Financial Performance - Net sales for the first quarter of fiscal 2026 were $1.0755 billion, representing a sequential growth of 10.8% but a decline of 13.4% year-over-year[3][7] - GAAP gross profit was 53.6%, with an operating income of $32.1 million, equating to 3.0% of net sales, and a net loss attributable to common stockholders of $46.4 million, or $0.09 per diluted share[3][8] - Non-GAAP gross profit was 54.3%, with an operating income of $222.3 million, or 20.7% of net sales, and net income of $154.7 million, translating to an EPS of $0.27 per diluted share[3][9] - Net sales for the three months ended June 30, 2025, were $1,075.5 million, a decrease of 13.4% compared to $1,241.3 million in the same period of 2024[22] - Gross profit decreased to $576.7 million, representing a gross profit margin of 53.6%, down from 59.4% in the prior year[25] - Operating income significantly declined to $32.1 million, with a corresponding operating income margin of 3.0%, down from 17.7% in the previous year[29] - The company reported a net loss attributable to common stockholders of $46.4 million, compared to a net income of $129.3 million in the same quarter of 2024[32] - Free cash flow for the quarter was $257.7 million, representing 24.0% of net sales, compared to 24.5% in the same period last year[34] Guidance and Expectations - The company expects September quarter net sales to be approximately $1.130 billion, plus or minus $20 million, indicating a sequential growth of about 5.1% at the midpoint[4] - For the second quarter of fiscal 2026, net sales guidance is set between $1.110 billion and $1.150 billion, with gross profit margins expected to be between 54.3% and 56.2%[12] - September quarter net sales are expected to be $1.130 billion, representing approximately 5.1% sequential growth at the midpoint[37] Shareholder Returns - Approximately $245.5 million was returned to common stockholders through dividends in the June quarter, with a declared quarterly dividend of 45.5 cents per share for the September quarter[3][10] Inventory Management - Inventory was reduced by $124.4 million, with distribution inventory days decreasing to 29 days and overall inventory days on the balance sheet declining to 214 days[4] - Continued progress on inventory optimization demonstrates the effectiveness of manufacturing improvements[37] Market Position and Strategy - The company continues to secure design wins with tier-one cloud providers for AI infrastructure and defense applications, positioning itself in two significant growth trends[4] - The Total System Solutions strategy is securing design wins with tier-one cloud providers for AI infrastructure and defense applications[37] - Customer engagement levels are strengthening across diversified end markets[37] - The company is well-positioned to deliver sustained growth and enhanced shareholder value throughout fiscal 2026[37] Capital Expenditures - Capital expenditures for the quarter ending September 30, 2025, are anticipated to be between $35 million and $40 million, with total capital expenditures for fiscal 2026 expected to be at or below $100 million[12] Debt and Assets - Total assets decreased to $14,979.5 million from $15,374.6 million as of March 31, 2025[24] - Long-term debt was reported at $5,458.1 million, a decrease from $5,630.4 million in the previous quarter[24] Research and Development - Research and development expenses increased to $255.5 million, accounting for 23.8% of net sales, compared to 19.5% in the same period last year[26] - The company plans to selectively expand production capacity and add research and development equipment[37] Conference Call - The company will host a conference call on August 7, 2025, to discuss these results[35] Customer Base - The company serves approximately 105,000 customers across various markets, including industrial, automotive, and defense[41] Non-GAAP Measures - The company emphasizes the importance of non-GAAP measures for investors[37]
Microchip Technology Incorporated(MCHPP) - 2026 Q1 - Quarterly Results