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MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) delivered second-quarter fiscal 2024 non-GAAP earnings of 59 cents per share, which beat the Zacks Consensus Estimate by 1.72%. However, the bottom line declined 25.3% from the year-ago quarter’s reported figure.
Revenues of $181.23 million surpassed the Zacks Consensus Estimate by 0.15%. The top line increased 7% from the year-ago quarter’s figure, owing to strength across the data center and industrial & defense markets.
MACOM remains optimistic about its product portfolio strength and growth prospects across industrial & defense, data center and telecom markets.
MACOM has returned 6.5% in the year-to-date period, outperforming the industry’s decline of 0.4%.
However, the company witnessed softness in the telecom market during the reported quarter.
MACOM Technology Solutions Holdings, Inc. Price, Consensus and EPS Surprise
Telecom Market: MTSI generated revenues of $47.2 million (26% of the total revenues) from the market, down 12.4% year over year. The figure beat the Zacks Consensus Estimate of $45.51 million.
Data Center Market: The market generated revenues of $43.15 million (23.8% of the total revenues), up 12.6% from the year-ago quarter. The figure topped the Zacks Consensus Estimate of $42.93 million.
Industrial & Defense Market: MACOM generated revenues of $90.89 million (50.2% of the total revenues) from the market, up 17.7% year over year. The figure missed the Zacks Consensus Estimate of $92 million.
Operating Details
In the second quarter of fiscal 2024, MTSI’s non-GAAP gross margin was 57.1%, which contracted 500 basis points (bps) from the year-ago fiscal quarter’s reported figure.
In the reported quarter, non-GAAP operating expenses were $63.3 million, which increased 30.2% from the year-ago fiscal quarter’s reported figure. As a percentage of revenues, the figure expanded 620 bps to 34.9%.
Consequently, MTSI’s non-GAAP operating margin was 22.2%, which contracted 1120 bps from the prior-year quarter’s figure.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash equivalents and short-term investments were $476.4 million, up from $463.3 million as of Dec 29, 2023.
Inventories were $177.8 million, up from $159.5 million in the previously reported quarter.
Long-term debt obligations, excluding the current portion, were $447.71 million in the reported quarter compared with $447.42 million in the previous quarter.
The company generated $51.3 million of cash from operations during the fiscal second quarter.
Guidance
For third-quarter fiscal 2024, MACOM expects revenues between $187 million and $193 million. The Zacks Consensus Estimate for the same is pegged at $184.97 million.
The non-GAAP gross margin is expected to be 56-58%.
MTSI’s adjusted earnings per share are anticipated to be within 63-69 cents. The Zacks Consensus Estimate for the same is pegged at 65 cents.
The company also expects a non-GAAP income tax rate of 3% and 74.0 million fully diluted shares outstanding.
Image: Bigstock
MACOM (MTSI) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) delivered second-quarter fiscal 2024 non-GAAP earnings of 59 cents per share, which beat the Zacks Consensus Estimate by 1.72%. However, the bottom line declined 25.3% from the year-ago quarter’s reported figure.
Revenues of $181.23 million surpassed the Zacks Consensus Estimate by 0.15%. The top line increased 7% from the year-ago quarter’s figure, owing to strength across the data center and industrial & defense markets.
MACOM remains optimistic about its product portfolio strength and growth prospects across industrial & defense, data center and telecom markets.
MACOM has returned 6.5% in the year-to-date period, outperforming the industry’s decline of 0.4%.
However, the company witnessed softness in the telecom market during the reported quarter.
MACOM Technology Solutions Holdings, Inc. Price, Consensus and EPS Surprise
MACOM Technology Solutions Holdings, Inc. price-consensus-eps-surprise-chart | MACOM Technology Solutions Holdings, Inc. Quote
Top Line in Detail
Telecom Market: MTSI generated revenues of $47.2 million (26% of the total revenues) from the market, down 12.4% year over year. The figure beat the Zacks Consensus Estimate of $45.51 million.
Data Center Market: The market generated revenues of $43.15 million (23.8% of the total revenues), up 12.6% from the year-ago quarter. The figure topped the Zacks Consensus Estimate of $42.93 million.
Industrial & Defense Market: MACOM generated revenues of $90.89 million (50.2% of the total revenues) from the market, up 17.7% year over year. The figure missed the Zacks Consensus Estimate of $92 million.
Operating Details
In the second quarter of fiscal 2024, MTSI’s non-GAAP gross margin was 57.1%, which contracted 500 basis points (bps) from the year-ago fiscal quarter’s reported figure.
In the reported quarter, non-GAAP operating expenses were $63.3 million, which increased 30.2% from the year-ago fiscal quarter’s reported figure. As a percentage of revenues, the figure expanded 620 bps to 34.9%.
Consequently, MTSI’s non-GAAP operating margin was 22.2%, which contracted 1120 bps from the prior-year quarter’s figure.
Balance Sheet & Cash Flow
As of Mar 29, 2024, cash equivalents and short-term investments were $476.4 million, up from $463.3 million as of Dec 29, 2023.
Inventories were $177.8 million, up from $159.5 million in the previously reported quarter.
Long-term debt obligations, excluding the current portion, were $447.71 million in the reported quarter compared with $447.42 million in the previous quarter.
The company generated $51.3 million of cash from operations during the fiscal second quarter.
Guidance
For third-quarter fiscal 2024, MACOM expects revenues between $187 million and $193 million. The Zacks Consensus Estimate for the same is pegged at $184.97 million.
The non-GAAP gross margin is expected to be 56-58%.
MTSI’s adjusted earnings per share are anticipated to be within 63-69 cents. The Zacks Consensus Estimate for the same is pegged at 65 cents.
The company also expects a non-GAAP income tax rate of 3% and 74.0 million fully diluted shares outstanding.
Zacks Rank & Stocks to Consider
Currently, MACOM has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Applied Material (AMAT - Free Report) and Dell Technologies (DELL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks’ shares have increased 11.6% year to date. ANET is set to report its first-quarter 2024 results on May 7.
Applied Material’s shares have gained 22.4% year to date. AMAT is set to report second-quarter fiscal 2024 results on May 16.
Dell Technologies’ shares have surged 62.1% year to date. DELL is set to report its first-quarter fiscal 2025 results on May 30.