MACOM (MTSI) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 revenue of $271.6 million, up 24.5% year-over-year and 4% sequentially, driven by strong demand across all end markets.

• Net income was $48.8 million ($0.64 per diluted share), reversing a prior year net loss of $167.5 million, while adjusted net income reached $78.2 million ($1.02 per share), up from $59.5 million year-over-year.

• Backlog and bookings remain at record levels, with a book-to-bill ratio of 1.3 and robust pipeline, especially in data center and defense.

• Gross margin improved to 55.9% from 53.7% year-over-year, supported by higher sales and lower amortization and share-based compensation expenses.

Financial highlights

• Adjusted gross profit was $156.5 million (57.6% of revenue), with sequential gross margin improvement expected to continue.

• Adjusted operating income hit $74 million (27.2% of revenue), up from $55.4 million year-over-year.

• Operating income rose to $43.3 million from $17.5 million year-over-year.

• Cash and cash equivalents at quarter-end were $119.6 million, with $648.8 million in short-term investments.

• Cash flow from operations was $42.9 million, down sequentially and year-over-year due to timing of payments and working capital changes.

Outlook and guidance

• Q2 revenue guidance: $281-$289 million; adjusted gross margin: 57%-59%; adjusted EPS: $1.05-$1.09, based on a 3% non-GAAP tax rate.

• Sequential revenue growth expected in all end markets, with data center projected for low to mid-teens growth and telecom/I&D for low single digits.

• Data center revenue growth forecast raised to 35%-40% year-over-year, driven by 1.6T optical and high-speed analog products.

• Management expects continued growth in all primary markets, but near-term demand may be impacted by macroeconomic and geopolitical conditions.

• Estimated annual effective tax rate for fiscal 2026 is expected to be approximately 16.2%.