Microchip Technology (NASDAQ:MCHP) Reports Q3 In Line With Expectations But Stock Drops

Core Insights - Microchip Technology met Wall Street's revenue expectations for Q3 CY2025, reporting sales of $1.14 billion, which represents a 2% year-on-year decline [1][7] - The company's revenue guidance for the next quarter is $1.13 billion, which is 4.3% below analysts' estimates [1][7] - Non-GAAP profit per share was $0.35, exceeding analysts' consensus estimates by 4.9% [1][7] Company Overview - Microchip Technology, established in 1987, is a leading provider of microcontrollers and integrated circuits, primarily serving the automotive sector, especially electric vehicles and their charging devices [4] Revenue Performance - The company has struggled with consistent demand over the past five years, experiencing a 4.2% annual decline in sales, indicating lower business quality [5] - In Q3 CY2025, net sales grew 6% sequentially, reflecting operational improvements despite a gradual market recovery [3] - The adjusted operating income for the quarter was $277.2 million, with a margin of 24.3%, surpassing analyst estimates [7] Financial Metrics - Revenue for Q3 CY2025 was $1.14 billion, aligning with analyst expectations, but down 2% year-on-year [7] - Adjusted EPS was $0.35, beating analyst estimates of $0.33 by 4.9% [7] - Operating margin decreased to 7.8% from 12.6% in the same quarter last year [7] - Free cash flow margin improved to 4.5%, up from 2% in the same quarter last year [7] - Inventory days outstanding decreased to 198 from 213 in the previous quarter [7] - The company's market capitalization stands at $32.81 billion [7]