Microchip Technology Announces Financial Results for First Quarter of Fiscal Year 2026
Microchip Technology (NASDAQ:MCHP) reported Q1 fiscal 2026 results with net sales of $1.0755 billion, showing a 10.8% sequential increase but a 13.4% year-over-year decline. The company posted a GAAP net loss of $46.4 million ($0.09 per share), while non-GAAP net income reached $154.7 million ($0.27 per share).
Key highlights include significant inventory reduction of $124.4 million, with distribution inventory days reduced to 29 days. The company achieved strong operational metrics with 76% incremental non-GAAP gross margins and 82% incremental non-GAAP operating margins. For Q2 fiscal 2026, Microchip expects net sales of $1.130 billion ±$20.0 million, representing 5.1% sequential growth.
The Board declared a quarterly dividend of 45.5 cents per share for September 2025. The company is seeing improved demand conditions and reports the highest July bookings since July 2022.
Microchip Technology (NASDAQ:MCHP) ha comunicato i risultati del primo trimestre fiscale 2026 con vendite nette pari a 1,0755 miliardi di dollari, segnando un aumento sequenziale del 10,8% ma una diminuzione del 13,4% rispetto all'anno precedente. La società ha registrato una perdita netta GAAP di 46,4 milioni di dollari (0,09 dollari per azione), mentre l'utile netto non GAAP ha raggiunto 154,7 milioni di dollari (0,27 dollari per azione).
I punti salienti includono una significativa riduzione dell'inventario di 124,4 milioni di dollari, con i giorni di inventario nella distribuzione ridotti a 29 giorni. L'azienda ha ottenuto solidi risultati operativi con margini lordi incrementali non GAAP del 76% e margini operativi incrementali non GAAP dell'82%. Per il secondo trimestre fiscale 2026, Microchip prevede vendite nette di 1,130 miliardi di dollari ± 20 milioni, con una crescita sequenziale del 5,1%.
Il Consiglio di Amministrazione ha dichiarato un dividendo trimestrale di 45,5 centesimi per azione per settembre 2025. L'azienda segnala un miglioramento delle condizioni di domanda e i più alti ordini registrati a luglio dall'estate 2022.
Microchip Technology (NASDAQ:MCHP) informó resultados del primer trimestre fiscal 2026 con ventas netas de
Los aspectos destacados incluyen una reducción significativa de inventarios de 124.4 millones de dólares, con los días de inventario en distribución reducidos a 29 días. La empresa logró métricas operativas fuertes con márgenes brutos incrementales no GAAP del 76% y márgenes operativos incrementales no GAAP del 82%. Para el segundo trimestre fiscal 2026, Microchip espera ventas netas de $1.130 mil millones ± 20.0 millones, representando un crecimiento secuencial del 5.1%.
La Junta declaró un dividendo trimestral de 45.5 centavos por acción para septiembre de 2025. La compañía observa condiciones de demanda mejoradas y reporta las reservas más altas de julio desde julio de 2022.
마이크로칩 테크놀로지 (NASDAQ:MCHP)는 2026 회계연도 1분기 실적으로 순매출액 10억 7,550만 달러를 보고했으며, 이는 전 분기 대비 10.8% 증가했지만 전년 동기 대비 13.4% 감소한 수치입니다. 회사는 GAAP 기준 순손실 4,640만 달러 (주당 0.09달러)을 기록했으며, 비GAAP 순이익은 1억 5,470만 달러 (주당 0.27달러)에 달했습니다.
주요 내용으로는 재고 대폭 감소 1억 2,440만 달러가 있으며, 유통 재고 일수는 29일로 줄였습니다. 회사는 비GAAP 증분 총이익률 76%와 비GAAP 증분 영업이익률 82%라는 우수한 운영 지표를 달성했습니다. 2026 회계연도 2분기에는 순매출액 11억 3천만 달러 ± 2천만 달러를 예상하며, 이는 전 분기 대비 5.1% 성장한 수치입니다.
이사회는 2025년 9월 분기 배당금으로 주당 45.5센트를 선언했습니다. 회사는 수요 상황이 개선되고 있으며 2022년 7월 이후 가장 높은 7월 주문량을 보고하고 있습니다.
Microchip Technology (NASDAQ:MCHP) a annoncé ses résultats du premier trimestre de l'exercice fiscal 2026 avec un chiffre d'affaires net de 1,0755 milliard de dollars, affichant une hausse séquentielle de 10,8 % mais une baisse de 13,4 % en glissement annuel. La société a enregistré une perte nette selon les normes GAAP de 46,4 millions de dollars (0,09 dollar par action), tandis que le bénéfice net non-GAAP a atteint 154,7 millions de dollars (0,27 dollar par action).
Les points clés incluent une réduction significative des stocks de 124,4 millions de dollars, avec un nombre de jours de stock en distribution réduit à 29 jours. L'entreprise a réalisé de solides indicateurs opérationnels avec des marges brutes incrémentales non-GAAP de 76 % et des marges opérationnelles incrémentales non-GAAP de 82 %. Pour le deuxième trimestre de l'exercice fiscal 2026, Microchip prévoit un chiffre d'affaires net de 1,130 milliard de dollars ± 20,0 millions, représentant une croissance séquentielle de 5,1 %.
Le conseil d'administration a déclaré un dividende trimestriel de 45,5 cents par action pour septembre 2025. La société constate une amélioration des conditions de la demande et rapporte les commandes les plus élevées en juillet depuis juillet 2022.
Microchip Technology (NASDAQ:MCHP) meldete die Ergebnisse für das erste Quartal des Geschäftsjahres 2026 mit Nettoumsätzen von 1,0755 Milliarden US-Dollar, was einem sequenziellen Anstieg von 10,8 %, aber einem Rückgang von 13,4 % im Jahresvergleich entspricht. Das Unternehmen verzeichnete einen GAAP-Nettogewinnverlust von 46,4 Millionen US-Dollar (0,09 US-Dollar pro Aktie), während der Non-GAAP-Nettogewinn 154,7 Millionen US-Dollar (0,27 US-Dollar pro Aktie) erreichte.
Zu den wichtigsten Highlights gehört eine erhebliche Bestandsreduzierung von 124,4 Millionen US-Dollar, wobei die Lagerbestände im Vertrieb auf 29 Tage reduziert wurden. Das Unternehmen erzielte starke operative Kennzahlen mit 76 % inkrementellen Non-GAAP-Bruttomargen und 82 % inkrementellen Non-GAAP-Betriebsmargen. Für das zweite Quartal des Geschäftsjahres 2026 erwartet Microchip Nettoumsätze von 1,130 Milliarden US-Dollar ± 20,0 Millionen US-Dollar, was einem sequenziellen Wachstum von 5,1 % entspricht.
Der Vorstand erklärte eine vierteljährliche Dividende von 45,5 Cent pro Aktie für September 2025. Das Unternehmen sieht verbesserte Nachfragesituationen und meldet die höchsten Juli-Bestellungen seit Juli 2022.
- Sequential revenue growth of 10.8% to $1.0755 billion, exceeding guidance
- Significant inventory reduction of $124.4 million with improved efficiency metrics
- Strong operational leverage with 76% incremental non-GAAP gross margins
- Highest July bookings since July 2022 indicating demand recovery
- Secured design wins with tier-one cloud providers for AI infrastructure
- Maintained quarterly dividend of 45.5 cents per share
- 13.4% year-over-year revenue decline to $1.0755 billion
- GAAP net loss of $46.4 million ($0.09 per share)
- Non-GAAP net income declined to $154.7 million from $289.9 million year-over-year
- Operating income decreased to 3.0% of net sales on GAAP basis
Insights
Microchip shows recovery with 10.8% sequential growth despite YoY decline; profitability improving as inventory normalizes.
Microchip Technology's Q1 FY2026 results demonstrate meaningful sequential improvement as the company executes its recovery strategy amid the semiconductor industry's gradual emergence from a prolonged downturn. Revenue reached
The company's operational metrics show significant improvement in inventory management - a crucial focus area in semiconductor recoveries. Microchip reduced overall inventory by
Profitability metrics reveal the leverage in Microchip's business model. Non-GAAP gross margins reached
The company is experiencing what management describes as a "trifecta effect" driving growth: improving distributor sell-through, narrowing gaps between distributor sell-in and sell-out, and normalizing direct customer inventory. July bookings reached their highest level since July 2022, and the September quarter backlog exceeds June quarter levels, supporting management's guidance of
Despite these positive operational trends, Microchip still reported a GAAP net loss of
For the quarter ended June 30, 2025
- Net sales of
$1.07 55 billion, increased10.8% sequentially and declined13.4% from the year ago quarter. The midpoint of our updated guidance provided on May 29, 2025 was net sales of$1.05 75 billion. - On a GAAP basis: gross profit of
53.6% ; operating income of$32.1 million and3.0% of net sales; net loss attributable to common stockholders of$46.4 million ; and loss of$0.09 per diluted share. Our updated guidance provided on May 29, 2025 was for GAAP EPS loss per diluted share of$0.11 t o$0.07 . - On a Non-GAAP basis: gross profit of
54.3% ; operating income of$222.3 million and20.7% of net sales; net income of$154.7 million ; and EPS of$0.27 per diluted share. Our updated guidance provided on May 29, 2025 was for Non-GAAP EPS per diluted share of$0.22 t o$0.26 . - Returned approximately
$245.5 million to common stockholders in the June quarter through dividends. - Quarterly dividend on common stock declared for the September quarter of 45.5 cents per share.
CHANDLER, Ariz., Aug. 07, 2025 (GLOBE NEWSWIRE) -- (NASDAQ: MCHP) - Microchip Technology Incorporated, a leading provider of smart, connected, and secure embedded control solutions, today reported results for the three months ended June 30, 2025.
Steve Sanghi, Microchip’s CEO and President commented that "Fiscal 2026 is off to a strong start as revenue grew
Mr. Sanghi added, "As a key objective of our recovery plan, we delivered a substantial inventory reduction in the June quarter, reducing overall inventory dollars by
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our first quarter results highlight the leverage in our business model, with incremental non-GAAP gross margins of
Rich Simoncic, Microchip's Chief Operating Officer, said, "Our Total System Solutions strategy continues to secure design wins with tier-one cloud providers for AI infrastructure and defense applications amid accelerating global defense spending. These design wins position us at the center of two secular growth trends where our integrated solutions, combining processing power, security, and energy efficiency, are essential."
Mr. Sanghi concluded, "Inventory destocking has continued to occur at our customers, channel partners and their downstream customers. The trifecta effect we have discussed, including recovery in distributor sell-through, narrowing of distributor sell-in and sell-out gaps, and normalization of direct customer inventory, is driving our revenue growth. Our September quarter backlog is running ahead of June quarter levels, and July bookings were the highest since July 2022. Customer engagement levels continue strengthening across our diversified end markets. Taking all these factors into account, we expect September quarter net sales of
The following table summarizes Microchip's reported result for the three months ended June 30, 2025.
| Three Months Ended June 30, 2025(1) | ||||||||||
| Net sales | $ | 1,075.5 | ||||||||
| GAAP | % | Non-GAAP(2) | % | |||||||
| Gross profit | $ | 576.7 | 53.6 | % | $ | 584.4 | 54.3 | % | ||
| Operating income | $ | 32.1 | 3.0 | % | $ | 222.3 | 20.7 | % | ||
| Other expense | $ | (47.9 | ) | $ | (47.9 | ) | ||||
| Income tax provision | $ | 2.8 | $ | 19.7 | ||||||
| Net (loss) income | $ | (18.6 | ) | $ | 154.7 | |||||
| Dividends on Series A Preferred Stock | $ | (27.8 | ) | — | ||||||
| Net (loss) income attributable to common stockholders | $ | (46.4 | ) | (4.3 | )% | $ | 154.7 | 14.4 | % | |
| Diluted net (loss) income per common share | $ | (0.09 | ) | $ | 0.27 | |||||
(1) In millions, except per share amounts and percentages of net sales.
(2) See the "Use of Non-GAAP Financial Measures" section of this release.
Net sales for the first quarter of fiscal 2026 were
GAAP net loss attributable to common stockholders for the first quarter of fiscal 2026 was
Non-GAAP net income for the first quarter of fiscal 2026 was
Microchip announced today that its Board of Directors declared a quarterly cash dividend on its common stock of 45.5 cents per share, which is payable on September 5, 2025 to stockholders of record on August 22, 2025. The Microchip Board also declared a quarterly cash dividend on Microchip's
Second Quarter Fiscal Year 2026 Outlook:
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.
| Microchip Consolidated Guidance | |||
| Net Sales | |||
| GAAP(5) | Non-GAAP Adjustments(1) | Non-GAAP(1) | |
| Gross Profit | |||
| Operating Expenses(2) | |||
| Operating Income | |||
| Other Expense, net | |||
| Income Tax Provision | |||
| Net income | |||
| Dividends on Series A Preferred Stock | — | ||
| Net (loss) income attributable to common stockholders | |||
| Diluted Common Shares Outstanding | Approximately 539.8 million shares | 28.5 to 29.5 million shares | Approximately 568.3 to 569.3 million shares |
| Diluted net (loss) per common share | |||
(1) See the "Use of Non-GAAP Financial Measures" section of this release for information regarding our non-GAAP guidance.
(2) We are not able to estimate the amount of certain Special Charges and Other, net that may be incurred during the quarter ending September 30, 2025. Therefore, our estimate of GAAP operating expenses excludes certain amounts that may be recognized as Special Charges and Other, net in the quarter ending September 30, 2025.
(3) The forecast for GAAP tax expense excludes any unexpected tax events that may occur during the quarter, as these amounts cannot be forecasted.
(4) Represents the expected cash tax rate for fiscal 2026, excluding any transition tax payments associated with the Tax Cuts and Jobs Act.
(5) Our GAAP guidance excludes the impact of any potential charges related to our ongoing evaluation of restructuring activities.
Capital expenditures for the quarter ending September 30, 2025 are expected to be between
Under the GAAP revenue recognition standard, we are required to recognize revenue when control of the product changes from us to a customer or distributor. We focus our sales and marketing efforts on creating demand for our products in the end markets we serve and not on moving inventory into our distribution network. We also manage our manufacturing and supply chain operations, including our distributor relationships, towards the goal of having our products available at the time and location the end customer desires.
Use of Non-GAAP Financial Measures: Our non-GAAP adjustments, where applicable, include the effect of share-based compensation, restructuring charges, expenses related to our acquisition activities (including intangible asset amortization, severance, and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters, and dividends on our Series A Mandatory Convertible Preferred Stock. For the first quarters of fiscal 2026 and fiscal 2025, our non-GAAP income tax expense is presented based on projected cash taxes for the fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act.
We are required to estimate the cost of certain forms of share-based compensation, including restricted stock units and our employee stock purchase plan, and to record a commensurate expense in our income statement. Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by the price of our stock at the date of grant. The price of our stock is affected by market forces that are difficult to predict and are not within the control of management. Our other non-GAAP adjustments are either non-cash expenses, unusual or infrequent items, or other expenses related to transactions. Management excludes all of these items from its internal operating forecasts and models.
We are using non-GAAP operating expenses in dollars, including non-GAAP research and development expenses and non-GAAP selling, general and administrative expenses, non-GAAP other expense, net, and non-GAAP income tax rate, which exclude the items noted above, as applicable, to permit additional analysis of our performance.
Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods. Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other charges that many investors feel may obscure our underlying operating results. Management uses non-GAAP measures to manage and assess the profitability of our business and for compensation purposes. We also use our non-GAAP results when developing and monitoring our budgets and spending. Our determination of these non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP. There are limitations associated with using these non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results.
Generally, gross profit fluctuates over time, driven primarily by the mix of products sold and licensing revenue; variances in manufacturing yields; fixed cost absorption; wafer fab loading levels; costs of wafers from foundries; inventory reserves; pricing pressures in our non-proprietary product lines; and competitive and economic conditions. Operating expenses fluctuate over time, primarily due to net sales and profit levels.
Diluted Common Shares Outstanding can vary for, among other things, the trading price of our common stock, the vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures and our mandatory convertible preferred stock (additional information regarding our share count is available in the investor relations section of our website under the heading "Supplemental Information"), and repurchases or issuances of shares of our common stock. The diluted common shares outstanding presented in the guidance table above assumes an average Microchip stock price in the September 2025 quarter between
| MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts; unaudited) | |||||||
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Net sales | $ | 1,075.5 | $ | 1,241.3 | |||
| Cost of sales | 498.8 | 504.4 | |||||
| Gross profit | 576.7 | 736.9 | |||||
| Research and development | 255.5 | 241.7 | |||||
| Selling, general and administrative | 159.3 | 150.5 | |||||
| Amortization of acquired intangible assets | 107.6 | 123.0 | |||||
| Special charges and other, net | 22.2 | 2.6 | |||||
| Operating expenses | 544.6 | 517.8 | |||||
| Operating income | 32.1 | 219.1 | |||||
| Other expense, net | (47.9 | ) | (57.3 | ) | |||
| (Loss) income before income taxes | (15.8 | ) | 161.8 | ||||
| Income tax provision | 2.8 | 32.5 | |||||
| Net (loss) income | (18.6 | ) | 129.3 | ||||
| Dividends on Series A Preferred Stock | (27.8 | ) | — | ||||
| Net (loss) income attributable to common stockholders | $ | (46.4 | ) | $ | 129.3 | ||
| Basic net (loss) income per common share | $ | (0.09 | ) | $ | 0.24 | ||
| Diluted net (loss) income per common share | $ | (0.09 | ) | $ | 0.24 | ||
| Basic common shares outstanding | 539.2 | 536.7 | |||||
| Diluted common shares outstanding | 539.2 | 542.8 | |||||
| MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions; unaudited) | |||||||
| ASSETS | |||||||
| June 30, | March 31, | ||||||
| 2025 | 2025 | ||||||
| Cash and short-term investments | $ | 566.5 | $ | 771.7 | |||
| Accounts receivable, net | 765.5 | 689.7 | |||||
| Inventories | 1,169.1 | 1,293.5 | |||||
| Other current assets | 252.7 | 236.4 | |||||
| Total current assets | 2,753.8 | 2,991.3 | |||||
| Property, plant and equipment, net | 1,153.9 | 1,183.7 | |||||
| Other assets | 11,071.8 | 11,199.6 | |||||
| Total assets | $ | 14,979.5 | $ | 15,374.6 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Accounts payable and accrued liabilities | $ | 1,190.4 | $ | 1,155.1 | |||
| Total current liabilities | 1,190.4 | 1,155.1 | |||||
| Long-term debt | 5,458.1 | 5,630.4 | |||||
| Long-term income tax payable | 640.2 | 633.4 | |||||
| Long-term deferred tax liability | 36.3 | 33.8 | |||||
| Other long-term liabilities | 797.4 | 843.6 | |||||
| Stockholders' equity | 6,857.1 | 7,078.3 | |||||
| Total liabilities and stockholders' equity | $ | 14,979.5 | $ | 15,374.6 | |||
| MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP MEASURES (in millions, except per share amounts and percentages; unaudited) | |||||||
RECONCILIATION OF GAAP GROSS PROFIT TO NON-GAAP GROSS PROFIT
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Gross profit, as reported | $ | 576.7 | $ | 736.9 | |||
| Share-based compensation expense | 7.7 | 6.6 | |||||
| Non-GAAP gross profit | $ | 584.4 | $ | 743.5 | |||
| GAAP gross profit percentage | 53.6 | % | 59.4 | % | |||
| Non-GAAP gross profit percentage | 54.3 | % | 59.9 | % | |||
RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Research and development expenses, as reported | $ | 255.5 | $ | 241.7 | |||
| Share-based compensation expense | (29.1 | ) | (23.3 | ) | |||
| Non-GAAP research and development expenses | $ | 226.4 | $ | 218.4 | |||
| GAAP research and development expenses as a percentage of net sales | 23.8 | % | 19.5 | % | |||
| Non-GAAP research and development expenses as a percentage of net sales | 21.1 | % | 17.6 | % | |||
RECONCILIATION OF GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Selling, general and administrative expenses, as reported | $ | 159.3 | $ | 150.5 | |||
| Share-based compensation expense | (16.1 | ) | (14.1 | ) | |||
| Other adjustments | — | (1.3 | ) | ||||
| Professional services associated with certain legal matters | (7.5 | ) | (0.5 | ) | |||
| Non-GAAP selling, general and administrative expenses | $ | 135.7 | $ | 134.6 | |||
| GAAP selling, general and administrative expenses as a percentage of net sales | 14.8 | % | 12.1 | % | |||
| Non-GAAP selling, general and administrative expenses as a percentage of net sales | 12.6 | % | 10.8 | % | |||
RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Operating expenses, as reported | $ | 544.6 | $ | 517.8 | |||
| Share-based compensation expense | (45.2 | ) | (37.4 | ) | |||
| Other adjustments | — | (1.3 | ) | ||||
| Professional services associated with certain legal matters | (7.5 | ) | (0.5 | ) | |||
| Amortization of acquired intangible assets (1) | (107.6 | ) | (123.0 | ) | |||
| Special charges and other, net | (22.2 | ) | (2.6 | ) | |||
| Non-GAAP operating expenses | $ | 362.1 | $ | 353.0 | |||
| GAAP operating expenses as a percentage of net sales | 50.6 | % | 41.7 | % | |||
| Non-GAAP operating expenses as a percentage of net sales | 33.7 | % | 28.4 | % | |||
(1) Amortization of acquired intangible assets consists of core and developed technology and customer-related acquired intangible assets in connection with business combinations. Such charges are excluded for purposes of calculating certain non-GAAP measures.
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP OPERATING INCOME
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Operating income, as reported | $ | 32.1 | $ | 219.1 | |||
| Share-based compensation expense | 52.9 | 44.0 | |||||
| Other adjustments | — | 1.3 | |||||
| Professional services associated with certain legal matters | 7.5 | 0.5 | |||||
| Amortization of acquired intangible assets (1) | 107.6 | 123.0 | |||||
| Special charges and other, net | 22.2 | 2.6 | |||||
| Non-GAAP operating income | $ | 222.3 | $ | 390.5 | |||
| GAAP operating income as a percentage of net sales | 3.0 | % | 17.7 | % | |||
| Non-GAAP operating income as a percentage of net sales | 20.7 | % | 31.5 | % | |||
(1) Amortization of acquired intangible assets consists of core and developed technology and customer-related acquired intangible assets in connection with business combinations. Such charges are excluded for purposes of calculating certain non-GAAP measures. The use of acquired intangible assets contributed to our revenues earned during the periods presented.
RECONCILIATION OF GAAP OTHER EXPENSE, NET TO NON-GAAP OTHER EXPENSE, NET
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Other expense, net, as reported | $ | (47.9 | ) | $ | (57.3 | ) | |
| Non-GAAP other expense, net | $ | (47.9 | ) | $ | (57.3 | ) | |
| GAAP other expense, net, as a percentage of net sales | (4.5 | )% | (4.6 | )% | |||
| Non-GAAP other expense, net, as a percentage of net sales | (4.5 | )% | (4.6 | )% | |||
RECONCILIATION OF GAAP INCOME TAX PROVISION TO NON-GAAP INCOME TAX PROVISION
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Income tax provision as reported | $ | 2.8 | $ | 32.5 | |||
| Income tax rate, as reported | (17.7 | )% | 20.1 | % | |||
| Other non-GAAP tax adjustment | 16.9 | 10.8 | |||||
| Non-GAAP income tax provision | $ | 19.7 | $ | 43.3 | |||
| Non-GAAP income tax rate | 11.3 | % | 13.0 | % | |||
RECONCILIATION OF GAAP NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS AND GAAP DILUTED NET (LOSS) INCOME PER COMMON SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER COMMON SHARE
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Net (loss) income attributable to common stockholders, as reported | $ | (46.4 | ) | $ | 129.3 | ||
| Dividends on Series A Preferred Stock | 27.8 | — | |||||
| Share-based compensation expense | 52.9 | 44.0 | |||||
| Other adjustments | — | 1.3 | |||||
| Professional services associated with certain legal matters | 7.5 | 0.5 | |||||
| Amortization of acquired intangible assets | 107.6 | 123.0 | |||||
| Special charges and other, net | 22.2 | 2.6 | |||||
| Other non-GAAP tax adjustment | (16.9 | ) | (10.8 | ) | |||
| Non-GAAP net income | $ | 154.7 | $ | 289.9 | |||
| GAAP net (loss) income attributable to common stockholders as a percentage of net sales | (4.3 | )% | 10.4 | % | |||
| Non-GAAP net income as a percentage of net sales | 14.4 | % | 23.4 | % | |||
| Diluted net (loss) income per common share, as reported | $ | (0.09 | ) | $ | 0.24 | ||
| Non-GAAP diluted net income per common share | $ | 0.27 | $ | 0.53 | |||
| Diluted common shares outstanding, as reported | 539.2 | 542.8 | |||||
| Diluted common shares outstanding non-GAAP | 569.5 | 542.8 | |||||
RECONCILIATION OF GAAP DILUTED COMMON SHARES OUTSTANDING TO NON-GAAP DILUTED COMMON SHARES OUTSTANDING
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| Diluted common shares outstanding, as reported | 539.2 | 542.8 | |||||
| Dilutive effect of RSUs(1) | 3.0 | — | |||||
| Dilutive effect of 2017 Senior Convertible Debt(1) | 0.3 | — | |||||
| Dilutive effect of Series A Preferred Stock(1) | 27.0 | — | |||||
| Diluted common shares outstanding non-GAAP | 569.5 | 542.8 | |||||
(1)The non-GAAP adjustment includes the impact that is anti-dilutive on a GAAP basis for the three months ended June 30, 2025 as the Company generated a GAAP net loss in the respective period.
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
| Three Months Ended June 30, | |||||||
| 2025 | 2024 | ||||||
| GAAP cash flow from operations, as reported | $ | 275.6 | $ | 377.1 | |||
| Capital expenditures | (17.9 | ) | (72.9 | ) | |||
| Free cash flow | $ | 257.7 | $ | 304.2 | |||
| GAAP cash flow from operations as a percentage of net sales | 25.6 | % | 30.4 | % | |||
| Free cash flow as a percentage of net sales | 24.0 | % | 24.5 | % | |||
Microchip will host a conference call today, August 7, 2025 at 5:00 p.m. (Eastern Time) to discuss this release. This call will be simulcast over the Internet at www.microchip.com. The webcast will be available for replay until September 4, 2025.
A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on August 7, 2025 and will remain available until 5:00 p.m. (Eastern Time) on September 4, 2025. Interested parties may listen to the replay by dialing 201-612-7415/877-660-6853 and entering access code 13754618.
Cautionary Statement:
The statements in this release relating to seeing improvements across key financial metrics, emerging from the prolonged industry downturn with enhanced operational capabilities and a strengthened financial position, momentum from the March quarter accelerating into fiscal 2026 validating our strategic plan and positioning us well to capitalize on the recovery, improving our working capital efficiency, that continued progress on our inventory optimization demonstrates the effectiveness of our manufacturing improvements and positions us with increased operational flexibility as demand conditions continue to strengthen, that our Total System Solutions strategy continues to secure design wins with tier-one cloud providers for AI infrastructure and defense applications amid accelerating global defense spending, that these design wins position us at the center of two secular growth trends where our integrated solutions, combining processing power, security, and energy efficiency, are essential, our ability to translate revenue growth directly to profitability, that as we execute our strategic plan and benefit from improving demand conditions, we expect this operational leverage to support sustained margin expansion and enhanced cash flow generation as we drive towards our long-term business model goals, that inventory destocking has continued to occur at our customers, channel partners and their downstream customers, that the trifecta effect is driving our revenue growth, that our September quarter backlog is running ahead of June quarter levels, that customer engagement levels continue strengthening across our diversified end markets, that we expect September quarter net sales of
For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip's website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services.
Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this August 7, 2025 press release, or to reflect the occurrence of unanticipated events.
About Microchip:
Microchip Technology Incorporated is a leading provider of smart, connected and secure embedded control solutions. Its easy-to-use development tools and comprehensive product portfolio enable customers to create optimal designs, which reduce risk while lowering total system cost and time to market. Our solutions serve approximately 105,000 customers across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support along with dependable delivery and quality. For more information, visit the Microchip website at www.microchip.com.
Note: The Microchip name and logo are registered trademarks of Microchip Technology Incorporated in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies.
INVESTOR RELATIONS CONTACT:
Sajid Daudi -- Head of Investor Relations..... (480) 792-7385
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