MACOM (MTSI) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2025 was $218.1M, up 38.8% year-over-year and 8.7% sequentially, with adjusted EPS of $0.79 per share and free cash flow of $63M.

• All three end markets—Industrial & Defense, Data Center, and Telecom—grew sequentially, with Data Center and I&D at record revenue levels.

• GAAP net loss was $167.5M, primarily due to a $193.1M non-cash loss on extinguishment of debt from convertible note exchanges.

• Completed acquisitions of ENGIN-IC and the RF Business of Wolfspeed, expanding product portfolio and market reach.

• Management highlighted a strong start to FY2025 and focus on expanding the product portfolio.

Financial highlights

• Adjusted gross profit was $125.3M (57.5% of revenue); gross margin was 53.7%, down from 55.6% year-over-year.

• Adjusted operating income was $55.4M, up 9% sequentially; adjusted net income was $59.5M.

• Cash, cash equivalents, and short-term investments totaled $656.5M, with a net cash position of $157M.

• Operating cash flow was $66.7M, up from $33.1M year-over-year.

• Operating expenses increased to $99.6M, mainly from R&D and share-based compensation.

Outlook and guidance

• Q2 FY2025 revenue expected between $227M and $233M, with adjusted gross margin of 57–58% and adjusted EPS of $0.82–$0.86.

• Sequential revenue growth anticipated in all end markets, led by ~10% growth in Data Center.

• Full-year capital expenditures projected at $30M, excluding CHIPS program spending.

• Management expects continued revenue growth in all markets, supported by new product introductions and recent acquisitions.

• Estimated annual effective tax rate for fiscal 2025 is expected to be approximately 16%, excluding the loss on extinguishment of debt.