MACOM Technology Solutions (MTSI) investor relations material

Executive summary

• Fiscal Q1 2026 revenue reached $271.6 million, up 4% sequentially and 24.5% year-over-year, with adjusted EPS at $1.02 per diluted share, marking a milestone above $1 for the first time.

• Net income was $48.8 million ($0.64 per diluted share), reversing a net loss of $167.5 million in the prior year, which included a $193.1 million non-cash debt extinguishment charge.

• Strong demand and record backlog across all three end markets: Industrial & Defense, Data Center, and Telecom, with a book-to-bill ratio of 1.3.

• Data center and I&D revenues hit record levels; data center revenue expected to grow 35%-40% year-over-year, driven by hyperscaler investments and 1.6T optical product demand.

• Continued expansion of product portfolio in data center, 5G, and SATCOM, with strategic focus on diversification and advanced technologies.

Financial highlights

• Adjusted gross profit was $156.5 million (57.6% of revenue), with sequential gross margin improvements expected throughout FY26.

• Adjusted operating income reached a record $74 million, up 10.4% sequentially and 33.5% year-over-year.

• Adjusted net income for Q1 was $78.2 million, up 9.6% sequentially.

• Cash, cash equivalents, and short-term investments totaled $768 million; net cash position of $268 million after accounting for convertible notes.

• Q1 cash flow from operations was $42.9 million, with Q2 expected to exceed $60 million.

Outlook and guidance

• Q2 FY26 revenue expected between $281-$289 million, with adjusted gross margin of 57%-59% and adjusted EPS of $1.05-$1.09.

• Sequential revenue growth anticipated in all end markets; data center projected for low to mid-teens growth, telecom and I&D for low single-digit growth.

• Full-year data center revenue growth base case raised to 35%-40%; telecom and I&D expected to grow high single to low double digits and 15%-20%, respectively.

• Incremental gross margin improvements of 25-50 basis points expected each quarter.

• Management expects continued growth in all primary markets, driven by demand for high-performance analog, digital, and optical semiconductors.