MACOM Technology Solutions Holdings, Inc.

LOWELL, Mass., May 08, 2025 (GLOBE NEWSWIRE) -- MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal second quarter ended April 4, 2025.

Second Quarter Fiscal Year 2025 GAAP Results

Revenue was $235.9 million, an increase of 30.2%, compared to $181.2 million in the previous year fiscal second quarter and an increase of 8.1% compared to $218.1 million in the prior fiscal quarter; Gross margin was 55.2%, compared to 52.5% in the previous year fiscal second quarter and 53.7% in the prior fiscal quarter; Income from operations was $34.9 million, or 14.8% of revenue, compared to income from operations of $15.4 million, or 8.5% of revenue, in the previous year fiscal second quarter and income from operations of $17.5 million, or 8.0% of revenue, in the prior fiscal quarter; and Net income was $31.7 million, or $0.42 income per diluted share, compared to net income of $15.0 million, or $0.20 per diluted share, in the previous year fiscal second quarter and net loss, which includes a one-time, primarily non-cash, charge of $193.1 million loss on extinguishment of debt related to the previously-announced refinancing of a portion of MACOM’s 0.25% convertible senior notes due 2026, of $167.5 million, or $2.30 loss per diluted share, in the prior fiscal quarter.

Second Quarter Fiscal Year 2025 Adjusted Non-GAAP Results

Adjusted gross margin was 57.5%, compared to 57.1% in the previous year fiscal second quarter and 57.5% in the prior fiscal quarter; Adjusted income from operations was $59.8 million, or 25.4% of revenue, compared to adjusted income from operations of $40.2 million, or 22.2% of revenue, in the previous year fiscal second quarter and adjusted income from operations of $55.4 million, or 25.4% of revenue, in the prior fiscal quarter; and Adjusted net income was $64.3 million, or $0.85 per diluted share, compared to adjusted net income of $43.2 million, or $0.59 per diluted share, in the previous year fiscal second quarter and adjusted net income of $59.5 million, or $0.79 per diluted share, in the prior fiscal quarter.

Management Commentary

“Exceptional teamwork across the entire MACOM organization enabled our solid Q2 performance,” said Stephen G. Daly, President and Chief Executive Officer, MACOM.

Business Outlook

For the fiscal third quarter ending July 4, 2025, MACOM expects revenue to be in the range of $246 million to $254 million. Adjusted gross margin is expected to be between 56.5% and 58.5%, and adjusted earnings per diluted share is expected to be between $0.87 and $0.91 utilizing an anticipated non-GAAP income tax rate of 3% and 76.5 million fully diluted shares outstanding.

Story Continues

Conference Call

MACOM will host a conference call on Thursday, May 8, 2025, at 8:30 a.m. Eastern Time to discuss its fiscal second quarter 2025 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days.

About MACOM

MACOM designs and manufactures high-performance semiconductor products for the Industrial and Defense, Data Center and Telecommunications industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts.

Special Note Regarding Forward-Looking Statements

This press release and the associated earnings call contains forward-looking statements. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to develop new products, achieve market acceptance of those products and better address certain markets, expand our capabilities and extend our product offerings, including through the acquisitions of ENGIN-IC, Inc., Linearizer Communications Group and the radio frequency (RF) business of Wolfspeed, Inc., including our ability to effect the transfer of and effectively integrate the Research Triangle Park, North Carolina RF business fabrication facility, and through the establishment and growth of our European Semiconductor Center and potential collaboration and sales opportunities with private and public sector partners resulting therefrom, and the teams’ capabilities and technologies and expansion thereof and any potential financial benefits derived by and financial impact to MACOM therefrom, strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business performance improvements, MACOM’s strategic investment plan, including negotiation and finalization of a definitive agreement with, and receipt of, funding from the Federal and State governments, the estimated financial results for our 2025 fiscal third quarter and the stated business outlook and future results of operations.

These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of global economic conditions, including as a result of the evolving impacts from tariffs, sanctions or other trade tensions (including implementation of new tariffs or retaliatory trade measures); our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures

In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest income. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, net, acquisition and integration related costs, loss on debt extinguishment and the tax effect of each non-GAAP adjustment.

Management believes these excluded items are not reflective of our underlying performance and uses these non-GAAP financial measures to: evaluate our ongoing operating performance and compare it against prior periods, make operating decisions, forecast future periods, evaluate potential acquisitions, compare our operating performance against peer companies and assess certain compensation programs. We believe this non-GAAP financial information provides additional insight into our ongoing performance and have therefore chosen to provide this information to investors to help them evaluate the results of our ongoing operations and enable more meaningful period-to-period comparisons. These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

A reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial data attached to this press release. We have not provided a reconciliation with respect to any forward-looking non-GAAP financial data presented because we do not have and cannot reliably estimate certain key inputs required to calculate the most comparable GAAP financial data, such as future acquisition costs, the possibility and impact of any litigation costs, changes in our GAAP effective tax rate and impairment charges. We believe these unknown inputs are likely to have a significant impact on any estimate of the comparable GAAP financial data.

Investors are cautioned against placing undue reliance on non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures may have limited value for purposes of drawing comparisons between companies because different companies may calculate similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles.

Additional information and management’s assessment regarding why certain items are excluded from our non-GAAP measures are summarized below:

Amortization Expense – is related to acquired intangible assets which are based upon valuation methodologies and are generally amortized over the expected life of the intangible asset at the time of acquisition, which may result in amortization amounts that vary over time. This non-cash expense is not considered by management in making operating decisions.

Share-Based Compensation Expense – includes share-based compensation expense for awards that are equity and liability classified on our balance sheet and the related employer tax expense at vesting. Share-based compensation expense is partially outside of our control due to factors such as stock price volatility and interest rates, which may be unrelated to our operating performance during the period in which the expense is incurred. It is an expense based upon valuation methodologies and assumptions that vary over time, and the amount of the expense can vary significantly between companies. Share-based compensation expense amounts are not considered by management in making operating decisions.

Non-cash Interest, Net – includes amounts associated with the amortization of certain fees associated with the establishment or amendment of our convertible notes that are being amortized over the life of the agreements. We believe these amounts are non-cash in nature, are not correlated to future business operations and do not reflect our ongoing operations.

Acquisition and Integration Related Costs – includes items such as professional fees, employee severance and other costs incurred in connection with acquisitions and integration specific activities which are not expected to have a continuing contribution to operations and the amortization of the fair market step-up value of acquired inventory and fixed assets. We believe the exclusion of these items is useful in providing management a basis to evaluate ongoing operating activities and strategic decision making.

Loss on Debt Extinguishment – includes the loss on exchange of our convertible notes. This loss is primarily non-cash and we do not believe this amount is reflective of our ongoing operations.

Tax Effect of Non-GAAP Adjustments – includes adjustments to arrive at an estimate of our non-GAAP income tax rate associated with our non-GAAP income over a period of time. We determine our non-GAAP income tax rate using applicable rates in taxing jurisdictions and assessing certain factors including our historical and forecast earnings by jurisdiction, discrete items, cash taxes paid in relation to our non-GAAP net income before income taxes and our ability to realize tax assets. We generally assess this non-GAAP income tax rate quarterly and have utilized 3% for our first two fiscal quarters of fiscal year 2025 and for our fiscal year 2024. Our historical effective income tax rate under GAAP has varied significantly from our non-GAAP income tax rate due primarily to income taxed in foreign jurisdictions at generally lower tax rates, research and development tax credits and acquisition expenses. We believe it is beneficial for management to review our non-GAAP income tax rate on a consistent basis over periods of time. Items such as those noted above may have a significant impact on our GAAP income tax expense and associated effective tax rate over time.

Adjusted EBITDA – is a calculation that adds depreciation expense to our adjusted income from operations. Management reviews and utilizes this measure for operational analysis purposes. We believe competitors and others in the financial industry also utilize this measure for analysis purposes.

Incremental Shares – is the number of potential shares of common stock issuable upon the exercise of stock options, restricted stock, restricted stock units and conversion of convertible debt which were not included in the calculation of our GAAP diluted shares. We believe competitors and others in the financial industry utilize this non-GAAP measure for analysis purposes.

Company Contact:
MACOM Technology Solutions Holdings, Inc. 
Stephen Ferranti
Vice President, Corporate Development and Investor Relations
P: 978-656-2977
E: [email protected]

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share data)

Three Months Ended  Six Months Ended April 4, 2025  January 3, 2025  March 29, 2024  April 4, 2025  March 29, 2024  Revenue $ 235,887   $ 218,122   $ 181,234   $ 454,009   $ 338,382  Cost of revenue  105,731    101,013    86,022    206,744    155,860  Gross profit  130,156    117,109    95,212    247,265    182,522  Operating expenses:  Research and development  57,837    60,369    45,621    118,206    85,034  Selling, general and administrative  37,449    39,213    34,184    76,662    71,071  Total operating expenses  95,286    99,582    79,805    194,868    156,105  Income from operations  34,870    17,527    15,407    52,397    26,417  Other income (expense):  Interest income  7,239    7,000    5,366    14,239    10,921  Interest expense  (1,179 )   (1,366 )   (1,285 )   (2,545 )   (2,574 ) Loss on extinguishment of debt  —    (193,098 )   —    (193,098 )   —  Total other income (expense)  6,060    (187,464 )   4,081    (181,404 )   8,347  Income (loss) before income taxes  40,930    (169,937 )   19,488    (129,007 )   34,764  Income tax expense (benefit)  9,264    (2,407 )   4,508    6,857    7,258  Net income (loss) $ 31,666   $ (167,530 )  $ 14,980   $ (135,864 )  $ 27,506   Net income (loss) per share:  Income (loss) per share - Basic $ 0.43   $ (2.30 )  $ 0.21   $ (1.85 )  $ 0.38  Income (loss) per share - Diluted $ 0.42   $ (2.30 )  $ 0.20   $ (1.85 )  $ 0.38  Weighted average common shares:  Shares - Basic  74,358    72,780    72,076    73,540    71,750  Shares - Diluted  75,741    72,780    73,272    73,540    72,779

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS 
(unaudited and in thousands)

April 4, 2025  September 27, 2024  ASSETS  Current assets:  Cash and cash equivalents $ 110,926  $ 146,806 Short-term investments  570,607   435,082 Accounts receivable, net  131,389   105,700 Inventories  209,332   194,490 Prepaid and other current assets  42,016   21,000 Total current assets  1,064,270   903,078 Property and equipment, net  178,501   176,017 Goodwill and intangible assets, net  418,415   408,289 Deferred income taxes  213,389   212,495 Other long-term assets  44,282   55,761 Total assets $ 1,918,857  $ 1,755,640 LIABILITIES AND STOCKHOLDERS’ EQUITY  Current liabilities:  Short-term debt  160,741   — Accounts payable  61,265   43,202 Accrued liabilities  76,080   64,336 Current portion of finance lease obligations  730   646 Total current liabilities  298,816   108,184 Finance lease obligations, less current portion  30,829   31,130 Financing obligation  8,830   9,006 Long-term debt obligations  339,073   448,281 Other long-term liabilities  38,977   32,696 Total liabilities  716,525   629,297 Stockholders’ equity  1,202,332   1,126,343 Total liabilities and stockholders’ equity $ 1,918,857  $ 1,755,640

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(unaudited and in thousands)

Six Months Ended April 4, 2025  March 29, 2024  CASH FLOWS FROM OPERATING ACTIVITIES:  Net (loss) income $ (135,864 )  $ 27,506  Depreciation and intangible asset amortization  30,800    31,486  Share-based compensation  44,287    20,747  Deferred income taxes  (2,747 )   3,706  Loss on extinguishment of debt  193,098    —  Other adjustments, net  (2,351 )   (1,497 ) Accounts receivable  (24,724 )   (31,327 ) Inventories  (14,961 )   (12,325 ) Accrued and other liabilities  1,647    (2,301 ) Change in other operating assets and liabilities  16,161    15,307  Net cash provided by operating activities  105,346    51,302  CASH FLOWS FROM INVESTING ACTIVITIES:  Acquisition of business, net  (12,684 )   (74,813 ) Sales, purchases and maturities of investments  (132,976 )   (15,478 ) Purchases of property and equipment  (13,498 )   (9,782 ) Other investing  (7,975 )   —  Net cash used in investing activities  (167,133 )   (100,073 ) CASH FLOWS FROM FINANCING ACTIVITIES:  Proceeds from convertible notes  86,629    —  Payments for fee on convertible note exchange and debt issuance costs  (23,126 )   —  Payments on finance leases and other  (498 )   (703 ) Proceeds from stock option exercises and employee stock purchases  4,537    2,849  Common stock withheld for taxes on employee equity awards  (41,260 )   (12,522 ) Net cash provided by (used in) financing activities  26,282    (10,376 ) Foreign currency effect on cash  (375 )   185  NET CHANGE IN CASH AND CASH EQUIVALENTS  (35,880 )   (58,962 ) CASH AND CASH EQUIVALENTS — Beginning of period  146,806    173,952  CASH AND CASH EQUIVALENTS — End of period $ 110,926   $ 114,990

MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(unaudited and in thousands, except per share data)

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Gross profit - GAAP $ 130,156 55.2 $ 117,109 53.7 $ 95,212 52.5 $ 247,265 54.5 $ 182,522 53.9 Amortization expense  3,343 1.4  3,332 1.5  4,200 2.3  6,675 1.5  6,142 1.8 Share-based compensation expense  1,765 0.7  3,498 1.6  1,820 1.0  5,263 1.2  3,370 1.0 Acquisition and integration related costs  356 0.2  1,394 0.6  2,226 1.2  1,750 0.4  4,516 1.3 Adjusted gross profit (Non-GAAP) $ 135,620 57.5 $ 125,333 57.5 $ 103,458 57.1 $ 260,953 57.5 $ 196,550 58.1

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Operating expenses - GAAP $ 95,286  40.4  $ 99,582  45.7  $ 79,805  44.0  $ 194,868  42.9  $ 156,105  46.1  Amortization expense  (1,617 ) (0.7 )  (3,177 ) (1.5 )  (4,121 ) (2.3 )  (4,794 ) (1.1 )  (8,919 ) (2.6 ) Share-based compensation expense  (17,331 ) (7.3 )  (25,889 ) (11.9 )  (11,308 ) (6.2 )  (43,220 ) (9.5 )  (19,627 ) (5.8 ) Acquisition and integration related costs  (522 ) (0.2 )  (605 ) (0.3 )  (1,107 ) (0.6 )  (1,127 ) (0.2 )  (9,751 ) (2.9 ) Adjusted operating expenses (Non-GAAP) $ 75,816  32.1  $ 69,911  32.1  $ 63,269  34.9  $ 145,727  32.1  $ 117,808  34.8

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Income from operations - GAAP $ 34,870 14.8 $ 17,527 8.0 $ 15,407 8.5 $ 52,397 11.5 $ 26,417 7.8 Amortization expense  4,960 2.1  6,509 3.0  8,321 4.6  11,469 2.5  15,061 4.5 Share-based compensation expense  19,096 8.1  29,387 13.5  13,128 7.2  48,483 10.7  22,997 6.8 Acquisition and integration related costs  878 0.4  1,999 0.9  3,333 1.8  2,877 0.6  14,267 4.2 Adjusted income from operations (Non-GAAP) $ 59,804 25.4 $ 55,422 25.4 $ 40,189 22.2 $ 115,226 25.4 $ 78,742 23.3  Depreciation expense  6,803 2.9  6,740 3.1  7,253 4.0  13,543 3.0  13,507 4.0 Adjusted EBITDA (Non-GAAP) $ 66,607 28.2 $ 62,162 28.5 $ 47,442 26.2 $ 128,769 28.4 $ 92,249 27.3

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Net income (loss) - GAAP $ 31,666 13.4 $ (167,530 ) (76.8 ) $ 14,980 8.3 $ (135,864 ) (29.9 ) $ 27,506 8.1 Amortization expense  4,960 2.1  6,509  3.0   8,321 4.6  11,469  2.5   15,061 4.5 Share-based compensation expense  19,096 8.1  29,387  13.5   13,128 7.2  48,483  10.7   22,997 6.8 Non-cash interest, net  380 0.2  307  0.1   287 0.2  687  0.2   573 0.2 Acquisition and integration related costs  878 0.4  1,999  0.9   3,333 1.8  2,877  0.6   14,267 4.2 Loss on debt extinguishment  — —  193,098  88.5   — —  193,098  42.5   — — Tax effect of non-GAAP adjustments  7,276 3.1  (4,247 ) (1.9 )  3,171 1.7  3,029  0.7   4,628 1.4 Adjusted net income (Non-GAAP) $ 64,256 27.2 $ 59,523  27.3  $ 43,220 23.8 $ 123,779  27.3  $ 85,032 25.1

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Net income Income per diluted share Net income (loss) Income (loss) per diluted share Net income Income per diluted share Net income (loss) Income (loss) per diluted share Net income Income per 
diluted share Net income (loss) - GAAP diluted $ 31,666 $ 0.42 $ (167,530 ) $ (2.30 ) $ 14,980 $ 0.20 $ (135,864 ) $ (1.85 ) $ 27,506 $ 0.38  Adjusted net income (Non-GAAP) $ 64,256 $ 0.85 $ 59,523  $ 0.79  $ 43,220 $ 0.59 $ 123,779  $ 1.64  $ 85,032 $ 1.17

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Shares  Shares  Shares  Shares  Shares  Diluted shares - GAAP 75,741  72,780  73,272  73,540  72,779  Incremental shares —  2,835  —  2,127  —  Adjusted diluted shares (Non-GAAP) 75,741  75,615  73,272  75,667  72,779

Three Months Ended Six Months Ended April 4, 2025 January 3, 2025 March 29, 2024 April 4, 2025 March 29, 2024 Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue Interest income - GAAP $ 7,239  3.1  $ 7,000  3.2  $ 5,366  3.0  $ 14,239  3.1  $ 10,921  3.2  Interest expense - GAAP  (1,179 ) (0.5 )  (1,366 ) (0.6 )  (1,285 ) (0.7 )  (2,545 ) (0.6 )  (2,574 ) (0.8 ) Non-cash interest expense  380  0.2   307  0.1   287  0.2   687  0.2   573  0.2  Adjusted interest income (Non-GAAP) $ 6,440  2.7  $ 5,941  2.7  $ 4,368  2.4  $ 12,381  2.7  $ 8,920  2.6

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