MACOM Reports Fiscal Second Quarter 2025 Financial Results

LOWELL, Mass., May 08, 2025 (GLOBE NEWSWIRE) -- MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal second quarter ended April 4, 2025. Second Quarter Fiscal Year 2025 GAAP Results Revenue was $235.9 million, an increase of 30.2%, compared to $181.2 million in the previous year fiscal second quarter and an increase of 8.1% compared to $218.1 million in the prior fiscal quarter;Gross margin was 55.2%, compared to 52.5% in the previous year fiscal second quarter and 53.7% in the prior fiscal quarter;Income from operations was $34.9 million, or 14.8% of revenue, compared to income from operations of $15.4 million, or 8.5% of revenue, in the previous year fiscal second quarter and income from operations of $17.5 million, or 8.0% of revenue, in the prior fiscal quarter; andNet income was $31.7 million, or $0.42 income per diluted share, compared to net income of $15.0 million, or $0.20 per diluted share, in the previous year fiscal second quarter and net loss, which includes a one-time, primarily non-cash, charge of $193.1 million loss on extinguishment of debt related to the previously-announced refinancing of a portion of MACOM’s 0.25% convertible senior notes due 2026, of $167.5 million, or $2.30 loss per diluted share, in the prior fiscal quarter. Second Quarter Fiscal Year 2025 Adjusted Non-GAAP Results Adjusted gross margin was 57.5%, compared to 57.1% in the previous year fiscal second quarter and 57.5% in the prior fiscal quarter;Adjusted income from operations was $59.8 million, or 25.4% of revenue, compared to adjusted income from operations of $40.2 million, or 22.2% of revenue, in the previous year fiscal second quarter and adjusted income from operations of $55.4 million, or 25.4% of revenue, in the prior fiscal quarter; andAdjusted net income was $64.3 million, or $0.85 per diluted share, compared to adjusted net income of $43.2 million, or $0.59 per diluted share, in the previous year fiscal second quarter and adjusted net income of $59.5 million, or $0.79 per diluted share, in the prior fiscal quarter. Management Commentary “Exceptional teamwork across the entire MACOM organization enabled our solid Q2 performance,” said Stephen G. Daly, President and Chief Executive Officer, MACOM. Business Outlook For the fiscal third quarter ending July 4, 2025, MACOM expects revenue to be in the range of $246 million to $254 million. Adjusted gross margin is expected to be between 56.5% and 58.5%, and adjusted earnings per diluted share is expected to be between $0.87 and $0.91 utilizing an anticipated non-GAAP income tax rate of 3% and 76.5 million fully diluted shares outstanding. Conference Call MACOM will host a conference call on Thursday, May 8, 2025, at 8:30 a.m. Eastern Time to discuss its fiscal second quarter 2025 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days. About MACOM MACOM designs and manufactures high-performance semiconductor products for the Industrial and Defense, Data Center and Telecommunications industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts. Special Note Regarding Forward-Looking Statements This press release and the associated earnings call contains forward-looking statements. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including through the acquisitions of ENGIN-IC, Inc., Linearizer Communications Group and the radio frequency (RF) business of Wolfspeed, Inc., including our ability to effect the transfer of and effectively integrate the Research Triangle Park, North Carolina RF business fabrication facility, and through the establishment and growth of our European Semiconductor Center and potential collaboration and sales opportunities with private and public sector partners resulting therefrom, and the teams’ capabilities and technologies and expansion thereof and any potential financial benefits derived by and financial impact to MACOM therefrom, strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business performance improvements, MACOM’s strategic investment plan, including negotiation and finalization of a definitive agreement with, and receipt of, funding from the Federal and State governments, the estimated financial results for our 2025 fiscal third quarter and the stated business outlook and future results of operations. These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of global economic conditions, including as a result of the evolving impacts from tariffs, sanctions or other trade tensions (including implementation of new tariffs or retaliatory trade measures); our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest income. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, net, acquisition and integration related costs, loss on debt extinguishment and the tax effect of each non-GAAP adjustment. Management believes these excluded items are not reflective of our underlying performance and uses these non-GAAP financial measures to: evaluate our ongoing operating performance and compare it against prior periods, make operating decisions, forecast future periods, evaluate potential acquisitions, compare our operating performance against peer companies and assess certain compensation programs. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors to help them evaluate the results of our ongoing operations and enable more meaningful period-to-period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release. We have not provided a reconciliation with respect to any forward-looking non-GAAP financial data presented because we do not have and cannot reliably estimate certain key inputs required to calculate the most comparable GAAP financial data, such as future acquisition costs, the possibility and impact of any litigation costs, changes in our GAAP effective tax rate and impairment charges. We believe these unknown inputs are likely to have a significant impact on any estimate of the comparable GAAP financial data. Investors are cautioned against placing undue reliance on non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures may have limited value for purposes of drawing comparisons between companies because different companies may calculate similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Additional information and management’s assessment regarding why certain items are excluded from our non-GAAP measures are summarized below: Amortization Expense – is related to acquired intangible assets which are based upon valuation methodologies and are generally amortized over the expected life of the intangible asset at the time of acquisition, which may result in amortization amounts that vary over time. This non-cash expense is not considered by management in making operating decisions. Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. Share-based compensation expense is partially outside of our control due to factors such as stock price volatility and interest rates, which may be unrelated to our operating performance during the period in which the expense is incurred. It is an expense based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies. Share-based compensation expense amounts are not considered by management in making operating decisions. Non-cash Interest, Net – includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations. Acquisition and Integration Related Costs – includes items such as professional fees, employee severance and other costs incurred in connection with acquisitions and integration specific activities which are not expected to have a continuing contribution to operations and the amortization of the fair market step-up value of acquired inventory and fixed assets. We believe the exclusion of these items is useful in providing management a basis to evaluate ongoing operating activities and strategic decision making. Loss on Debt Extinguishment – includes the loss on exchange of our convertible notes. This loss is primarily non-cash and we do not believe this amount is reflective of our ongoing operations. Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors including our historical and forecast earnings by jurisdiction, discrete items, cash taxes paid in relation to our non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly and have utilized 3% for our first two fiscal quarters of fiscal year 2025 and for our fiscal year 2024. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to income taxed in foreign jurisdictions at generally lower tax rates, research and development tax credits and acquisition expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time. Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes. Incremental Shares – is the number of potential shares of common stock issuable upon the exercise of stock options, restricted stock, restricted stock units and conversion of convertible debt which were not included in the calculation of our GAAP diluted shares. We believe competitors and others in the financial industry utilize this non-GAAP measure for analysis purposes. Company Contact:MACOM Technology Solutions Holdings, Inc. Stephen FerrantiVice President, Corporate Development and Investor RelationsP: 978-656-2977E: stephen.ferranti@macom.com MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited and in thousands, except per share data) Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Revenue$ 235,887 $ 218,122 $ 181,234 $ 454,009 $ 338,382 Cost of revenue 105,731 101,013 86,022 206,744 155,860 Gross profit 130,156 117,109 95,212 247,265 182,522 Operating expenses: Research and development 57,837 60,369 45,621 118,206 85,034 Selling, general and administrative 37,449 39,213 34,184 76,662 71,071 Total operating expenses 95,286 99,582 79,805 194,868 156,105 Income from operations 34,870 17,527 15,407 52,397 26,417 Other income (expense): Interest income 7,239 7,000 5,366 14,239 10,921 Interest expense (1,179) (1,366) (1,285) (2,545) (2,574)Loss on extinguishment of debt — (193,098) — (193,098) — Total other income (expense) 6,060 (187,464) 4,081 (181,404) 8,347 Income (loss) before income taxes 40,930 (169,937) 19,488 (129,007) 34,764 Income tax expense (benefit) 9,264 (2,407) 4,508 6,857 7,258 Net income (loss)$ 31,666 $ (167,530) $ 14,980 $ (135,864) $ 27,506 Net income (loss) per share: Income (loss) per share - Basic$ 0.43 $ (2.30) $ 0.21 $ (1.85) $ 0.38 Income (loss) per share - Diluted$ 0.42 $ (2.30) $ 0.20 $ (1.85) $ 0.38 Weighted average common shares: Shares - Basic 74,358 72,780 72,076 73,540 71,750 Shares - Diluted 75,741 72,780 73,272 73,540 72,779 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) April 4, 2025 September 27, 2024 ASSETS Current assets: Cash and cash equivalents$ 110,926 $ 146,806 Short-term investments 570,607 435,082 Accounts receivable, net 131,389 105,700 Inventories 209,332 194,490 Prepaid and other current assets 42,016 21,000 Total current assets 1,064,270 903,078 Property and equipment, net 178,501 176,017 Goodwill and intangible assets, net 418,415 408,289 Deferred income taxes 213,389 212,495 Other long-term assets 44,282 55,761Total assets$ 1,918,857 $ 1,755,640 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term debt 160,741 —Accounts payable 61,265 43,202Accrued liabilities 76,080 64,336Current portion of finance lease obligations 730 646 Total current liabilities 298,816 108,184 Finance lease obligations, less current portion 30,829 31,130 Financing obligation 8,830 9,006 Long-term debt obligations 339,073 448,281 Other long-term liabilities 38,977 32,696 Total liabilities 716,525 629,297Stockholders’ equity 1,202,332 1,126,343Total liabilities and stockholders’ equity$ 1,918,857 $ 1,755,640 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Six Months Ended April 4, 2025 March 29, 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income$ (135,864) $ 27,506 Depreciation and intangible asset amortization 30,800 31,486 Share-based compensation 44,287 20,747 Deferred income taxes (2,747) 3,706 Loss on extinguishment of debt 193,098 — Other adjustments, net (2,351) (1,497)Accounts receivable (24,724) (31,327)Inventories (14,961) (12,325)Accrued and other liabilities 1,647 (2,301)Change in other operating assets and liabilities 16,161 15,307 Net cash provided by operating activities 105,346 51,302 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of business, net (12,684) (74,813)Sales, purchases and maturities of investments (132,976) (15,478)Purchases of property and equipment (13,498) (9,782)Other investing (7,975) — Net cash used in investing activities (167,133) (100,073)CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from convertible notes 86,629 — Payments for fee on convertible note exchange and debt issuance costs (23,126) — Payments on finance leases and other (498) (703)Proceeds from stock option exercises and employee stock purchases 4,537 2,849 Common stock withheld for taxes on employee equity awards (41,260) (12,522)Net cash provided by (used in) financing activities 26,282 (10,376)Foreign currency effect on cash (375) 185 NET CHANGE IN CASH AND CASH EQUIVALENTS (35,880) (58,962)CASH AND CASH EQUIVALENTS — Beginning of period 146,806 173,952 CASH AND CASH EQUIVALENTS — End of period$ 110,926 $ 114,990 MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS(unaudited and in thousands, except per share data) Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % RevenueGross profit - GAAP$ 130,156 55.2$ 117,109 53.7$ 95,212 52.5$ 247,265 54.5$ 182,522 53.9Amortization expense 3,343 1.4 3,332 1.5 4,200 2.3 6,675 1.5 6,142 1.8Share-based compensation expense 1,765 0.7 3,498 1.6 1,820 1.0 5,263 1.2 3,370 1.0Acquisition and integration related costs 356 0.2 1,394 0.6 2,226 1.2 1,750 0.4 4,516 1.3Adjusted gross profit (Non-GAAP)$ 135,620 57.5$ 125,333 57.5$ 103,458 57.1$ 260,953 57.5$ 196,550 58.1 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % RevenueOperating expenses - GAAP$ 95,286 40.4 $ 99,582 45.7 $ 79,805 44.0 $ 194,868 42.9 $ 156,105 46.1 Amortization expense (1,617) (0.7) (3,177) (1.5) (4,121) (2.3) (4,794) (1.1) (8,919) (2.6)Share-based compensation expense (17,331) (7.3) (25,889) (11.9) (11,308) (6.2) (43,220) (9.5) (19,627) (5.8)Acquisition and integration related costs (522) (0.2) (605) (0.3) (1,107) (0.6) (1,127) (0.2) (9,751) (2.9)Adjusted operating expenses (Non-GAAP)$ 75,816 32.1 $ 69,911 32.1 $ 63,269 34.9 $ 145,727 32.1 $ 117,808 34.8 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % RevenueIncome from operations - GAAP$ 34,870 14.8$ 17,527 8.0$ 15,407 8.5$ 52,397 11.5$ 26,417 7.8Amortization expense 4,960 2.1 6,509 3.0 8,321 4.6 11,469 2.5 15,061 4.5Share-based compensation expense 19,096 8.1 29,387 13.5 13,128 7.2 48,483 10.7 22,997 6.8Acquisition and integration related costs 878 0.4 1,999 0.9 3,333 1.8 2,877 0.6 14,267 4.2Adjusted income from operations (Non-GAAP)$ 59,804 25.4$ 55,422 25.4$ 40,189 22.2$ 115,226 25.4$ 78,742 23.3 Depreciation expense 6,803 2.9 6,740 3.1 7,253 4.0 13,543 3.0 13,507 4.0Adjusted EBITDA (Non-GAAP)$ 66,607 28.2$ 62,162 28.5$ 47,442 26.2$ 128,769 28.4$ 92,249 27.3 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % RevenueNet income (loss) - GAAP$ 31,666 13.4$ (167,530) (76.8)$ 14,980 8.3$ (135,864) (29.9)$ 27,506 8.1Amortization expense 4,960 2.1 6,509 3.0 8,321 4.6 11,469 2.5 15,061 4.5Share-based compensation expense 19,096 8.1 29,387 13.5 13,128 7.2 48,483 10.7 22,997 6.8Non-cash interest, net 380 0.2 307 0.1 287 0.2 687 0.2 573 0.2Acquisition and integration related costs 878 0.4 1,999 0.9 3,333 1.8 2,877 0.6 14,267 4.2Loss on debt extinguishment — — 193,098 88.5 — — 193,098 42.5 — — Tax effect of non-GAAP adjustments 7,276 3.1 (4,247) (1.9) 3,171 1.7 3,029 0.7 4,628 1.4Adjusted net income (Non-GAAP)$ 64,256 27.2$ 59,523 27.3 $ 43,220 23.8$ 123,779 27.3 $ 85,032 25.1 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Net incomeIncome per diluted shareNet income (loss)Income (loss) per diluted shareNet incomeIncome per diluted shareNet income (loss)Income (loss) per diluted shareNet incomeIncome per diluted shareNet income (loss) - GAAP diluted$ 31,666$ 0.42$ (167,530)$ (2.30)$ 14,980$ 0.20$ (135,864)$ (1.85)$ 27,506$ 0.38 Adjusted net income (Non-GAAP)$ 64,256$ 0.85$ 59,523 $ 0.79 $ 43,220$ 0.59$ 123,779 $ 1.64 $ 85,032$ 1.17 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Shares Shares Shares Shares Shares Diluted shares - GAAP 75,741 72,780 73,272 73,540 72,779 Incremental shares — 2,835 — 2,127 — Adjusted diluted shares (Non-GAAP) 75,741 75,615 73,272 75,667 72,779 Three Months EndedSix Months Ended April 4, 2025January 3, 2025March 29, 2024April 4, 2025March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % RevenueInterest income - GAAP$ 7,239 3.1 $ 7,000 3.2 $ 5,366 3.0 $ 14,239 3.1 $ 10,921 3.2 Interest expense - GAAP (1,179) (0.5) (1,366) (0.6) (1,285) (0.7) (2,545) (0.6) (2,574) (0.8)Non-cash interest expense 380 0.2 307 0.1 287 0.2 687 0.2 573 0.2 Adjusted interest income (Non-GAAP)$ 6,440 2.7 $ 5,941 2.7 $ 4,368 2.4 $ 12,381 2.7 $ 8,920 2.6

MACOM Reports Fiscal Second Quarter 2025 Financial Results

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