MACOM Q4 Earnings Match Estimates, Revenues Rise Y/Y, Stock Up

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]