MACOM Technology Solutions (MTSI) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 revenue of $200.7 million, up 33.5% year-over-year and 5.4% sequentially; full-year revenue was $729.6 million, up 12.5% year-over-year, with adjusted EPS of $0.73 for Q4 and $2.56 for the year.

• Ended FY24 with $582 million in cash and short-term investments, and record quarterly free cash flow of $57 million.

• Q4 book-to-bill ratio was 1.1, with a record backlog entering FY25, driven by strong data center and defense demand.

• Notable FY24 accomplishments include large program awards, 30%+ data center revenue growth, $29 million in government funding for semiconductor R&D, and successful strategic acquisitions.

• Areas for improvement include increasing new product introduction (NPI) capacity and better fab utilization.

Financial highlights

• Q4 revenue up 5.4% sequentially and 33.5% year-over-year; all end markets contributed to growth.

• Adjusted gross profit for Q4 was $116.6 million (58.1% margin), up 60 bps from Q3; Q4 gross margin was 54.7%, up from 53.2% sequentially.

• Adjusted operating income for Q4 was $50.7 million (25.2% margin), up 11% sequentially; FY24 adjusted operating income was $175 million.

• Adjusted net income for Q4 was $54.2 million; adjusted EPS was $0.73, up from $0.66 in Q3.

• Q4 cash flow from operations was $62.3 million; annual CapEx for FY24 was $22.4 million.

• Adjusted EBITDA for the year was $203.1 million (27.8% margin).

Outlook and guidance

• Q1 FY25 revenue expected between $212–$218 million, with adjusted gross margin of 57–59% and adjusted EPS of $0.75–$0.81.

• Sequential revenue growth anticipated in all end markets, led by ~15% growth in data center.

• Targeting $1 billion annualized revenue run rate by FY26, with plans to sequentially improve operating margins and EPS.

• FY25 CapEx expected to be $35 million.