MTSI Q1 Earnings Surpass Expectations, Revenues Rise Y/Y

Core Insights - MACOM Technology Solutions Holdings, Inc. (MTSI) reported first-quarter fiscal 2026 earnings of $1.02 per share, exceeding the Zacks Consensus Estimate of 99 cents per share, with a year-over-year growth of 29.1% [1] - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 1.61% [1] Revenue Performance - MTSI posted revenues of $271.6 million in the first quarter of fiscal 2026, surpassing the Zacks Consensus Estimate by 1%, and reflecting a year-over-year increase of 24.5% [2] Operating Metrics - The adjusted gross margin for the first quarter of fiscal 2026 was 57.6%, slightly up from 57.5% in the prior-year quarter [3] - Adjusted operating income reached $73.97 million, an increase from $55.4 million in the year-ago period, representing 27.2% of revenues, up 180 basis points year-over-year [3] Operating Expenses - Non-GAAP operating expenses were $82.5 million, an 18% increase year over year, but as a percentage of revenues, they contracted 170 basis points to 30.4% [4] Balance Sheet and Cash Flow - As of January 2, 2026, cash equivalents and short-term investments totaled $768.5 million, down from $785.9 million in the prior quarter [5] - Long-term debt was reported at $339.91 million, slightly up from $339.63 million in the previous quarter [5] - Net cash flows from operating activities amounted to $42.93 million [5] Guidance for Q2 FY26 - For the second quarter of fiscal 2026, MTSI expects revenues between $281 million and $289 million, with the Zacks Consensus Estimate at $274.54 million, indicating a year-over-year growth of 16.4% [6] - The company anticipates adjusted earnings per share between $1.05 and $1.09, compared to the Zacks Consensus Estimate of $1.02 per share, suggesting a growth of 20% year over year [6] Market Position - MTSI currently holds a Zacks Rank 3 (Hold) [7] - Competitors such as Amphenol (APH), Broadcom (AVGO), and BILL Holdings, Inc. (BILL) are rated higher with a Zacks Rank 1 (Strong Buy) [7]