M/A-Com (MTSI) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.78 per share. This compares to earnings of $0.58 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.28%. A quarter ago, it was expected that this chipmaker would post earnings of $0.73 per share when it actually produced earnings of $0.73, delivering no surprise.Over the last four quarters, the company has surpassed co ...

Financial Performance - Revenue for Q1 FY2025 was $218.1 million, a 38.8% increase from $157.1 million in Q1 FY2024 and an 8.7% increase from $200.7 million in the prior quarter[5] - Net loss for Q1 FY2025 was $167.5 million, or $2.30 loss per diluted share, compared to net income of $12.5 million, or $0.17 per diluted share, in Q1 FY2024[5] - Adjusted net income for Q1 FY2025 was $59.5 million, or $0.79 per diluted share, compared to $41.8 million, or $0.58 per diluted share, in Q1 FY2024[5] - Income from operations for Q1 FY2025 was $17.5 million, or 8.0% of revenue, compared to $11.0 million, or 7.0% of revenue, in Q1 FY2024[5] - Adjusted EBITDA (Non-GAAP) for the quarter was $62,162 thousand, representing 28.5% of revenue, compared to $44,806 thousand or 28.5% in the same quarter last year[31] Margin and Expenses - Adjusted gross margin for Q1 FY2025 was 57.5%, down from 59.2% in Q1 FY2024 and 58.1% in the prior quarter[5] - Operating expenses (GAAP) rose to $99,582 thousand, which is 45.7% of revenue, compared to $76,300 thousand or 48.6% in the prior year[31] Future Outlook - For Q2 FY2025, MACOM expects revenue to be between $227 million and $233 million, with adjusted gross margin between 57% and 58%[4] - MACOM anticipates a non-GAAP income tax rate of 3% for FY2025, reflecting its strategic financial planning[4] Strategic Initiatives - The company is focused on expanding its product portfolio and enhancing competitiveness in the semiconductor market[4] - MACOM has made strategic acquisitions, including ENGIN-IC, Inc. and Linearizer Communications Group, to strengthen its market position[8] Assets and Liabilities - Total assets increased to $1,843,630 thousand, up from $1,755,640 thousand, representing a growth of 5.0%[27] - Total current liabilities increased to $272,407 thousand from $108,184 thousand, indicating a significant rise in short-term obligations[27] Cash Flow and Debt - Cash and cash equivalents at the end of the period increased to $232,699 thousand from $163,586 thousand, marking a significant increase[29] - The company reported a loss on extinguishment of debt amounting to $193,098 thousand during the latest quarter[29] - The company made an acquisition of business, netting $(12,474) thousand during the latest quarter, compared to $(75,000) thousand in the same period last year[29]

Group 1 - Analysts project M/A-Com (MTSI) will announce quarterly earnings of $0.78 per share, a 34.5% increase year over year [1] - Revenues are expected to reach $215.07 million, reflecting a 36.9% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the last 30 days, indicating analysts' reassessment of their initial estimates [1][2] Group 2 - Revenue from the Telecommunications market is forecasted to reach $56.06 million, an increase of 83% from the prior-year quarter [4] - Revenue from the Industrial & Defense market is expected to be $97.61 million, indicating a 26.8% increase year over year [4] - Revenue from the Data Center market is projected at $61.40 million, reflecting a 24% year-over-year change [4] Group 3 - M/A-Com shares have shown a return of -2.1% over the past month, compared to the Zacks S&P 500 composite's +1.7% change [5] - M/A-Com holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [5]

Industry Overview - Semiconductor chips are essential for telecommunication equipment, electronic goods, and IoT devices, with increasing demand driven by advancements in AI technologies [1] - The 2022 Chips Act allocates $39 billion in direct grants and $75 billion in loans to revitalize domestic semiconductor production, aiming to foster innovation and expansion in the industry [2][3] - The steady rollout of 5G and investments in rural fiber infrastructure are creating healthy demand trends for semiconductor chips, with 5G being a primary catalyst for next-generation IoT services [5][6] Technological Advancements - Continuous network tuning and optimization are necessary to maintain performance standards, leading to increased demand for advanced wireless products and services [7] - The shift towards converged network structures is enabling operators to combine voice, video, and data communications, driving the development of solutions that support this convergence [8] - The proliferation of cloud networking solutions is increasing the demand for quality networking equipment, further boosting chip demand [9] Focus on Novel Technologies - Adoption of cutting-edge technologies such as AI, machine learning, and advanced networking platforms is driving higher demand for semiconductor chips [10] - The need for faster data transfer rates due to changing data consumption patterns, particularly for video content, is expected to drive the adoption of higher-speed optical and photonic components [14] Company Highlights - **MACOM Technology Solutions Holdings, Inc. (MTSI)**: Offers power analog semiconductor solutions and has a Zacks Industry Rank of 82, with a stock gain of 40.9% over the past year and long-term earnings growth expectations of 21% [13][15] - **NVIDIA Corporation (NVDA)**: A leader in visual computing technologies, NVIDIA's GPUs are benefiting from the AI boom, with a stock gain of 161.4% over the past year and long-term earnings growth expectations of 20% [16][18] - **Semtech Corporation (SMTC)**: Manufactures analog and mixed-signal semiconductors, with a Zacks Rank of 2 and a stock gain of 190% over the past year, alongside long-term earnings growth expectations of 20% [19][21]

Group 1 - M/A-Com (MTSI) is currently outperforming the Computer and Technology sector, with a year-to-date performance of 42.5% compared to the sector's average return of 31.3% [4] - The Zacks Rank system indicates M/A-Com has a strong buy rating (1), with a consensus estimate for full-year earnings increasing by 7.2% over the past quarter, reflecting positive analyst sentiment [3] - M/A-Com belongs to the Semiconductor - Analog and Mixed industry, which has seen a decline of 8.3% year-to-date, further highlighting M/A-Com's superior performance within its industry [5] Group 2 - The Computer and Technology sector includes 618 companies and is currently ranked 2 in the Zacks Sector Rank, which evaluates 16 different sector groups [2] - Meta Platforms (META) is another strong performer in the Computer and Technology sector, with a year-to-date increase of 68.7% and a Zacks Rank of 2 (Buy) [4][5] - The Internet - Software industry, where Meta Platforms operates, has 145 stocks and has returned 32.4% since the beginning of the year, indicating a competitive environment within the sector [6]

Have you assessed how the international operations of M/A-Com (MTSI) performed in the quarter ended September 2024? For this chipmaker, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects. In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, unde ...

Market Overview - The company operates in three primary markets: Industrial and Defense (I&D), Data Center, and Telecommunications (Telecom), serving over 6,000 end customers[8]. - Revenue in the I&D market is expected to grow due to the expansion of the product portfolio for satellite communications, civil and military radar, and electronic warfare applications[12]. - The Data Center market revenue growth is anticipated from the adoption of higher speed processing technologies and upgrades to data center architectures utilizing 100G to 1.6T interconnects[12]. - The Telecom market is driven by 5G and future generation telecommunication deployments, with increasing demand for bandwidth-rich services[12]. Sales and Revenue - Sales to distributors accounted for 29.3%, 24.0%, and 30.9% of total revenue in fiscal years 2024, 2023, and 2022, respectively[16]. - No single customer accounted for 10% or more of revenue in fiscal years 2024, 2023, and 2022, with the top 25 customers representing 47.0%, 51.5%, and 47.1% of revenue, respectively[17]. - Sales to the top 10 direct and distribution customers accounted for 55.8% of MACOM's revenue in the fiscal year ended September 27, 2024[43]. - Sales to customers outside the U.S. accounted for 55.1% of total revenue for the fiscal year ended September 27, 2024, with China and the Asia Pacific region contributing 24.4% and 12.2% respectively[49]. Financial Performance - Revenue for fiscal year 2024 reached $729.6 million, an increase of 12.5% compared to $648.4 million in fiscal year 2023[108]. - Gross profit for fiscal year 2024 was $393.8 million, slightly up from $385.8 million in fiscal year 2023, resulting in a gross margin of approximately 54%[108]. - Operating expenses increased to $320.1 million in fiscal year 2024, up from $278.4 million in fiscal year 2023, primarily due to higher research and development costs[108]. - Net income for fiscal year 2024 was $76.9 million, a decrease of 16.1% from $91.6 million in fiscal year 2023[108]. Research and Development - The company continues to invest in proprietary processes and technologies to develop high-value solutions for its customers[11]. - R&D expenses for the fiscal year ended September 27, 2024, were $182.2 million, reflecting a continued investment strategy in innovative products and solutions[61]. - Research and development expenses rose to $182.2 million in fiscal year 2024, compared to $148.5 million in fiscal year 2023, reflecting a focus on innovation[108]. Acquisitions and Growth Strategy - MACOM Technology Solutions Inc. completed the acquisition of Linearizer Technology, Inc. in March 2023 to enhance its component and subsystem design expertise[33]. - In May 2023, MACOM acquired key manufacturing facilities and assets from OMMIC SAS to expand its European footprint and offer higher frequency GaAs and GaN MMICs[33]. - The acquisition of certain assets from Wolfspeed, Inc. in December 2023 included a portfolio of GaN on Silicon Carbide products for high-performance RF and microwave applications[33]. - The company’s acquisition strategy aims to accelerate growth, expand its technology portfolio, and create stockholder value[33]. Operational Risks - The semiconductor industry is characterized by significant fluctuations in demand and product obsolescence, which can lead to revenue and profitability declines[36]. - The company faces risks related to supply chain uncertainties, which could lead to delays or reductions in product shipments[39]. - The company may experience fluctuations in operating results due to various factors, including economic conditions and customer demand[42]. - The company may face difficulties in managing future growth, including maintaining manufacturing capacity and securing raw materials, which could impact revenue and profitability[56]. Compliance and Regulatory Issues - The company is subject to various export regulations, requiring compliance with U.S. and international laws for certain products[29]. - The company is committed to environmental compliance, facing potential future expenditures due to increasingly stringent regulations[26]. - Changes in U.S. and international laws, including export and import controls, could adversely impact the company's business and operating results, potentially increasing costs and affecting product demand[67]. Cybersecurity and Data Privacy - Cybersecurity vulnerabilities pose a significant risk, with potential unauthorized access to confidential data and operational disruptions[46]. - The company has established oversight mechanisms for cybersecurity risks, with the Audit Committee responsible for reviewing information security and risk management strategies at least annually[84]. - The company has engaged third-party providers for cybersecurity assessments, including penetration testing and regular audits[82]. Stockholder Information - The largest stockholder, Susan Ocampo, beneficially owns 17.8% of the common stock, allowing significant influence over management decisions[75]. - The company does not intend to pay cash dividends in the foreseeable future, as future earnings will be retained for business development[77]. Cash Flow and Investments - The company has approximately $74.8 million in money market funds and $435.1 million in short-term investments as of September 27, 2024, which are subject to market and liquidity risks[48]. - Net cash provided by operating activities was $162.6 million, down from $166.9 million in fiscal year 2023[116][117]. - Cash flow used in investing activities was $181.1 million, primarily for acquisitions and capital expenditures[119]. Manufacturing and Supply Chain - The company operates wafer fabrication facilities in Lowell, Massachusetts, Ann Arbor, Michigan, and Limeil-Brévannes, France, with plans to assume control of a facility in Research Triangle Park, North Carolina[23]. - The company relies on a fab-lite model, outsourcing certain manufacturing activities to reduce capital requirements and increase flexibility[24]. - The company operates multiple manufacturing facilities and relies on external foundries, which subjects it to various manufacturing and supply risks[57]. Employee and Workforce - The company employs approximately 1,700 individuals worldwide, with 700 in research and development, and 73% of the workforce located in North America[30]. - The company has a diverse employee base, with approximately 70% male and 30% female representation, and 14% of senior management being female[30]. - The voluntary attrition rate for fiscal year 2024 was approximately 7%[30].

Core Insights - MACOM Technology Solutions Holdings, Inc. reported fourth-quarter fiscal 2024 earnings of 73 cents per share, aligning with the Zacks Consensus Estimate and reflecting a year-over-year increase of 30.4% [1] - The company's revenues rose 33.5% year over year to $200.71 million, slightly missing the Zacks Consensus Estimate by 0.23% [2] - Following the earnings report, MACOM shares increased by over 14%, although they have declined 49.7% year to date, underperforming the Zacks Computer & Technology sector's return of 28.5% [2] Revenue Breakdown - Telecom Market: Generated revenues of $51.7 million, accounting for 25.8% of total revenues, marking a 69% year-over-year increase due to high demand for products supporting the 5G market [3] - Data Center Market: Revenues reached $56.2 million, representing 28% of total revenues, up 38.8% from the previous year, driven by strong demand from Internet service providers [4] - Industrial & Defense Market: Generated revenues of $92.8 million, making up 17.2% of total revenues, with an 8.8% year-over-year increase, reflecting high demand for products in electronic warfare and secure communications [5] Operating Performance - Non-GAAP gross margin for the fourth quarter was 58.1%, a contraction of 200 basis points from the previous year [6] - Non-GAAP operating expenses were $65.9 million, up 24.1% year over year, but as a percentage of revenues, this figure decreased by 240 basis points to 32.9% [6] - Non-GAAP operating margin improved to 25.2%, an expansion of 50 basis points from the prior year [6] Balance Sheet Highlights - As of September 27, 2024, cash equivalents and short-term investments totaled $581.9 million, an increase from $521.5 million as of June 28, 2024 [7] - Inventories rose to $194.5 million from $190.7 million in the previous quarter [7] - Long-term debt obligations were $448.3 million, slightly up from $447.9 million in the prior quarter [7] Future Guidance - For the first quarter of fiscal 2025, MACOM expects revenues between $212 million and $218 million, exceeding the Zacks Consensus Estimate of $203.3 million [9] - The anticipated non-GAAP gross margin is projected to be between 57% and 59% [9] - Adjusted earnings per share are expected to range from 75 to 81 cents, compared to the Zacks Consensus Estimate of 72 cents [9]

Call Start: 08:30 January 1, 0000 9:35 AM ET MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) Q4 2024 Earnings Conference Call November 07, 2024 08:30 AM ET Company Participants Steve Ferranti - Vice President, Corporate Development & Investor Relations Steve Daly - President & Chief Executive Officer Jack Kober - Chief Financial Officer Conference Call Participants David Williams - The benchmark company Harsh Kumar - Piper Sandler Tore Svanberg - Stifel Srini Pajjuri - Raymond James Karl Ackerman - ...

M/A-Com (MTSI) came out with quarterly earnings of $0.73 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this chipmaker would post earnings of $0.66 per share when it actually produced earnings of $0.66, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. M/A-Com, which belongs to the Zacks Semicon ...