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    MTSI
    Earnings call· Oct 2025(Q4 FY25)

    MACOM Technology Solutions Holdings, Inc. MTSI

    Nov 6, 2025 Source

    Executive summary

    MACOM Q4 FY25 — Record Revenue and Strong Data Center Growth

    MACOM concluded FY25 with record revenue and strong profitability, driven by robust demand in Data Center and Industrial & Defense segments. The company is nearing its $1 billion annual revenue goal and is strategically investing in new product development, capacity expansion, and advanced GaN technology to capitalize on secular growth trends. Management anticipates continued double-digit growth and improved operating leverage in FY26, with Data Center leading the expansion.

    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, with Q4 adjusted EPS at $0.94.

    • Generated $193 million in free cash flow for FY25, and $69.6 million in operating cash flow for Q4.

    • Ended the year with a strong net cash position of over $285 million and $786 million in cash and short-term investments.

    Concerns

    3

    • Q4 FY25 Telecom revenue was slightly down sequentially to $66 million.

    • Day sales outstanding (DSO) averaged 52 days in Q4, up from 47 days in Q3.

    • Inventory turns decreased to 1.9x in Q4 from 2.0x in the preceding quarter.

    Guidance & targets

    13
    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
    Data Center Revenue Growth
    approximately 5% sequential growth
    medium materiality
    High
    Telecom Revenue Growth
    low single-digit sequential growth
    medium materiality
    High
    Industrial & Defense Revenue Growth
    low single-digit sequential growth
    medium materiality
    High
    Annual Revenue
    $1 billion
    high materiality
    High
    Gross Margin Improvement
    25 to 50 basis points sequential quarterly improvements
    medium materiality
    High
    Adjusted Income Tax Rate
    3%
    low materiality
    High
    Capital Expenditures
    $50 million to $55 million
    medium materiality
    High
    Overall Revenue Growth
    double-digit growth with no less than mid-teens
    high materiality
    Medium
    LEO Business Growth
    expected to grow
    medium materiality
    High
    Drone Defense System Production Ramp
    expected production ramp-up
    low materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Industrial & Defense
    Achieved annual and quarterly record revenue. Defense, radar, and electronic warfare markets experienced over 50% year-over-year revenue growth for GaN-based components.
    		$115.6 million—up approximately 7% sequentially—
    Telecom
    Demand from satellite-based broadband access and direct-to-cell opportunities remains robust. Cable TV infrastructure market is improving with new orders for DOCSIS 4.0 products.
    		$66 million—slightly down sequentially—
    Data Center
    Achieved annual and quarterly record revenue. Strong demand from 800G and 1.6T applications, with 200-gig per lane photodetector products ramping volume production.
    		$79.6 million—up approximately 5% sequentially—
    U.S. Domestic Customers
    Represented 43% of fiscal Q4 revenue and approximately 44% of full fiscal year 2025 U.S.-based revenue.
    		43% of fiscal Q4 results———

    Operational metrics

    25
    Adjusted Gross Profit
    $149.1 million
    Q4 FY25

    Adjusted gross profit for the fourth fiscal quarter.

    Adjusted Operating Expense
    $82.1 millionsequential increase compared to Q3
    Q4 FY25

    Total adjusted operating expense for the fourth fiscal quarter.

    Depreciation Expense
    $8.7 millioncompared to $6.9 million in Q3 2025
    Q4 FY25

    Depreciation expense for the fourth fiscal quarter.

    Adjusted Operating Income
    $67 millionup 5.5% sequentially from $63.5 million in fiscal Q3 2025 and up 32.1% year-over-year
    Q4 FY25

    Adjusted operating income for the fourth fiscal quarter.

    Adjusted Net Interest Income
    $6.6 millionnet decrease of $200,000 sequentially from $6.8 million in Q3
    Q4 FY25

    Adjusted net interest income for the fourth fiscal quarter.

    Adjusted Income Tax Rate
    3%
    Q4 FY25

    Adjusted income tax rate for the fourth fiscal quarter.

    Adjusted Net Income
    $71.4 millionincreased approximately 4.7% to $71.4 million compared to $68.2 million in fiscal Q3 2025
    Q4 FY25

    Adjusted net income for the fourth fiscal quarter.

    Adjusted EPS
    $0.94compared to $0.90 of adjusted earnings per share in fiscal Q3 2025
    Q4 FY25

    Adjusted earnings per fully diluted share for the fourth fiscal quarter.

    Gain on Acquired Assets
    $10.1 million
    Q4 FY25

    Recorded in connection with the RTP Fab transfer, below operating income.

    Accounts Receivable
    $148.6 millionup from $129.5 million in fiscal Q3 2025
    Q4 FY25

    Accounts receivable balance at quarter end.

    Day Sales Outstanding
    52 daysas compared to our previous quarter at 47 days
    Q4 FY25

    Average day sales outstanding for the fourth fiscal quarter.

    Inventories
    $237.8 millionup sequentially from $215.4 million
    Q4 FY25

    Inventories at quarter end.

    Inventory Turns
    1.9xfrom 2.0x in the preceding quarter
    Q4 FY25

    Inventory turns for the fourth fiscal quarter.

    Capital Expenditures
    $20.2 millionup $11.5 million sequentially
    Q4 FY25

    Capital expenditures for the fourth fiscal quarter.

    Cash, Cash Equivalents and Short-term Investments
    $786 millionup $50.7 million from Q3
    Q4 FY25

    Balance at the end of the fourth fiscal quarter.

    Net Cash Position
    more than $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.

    Convertible Notes Principal Value
    $161 million
    March 2026

    Anticipated payoff of remaining March 2026 notes over the next couple of quarters.

    FY25 Adjusted Operating Margin
    25.4%grew by 140 basis points
    FY25

    Annual adjusted operating margin for fiscal year 2025.

    FY25 Capital Expenditures
    $42.6 million
    FY25

    Annual capital expenditures for fiscal year 2025.

    Deferred Tax Asset Balances
    $208 millionas compared to $212 million at the end of fiscal 2024
    October 3, 2025

    Deferred tax asset balances at the end of Q4 FY25.

    New Product Introductions
    over 200record
    FY25

    Number of new products launched in fiscal year 2025.

    GaN-based Components Revenue Growth
    over 50%year-over-year
    FY25

    Revenue growth for GaN-based components in defense markets.

    Workforce
    approximately 2,000 employeesgrew by 17% over the past year
    FY25

    Total number of employees at the end of fiscal year 2025.

    Turns Business
    14.5%
    Q4 FY25

    Orders booked and shipped within the quarter.

    LPO Customers in Production
    3tripled from last quarter
    Q4 FY25

    Number of customers in production for LPO solutions.

    Industry KPIs

    9
    MetricValueDetails
    Backlog order bookrecord level
    Book to bill ratiojust over 1.0:1ratio
    Ai data center revenue$79.6 millionUSD
    Fab capacity utilizationapproaching maximum capacity%
    Bookings net order intakejust over 1.0:1ratio
    Design wins socket pipelinePD design wins at all major module manufacturers
    Inventory channel inventory$237.8 millionUSD
    Node platform ramp schedule40-nanometer GaN on Silicon Carbide (T3L) process
    End market segment revenue mixIndustrial & Defense: $115.6 million; Telecom: $66 million; Data Center: $79.6 millionUSD

    Orderbook & backlog

    4
    Book-to-bill ratiojust over 1.0:1Q4 FY25

    Company-wide book-to-bill for the quarter.

    Book-to-bill ratio1.1:1FY25

    Company-wide book-to-bill for the full fiscal year.

    Current backlogrecord levelQ4 FY25

    Company-wide backlog.

    October bookingsone of the best months in yearsOctober 2025

    Strong start to fiscal year 2026.

    Product announcements

    7
    ProductTypeDetails
    40-nanometer GaN on Silicon Carbide (T3L) processlaunch
    RTP Fab's G28V5 150-nanometer GaN on Silicon Carbide process with ALDupdate
    200-gig per lane photodetector productsexpansion
    CW laser developmentroadmap
    Single-mode LPO 100-gig per lane solutionslaunch
    Linear optical PCIe chipsetlaunch
    Linear equalizer productslaunch

    Deals & partnerships

    1
    HRL (Hughes Research Laboratories)Exclusive license agreement to manufacture HRL's 40-nanometer GaN on Silicon Carbide (T3L) process.

    T3L process was developed with DARPA, DoD, and HRL funding, engineered for high-power performance at very high frequencies. HRL recently completed long-term reliability studies and qualified the process.

    Capital programs

    2
    RTP Fab Capacity Expansionunderway
    Period spend: $12 million
    Start: Q4 FY25

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

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

    MOCVD Epi Reactor Installationplanned

    Benefit: support our 6-inch production transition and the 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

    3
    Telecom market volatilityQ4 FY25

    Q4 revenue slightly down sequentially

    Mitigation: Focus on 5G and LEO growth, improving cable TV market (DOCSIS 4.0) expected to contribute to FY26 growth.

    Supply chain stress points in high-growth environmentOngoing

    Always stress points throughout our operations and supply chain

    Mitigation: Outstanding team managing tactical and strategic issues; proactive actions like transferring 200-gig PD process to larger Lowell facility for unlimited manufacturing capability; ensuring front-end, back-end test capacity.

    Industrial market growthNear term

    do not expect significant growth in the near term

    Mitigation: Expect some positive trends in industrial, but stronger trends in defense will be a tailwind on gross margins.

    What to watch in Q1 FY26

    5

    Q1 FY26 Revenue

    Q1 FY26
    Current$261.2 million (Q4 FY25)
    Target$265 million to $273 million

    Why it matters

    Verifies the company's ability to achieve its short-term revenue guidance and progress towards the $1 billion annual revenue goal.

    MACOM expects revenue in fiscal Q1 ending January 2, 2026, to be in the range of $265 million to $273 million.

    Q&A highlights

    7

    What are the biggest pull factors for the Telecom business in the fiscal year, considering other companies are seeing improvement?

    The main pull factors 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 read5 chapters

    Detailed Narrative

    01

    Strategic GaN Technology Expansion

    MACOM announced an exclusive licensing agreement with HRL for their 40-nanometer GaN on Silicon Carbide (T3L) process, developed with DARPA and DoD funding. This technology complements MACOM's existing GaN portfolio by addressing higher frequencies (above 40 GHz) and offering superior power density and efficiency for applications like SATCOM. The company expects this to accelerate the launch of other sub-100-nanometer GaN processes and capture significant market share in high-frequency GaN MMICs.

    02

    Data Center Growth and Product Innovation

    The Data Center segment achieved record revenue in Q4 FY25 and is expected to lead sequential growth in Q1 FY26. MACOM is seeing strong demand for 800G and 1.6T applications, particularly for its 200-gig per lane photodetector products, which are ramping volume production at the Massachusetts fab. The company is also intensifying CW laser development and supporting the adoption of single-mode LPO 100-gig per lane solutions, with multiple customers now in production. New linear equalizer products for 1.6T and PCIe 6 solutions are also being developed to extend copper interconnect reach and support disaggregated data centers.

    03

    Telecom Market Recovery and LEO Opportunities

    While Telecom revenue was slightly down sequentially in Q4 FY25, MACOM anticipates low single-digit sequential growth in Q1 FY26. Key drivers include continued growth in 5G and robust demand from satellite-based broadband access and direct-to-cell LEO networks. The company supports LEO constellations at various supply chain levels, from chip to subsystem, and expects this business to grow significantly over the next 12-18 months. Additionally, the cable TV infrastructure market is improving with new orders for DOCSIS 4.0 products, expected to contribute to FY26 Telecom revenue growth.

    04

    Industrial & Defense Strength and European Expansion

    The Industrial & Defense segment achieved record revenue in Q4 FY25 and is expected to continue with low single-digit sequential growth. Defense, radar, and electronic warfare markets saw over 50% year-over-year revenue growth for GaN-based components. MACOM upgraded its RTP Fab's 150-nanometer GaN on Silicon Carbide process with ALD passivation, making it suitable for airborne radars. The company is also building relationships with European defense contractors, leveraging its manufacturing facility in France to secure critical semiconductor supply.

    05

    Operational Efficiency and Capacity Expansion

    MACOM's adjusted operating margin for FY25 grew by 140 basis points to 25.4%, with adjusted operating income up 32.1% year-over-year in Q4. The company expects sequential quarterly gross margin improvements of 25 to 50 basis points through FY26 due to increased fab utilization and more profitable products. Capital expenditures are projected to increase to $50-$55 million in FY26 to upgrade equipment, enhance facilities, and expand capacity, including a 30% expansion at the RTP Fab and a new MOCVD epi reactor in Europe.

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