MACOM(US:MTSI)2025-05-08 20:02Financial Performance - Revenue for the three months ended April 4, 2025, was $235.9 million, a 30.1% increase from $181.2 million for the same period in 2024[124] - Gross profit for the six months ended April 4, 2025, was $247.3 million, compared to $182.5 million for the same period in 2024, reflecting a 35.5% increase[124] - Net income for the three months ended April 4, 2025, was $31.7 million, compared to $15.0 million for the same period in 2024, indicating a 111.5% increase[124] - Revenue increased by $54.7 million, or 30.2%, to $235.9 million for the three months ended April 4, 2025, and by $115.6 million, or 34.2%, to $454.0 million for the six months ended April 4, 2025[126] - Gross profit for the three months ended April 4, 2025, was $130.2 million, representing a gross margin of 55.2%, compared to $95.2 million and 52.5% for the same period in 2024[132] Operating Expenses - Operating expenses for the three months ended April 4, 2025, totaled $95.3 million, up from $79.8 million in the same period in 2024, representing a 19.3% increase[124] - Research and development expenses for the three months ended April 4, 2025, were $57.8 million, an increase from $45.6 million in the same period in 2024, reflecting a 26.5% rise[124] - Research and development expenses increased by $12.2 million, or 26.8%, to $57.8 million for the three months ended April 4, 2025, and by $33.2 million, or 39.0%, to $118.2 million for the six months ended April 4, 2025[133] - Selling, general and administrative expenses rose by $3.3 million, or 9.6%, to $37.4 million for the three months ended April 4, 2025, and by $5.6 million, or 7.9%, to $76.7 million for the six months ended April 4, 2025[134] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $110.9 million, down from $115.0 million at the end of March 29, 2024[139] - Net cash provided by operating activities was $105.3 million for the six months ended April 4, 2025, compared to $51.3 million for the same period in 2024[140] - Cash flow used in investing activities was $167.1 million for the six months ended April 4, 2025, primarily due to cash paid for acquisitions and purchases of short-term investments[142] - As of April 4, 2025, the company held $110.9 million in cash and cash equivalents and $570.6 million in liquid short-term investments, indicating strong liquidity[146] - Cash provided by financing activities for the six months ended April 4, 2025, was $26.3 million, mainly from $86.6 million in proceeds from convertible notes[144] Debt and Financing - The company reported a loss on extinguishment of debt amounting to $193.1 million for the six months ended April 4, 2025[124] - The company recognized a $193.1 million loss on extinguishment of debt in the six months ended April 4, 2025[136] - The company exchanged approximately $288.8 million in 2026 Convertible Notes for $257.7 million in 2029 Convertible Notes and issued 1,582,958 shares valued at $205.9 million[147] - The company plans to use remaining cash and short-term investments for general corporate purposes, including working capital and debt payments, indicating a focus on financial stability[150] Market Outlook - The company expects revenue growth in the Data Center market driven by the adoption of higher speed processing technologies and upgrades to data center architectures[115] - Future revenue growth is anticipated from the expanding product portfolio in the Industrial and Defense market, including applications in test and measurement and satellite communications[114] - The Telecom market revenue is expected to grow due to 5G deployments and the expansion of communications equipment[116] Tax and Interest - The estimated annual effective tax rate for the fiscal year ending October 3, 2025, is expected to be approximately 17%[138] - Interest income increased to $7.2 million for the three months ended April 4, 2025, compared to $5.4 million for the same period in 2024, and to $14.2 million for the six months ended April 4, 2025, compared to $10.9 million for the same period in 2024[135] - A 1% change in interest rates could impact annual interest income by $6.8 million based on cash and short-term investment balances as of April 4, 2025[154] Currency Risk - The company has limited exposure to foreign currency risk, with most international agreements denominated in U.S. dollars, minimizing potential negative impacts[155] - As of April 4, 2025, the company had $25.1 million in notional forward foreign currency contracts to hedge against currency fluctuations[156] Government Funding - The company announced a preliminary agreement for potential funding of up to $70 million from the U.S. Department of Commerce under the CHIPS Act[149]