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MACOM (MTSI) Q1 Earnings & Revenues Top Estimates, Rise Y/Y

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MACOM Technology Solutions Holdings, Inc. (MTSI - Free Report) reported first-quarter fiscal 2022 non-GAAP earnings of 64 cents per share, beating the Zacks Consensus Estimate by 3.2%. Further, the bottom line improved 39.1% year over year and 4.9% from the previous quarter.

Revenues of $159.62 million surpassed the Zacks Consensus Estimate of $159.13 million. Moreover, the top line rose 7.5% from the year-ago quarter and 2.8% sequentially.

The company’s strengthening momentum in the telecommunication market contributed well.

Its growing investments are expected to aid it in developing advanced technologies and products, which, in turn, will continue to drive its top-line growth in the days ahead.

Top Line in Detail

Telecom Market: The company generated revenues of $55.8 million (35% of total revenues) from the market, up 20% from the previous quarter.

Data Center Market: The market generated revenues of $30.7 million (19% of total revenues), down 8.4% from the prior quarter.

Industrial & Defense Market: MACOM generated revenues of $73.1 million (46% of total revenues) from the market, which declined 2.7% sequentially.

Operating Details

In first-quarter fiscal 2022, the non-GAAP gross margin was 61.4%, which expanded 390 basis points (bps) year over year.

In the reported quarter, non-GAAP operating expenses were $49 million, which increased 2.9% year over year. As a percentage of revenues, the figure contracted 140 bps to 30.7%.

Consequently, the company’s non-GAAP operating margin was 30.7%, which expanded 530 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Dec 31, 2021, cash equivalents and short-term investments were $477.7 million, up from $344.9 million as of Oct 1, 2021. Inventories were $88.5 million, up from $82.7 million in the last reported quarter.

Long-term debt obligations, excluding the current portion, were $564.7 million in the reported quarter compared with $492.1 million in the previous quarter.

Cash generated from operations was $34.1 million, down from $40.8 million in the last reported quarter.

The company’s free cash flow in the reported quarter was $29.02 million.

Guidance

For second-quarter fiscal 2022, MACOM expects revenues between $161 million and $165 million. The Zacks Consensus Estimate for the same is pegged at $162.7 million.

The company’s adjusted earnings per share are anticipated to be 64-68 cents. The Zacks Consensus Estimate for the same is pegged at 63 cents.

The non-GAAP gross margin is anticipated to be 60-62%.

Zacks Rank & Stocks to Consider

Currently, MACOM has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are AMETEK (AME - Free Report) , Advanced Micro Devices (AMD - Free Report) and Mimecast , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMETEK is scheduled to release fourth-quarter 2021 results on Feb 3. It has gained 16.2% over a year. The long-term earnings growth rate for AME is currently projected at 10.4%.

Advanced Micro Devices is slated to report fourth-quarter 2021 results on Feb 1. It has gained 26.5% over a year. The long-term earnings growth rate for AMD is currently projected at 46.2%.

Mimecast is slated to report third-quarter fiscal 2022 results on Feb 3. It has gained 83.4% over a year. The long-term earnings growth rate for MIME is currently projected at 35%.


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