MTSI
Earnings call · Oct 2025 (Q4 FY25)

MACOM Technology Solutions Holdings Q4 FY25 earnings call MTSI

Nov 6, 2025 Source

Executive summary

MACOM Q4 FY25 — Record Revenue and Strong Data Center Growth

MACOM concluded fiscal year 2025 with record revenue and strong profitability, driven by robust demand in Data Center and Industrial & Defense segments. The company is poised to achieve its $1 billion annual revenue milestone in Q1 FY26, fueled by strategic investments in new products, expanded manufacturing capabilities, and key technology acquisitions like the HRL GaN on SiC process. Management anticipates continued double-digit growth in FY26, with a focus on leveraging its diversified semiconductor portfolio and improving operating margins through increased fab utilization.

Highlights

5

  • Q4 FY25 revenue reached a new quarterly record of $261.2 million, up 30.1% year-over-year.

  • Full-year FY25 revenue was a record $967 million, increasing over 32% year-over-year.

  • Adjusted EPS for FY25 grew over 35% to $3.47 per diluted share.

  • Cash flow from operations strengthened by 45% to $235.4 million for FY25.

  • Q1 FY26 revenue guidance of $265 million to $273 million is expected to achieve the $1 billion annual revenue goal on a trailing 12-month basis.

Concerns

2

  • Q4 FY25 inventory turns decreased to 1.9x from 2.0x in the preceding quarter, driven by additional work-in-process inventory at the RTP Fab and higher balances for future demand.

  • Q4 FY25 day sales outstanding (DSO) averaged 52 days, up from 47 days in fiscal Q3 2025, due to revenue growth and timing of customer shipments and payments.

Guidance & targets

CategoryTargetConfidence
Revenue
$265 million to $273 million
high materiality
High
Adjusted Gross Margin
56.5% to 58.5%
medium materiality
High
Adjusted Earnings Per Share
$0.98 and $1.02
high materiality
High
Gross Margin Improvement
25 to 50 basis points
medium materiality
High
Capital Expenditures
$50 million to $55 million
medium materiality
High
Adjusted Income Tax Rate
3%
low materiality
High
Revenue Growth
Double-digit growth with no less than mid-teens on the top line
high materiality
Medium
Segment Growth
Data Center strongest, then Industrial & Defense, then Telecom
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Industrial & Defense
Q4 FY25 revenue was an annual and quarterly record. Expected low single-digit sequential growth in Q1 FY26.
$115.6 million—up ~7%—
Telecom
Expected low single-digit sequential growth in Q1 FY26, driven by 5G, LEO, and DOCSIS 4.0.
$66 million—slightly down—
Data Center
Q4 FY25 revenue was an annual and quarterly record. Expected ~5% sequential growth in Q1 FY26, driven by 800G and 1.6T applications.
$79.6 million—up ~5%—

Operational metrics

Revenue
$967 million up >32% YoY
FY25

Record annual revenue for fiscal year 2025.

Adjusted Operating Margin
25.4% grew by 140 bps
FY25

Annual adjusted operating margin for fiscal year 2025.

Adjusted EPS
$3.47 grew by >35% YoY
FY25

Adjusted earnings per share for fiscal year 2025.

Adjusted Gross Profit
$149.1 million
Q4 FY25

Adjusted gross profit for fiscal Q4 2025.

Non-GAAP gross margin
57.1%
Q4 FY25

Adjusted gross margin for fiscal Q4 2025.

Adjusted Operating Income
$67 million up 5.5% sequentially, up 32.1% YoY
Q4 FY25

Adjusted operating income for fiscal Q4 2025, compared to $63.5 million in Q3 FY25.

Adjusted Operating Income
$63.5 million
Q3 FY25

Adjusted operating income for fiscal Q3 2025.

Adjusted Net Interest Income
$6.6 million net decrease of $200,000 sequentially
Q4 FY25

Adjusted net interest income for fiscal Q4 2025, compared to $6.8 million in Q3 FY25.

Adjusted Net Interest Income
$6.8 million
Q3 FY25

Adjusted net interest income for fiscal Q3 2025.

Adjusted Income Tax Expense
$2.2 million
Q4 FY25

Adjusted income tax expense for fiscal Q4 2025.

Adjusted Income Tax Rate
3%
Q4 FY25

Adjusted income tax rate for fiscal Q4 2025.

Adjusted Net Income
$71.4 million increased ~4.7% sequentially
Q4 FY25

Adjusted net income for fiscal Q4 2025, compared to $68.2 million in Q3 FY25.

Adjusted Net Income
$68.2 million
Q3 FY25

Adjusted net income for fiscal Q3 2025.

Diluted Share Count
76.2 million
Q4 FY25

Share count used for adjusted earnings per fully diluted share in fiscal Q4 2025.

Accounts Receivable Balance
$148.6 million up from $129.5 million in Q3 FY25
Q4 FY25

Accounts receivable balance at quarter end, driven by revenue growth and timing of customer shipments and payments.

Accounts Receivable Balance
$129.5 million
Q3 FY25

Accounts receivable balance at the end of fiscal Q3 2025.

Day Sales Outstanding (DSO)
52 days compared to 47 days in Q3 FY25
Q4 FY25

Average day sales outstanding for fiscal Q4 2025.

Inventories
$237.8 million up sequentially from $215.4 million
Q4 FY25

Inventories at quarter end, largely driven by additional work-in-process inventory at the RTP Fab and higher balances for future demand.

Inventories
$215.4 million
Q3 FY25

Inventories at the end of fiscal Q3 2025.

Inventory Turns
1.9x decreased from 2.0x in Q3 FY25
Q4 FY25

Inventory turns for fiscal Q4 2025.

Capital Expenditures
$20.2 million up $11.5 million sequentially
Q4 FY25

Capital expenditures for fiscal Q4 2025, major driver was anticipated purchase of $12 million of surplus equipment at the RTP Fab.

Capital Expenditures
$42.6 million
FY25

Total capital expenditures for fiscal year 2025.

Cash and investments balance
$786 million up $50.7 million from Q3
Q4 FY25

Cash, cash equivalents and short-term investments for fiscal Q4 2025.

Net Cash Position
>$285 million
Q4 FY25

Net cash position as of October 3, 2025, comparing cash and short-term investments to the book value of convertible notes.

Remaining Convertible Notes
$161 million
March 2026

Principal value of remaining March 2026 notes, anticipated to be paid off over the next couple of quarters.

Workforce
2,000 grew by 17% YoY
FY25

Total workforce at the end of fiscal year 2025.

New Products Launched
>200
FY25

Record number of new products launched in fiscal year 2025.

GaN-based Components Revenue Growth
>50% YoY
FY25

Revenue growth for GaN-based components and products in defense, radar, and electronic warfare markets.

Deferred Tax Asset Balances
$208 million compared to $212 million at end of FY24
Q4 FY25

Deferred tax asset balances as of October 3, 2025, including R&D tax credits.

Depreciation Expense
$8.7 million compared to $6.9 million in Q3 FY25
Q4 FY25

Depreciation expense for fiscal Q4 2025, primarily due to taking control of the RTP Fab.

Gain on Acquired Assets
$10.1 million
Q4 FY25

Gain recorded in connection with the RTP Fab transfer, representing the difference between fair value of inventory received and estimated value at the time of RF business acquisition. Excluded from adjusted operating results.

Turns Business
14.5%
Q4 FY25

Orders booked and shipped within the quarter as a percentage of total revenue.

New Product Introductions Growth
outpaced overall revenue growth
FY25

New product introductions as a group have outpaced MACOM's overall revenue growth.

New Product Introductions Margin
accretive to MACOM's gross margins
FY25

New product introductions as a group are accretive to MACOM's gross margins.

R&D Spending
increasing
FY25

Company has been increasing R&D spending to capitalize on growth opportunities.

Engineers Hired
increasing
FY25

Company has been hiring more engineers to capitalize on growth opportunities.

IC Design Centers
2
next couple of months

Planned opening of two additional IC design centers to secure specialized talent and teams.

RTP Fab G28V5 150-nanometer GaN on Silicon Carbide Process Upgrade
—
Q4 FY25

Upgraded the RTP Fab's G28V5 150-nanometer GaN on Silicon Carbide process to include ALD, enabling MMIC products to pass moisture and HASS tests, making it suitable for airborne radars.

LEO Constellations
numerous in planning or development stages
current

Satellite-based broadband access and direct-to-cell opportunities remain robust with numerous LEO networks in planning or development stages.

DOCSIS 4.0 Products Orders
beginning to see new orders
Q4 FY25

Cable networks are transitioning from DOCSIS 3.1 to DOCSIS 4.0, and MACOM is beginning to see new orders for its products supporting this upgrade.

200-gig per lane Photodetector Performance
industry-leading sensitivity and dark current performance
current

MACOM's 200-gig PD enables customers to achieve better manufacturing margin and optical receiver sensitivity performance.

PD Design Wins
at all major module manufacturers
current

MACOM has PD design wins at all major module manufacturers supporting 800G and/or 1.6T applications.

Ann Arbor Fab Capacity
approaching maximum capacity
Q4 FY25

The Ann Arbor fab is approaching maximum capacity, prompting transfer of 200-gig PD process to Massachusetts fab.

Massachusetts Fab Status
qualified and ramping volume production
Q4 FY25

The Massachusetts fab is qualified and ramping volume production for 200-gig PD to support forecasted demand.

Single-mode LPO 100-gig per lane Solutions Customers
multiple customers tripled from last quarter
Q4 FY25

Steady adoption of single-mode LPO 100-gig per lane solutions, with the number of customers in production having tripled.

LPO Competitive Advantage
—
current

MACOM's competitive advantage with LPO solutions is that there is no DSP, which changes the competitive dynamics.

Linear Equalizer Products
extend the reach of copper interconnects at 1.6T
FY26

MACOM provides a family of linear equalizer products that can help extend the reach of copper interconnects at 1.6T, expected to be of interest to major cloud vendors and for backplane applications.

PCIe 6 Solutions Opportunity
create an opportunity for MACOM
current

As data centers continue to disaggregate memory and compute, the adoption of PCIe 6 solutions is believed to create an opportunity for MACOM.

Next-generation Base Station Products Update
—
FY26

Next-generation base station products will be updated with in-sourced IPD and matching circuits to improve performance and lower manufacturing costs.

Advanced Semiconductor Technologies Development
—
FY26

Goal in FY26 is to make meaningful progress on hot-via flip-chip, bump technologies like copper pillar to lead the industry in advanced chip scale package solutions.

October Bookings
one of the best months in years
October

MACOM started fiscal '26 with a strong backlog and a lot of momentum, with October bookings being one of the best months in years.

Industry KPIs

MetricValueDetails
Lead timesLonger lead times
Backlog order bookRecord level
Book to bill ratio1.0:1 ratio
Ai data center revenue$79.6 million USD
Fab capacity utilizationApproaching maximum capacity
Bookings net order intakeJust over 1.0:1 ratio
Design wins socket pipelinePD design wins at all major module manufacturers
Inventory channel inventory$237.8 million USD
Node platform ramp scheduleT3L 40-nanometer GaN on Silicon Carbide process
End market segment revenue mixIndustrial & Defense: $115.6M; Telecom: $66M; Data Center: $79.6M USD

Orderbook & backlog

Book-to-bill ratio just over 1.0:1 Q4 FY25
Book-to-bill ratio 1.1:1 FY25
Current backlog record level Q4 FY25
October bookings one of the best months in years October 2025

Strong start to fiscal year 2026.

Product announcements

ProductTypeDetails
200-gig per lane photodetector productsmilestone
CW laser development effortsroadmap
Single-mode LPO 100-gig per lane solutionsmilestone
Linear equalizer productslaunch
Linear optical PCIe chipsetlaunch
300 and 400-gig per lane connectivity ICsroadmap
Next-generation base station productsupdate
Advanced chip scale package solutionsroadmap

Deals & partnerships

HRL (Hughes Research Laboratories) Agreement to transfer their 40-nanometer GaN on Silicon Carbide process (T3L) to MACOM.

MACOM will be an exclusive licensee with rights to manufacture the T3L process, which was developed with DARPA, DoD, and HRL funding. HRL completed long-term reliability studies and qualified the process, ready for transition to production.

Capital programs

RTP Fab Capacity Expansion underway
Period spend: $12 million
Start: Q4 FY25

Benefit:up to 30% over next 12 to 18 months

Anticipated purchase and installation of $12 million of surplus equipment at the RTP Fab from the previous owner to expand capacity and capabilities.

MOCVD Epi Reactor Installation planned

Benefit:support 6-inch production transition and growing volumes of GaN on Silicon and other gas processes

Intention to purchase and install a modern MOCVD epi reactor in the European Semiconductor Center (MESC).

Risks & headwinds

Supply Chain Stress current

Growing as quickly as we are, there's always stress points throughout our operations and supply chain.

Mitigation:Outstanding team manages tactical and strategic issues well, ensuring capacity availability and addressing pinch points.

Competitive Landscape in TIA/Driver Market current

Very competitive landscape.

Mitigation:Bringing best game to market, earning every socket based on performance, timing, and price with differentiated product.

What to watch in Q1 FY26

1.6T Optical Solutions Ramp

FY26
Current Early in the cycle, strong demand
Target Continued rapid growth and volume

Why it matters

1.6T is identified as the fastest-growing part of the Data Center business and a key driver for overall revenue growth.

However, the massive growth is really at the higher data rates. So that would be 200 gig per lane servicing primarily 1.6T. And we are very early in the cycle of the rollout of those interconnects. And so that is one of the fastest-growing parts of our Data Center business.

Q&A highlights

What are the biggest pull factors for the Telecom business in the upcoming fiscal year?

The two main drivers are continued growth in 5G and the robust satellite communications/LEO business. The metro long-haul segment is also seeing continued growth.

“The 2 main pull factors for MACOM this year will be 5G continuing to grow, and that's a core business for MACOM. And second would be the satellite communications and LEO business.”

asked by Kyle Bleustein · answered by Stephen Daly

2 min read 6 chapters

Detailed narrative

Strategic Growth Initiatives

MACOM launched over 200 new products in FY25, a record, with new product introductions (less than 3 years old) outpacing overall revenue growth and being accretive to gross margins. The company is increasing R&D spending, hiring engineers, and acquiring complementary design capabilities, including opening two new IC design centers in Southern California and Central Europe to secure specialized talent and teams with advanced silicon design expertise.

GaN Technology Expansion

MACOM secured an exclusive license from HRL for their 40-nanometer GaN on Silicon Carbide (T3L) process, which complements its existing GaN portfolio by addressing higher frequencies (above 40 GHz) for SATCOM bands and defense applications. This technology offers higher power density and efficiency compared to pHEMT. The company also upgraded its RTP Fab's 150-nanometer GaN on SiC process with ALD passivation, making it suitable for airborne radar markets and enhancing reliability.

Telecom Market Dynamics

The telecom segment is seeing robust demand from satellite-based broadband access and direct-to-cell opportunities, with numerous LEO networks in planning or development stages. These networks utilize microwave, millimeter wave, and free space optics, areas where MACOM contributes. The cable TV infrastructure market is also improving, driven by the transition from DOCSIS 3.1 to DOCSIS 4.0, with MACOM beginning to see new orders for its DOCSIS 4.0 products, including amplifiers, baluns, couplers, and filters.

Data Center Leadership

Strong demand continues from the Data Center portfolio, particularly for 800G and 1.6T applications. MACOM's 200-gig per lane photodetector products are gaining traction with design wins at major module manufacturers, and the company is ramping volume production at its Massachusetts fab as its Ann Arbor fab approaches maximum capacity. Development efforts for CW lasers and adoption of single-mode LPO 100-gig per lane solutions are also intensifying, with multiple customers now in production.

FY26 Priorities and Outlook

Key priorities for FY26 include capitalizing on data center growth, expanding market share in 5G with improved GaN4 process, extending leadership in A&D, and developing advanced semiconductor technologies like hot-via flip-chip and copper pillar bump technologies. The company expects to achieve double-digit revenue growth, driven primarily by Data Center, followed by I&D and Telecom, leading to improved operating income and earnings growth.

Financial Performance and Capital Allocation

For FY25, MACOM achieved record revenue of $967 million, a 32% increase, with adjusted operating margin growing 140 basis points to 25.4% and adjusted EPS up 35% to $3.47. Cash flow from operations increased 45% to $235.4 million. The company plans to invest $50 million to $55 million in CapEx for FY26 to upgrade production equipment and expand capacity, including a new MOCVD epi reactor in Europe to support 6-inch production transition.

AI-generated summary of the company's earnings call. Not investment advice.