended, in thousands) | Cash Flow Activity | July 4, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $165,732 | $100,311 | | Net cash used in investing activities | $(246,131) | $(148,615) | | Net cash provided by (used in) financing activities | $58,796 | $(8,434) | | **Net Change in Cash** | **$(21,340)** | **$(56,648)** | | Cash and cash equivalents - End of period | $125,466 | $117,304 | - Operating cash flow for the nine months ended July 4, 2025, increased significantly to **$165.7 million**, despite a net loss, primarily due to non-cash charges like a **$193.1 million loss** on debt extinguishment and **$61.6 million** in share-based compensation[20](index=20&type=chunk)[147](index=147&type=chunk) Notes to Condensed Consolidated Financial Statements Revenue by Market (Nine Months Ended, in thousands) | Market | July 4, 2025 | June 28, 2024 | % Change | | :--- | :--- | :--- | :--- | | Industrial & Defense | $304,148 | $258,792 | +17.5% | | Data Center | $213,286 | $141,662 | +50.6% | | Telecom | $188,654 | $128,414 | +46.9% | | **Total** | **$706,088** | **$528,868** | **+33.5%** | - The company completed the acquisition of ENGIN-IC, Inc. on November 5, 2024, for approximately **$14.4 million** to expand MMIC design capabilities, and the RF Business from Wolfspeed, Inc. on December 2, 2023, for **$75.0 million** cash and **$57.7 million** stock[39](index=39&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - On December 12, 2024, the company exchanged **$288.8 million** of 2026 Convertible Notes for **$257.7 million** of new 2029 Convertible Notes, common stock, and cash, resulting in a pre-tax debt extinguishment charge of **$193.1 million**[65](index=65&type=chunk) Share-Based Compensation Expense (in thousands) | Period | Three Months Ended July 4, 2025 | Nine Months Ended July 4, 2025 | | :--- | :--- | :--- | | Cost of revenue | $1,728 | $6,376 | | Research and development | $7,109 | $25,235 | | Selling, general and administrative | $8,469 | $29,982 | | **Total** | **$17,306** | **$61,593** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 33.5% revenue growth to strong market performance, improved gross margin, and increased operating expenses, maintaining strong liquidity despite a one-time debt loss Results of Operations Revenue Growth by Market (Nine Months Ended July 4, 2025 vs. June 28, 2024) | Market | Revenue Increase (in millions) | % Change | | :--- | :--- | :--- | | Industrial & Defense | $45.4 | +17.5% | | Data Center | $71.6 | +50.6% | | Telecom | $60.2 | +46.9% | | **Total** | **$177.2** | **+33.5%** | - Gross margin for the nine months ended July 4, 2025, increased to **54.8%** from 53.7%, driven by higher sales volume and decreased production supply costs[137](index=137&type=chunk) - Research and development (R&D) expenses increased by **37.0%** to **$181.6 million**, primarily due to higher employee-related costs, share-based compensation, and development supplies[138](index=138&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **9.3%** to **$115.1 million**, mainly due to higher employee-related costs and share-based compensation[139](index=139&type=chunk) Liquidity and Capital Resources - As of July 4, 2025, the company held **$125.5 million** in cash and cash equivalents and **$609.8 million** in liquid short-term investments[154](index=154&type=chunk) - Net cash from operating activities for the nine months ended July 4, 2025, was **$165.7 million**, a significant increase from **$100.3 million** in the prior-year period[146](index=146&type=chunk)[147](index=147&type=chunk) - The company exchanged a portion of its 2026 Convertible Notes for new 2029 Convertible Notes, resulting in net proceeds of approximately **$63.7 million** for general corporate purposes[155](index=155&type=chunk) - Capital expenditures for the fourth fiscal quarter are anticipated to be between **$17.0 million** and **$23.0 million**, including investments for the newly acquired RTP Fab[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on investments and foreign currency risk on intercompany debt, mitigated by hedging contracts for Euro and Yen exposures - The company's primary market risks are interest rate fluctuations on its cash and investment portfolio and foreign currency exchange rate changes[161](index=161&type=chunk) - A hypothetical **1%** change in interest rates would impact annual interest income by approximately **$7.4 million**, based on balances as of July 4, 2025[162](index=162&type=chunk) - To mitigate foreign currency risk on intercompany debt, the company held **$33.0 million** in notional forward foreign currency contracts (Euro and Yen) as of July 4, 2025[164](index=164&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures as of July 4, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[165](index=165&type=chunk) - No material changes occurred during the most recent fiscal quarter that affected internal control over financial reporting[166](index=166&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company was not involved in any material pending legal proceedings during the three and nine months ended July 4, 2025 - The company was not involved in any material pending legal proceedings during the reported periods[86](index=86&type=chunk)[169](index=169&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the 2024 Annual Report on Form 10-K, except as updated in prior quarterly reports - There have been no material changes in the risk factors from those described in the 2024 Annual Report on Form 10-K, except as updated in previous 10-Q filings for the current fiscal year[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company repurchased 12,442 shares of common stock, primarily for tax obligations related to restricted stock awards Issuer Purchases of Equity Securities (Quarter Ended July 4, 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 5 - May 2, 2025 | 4,850 | $99.29 | | May 3 - May 30, 2025 | 5,710 | $122.53 | | May 31 - July 4, 2025 | 1,882 | $129.02 | | **Total** | **12,442** | **$114.45** | - The shares were withheld from employees to cover tax withholding obligations upon the vesting of restricted stock awards, known as "withhold to cover"[172](index=172&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the third fiscal quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended July 4, 2025[173](index=173&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and XBRL data files