Microchip Technology Announces Financial Results for Second Quarter of Fiscal Year 2027
December-quarter sales guidance incorporates about $53 million of infrequent September-quarter revenue that will not repeat.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Microchip Technology (NASDAQ: MCHP) reported fiscal second-quarter net sales of $1,621.5 million, exceeding guidance and rising from the prior year. Sales increased 42.2% year over year and 9.2% sequentially. GAAP net income attributable to common stockholders rose to $373.6 million, or $0.68 per diluted share, from $13.9 million, or $0.03. Non-GAAP diluted EPS was $0.97, above its $0.91–$0.95 guidance.
For the December quarter, Microchip expects sales of $1.573–$1.638 billion and GAAP diluted EPS of $0.47–$0.50. The sales midpoint implies a 1% sequential decline and approximately 35.4% year-over-year growth; about $53 million of September-quarter revenue will not repeat. Microchip completed acquisitions of Hailo on September 17 and Vorago Technologies on October 8. It declared a common dividend of 45.5 cents per share. Victor Peng informed the board of his decision to step down because of other time commitments.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointQuarterly sales of $1,621.5 million rose 42.2% year over year and 9.2% sequentially, exceeding guidance.
- Moderate pointGAAP common-stockholder net income rose to $373.6 million from $13.9 million a year earlier.
- Moderate pointNon-GAAP net income increased to $559.2 million from $199.1 million a year earlier.
- Moderate point. Forward-looking: it has not happened yet and may not happen.December-quarter sales guidance of $1.573–$1.638 billion implies 1% sequential decline and approximately 35.4% annual growth at midpoint.
- Minor pointGAAP diluted EPS of $0.68 exceeded $0.53–$0.54 guidance and the prior-year $0.03.
9 minor points
- Minor pointGAAP gross margin reached 65.9%, with operating income of $464.5 million and operating margin of 28.6%.
- Minor pointNon-GAAP diluted EPS of $0.97 exceeded $0.91–$0.95 guidance and the prior-year $0.35.
- Minor pointNon-GAAP gross margin reached 66.5%, with operating income of $639.9 million and operating margin of 39.5%.
- Minor pointBook-to-bill remained above one, meaning bookings exceeded sales.
- Minor pointPCIe Gen6 switch and retimer design wins reached 24, versus 12 at June-quarter end.
- Minor pointHailo acquisition completed September 17, adding an accelerated edge AI processor provider.
- Minor pointVorago Technologies acquisition completed October 8, adding a radiation-hardened microcontroller and microprocessor provider.
- Minor pointApproximately $247.6 million returned to common stockholders through September-quarter dividends.
- Minor point. Forward-looking: it has not happened yet and may not happen.Selective production-capacity expansion is planned through added capital equipment, alongside research and development equipment.
Negative
- Moderate point. Forward-looking: it has not happened yet and may not happen.December-quarter GAAP EPS guidance of $0.47–$0.50 is below September-quarter EPS of $0.68.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Most factory expansion actions remain paused, with planned capital investments reduced through fiscal 2027.
- Minor point. Forward-looking: it has not happened yet and may not happen.About $53 million of infrequent September-quarter revenue will not repeat in the December quarter.
- Minor point. Forward-looking: it has not happened yet and may not happen.December-quarter non-GAAP EPS guidance of $0.87–$0.95 is below September-quarter EPS of $0.97.
- Minor point. Forward-looking: it has not happened yet and may not happen.December-quarter GAAP gross margin guidance of 62.9%–63.9% is below September-quarter 65.9%.
6 minor points
- Minor point. Forward-looking: it has not happened yet and may not happen.December-quarter non-GAAP gross margin guidance of 64.0%–65.0% is below September-quarter 66.5%.
- Minor point. Forward-looking: it has not happened yet and may not happen.December-quarter GAAP operating margin guidance of 25.5%–27.2% is below September-quarter 28.6%.
- Minor point. Forward-looking: it has not happened yet and may not happen.December-quarter non-GAAP operating margin guidance of 37.0%–38.5% is below September-quarter 39.5%.
- Minor pointLengthening supply-chain lead times prompted work to expand capacity and secure additional wafer allocation.
- Minor point. Forward-looking: it has not happened yet and may not happen.Capital expenditures are expected at about $35 million for December quarter and approximately $100 million for fiscal 2027.
- Minor point. Forward-looking: it has not happened yet and may not happen.GAAP guidance excludes potential restructuring gains or charges, including those related to the Fab 2 sale evaluation.
News Explained
Microchip declared a quarterly cash dividend on its Series A Mandatory Convertible Preferred Stock of
Details
Market Reaction – MCHP
On Nov 6, the first trading day after this news, the latest delayed price for MCHP is 3.01% below the previous close. The latest delayed price is $62.90. Relative volume is exceptionally heavy at 33.4x what this stock usually trades by this time of day.
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Key Figures
- Net sales
- $1.622 billion
- Q2 FY27; above the $1.604 billion guidance midpoint
- GAAP diluted EPS
- $0.68 per share
- Q2 FY27; prior guidance was $0.53 to $0.54
- Non-GAAP diluted EPS
- $0.97 per share
- Q2 FY27; prior guidance was $0.91 to $0.95
- Common dividend
- 45.5 cents per share
- Quarterly dividend declared for the December quarter
- Net sales guidance
- $1.573 to $1.638 billion
- Q3 FY27
- GAAP diluted EPS guidance
- $0.47 to $0.50
- Q3 FY27
- Non-GAAP diluted EPS guidance
- $0.87 to $0.95
- Q3 FY27
- Non-GAAP gross margin guidance
- 64% to 65%
- Q3 FY27
Previous Earnings Reports
-
Q1 sales and non-GAAP EPS exceeded guidance; the Q2 guidance established the comparison for current results.
-
Same-quarter prior-year sales and earnings provide a direct baseline for the current Q2 results.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Key Terms
gaap financial
book-to-bill financial
radiation-hardened technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
- Net sales of
$1.622 billion , increased42.2% from the year-ago quarter and up9.2% sequentially. The midpoint of our guidance provided on August 6, 2026 was net sales of$1.604 billion . - On a GAAP basis: gross profit of
65.9% ; operating income of$464.5 million and28.6% of net sales; net income attributable to common stockholders of$373.6 million ; and EPS of$0.68 per diluted share. Our guidance provided on August 6, 2026 was GAAP EPS per diluted share of $0.53 to $0.54. - On a Non-GAAP basis: gross profit of
66.5% ; operating income of$639.9 million and39.5% of net sales; net income of$559.2 million ; and EPS of$0.97 per diluted share. Our guidance provided on August 6, 2026 was Non-GAAP EPS per diluted share of $0.91 to $0.95. - Returned approximately
$247.6 million to common stockholders in the September quarter through dividends. - Quarterly dividend on common stock declared for the December quarter of 45.5 cents per share.
- Completed acquisitions of Hailo, a provider of accelerated edge AI processors, on September 17th, and Vorago Technologies, a provider of radiation-hardened microcontrollers and microprocessors, on October 8th.
CHANDLER, Ariz., Nov. 05, 2026 (GLOBE NEWSWIRE) -- (NASDAQ: MCHP) - Microchip Technology Incorporated, a broadline supplier of semiconductors committed to making innovative design easier through total system solutions, today reported results for the three months ended September 30, 2026.
"Our September quarter net sales were above the high end of our guidance, increasing
Mr. Sanghi added, “Bookings remained robust, with book-to-bill well above one, consistent with recent quarters. We are winning new designs across our end markets, including data center, where our PCIe Gen6 switch and retimer design wins have grown to 24 to date, up from 12 at the end of the June quarter. We also broadened our portfolio, with a steady cadence of product and technology introductions across data center, aerospace and defense, automotive and industrial applications, which expands the foundation for future design wins."
Eric Bjornholt, Microchip's Corporate Senior Vice President and Chief Financial Officer, said, "Our September quarter results reflect ongoing operational improvements, with non-GAAP operating expenses growing well below net sales and supporting higher profitability. We believe our existing manufacturing footprint enables us to grow with modest incremental capital investment, and we remain focused on strengthening our balance sheet while making targeted investments that accelerate our product roadmap.”
Mr. Sanghi concluded, “As we enter the December quarter, we are experiencing some normal seasonal factors in our business. Normal seasonality is for our revenue to be down sequentially
The following table summarizes Microchip's reported results for the three months ended September 30, 2026.
| Three Months Ended September 30, 2026(1) | |||||
| Net sales | |||||
| GAAP | % | Non-GAAP(2) | % | ||
| Gross profit | |||||
| Operating income | |||||
| Other expense | |||||
| Income tax provision | |||||
| Net income | |||||
| Dividends on Series A Preferred Stock | — | ||||
| Net income attributable to common stockholders | |||||
| Diluted net income per common share | |||||
(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 second quarter of fiscal 2027 were
GAAP net income attributable to common stockholders for the second quarter of fiscal 2027 was
Non-GAAP net income for the second quarter of fiscal 2027 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 December 8, 2026 to stockholders of record on November 23, 2026. Our Board also declared a quarterly cash dividend on Microchip's
Microchip also announced that, on November 3, 2026, Victor Peng informed our Board of Directors of his decision to step down from the Board due to his time commitments on other matters including serving as Chief Executive Officer of PsiQuantum. The Board thanks Mr. Peng for his service and contributions during his tenure on the Board.
Third Quarter Fiscal Year 2027 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 income attributable to common stockholders | |||
| Diluted Common Shares Outstanding | Approximately 551.0 to 552.0 million shares | 23.8 million shares | Approximately 574.8 to 575.8 million shares |
| Diluted net income 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 December 31, 2026. Therefore, our estimate of GAAP operating expenses excludes certain amounts that may be recognized as Special Charges and Other, net in the quarter ending December 31, 2026.
(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 2027, excluding any transition tax payments associated with the Tax Cuts and Jobs Act.
(5) Our GAAP guidance excludes the impact of any potential gains or charges related to our ongoing evaluation of restructuring activities including the sale of our Fab 2 wafer fabrication facility in Tempe, Arizona.
Capital expenditures for the quarter ending December 31, 2026 are expected to be about
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, other restructuring costs, and legal and other general and administrative expenses including legal fees and expenses for litigation related to our Microsemi acquisition), professional services associated with certain legal matters, (gain) loss on available-for-sale investments, and dividends on our Series A Mandatory Convertible Preferred Stock. For the second quarters of fiscal 2027 and fiscal 2026, 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 December 2026 quarter between
| MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts, unaudited) | |||||||||||||||
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net sales | $ | 1,621.5 | $ | 1,140.4 | $ | 3,106.2 | $ | 2,215.9 | |||||||
| Cost of sales | 553.5 | 502.5 | 1,099.3 | 1,001.3 | |||||||||||
| Gross profit | 1,068.0 | 637.9 | 2,006.9 | 1,214.6 | |||||||||||
| Research and development | 318.5 | 262.3 | 627.4 | 517.8 | |||||||||||
| Selling, general and administrative | 186.9 | 172.3 | 371.2 | 331.6 | |||||||||||
| Amortization of acquired intangible assets | 90.2 | 108.1 | 180.2 | 215.7 | |||||||||||
| Special charges and other, net | 7.9 | 6.3 | 26.8 | 28.5 | |||||||||||
| Operating expenses | 603.5 | 549.0 | 1,205.6 | 1,093.6 | |||||||||||
| Operating income | 464.5 | 88.9 | 801.3 | 121.0 | |||||||||||
| Other expense, net | (47.0 | ) | (57.1 | ) | (93.9 | ) | (105.0 | ) | |||||||
| Income before income taxes | 417.5 | 31.8 | 707.4 | 16.0 | |||||||||||
| Income tax provision (benefit) | 16.1 | (9.9 | ) | 76.2 | (7.1 | ) | |||||||||
| Net income | 401.4 | 41.7 | 631.2 | 23.1 | |||||||||||
| Dividends on Series A Preferred Stock | (27.8 | ) | (27.8 | ) | (55.6 | ) | (55.6 | ) | |||||||
| Net income (loss) attributable to common stockholders | $ | 373.6 | $ | 13.9 | $ | 575.6 | $ | (32.5 | ) | ||||||
| Basic net income (loss) per common share | $ | 0.69 | $ | 0.03 | $ | 1.06 | $ | (0.06 | ) | ||||||
| Diluted net income (loss) per common share | $ | 0.68 | $ | 0.03 | $ | 1.05 | $ | (0.06 | ) | ||||||
| Basic common shares outstanding | 543.6 | 540.0 | 543.1 | 539.6 | |||||||||||
| Diluted common shares outstanding | 550.6 | 545.0 | 550.6 | 539.6 | |||||||||||
| MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited) | |||||
| ASSETS | |||||
| September 30, | March 31, | ||||
| 2026 | 2026 | ||||
| Cash and short-term investments | $ | 457.0 | $ | 240.3 | |
| Accounts receivable, net | 963.1 | 894.7 | |||
| Inventories | 1,117.3 | 1,035.4 | |||
| Other current assets | 208.9 | 207.2 | |||
| Total current assets | 2,746.3 | 2,377.6 | |||
| Property, plant and equipment, net | 1,074.3 | 1,106.7 | |||
| Other assets | 10,839.8 | 10,885.8 | |||
| Total assets | $ | 14,660.4 | $ | 14,370.1 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Accounts payable and accrued liabilities | $ | 1,224.7 | $ | 1,136.3 | |
| Total current liabilities | 1,224.7 | 1,136.3 | |||
| Long-term debt | 5,517.2 | 5,496.4 | |||
| Long-term income tax payable | 592.8 | 570.9 | |||
| Long-term deferred tax liability | 24.1 | 25.1 | |||
| Other long-term liabilities | 660.8 | 709.0 | |||
| Stockholders' equity | 6,640.8 | 6,432.4 | |||
| Total liabilities and stockholders' equity | $ | 14,660.4 | $ | 14,370.1 | |
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 September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Gross profit, as reported | $ | 1,068.0 | $ | 637.9 | $ | 2,006.9 | $ | 1,214.6 | |||||||
| Share-based compensation expense | 9.8 | 8.3 | 18.5 | 16.0 | |||||||||||
| Non-GAAP gross profit | $ | 1,077.8 | $ | 646.2 | $ | 2,025.4 | $ | 1,230.6 | |||||||
| GAAP gross profit percentage | 65.9 | % | 55.9 | % | 64.6 | % | 54.8 | % | |||||||
| Non-GAAP gross profit percentage | 66.5 | % | 56.7 | % | 65.2 | % | 55.5 | % | |||||||
RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Research and development expenses, as reported | $ | 318.5 | $ | 262.3 | $ | 627.4 | $ | 517.8 | |||||||
| Share-based compensation expense | (39.5 | ) | (33.2 | ) | (80.6 | ) | (62.3 | ) | |||||||
| Other adjustments | (4.5 | ) | — | (4.5 | ) | — | |||||||||
| Non-GAAP research and development expenses | $ | 274.5 | $ | 229.1 | $ | 542.3 | $ | 455.5 | |||||||
| GAAP research and development expenses as a percentage of net sales | 19.6 | % | 23.0 | % | 20.2 | % | 23.4 | % | |||||||
| Non-GAAP research and development expenses as a percentage of net sales | 16.9 | % | 20.1 | % | 17.5 | % | 20.6 | % | |||||||
RECONCILIATION OF GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO NON-GAAP SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Selling, general and administrative expenses, as reported | $ | 186.9 | $ | 172.3 | $ | 371.2 | $ | 331.6 | |||||||
| Share-based compensation expense | (22.7 | ) | (20.1 | ) | (47.9 | ) | (36.2 | ) | |||||||
| Other adjustments | (0.8 | ) | — | (0.8 | ) | — | |||||||||
| Professional services associated with certain legal matters | — | (12.3 | ) | (0.4 | ) | (19.8 | ) | ||||||||
| Non-GAAP selling, general and administrative expenses | $ | 163.4 | $ | 139.9 | $ | 322.1 | $ | 275.6 | |||||||
| GAAP selling, general and administrative expenses as a percentage of net sales | 11.5 | % | 15.1 | % | 12.0 | % | 15.0 | % | |||||||
| Non-GAAP selling, general and administrative expenses as a percentage of net sales | 10.1 | % | 12.3 | % | 10.4 | % | 12.4 | % | |||||||
RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Operating expenses, as reported | $ | 603.5 | $ | 549.0 | $ | 1,205.6 | $ | 1,093.6 | |||||||
| Share-based compensation expense | (62.2 | ) | (53.3 | ) | (128.5 | ) | (98.5 | ) | |||||||
| Other adjustments | (5.3 | ) | — | (5.3 | ) | — | |||||||||
| Professional services associated with certain legal matters | — | (12.3 | ) | (0.4 | ) | (19.8 | ) | ||||||||
| Amortization of acquired intangible assets (1) | (90.2 | ) | (108.1 | ) | (180.2 | ) | (215.7 | ) | |||||||
| Special charges and other, net | (7.9 | ) | (6.3 | ) | (26.8 | ) | (28.5 | ) | |||||||
| Non-GAAP operating expenses | $ | 437.9 | $ | 369.0 | $ | 864.4 | $ | 731.1 | |||||||
| GAAP operating expenses as a percentage of net sales | 37.2 | % | 48.1 | % | 38.8 | % | 49.4 | % | |||||||
| Non-GAAP operating expenses as a percentage of net sales | 27.0 | % | 32.4 | % | 27.8 | % | 33.0 | % | |||||||
(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 September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Operating income, as reported | $ | 464.5 | $ | 88.9 | $ | 801.3 | $ | 121.0 | |||||||
| Share-based compensation expense | 72.0 | 61.6 | 147.0 | 114.5 | |||||||||||
| Other adjustments | 5.3 | — | 5.3 | — | |||||||||||
| Professional services associated with certain legal matters | — | 12.3 | 0.4 | 19.8 | |||||||||||
| Amortization of acquired intangible assets (1) | 90.2 | 108.1 | 180.2 | 215.7 | |||||||||||
| Special charges and other, net | 7.9 | 6.3 | 26.8 | 28.5 | |||||||||||
| Non-GAAP operating income | $ | 639.9 | $ | 277.2 | $ | 1,161.0 | $ | 499.5 | |||||||
| GAAP operating income as a percentage of net sales | 28.6 | % | 7.8 | % | 25.8 | % | 5.5 | % | |||||||
| Non-GAAP operating income as a percentage of net sales | 39.5 | % | 24.3 | % | 37.4 | % | 22.5 | % | |||||||
(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 September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Other expense, net, as reported | $ | (47.0 | ) | $ | (57.1 | ) | $ | (93.9 | ) | $ | (105.0 | ) | |||
| (Gain) loss on available-for-sale investments | — | (0.1 | ) | — | (0.1 | ) | |||||||||
| Non-GAAP other expense, net | $ | (47.0 | ) | $ | (57.2 | ) | $ | (93.9 | ) | $ | (105.1 | ) | |||
| GAAP other expense, net, as a percentage of net sales | (2.9)% | (5.0)% | (3.0)% | (4.7)% | |||||||||||
| Non-GAAP other expense, net, as a percentage of net sales | (2.9)% | (5.0)% | (3.0)% | (4.7)% | |||||||||||
RECONCILIATION OF GAAP INCOME TAX PROVISION (BENEFIT) TO NON-GAAP INCOME TAX PROVISION
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Income tax provision (benefit) as reported | $ | 16.1 | $ | (9.9 | ) | $ | 76.2 | $ | (7.1 | ) | |||||
| Income tax rate, as reported | 3.9 | % | (31.1)% | 10.8 | % | (44.4)% | |||||||||
| Other non-GAAP tax adjustment | 17.6 | 30.8 | (6.9 | ) | 47.7 | ||||||||||
| Non-GAAP income tax provision | $ | 33.7 | $ | 20.9 | $ | 69.3 | $ | 40.6 | |||||||
| Non-GAAP income tax rate | 5.7 | % | 9.5 | % | 6.5 | % | 10.3 | % | |||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS AND GAAP DILUTED NET INCOME (LOSS) PER COMMON SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER COMMON SHARE
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income (loss) attributable to common stockholders, as reported | $ | 373.6 | $ | 13.9 | $ | 575.6 | $ | (32.5 | ) | ||||||
| Dividends on Series A Preferred Stock | 27.8 | 27.8 | 55.6 | 55.6 | |||||||||||
| Share-based compensation expense | 72.0 | 61.6 | 147.0 | 114.5 | |||||||||||
| Other adjustments | 5.3 | — | 5.3 | — | |||||||||||
| Professional services associated with certain legal matters | — | 12.3 | 0.4 | 19.8 | |||||||||||
| Amortization of acquired intangible assets | 90.2 | 108.1 | 180.2 | 215.7 | |||||||||||
| Special charges and other, net | 7.9 | 6.3 | 26.8 | 28.5 | |||||||||||
| (Gain) loss on available-for-sale investments | — | (0.1 | ) | — | (0.1 | ) | |||||||||
| Other non-GAAP tax adjustment | (17.6 | ) | (30.8 | ) | 6.9 | (47.7 | ) | ||||||||
| Non-GAAP net income | $ | 559.2 | $ | 199.1 | $ | 997.8 | $ | 353.8 | |||||||
| GAAP net income (loss) attributable to common stockholders as a percentage of net sales | 23.0 | % | 1.2 | % | 18.5 | % | (1.5)% | ||||||||
| Non-GAAP net income as a percentage of net sales | 34.5 | % | 17.5 | % | 32.1 | % | 16.0 | % | |||||||
| Diluted net income (loss) per common share, as reported | $ | 0.68 | $ | 0.03 | $ | 1.05 | $ | (0.06 | ) | ||||||
| Non-GAAP diluted net income per common share | $ | 0.97 | $ | 0.35 | $ | 1.74 | $ | 0.62 | |||||||
| Diluted common shares outstanding, as reported | 550.6 | 545.0 | 550.6 | 539.6 | |||||||||||
| Diluted common shares outstanding non-GAAP | 574.4 | 568.8 | 574.4 | 569.2 | |||||||||||
RECONCILIATION OF GAAP DILUTED COMMON SHARES OUTSTANDING TO NON-GAAP DILUTED COMMON SHARES OUTSTANDING
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||
| 2026 | 2025 | 2026 | 2025 | ||||
| Diluted common shares outstanding, as reported | 550.6 | 545.0 | 550.6 | 539.6 | |||
| Dilutive effect of RSUs(1) | — | — | — | 3.8 | |||
| Dilutive effect of 2017 Senior Convertible Debt(1) | — | — | — | 0.4 | |||
| Dilutive effect of Series A Preferred Stock(1) | 23.8 | 23.8 | 23.8 | 25.4 | |||
| Diluted common shares outstanding non-GAAP | 574.4 | 568.8 | 574.4 | 569.2 | |||
(1) The non-GAAP adjustment includes the impact that is anti-dilutive on a GAAP basis for the periods shown in the table above.
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| GAAP cash flow from operations, as reported | $ | 419.2 | $ | 88.1 | $ | 930.7 | $ | 363.7 | |||||||
| Capital expenditures | (23.1 | ) | (36.5 | ) | (37.0 | ) | (54.4 | ) | |||||||
| Free cash flow | $ | 396.1 | $ | 51.6 | $ | 893.7 | $ | 309.3 | |||||||
| GAAP cash flow from operations as a percentage of net sales | 25.9 | % | 7.7 | % | 30.0 | % | 16.4 | % | |||||||
| Free cash flow as a percentage of net sales | 24.4 | % | 4.5 | % | 28.8 | % | 14.0 | % | |||||||
Microchip will host a conference call today, November 5, 2026 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 December 3, 2026.
A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on November 5, 2026 and will remain available until 5:00 p.m. (Eastern Time) on December 3, 2026. Interested parties may listen to the replay by dialing 201-612-7415/877-660-6853 and entering access code 13761638.
Cautionary Statement:
The statements in this release relating to the momentum from the start of fiscal 2027, broad-based growth across our end markets driven by industrial and data center applications, growth being increasingly supported by new design wins and product innovations which we believe positions us well for the opportunities ahead, that we are winning new designs across our end markets, that we have a steady cadence of product and technology introductions across data center, aerospace and defense, automotive and industrial applications which expands the foundation for future design wins, ongoing operational improvements with non-GAAP operating expenses growing well below net sales and supporting higher profitability, that we believe our existing manufacturing footprint enables us to grow with modest incremental capital investment, that we remain focused on strengthening our balance sheet while making targeted investments that accelerate our product roadmap, that we are experiencing some normal seasonal factors in our business, normal seasonality is for our revenue to be down sequentially
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 November 5, 2026 press release, or to reflect the occurrence of unanticipated events.
About Microchip:
Microchip Technology Inc. is a broadline supplier of semiconductors committed to making innovative design easier through total system solutions that address critical challenges at the intersection of emerging technologies and durable end markets. Its easy-to-use development tools and comprehensive product portfolio support customers throughout the design process, from concept to completion. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support and delivers solutions across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. 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
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Microchip's fiscal second-quarter 2027 sales and earnings?
Microchip reported $1,621.5 million in sales and GAAP net income attributable to common stockholders of $373.6 million, or $0.68 per diluted share. Sales increased 42.2% year over year and 9.2% sequentially. Non-GAAP net income was $559.2 million, or $0.97 per diluted share.
What is Microchip's fiscal third-quarter 2027 outlook?
Microchip expects December-quarter sales of $1.573 to $1.638 billion, GAAP diluted EPS of $0.47 to $0.50 and non-GAAP diluted EPS of $0.87 to $0.95. The sales midpoint represents a 1% sequential decline and approximately 35.4% year-over-year growth.
When will Microchip pay its December 2026 dividends?
Microchip will pay its 45.5-cent common dividend on December 8, 2026, to stockholders of record on November 23, 2026. Its Series A preferred dividend of $18.750 per share, equivalent to $0.9375 per depositary share, is payable December 15, 2026, to stockholders of record on December 1, 2026.