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Microchip (MCHP)
NASDAQ:MCHP
Earnings Data
Report Date
May 11, 2026After Close (Confirmed)
Period Ending
2026 (Q4)Consensus EPS Forecast
0.5Last Year’s EPS
0.11Same Quarter Last Year
Strong Buy
Based on 20 Analysts Ratings
Earnings Call Summary
Earnings Call Sentiment|Positive
The call presents a constructive operational and financial recovery: revenue and backlog strengthened materially (Q3 net sales +4% sequential, +15.6% YoY; March guidance +6.2% sequential), non-GAAP margins and free cash flow improved, and the company announced meaningful design wins and strategic partnerships (Hyundai, Gen6 PCIe wins). However, noteworthy near-term headwinds remain — inventory days are high, meaningful inventory reserves and underutilization charges continue, leverage is still elevated (net debt/EBITDA 4.18) and certain supply-chain/foundry constraints are broadening. Management is prioritizing debt reduction and cautious OpEx discipline while investing to support growth. On balance, the positive execution, improving demand and strong guidance outweigh the operational and balance-sheet challenges.Company Guidance
Revenue Growth and Guidance Beat
Net sales for December were $1.186 billion, up 4% sequentially and 15.6% year-over-year, and above the high end of prior guidance. Guidance for March is $1.26 billion ± $20 million (midpoint +6.2% sequential, +29.8% YoY). Book-to-bill in December was well above 1 and backlog entering March materially higher than entering December.
Strong Non-GAAP Profitability
Non-GAAP gross margin reached 60.5% (up 379 basis points sequentially). Non-GAAP operating margin was 28.5% (up 418 basis points sequentially and up 800 basis points YoY). Non-GAAP net income was $252.8 million and non-GAAP diluted EPS was $0.44, $0.04 above the high end of original guidance. March non-GAAP EPS guidance: $0.48–$0.52.
Cash Flow and Adjusted Free Cash Flow
Cash flow from operations was $341.4 million and adjusted free cash flow was $305.6 million in December. Adjusted EBITDA for the quarter was $402 million (33.9% of net sales) and trailing twelve-month adjusted EBITDA was $1.23 billion.
Inventory and Distribution Improvements
Ending inventory was $1.058 billion, down $37.6 million sequentially; distributor inventory was 28 days (in normal range). The distributor sell-in vs sell-through gap shrank from $52.9 million in September to $11.7 million in December, indicating correction in distribution channels.
Design Wins and Product Momentum (Connectivity & Data Center)
Strategic collaboration announced with Hyundai Motor Group for 10BASE-T1S automotive Ethernet. Company reported three Gen6 PCIe switch design wins (one win expected to deliver $100M+ revenue in calendar 2027). Stated leadership claims for Gen6 PCIe (3nm) sampling with hyperscalers and strong momentum in automotive and industrial Ethernet (T1S, ASA).
Operational Discipline on CapEx and Leverage Trajectory
Capital expenditures were $22.5 million in the quarter and company expects FY2026 capex at or below $100 million. Net debt to adjusted EBITDA improved to 4.18 from 4.69 sequentially, and management plans to prioritize debt reduction using excess free cash flow above dividends.
Broad-Based End-Market Recovery
Management reported recovering demand across automotive, industrial, communications, data center, aerospace & defense, and consumer end markets; strongest performance in aerospace & defense and networking/data center solutions.
Improving Factory & Margin Outlook
Management expects inventory reserve charges to normalize and gross margins to stay elevated (guidance 60.5%–61.5% for March). Company reiterated long-term gross margin target (~65%) and cited product mix (high-margin foundry-produced products) and gradual fab ramp as drivers of further margin improvement.
MCHP Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed
MCHP Earnings-Related Price Changes
Report Date | Price 1 Day Before | Price 1 Day After | Percentage Change |
|---|---|---|---|
Feb 05, 2026 | $77.58 | $75.56 | -2.60% |
Nov 06, 2025 | $58.48 | $55.45 | -5.17% |
Aug 07, 2025 | $64.79 | $60.54 | -6.57% |
May 08, 2025 | $47.71 | $53.72 | +12.60% |
Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.
FAQ
When does Microchip (MCHP) report earnings?
Microchip (MCHP) is schdueled to report earning on May 11, 2026, After Close (Confirmed).
What is Microchip (MCHP) earnings time?
Microchip (MCHP) earnings time is at May 11, 2026, After Close (Confirmed).
Where can I see when companies are reporting earnings?
You can see which companies are reporting today on our designated earnings calendar.
What companies are reporting earnings today?
You can see a list of the companies which are reporting today on TipRanks earnings calendar.
What is MCHP EPS forecast?
MCHP EPS forecast for the fiscal quarter 2026 (Q4) is 0.5.