Financial Performance - Net sales for the second quarter of fiscal 2026 were $1.140 billion, representing a 6.0% sequential increase but a 2.0% decline year-over-year[4]. - GAAP gross profit was 55.9%, with operating income of $88.9 million (7.8% of net sales) and net income attributable to common stockholders of $13.9 million, or $0.03 per diluted share[4][7]. - Non-GAAP gross profit was 56.7%, with operating income of $277.2 million (24.3% of net sales) and net income of $199.1 million, or $0.35 per diluted share[4][8]. - Reported net income attributable to common stockholders for Q2 2026 was $13.9 million, compared to $78.4 million in Q2 2025, reflecting a decrease of 82.3%[32]. - Non-GAAP net income for Q2 2026 was $199.1 million, down from $250.2 million in Q2 2025, representing a decline of 20.4%[32]. - Diluted net income per common share, as reported, was $0.03 for Q2 2026, down from $0.14 in Q2 2025[32]. Dividends and Shareholder Returns - Approximately $245.8 million was returned to common stockholders through dividends in the September quarter, with a declared quarterly dividend of 45.5 cents per share for the December quarter[4][9]. Future Projections - For the third quarter of fiscal 2026, net sales are expected to be between $1.109 billion and $1.149 billion, with GAAP gross profit projected between 56.2% and 58.1%[11]. - The company anticipates a net income attributable to common stockholders ranging from $(13.2) million to $9.5 million for the third quarter[11]. - The company expects net sales for Q3 2026 to be approximately $1.129 billion, with a variance of plus or minus $20 million[37]. Operational Efficiency and Cost Management - The company is focused on operational efficiency and disciplined cost management to improve cash flow and reduce debt levels in the coming quarters[5]. Research and Development - Research and development expenses increased to $262.3 million in Q3 2025, up 8.5% from $240.7 million in Q3 2024, representing 23.0% of net sales[25]. Technological Advancements - The company introduced the industry's first 3nm PCIe Gen 6 switch, enhancing its technological leadership in AI and enterprise data center applications[4][5]. - The company launched the industry's first 3nm PCIe Gen 6 switch, marking a significant technological milestone[37]. Financial Metrics - Total assets as of September 30, 2025, were $14,469.7 million, down from $15,374.6 million as of March 31, 2025[23]. - Long-term debt decreased to $5,375.9 million from $5,630.4 million since March 31, 2025[23]. - Cash and short-term investments were $236.8 million as of September 30, 2025, a significant decrease from $771.7 million[23]. - GAAP cash flow from operations for Q2 2026 was $88.1 million, an increase of 102.9% from $43.6 million in Q2 2025[34]. - Free cash flow for Q2 2026 was $51.6 million, compared to $22.8 million in Q2 2025, marking a growth of 126.3%[34]. Company Overview - Microchip Technology reported financial results for the second quarter of fiscal 2026[42]. - The company is a broadline supplier of semiconductors, focusing on innovative design solutions across various markets[42]. - Microchip's comprehensive product portfolio supports customers from concept to completion in the design process[42]. - The company provides technical support and solutions in industrial, automotive, consumer, aerospace and defense, communications, and computing markets[42].
Microchip Technology Incorporated(MCHPP) - 2026 Q2 - Quarterly Results