MACOM (MTSI) Q1 Earnings & Revenues Beat Estimates, Fall Y/Y
MACOM Technology Solutions Holdings, Inc. MTSI delivered first-quarter fiscal 2024 non-GAAP earnings of 58 cents per share, which beat the Zacks Consensus Estimate by 1.75%. However, the bottom line declined 28.4% from the year-ago quarter’s reported figure.
Revenues of $157.15 million surpassed the Zacks Consensus Estimate of $151.12 million. The top line dropped 12.7% from the year-ago quarter’s figure, owing to the telecommunications market’s softness.
Nevertheless, the company witnessed improvement in the data center market during the reported quarter.
MACOM remains optimistic about its product portfolio strength and growth prospects across industrial & defense, data center and telecom markets.
MACOM has returned 26.3% over a year, outperforming the industry’s growth of 5.1%.
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 $30.64 million (19.5% of the total revenues) from the market, down 50.1% year over year. The figure missed the Zacks Consensus Estimate of $32.7 million.
Data Center Market: The market generated revenues of $49.51 million (31.5% of the total revenues), up 19.3% from the year-ago quarter. The figure topped the Zacks Consensus Estimate of $41.98 million.
Industrial & Defense Market: MACOM generated revenues of $76.99 million (49% of the total revenues) from the market, down 0.2% year over year. The figure came ahead of the Zacks Consensus Estimate of $76.54 million.
Operating Details
In first-quarter fiscal 2024, MTSI’s non-GAAP gross margin was 59.2%, which contracted 340 basis points (bps) from the year-ago fiscal quarter’s reported figure.
In the reported quarter, non-GAAP operating expenses were $54.5 million, which decreased 1.2% from the year-ago fiscal quarter’s reported figure. As a percentage of revenues, the figure expanded 480 bps to 34.7%.
Consequently, MTSI’s non-GAAP operating margin was 24.5%, which contracted 820 bps from the prior-year quarter’s figure.
Balance Sheet & Cash Flow
As of Dec 29, 2023, cash equivalents and short-term investments were $463.3 million, down from $514.5 million as of Sep 30, 2023.
Inventories were $159.5 million, up from $136.3 million in the previously reported quarter.
Long-term debt obligations, excluding the current portion, were $447.42 million in the reported quarter compared with $447.13 million in the previous quarter.
The company generated $33.1 million of cash from operations during the fiscal first quarter.
Guidance
For second-quarter fiscal 2024, MACOM expects revenues between $178 million and $184 million. The Zacks Consensus Estimate for the same is pegged at $157.78 million.
The non-GAAP gross margin is expected to be 56-58%.
MTSI’s adjusted earnings per share are anticipated to be within 56-62 cents. The Zacks Consensus Estimate for the same is pegged at 62 cents.
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, Logitech International LOGI and Itron ITRI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have returned 116.5% over the past year. The long-term earnings growth rate for ANET is pegged at 19.77%.
Shares of Logitech International have returned 23.2% over the past year. The long-term earnings growth rate for LOGI is currently projected at 15.75%.
Shares of Itron have gained 22.3% over the past year. The long-term earnings growth rate for ITRI is currently projected at 23%.
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