Microchip Technology Announces Financial Results for Second Quarter of Fiscal Year 2025
Microchip Technology reported Q2 fiscal 2025 results with net sales of $1.164 billion, down 6.2% sequentially and 48.4% year-over-year. GAAP net income was $78.4 million ($0.14 per share), while non-GAAP net income reached $250.2 million ($0.46 per share). The company declared a record quarterly dividend of 45.5 cents per share, up 3.6% year-over-year. A $13.3 million legal settlement positively impacted revenue and profits. The company returned $261 million to stockholders through dividends and share repurchases. For Q3 FY2025, Microchip expects net sales between $1.025-$1.095 billion amid ongoing inventory corrections and macro uncertainties.
Microchip Technology ha riportato i risultati del secondo trimestre dell'anno fiscale 2025, con vendite nette di 1,164 miliardi di dollari, in calo del 6,2% rispetto al trimestre precedente e del 48,4% rispetto allo stesso periodo dell'anno precedente. L'utile netto GAAP è stato di 78,4 milioni di dollari (0,14 dollari per azione), mentre l'utile netto non-GAAP ha raggiunto i 250,2 milioni di dollari (0,46 dollari per azione). L'azienda ha dichiarato un dividendo trimestrale record di 45,5 centesimi per azione, in aumento del 3,6% rispetto all'anno precedente. Un accordo legale di 13,3 milioni di dollari ha avuto un impatto positivo sui ricavi e sugli utili. L'azienda ha restituito 261 milioni di dollari agli azionisti attraverso dividendi e riacquisti di azioni. Per il terzo trimestre dell'anno fiscale 2025, Microchip prevede vendite nette comprese tra 1,025 e 1,095 miliardi di dollari, in mezzo a correzioni dell'inventario in corso e incertezze macroeconomiche.
Microchip Technology informó los resultados del segundo trimestre del año fiscal 2025, con ventas netas de 1.164 millones de dólares, una disminución del 6,2% secuencialmente y del 48,4% en comparación con el año anterior. El ingreso neto GAAP fue de 78,4 millones de dólares (0,14 dólares por acción), mientras que el ingreso neto no GAAP alcanzó los 250,2 millones de dólares (0,46 dólares por acción). La compañía declaró un dividendo trimestral récord de 45,5 centavos por acción, un aumento del 3,6% en comparación con el año pasado. Un acuerdo legal de 13,3 millones de dólares impactó positivamente los ingresos y las ganancias. La empresa devolvió 261 millones de dólares a los accionistas a través de dividendos y recompra de acciones. Para el tercer trimestre del año fiscal 2025, Microchip espera ventas netas entre 1.025 y 1.095 millones de dólares en medio de correcciones en inventarios e incertidumbres macroeconómicas.
마이크로칩 테크놀로지는 2025 회계연도 2분기 실적을 발표했으며, 순매출은 11억 6,400만 달러로, 전분기 대비 6.2% 감소하고, 전년 동기 대비 48.4% 감소했습니다. GAAP 순이익은 7,840만 달러(주당 0.14 달러)였으며, 비GAAP 순이익은 2억 5,020만 달러(주당 0.46 달러)에 달했습니다. 회사는 주당 45.5센트의 분기 배당금을 기록적으로 선언했으며, 이는 전년 대비 3.6% 증가한 수치입니다. 1,330만 달러의 법적 합의가 수익과 수익성에 긍정적인 영향을 미쳤습니다. 회사는 배당금과 자사주 매입을 통해 주주에게 2억 6,100만 달러를 환원했습니다. 2025 회계연도 3분기에는 재고 조정 및 거시 경제 불확실성 속에서 순매출을 10억 2,500만 달러에서 10억 9,500만 달러 사이로 예상하고 있습니다.
Microchip Technology a annoncé ses résultats financiers pour le deuxième trimestre de l'exercice 2025, avec des ventes nettes de 1,164 milliard de dollars, en baisse de 6,2 % par rapport au trimestre précédent et de 48,4 % par rapport à l'année précédente. Le bénéfice net selon les normes GAAP s'est élevé à 78,4 millions de dollars (0,14 dollar par action), tandis que le bénéfice net non-GAAP a atteint 250,2 millions de dollars (0,46 dollar par action). L'entreprise a annoncé un dividende trimestriel record de 45,5 cents par action, soit une augmentation de 3,6 % par rapport à l'année précédente. Un règlement légal de 13,3 millions de dollars a eu un effet positif sur les revenus et les bénéfices. La société a restitué 261 millions de dollars aux actionnaires par le biais de dividendes et de rachats d'actions. Pour le troisème trimestre de l'exercice 2025, Microchip s'attend à des ventes nettes comprises entre 1,025 et 1,095 milliard de dollars, dans un contexte d'ajustements de stocks en cours et d'incertitudes macroéconomiques.
Microchip Technology berichtete über die Ergebnisse des 2. Quartals des Geschäftsjahres 2025 mit Nettoumsätzen von 1,164 Milliarden Dollar, was einem Rückgang von 6,2% im Vergleich zum vorherigen Quartal und 48,4% im Vergleich zum Vorjahr entspricht. Der GAAP-Nettoertrag betrug 78,4 Millionen Dollar (0,14 Dollar pro Aktie), während der Non-GAAP-Nettoertrag 250,2 Millionen Dollar (0,46 Dollar pro Aktie) erreichte. Das Unternehmen erklärte eine Rekorddividende von 45,5 Cent pro Aktie, was einem Anstieg von 3,6% im Vergleich zum Vorjahr entspricht. Eine rechtliche Einigung in Höhe von 13,3 Millionen Dollar hatte einen positiven Einfluss auf den Umsatz und den Gewinn. Das Unternehmen gab den Aktionären 261 Millionen Dollar durch Dividenden und Aktienrückkäufe zurück. Für das 3. Quartal des Geschäftsjahres 2025 erwartet Microchip Nettoumsätze zwischen 1,025 und 1,095 Milliarden Dollar, während anhaltende Bestandskorrekturen und makroökonomische Unsicherheiten bestehen.
- Legal settlement of $13.3 million boosting revenue and EPS
- Record quarterly dividend increase of 3.6% year-over-year
- Strong shareholder returns with $261 million through dividends and buybacks
- Q2 results met guidance expectations
- Non-GAAP gross margin maintained at 59.5%
- Net sales declined 48.4% year-over-year to $1.164 billion
- GAAP net income dropped from $666.6M to $78.4M year-over-year
- Sequential revenue decline of 6.2%
- Weak guidance for Q3 with expected sales of $1.025-$1.095 billion
- Continued inventory correction and macro weakness affecting performance
Insights
The Q2 FY2025 results reveal significant challenges for Microchip, with net sales dropping 48.4% YoY to
The ongoing inventory correction, coupled with European market weakness in Industrial and Automotive segments, presents near-term challenges. However, positive indicators include normalized cancellation rates and increased expedite requests, suggesting potential market bottom formation. The company's focus on AI-accelerated servers and data center markets through PCIe switches and CXL solutions provides strategic growth opportunities despite current headwinds.
The semiconductor industry cycle is evident in Microchip's results, with customer destocking being a primary factor in the revenue decline. The guidance for Q3 FY2025 between
The Total System Solutions strategy and focus on data center markets positions Microchip well for recovery, though timing remains uncertain. The company's strong design-in momentum and strategic positioning in key growth markets provide a foundation for future growth once inventory correction completes and macro conditions improve.
- Net sales of
$1.16 4 billion, down6.2% sequentially and down48.4% from the year ago quarter. The midpoint of our guidance provided on August 1, 2024 was net sales of$1.15 0 billion. - Revenue, gross profit and non-GAAP gross profit were positively impacted by a
$13.3 million legal settlement. This settlement also positively impacted GAAP and non-GAAP EPS by$0.02 per diluted share. - On a GAAP basis: gross profit of
57.4% ; operating income of$146.6 million and12.6% of net sales; net income of$78.4 million ; and EPS of$0.14 per diluted share. Our guidance provided on August 1, 2024 was for GAAP EPS of$0.10 t o$0.14 per diluted share. - On a Non-GAAP basis: gross profit of
59.5% ; operating income of$340.8 million and29.3% of net sales; net income of$250.2 million ; and EPS of$0.46 per diluted share. Our guidance provided on August 1, 2024 was for Non-GAAP EPS of$0.40 t o$0.46 per diluted share. - Returned approximately
$261.0 million to stockholders in the September quarter through dividends of$243.7 million and the repurchase of$17.3 million , or 0.2 million shares of our common stock, at an average price of$76.86 per share under our previously announced$4.0 billion stock buyback program. Cumulatively repurchased$2.44 4 billion, or 31.4 million shares, over the last twelve quarters. - Record quarterly dividend declared today for the December quarter of 45.5 cents per share, an increase of
3.6% from the year ago quarter.
CHANDLER, Ariz., Nov. 05, 2024 (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 September 30, 2024, as summarized in the table below.
Three Months Ended September 30, 2024(1) | ||||
Net sales | ||||
GAAP | % | Non-GAAP(2) | % | |
Gross profit | ||||
Operating income | ||||
Other expense | ||||
Income tax provision | ||||
Net income | ||||
Net income per diluted 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 2025 were
GAAP net income for the second quarter of fiscal 2025 was
Non-GAAP net income for the second quarter of fiscal 2025 was
Microchip announced today that its Board of Directors declared a record quarterly cash dividend on its common stock of 45.5 cents per share, up
"Our September quarter results were consistent with our guidance, as we continued to navigate through an inventory correction that’s occurring in the midst of macro weakness for many manufacturing businesses, accentuated by heightened weakness in our European business which is concentrated with Industrial and Automotive customers," said Ganesh Moorthy, President and Chief Executive Officer. "The 'green shoots' we saw in recent quarters have progressed unevenly with essentially flat sequential bookings, normalized cancellation rates and much higher expedite requests, which we believe are all positive signs for a potential bottom formation despite limited visibility."
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our September quarter results reflect continued customer destocking efforts and sluggish end-market demand. We are maintaining strong cost discipline and balance sheet management while taking actions to ensure operational readiness for the anticipated market recovery."
Rich Simoncic, Microchip's Chief Operating Officer, said, "Our Total System Solutions approach is driving strong execution and seeing growing adoption in AI-accelerated servers in the data center markets. Our PCIe switches, SSD controllers, CXL solutions, and associated power and timing products are key to continuing to strengthen our data center portfolio. With our expanding capabilities, we believe we are well-positioned to capitalize on opportunities in this growth market."
Mr. Moorthy concluded, "For the December quarter, we expect net sales between
Third Quarter Fiscal Year 2025 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 | Non-GAAP Adjustments(1) | Non-GAAP(1) | |
Gross Profit | |||
Operating Expenses(2) | |||
Operating Income | |||
Other Expense, net | ( | ||
Income Tax Provision | |||
Net Income (loss) | ( | ||
Diluted Common Shares Outstanding | Approximately 537.3 to 543.0 million shares | Approximately 543.0 million shares | |
Earnings (Loss) per Diluted 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, 2024. 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, 2024. |
(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 2025, excluding any transition tax payments associated with the Tax Cuts and Jobs Act. |
Capital expenditures for the quarter ending December 31, 2024 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, cybersecurity incident expenses, other manufacturing adjustments, 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 losses on the settlement of debt. For the second quarters of fiscal 2025 and fiscal 2024, 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 employee stock options, 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 exercise of options or vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures (additional information regarding our share count is available in the investor relations section of our website under the heading "Supplemental Financial 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 2024 quarter between
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(in millions, except per share amounts; unaudited) | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net sales | $ | 1,163.8 | $ | 2,254.3 | $ | 2,405.1 | $ | 4,542.9 | |||||||
Cost of sales | 495.3 | 726.9 | 999.7 | 1,457.1 | |||||||||||
Gross profit | 668.5 | 1,527.4 | 1,405.4 | 3,085.8 | |||||||||||
Research and development | 240.7 | 292.6 | 482.4 | 591.1 | |||||||||||
Selling, general and administrative | 157.0 | 196.6 | 307.5 | 400.2 | |||||||||||
Amortization of acquired intangible assets | 122.7 | 151.4 | 245.7 | 302.9 | |||||||||||
Special charges and other, net | 1.5 | 1.8 | 4.1 | 3.5 | |||||||||||
Operating expenses | 521.9 | 642.4 | 1,039.7 | 1,297.7 | |||||||||||
Operating income | 146.6 | 885.0 | 365.7 | 1,788.1 | |||||||||||
Other expense, net | (55.1 | ) | (51.4 | ) | (112.4 | ) | (106.2 | ) | |||||||
Income before income taxes | 91.5 | 833.6 | 253.3 | 1,681.9 | |||||||||||
Income tax provision | 13.1 | 167.0 | 45.6 | 348.9 | |||||||||||
Net income | $ | 78.4 | $ | 666.6 | $ | 207.7 | $ | 1,333.0 | |||||||
Basic net income per common share | $ | 0.15 | $ | 1.23 | $ | 0.39 | $ | 2.45 | |||||||
Diluted net income per common share | $ | 0.14 | $ | 1.21 | $ | 0.38 | $ | 2.42 | |||||||
Basic common shares outstanding | 536.7 | 543.1 | 536.7 | 544.1 | |||||||||||
Diluted common shares outstanding | 542.0 | 549.2 | 542.4 | 550.3 | |||||||||||
MICROCHIP TECHNOLOGY INCORPORATED AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(in millions; unaudited) | |||||
ASSETS | |||||
September 30, | March 31, | ||||
2024 | 2024 | ||||
Cash and short-term investments | $ | 286.1 | $ | 319.7 | |
Accounts receivable, net | 1,044.3 | 1,143.7 | |||
Inventories | 1,339.6 | 1,316.0 | |||
Other current assets | 235.5 | 233.6 | |||
Total current assets | 2,905.5 | 3,013.0 | |||
Property, plant and equipment, net | 1,171.2 | 1,194.6 | |||
Other assets | 11,545.6 | 11,665.6 | |||
Total assets | $ | 15,622.3 | $ | 15,873.2 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable and accrued liabilities | $ | 1,339.4 | $ | 1,520.0 | |
Current portion of long-term debt | 1,946.3 | 999.4 | |||
Total current liabilities | 3,285.7 | 2,519.4 | |||
Long-term debt | 4,476.6 | 5,000.4 | |||
Long-term income tax payable | 590.4 | 649.2 | |||
Long-term deferred tax liability | 29.8 | 28.8 | |||
Other long-term liabilities | 963.9 | 1,017.6 | |||
Stockholders' equity | 6,275.9 | 6,657.8 | |||
Total liabilities and stockholders' equity | $ | 15,622.3 | $ | 15,873.2 | |
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, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Gross profit, as reported | $ | 668.5 | $ | 1,527.4 | $ | 1,405.4 | $ | 3,085.8 | |||||||
Share-based compensation expense | 4.3 | 7.4 | 10.9 | 14.2 | |||||||||||
Cybersecurity incident expenses | 20.1 | — | 20.1 | — | |||||||||||
Non-GAAP gross profit | $ | 692.9 | $ | 1,534.8 | $ | 1,436.4 | $ | 3,100.0 | |||||||
GAAP gross profit percentage | 57.4 | % | 67.8 | % | 58.4 | % | 67.9 | % | |||||||
Non-GAAP gross profit percentage | 59.5 | % | 68.1 | % | 59.7 | % | 68.2 | % | |||||||
RECONCILIATION OF GAAP RESEARCH AND DEVELOPMENT EXPENSES TO NON-GAAP RESEARCH AND DEVELOPMENT EXPENSES | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Research and development expenses, as reported | $ | 240.7 | $ | 292.6 | $ | 482.4 | $ | 591.1 | |||||||
Share-based compensation expense | (26.9 | ) | (23.7 | ) | (50.2 | ) | (46.6 | ) | |||||||
Other adjustments | — | (0.2 | ) | — | (0.4 | ) | |||||||||
Non-GAAP research and development expenses | $ | 213.8 | $ | 268.7 | $ | 432.2 | $ | 544.1 | |||||||
GAAP research and development expenses as a percentage of net sales | 20.7 | % | 13.0 | % | 20.1 | % | 13.0 | % | |||||||
Non-GAAP research and development expenses as a percentage of net sales | 18.4 | % | 11.9 | % | 18.0 | % | 12.0 | % | |||||||
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, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Selling, general and administrative expenses, as reported | $ | 157.0 | $ | 196.6 | $ | 307.5 | $ | 400.2 | |||||||
Share-based compensation expense | (15.1 | ) | (14.3 | ) | (29.2 | ) | (29.1 | ) | |||||||
Cybersecurity incident expenses | (1.3 | ) | — | (1.3 | ) | — | |||||||||
Other adjustments | (2.1 | ) | (0.6 | ) | (3.4 | ) | 0.5 | ||||||||
Professional services associated with certain legal matters | (0.2 | ) | (0.3 | ) | (0.7 | ) | (0.8 | ) | |||||||
Non-GAAP selling, general and administrative expenses | $ | 138.3 | $ | 181.4 | $ | 272.9 | $ | 370.8 | |||||||
GAAP selling, general and administrative expenses as a percentage of net sales | 13.5 | % | 8.7 | % | 12.8 | % | 8.8 | % | |||||||
Non-GAAP selling, general and administrative expenses as a percentage of net sales | 11.9 | % | 8.0 | % | 11.3 | % | 8.2 | % | |||||||
RECONCILIATION OF GAAP OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Operating expenses, as reported | $ | 521.9 | $ | 642.4 | $ | 1,039.7 | $ | 1,297.7 | |||||||
Share-based compensation expense | (42.0 | ) | (38.0 | ) | (79.4 | ) | (75.7 | ) | |||||||
Cybersecurity incident expenses | (1.3 | ) | — | (1.3 | ) | — | |||||||||
Other adjustments | (2.1 | ) | (0.8 | ) | (3.4 | ) | 0.1 | ||||||||
Professional services associated with certain legal matters | (0.2 | ) | (0.3 | ) | (0.7 | ) | (0.8 | ) | |||||||
Amortization of acquired intangible assets(1) | (122.7 | ) | (151.4 | ) | (245.7 | ) | (302.9 | ) | |||||||
Special charges and other, net | (1.5 | ) | (1.8 | ) | (4.1 | ) | (3.5 | ) | |||||||
Non-GAAP operating expenses | $ | 352.1 | $ | 450.1 | $ | 705.1 | $ | 914.9 | |||||||
GAAP operating expenses as a percentage of net sales | 44.8 | % | 28.5 | % | 43.2 | % | 28.6 | % | |||||||
Non-GAAP operating expenses as a percentage of net sales | 30.3 | % | 20.0 | % | 29.3 | % | 20.1 | % | |||||||
(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, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Operating income, as reported | $ | 146.6 | $ | 885.0 | $ | 365.7 | $ | 1,788.1 | |||||||
Share-based compensation expense | 46.3 | 45.4 | 90.3 | 89.9 | |||||||||||
Cybersecurity incident expenses | 21.4 | — | 21.4 | — | |||||||||||
Other adjustments | 2.1 | 0.8 | 3.4 | (0.1 | ) | ||||||||||
Professional services associated with certain legal matters | 0.2 | 0.3 | 0.7 | 0.8 | |||||||||||
Amortization of acquired intangible assets(1) | 122.7 | 151.4 | 245.7 | 302.9 | |||||||||||
Special charges and other, net | 1.5 | 1.8 | 4.1 | 3.5 | |||||||||||
Non-GAAP operating income | $ | 340.8 | $ | 1,084.7 | $ | 731.3 | $ | 2,185.1 | |||||||
GAAP operating income as a percentage of net sales | 12.6 | % | 39.3 | % | 15.2 | % | 39.4 | % | |||||||
Non-GAAP operating income as a percentage of net sales | 29.3 | % | 48.1 | % | 30.4 | % | 48.1 | % | |||||||
(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, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Other expense, net, as reported | $ | (55.1 | ) | $ | (51.4 | ) | $ | (112.4 | ) | $ | (106.2 | ) | |||
Loss on settlement of debt | — | 3.1 | — | 12.2 | |||||||||||
Loss on available-for-sale investments | 1.8 | — | 1.8 | — | |||||||||||
Non-GAAP other expense, net | $ | (53.3 | ) | $ | (48.3 | ) | $ | (110.6 | ) | $ | (94.0 | ) | |||
GAAP other expense, net, as a percentage of net sales | (4.7) % | (2.3) % | (4.7) % | (2.3) % | |||||||||||
Non-GAAP other expense, net, as a percentage of net sales | (4.6) % | (2.1) % | (4.6) % | (2.1) % | |||||||||||
RECONCILIATION OF GAAP INCOME TAX PROVISION TO NON-GAAP INCOME TAX PROVISION | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Income tax provision as reported | $ | 13.1 | $ | 167.0 | $ | 45.6 | $ | 348.9 | |||||||
Income tax rate, as reported | 14.3 | % | 20.0 | % | 18.0 | % | 20.7 | % | |||||||
Other non-GAAP tax adjustment | 24.2 | (19.9 | ) | 35.0 | (52.4 | ) | |||||||||
Non-GAAP income tax provision | $ | 37.3 | $ | 147.1 | $ | 80.6 | $ | 296.5 | |||||||
Non-GAAP income tax rate | 13.0 | % | 14.2 | % | 13.0 | % | 14.2 | % | |||||||
RECONCILIATION OF GAAP NET INCOME AND GAAP DILUTED NET INCOME 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, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income, as reported | $ | 78.4 | $ | 666.6 | $ | 207.7 | $ | 1,333.0 | |||||||
Share-based compensation expense | 46.3 | 45.4 | 90.3 | 89.9 | |||||||||||
Cybersecurity incident expenses | 21.4 | — | 21.4 | — | |||||||||||
Other adjustments | 2.1 | 0.8 | 3.4 | (0.1 | ) | ||||||||||
Professional services associated with certain legal matters | 0.2 | 0.3 | 0.7 | 0.8 | |||||||||||
Amortization of acquired intangible assets | 122.7 | 151.4 | 245.7 | 302.9 | |||||||||||
Special charges and other, net | 1.5 | 1.8 | 4.1 | 3.5 | |||||||||||
Loss on settlement of debt | — | 3.1 | — | 12.2 | |||||||||||
Loss on available-for-sale investments | 1.8 | — | 1.8 | — | |||||||||||
Other non-GAAP tax adjustment | (24.2 | ) | 19.9 | (35.0 | ) | 52.4 | |||||||||
Non-GAAP net income | $ | 250.2 | $ | 889.3 | $ | 540.1 | $ | 1,794.6 | |||||||
GAAP net income as a percentage of net sales | 6.7 | % | 29.6 | % | 8.6 | % | 29.3 | % | |||||||
Non-GAAP net income as a percentage of net sales | 21.5 | % | 39.4 | % | 22.5 | % | 39.5 | % | |||||||
Diluted net income per common share, as reported | $ | 0.14 | $ | 1.21 | $ | 0.38 | $ | 2.42 | |||||||
Non-GAAP diluted net income per common share | $ | 0.46 | $ | 1.62 | $ | 1.00 | $ | 3.26 | |||||||
Diluted common shares outstanding, as reported | 542.0 | 549.2 | 542.4 | 550.3 | |||||||||||
Diluted common shares outstanding non-GAAP | 542.0 | 549.2 | 542.4 | 550.3 | |||||||||||
RECONCILIATION OF GAAP CASH FLOW FROM OPERATIONS TO FREE CASH FLOW | |||||||||||||||
Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
GAAP cash flow from operations, as reported | $ | 43.6 | $ | 616.2 | $ | 420.7 | $ | 1,609.4 | |||||||
Capital expenditures | (20.8 | ) | (74.4 | ) | (93.7 | ) | (185.5 | ) | |||||||
Free cash flow | $ | 22.8 | $ | 541.8 | $ | 327.0 | $ | 1,423.9 | |||||||
GAAP cash flow from operations as a percentage of net sales | 3.7 | % | 27.3 | % | 17.5 | % | 35.4 | % | |||||||
Free cash flow as a percentage of net sales | 2.0 | % | 24.0 | % | 13.6 | % | 31.3 | % | |||||||
Microchip will host a conference call today, November 5, 2024 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 November 26, 2024.
A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on November 5, 2024 and will remain available until 5:00 p.m. (Eastern Time) on November 26, 2024. Interested parties may listen to the replay by dialing 201-612-7415/877-660-6853 and entering access code 13747161.
Cautionary Statement:
The statements in this release relating to continuing to navigate through an inventory correction, macro weakness for many manufacturing businesses, heightened weakness in our European business, that the green shoots we saw in recent quarters have progressed unevenly, our belief that these are all positive signs for a potential bottom formation despite limited visibility, that we are maintaining strong cost discipline and balance sheet management while taking actions to ensure operational readiness for the anticipated market recovery, that our Total System Solutions approach is driving strong execution and seeing growing adoption in AI-accelerated servers in the data center markets, that our PCIe switches, SSD controllers, CXL solutions, and associated power and timing products are key to continuing to strengthen our data center portfolio, that we believe we are well-positioned to capitalize on opportunities in this growth market, that for the December quarter we expect net sales between
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, 2024 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 116,000 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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