On August 1, 2024, MACOM Technology Solutions Holdings Inc (MTSI, Financial) released its 8-K filing for the fiscal third quarter ended June 28, 2024. MACOM Technology Solutions Holdings Inc is a provider of analog, digital, and mixed-signal semiconductor solutions to original equipment manufacturers and distributors. These solutions are found in systems for industrial, medical, scientific, and test and measurement markets. The firm's portfolio includes integrated circuits, multichip modules, power pallets and transistors, diodes, amplifiers, switches and switch limiters, passive and active components, and complete subsystems. Approximately one-third of the firm's revenue is generated in the United States, with the remainder coming from China, Taiwan, and other countries worldwide.
Q3 FY2024 Financial Highlights
MACOM Technology Solutions Holdings Inc reported revenue of $190.5 million for the third quarter of fiscal year 2024, surpassing the analyst estimate of $190.39 million. This represents a 28.3% increase compared to $148.5 million in the same quarter last year and a 5.1% increase from $181.2 million in the prior fiscal quarter.
The company's gross margin stood at 53.2%, down from 58.0% in the previous year's third quarter but up from 52.5% in the prior fiscal quarter. Income from operations was $19.7 million, or 10.4% of revenue, compared to $17.3 million, or 11.7% of revenue, in the previous year's third quarter and $15.4 million, or 8.5% of revenue, in the prior fiscal quarter.
Net income for the quarter was $19.9 million, or $0.27 per diluted share, missing the analyst estimate of $0.34 per share. This compares to net income of $11.9 million, or $0.17 per diluted share, in the previous year's third quarter and $15.0 million, or $0.20 per diluted share, in the prior fiscal quarter.
Adjusted Non-GAAP Results
On an adjusted non-GAAP basis, MACOM reported a gross margin of 57.5%, compared to 60.1% in the previous year's third quarter and 57.1% in the prior fiscal quarter. Adjusted income from operations was $45.6 million, or 24.0% of revenue, compared to $37.0 million, or 24.9% of revenue, in the previous year's third quarter and $40.2 million, or 22.2% of revenue, in the prior fiscal quarter.
Adjusted net income was $48.9 million, or $0.66 per diluted share, compared to $38.5 million, or $0.54 per diluted share, in the previous year's third quarter and $43.2 million, or $0.59 per diluted share, in the prior fiscal quarter.
Management Commentary
“We remain focused on engineering excellence, financial performance and execution,” said Stephen G. Daly, President and Chief Executive Officer. “Our portfolio expansion strategy continues to create new business opportunities with our Industrial, Defense, Telecom and Data Center customers.”
Financial Statements Overview
Key financial metrics from the income statement, balance sheet, and cash flow statement are summarized below:
| Metric | Q3 FY2024 | Q2 FY2024 | Q3 FY2023 |
|---|---|---|---|
| Revenue | $190.5 million | $181.2 million | $148.5 million |
| Gross Margin | 53.2% | 52.5% | 58.0% |
| Net Income | $19.9 million | $15.0 million | $11.9 million |
| EPS (Diluted) | $0.27 | $0.20 | $0.17 |
Analysis and Outlook
MACOM Technology Solutions Holdings Inc's strong performance in Q3 FY2024, with revenue and earnings surpassing analyst estimates, underscores the company's robust market position and effective execution of its strategic initiatives. The increase in revenue and net income highlights the company's ability to capitalize on new business opportunities across its key markets.
However, the decline in gross margin compared to the previous year indicates potential challenges in cost management or pricing pressures. Investors should monitor these metrics closely in future quarters to assess the company's operational efficiency.
Looking ahead, MACOM expects revenue for the fiscal fourth quarter ending September 27, 2024, to be in the range of $197 million to $203 million. Adjusted gross margin is anticipated to be between 57% and 59%, with adjusted earnings per diluted share expected to be between $0.70 and $0.76.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from MACOM Technology Solutions Holdings Inc for further details.
