MACOM Technology Solutions Holdings, Inc. Aktienkurs
Vergleich mit Peer Group
📊 Peer Group
📈 Was ist das?
Die Peer Group sind die Unternehmen mit dem ähnlichsten Geschäftsmodell. Sie dienen als Vergleichsmaßstab, um eine Aktie einzuordnen.
🧮 Wie wird sie ausgewählt?
Nach Ähnlichkeit des Geschäftsmodells, also Unternehmen aus derselben Branche, mit vergleichbaren Produkten und einer ähnlichen Kundengruppe. Nur so vergleichst du Äpfel mit Äpfeln.
🏛️ Wofür ist sie wichtig?
Ob eine Aktie günstig oder teuer ist, lässt sich am ehesten im Vergleich beurteilen. Ein KGV von 18 oder ein EV/FCF von 20 wirkt je nach Maßstab günstig oder teuer. Die Peer Group liefert dabei den treffsichersten Maßstab: Unternehmen mit ähnlichem Geschäftsmodell, die denselben Bedingungen unterliegen.
🎯 Was bedeutet das für Anleger?
Liegt eine Kennzahl unter dem Peer-Durchschnitt, ist die Aktie relativ günstiger bewertet, über dem Durchschnitt entsprechend teurer. Ein Abschlag zur Peer Group kann eine Chance sein, aber auch einen Grund haben (zum Beispiel geringeres Wachstum). Der Vergleich ist ein Startpunkt, kein Urteil.
Ist MACOM Technology Solutions Holdings, Inc. eine Topscorer-Aktie nach der Dividenden-, High-Growth-Investing- oder Levermann-Strategie?
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📘 Marktkapitalisierung
📈 Was ist das?
Die Marktkapitalisierung zeigt, wie viel ein Unternehmen laut Börse aktuell wert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft Unternehmen in Größenklassen (Large, Mid, Small Cap) einzuordnen und gibt Hinweise auf Marktmacht und Stabilität.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Große Unternehmen gelten als stabiler, zahlen oft Dividenden, wachsen aber langsamer.
- Kleine Firmen können stärker wachsen, sind aber schwankungsanfälliger.
- Die Marktkapitalisierung ist ein guter Indikator für Unternehmensgröße, aber kein Maß für Unter- oder Überbewertung.
📘 Enterprise Value (Unternehmenswert)
📈 Was ist das?
Der Enterprise Value (EV) zeigt, was ein Unternehmen tatsächlich kostet, wenn man es komplett übernehmen würde – inklusive Schulden und abzüglich Cash.
🧮 Wie wird es berechnet?
(= Marktkapitalisierung + Nettoverschuldung)
🏛️ Wofür ist es wichtig?
Der EV ist eine realistischere Bewertungsbasis als die Marktkapitalisierung, da er die Kapitalstruktur berücksichtigt. Er ist Grundlage für Kennzahlen wie EV/FCF oder EV/Sales.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Der Enterprise Value zeigt, was ein Unternehmen tatsächlich wert ist – unabhängig davon, wie es finanziert ist.
- Er ist besonders wichtig für professionelle Investoren, da er eine objektivere Grundlage für Bewertungsvergleiche bietet als die Marktkapitalisierung allein.
- Ein Unternehmen mit hoher Verschuldung erscheint im EV teurer, eines mit viel Cash günstiger – auch wenn sie an der Börse gleich viel wert sind.
📘 Nettoverschuldung
📈 Was ist das?
Die Nettoverschuldung zeigt, wie viele Schulden nach Abzug des verfügbaren Cashs tatsächlich verbleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie zeigt, wie stark ein Unternehmen von Fremdkapital abhängig ist – und wie gut es in der Lage ist, seine Schulden kurzfristig zu bedienen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine niedrige oder negative Nettoverschuldung bedeutet hohe finanzielle Stabilität.
- Unternehmen mit viel Cash und geringer Verschuldung sind besser gerüstet für Krisen.
- Eine hohe Nettoverschuldung erhöht das Risiko – besonders bei steigenden Zinsen oder konjunkturellen Schwächen.
📘 Cash
📈 Was ist das?
Der Cashbestand zeigt, wie viele liquide Mittel einem Unternehmen sofort zur Verfügung stehen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Er gibt Auskunft über die finanzielle Flexibilität: Ein hoher Cashbestand ermöglicht Investitionen, Rückkäufe oder Krisenresistenz.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Cashbestand zeigt finanzielle Stärke und Handlungsspielraum.
- Cash kann für Investitionen, Schuldentilgung oder Aktienrückkäufe genutzt werden.
- Allerdings: Zu viel ungenutztes Kapital kann auch auf mangelnde Investitionsideen hinweisen.
📘 Anzahl ausstehender Aktien
📈 Was ist das?
Die Anzahl ausstehender Aktien gibt an, wie viele Aktien eines Unternehmens aktuell im Umlauf sind und von Investoren gehalten werden.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie ist die Grundlage für viele Kennzahlen wie Gewinn je Aktie (EPS), Marktkapitalisierung oder KGV.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Je weniger Aktien im Umlauf sind, desto höher fällt z. B. der Gewinn je Aktie aus – wichtig für Bewertung und Dividendenrendite.
- Aktienrückkäufe verringern die Anzahl ausstehender Aktien – und steigern den Wert je Aktie.
- Kapitalerhöhungen haben den gegenteiligen Effekt: mehr Aktien → Verwässerung der bestehenden Anteile.
📘 Kurs-Gewinn-Verhältnis (KGV)
📈 Was ist das?
Das KGV zeigt, wie oft der Gewinn pro Aktie im aktuellen Aktienkurs enthalten ist – also wie „teuer“ eine Aktie im Verhältnis zum Gewinn ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KGV gehört zu den bekanntesten Bewertungskennzahlen. Es hilft Anlegern einzuschätzen, ob eine Aktie im Vergleich zu ihrem Gewinn eher günstig oder teuer erscheint.
🧮 Berechnung
📊 KGV (TTM) = bezogen auf den Gewinn der letzten 12 Monate (Trailing Twelve Months):🎯 Was bedeutet das für Anleger?
- Ein niedriges KGV kann auf eine günstige Bewertung hindeuten – oder auf Probleme im Geschäftsmodell.
- Ein hohes KGV kann Wachstumserwartungen widerspiegeln – oder eine überbewertete Aktie.
📘 Kurs-Umsatz-Verhältnis (KUV)
📈 Was ist das?
Das KUV zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen – unabhängig vom Gewinn.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KUV ist besonders bei wachstumsstarken oder noch nicht profitablen Unternehmen hilfreich. Es zeigt, wie hoch der Umsatz an der Börse bewertet wird.
🧮 Berechnung
Marktkapitalisierung = 20,10 Mrd. $ | Umsatz (TTM) = 1,16 Mrd. $
Marktkapitalisierung = 20,10 Mrd. $ | Umsatz erwartet = 1,34 Mrd. $
🎯 Was bedeutet das für Anleger?
- Ein niedriges KUV kann auf Unterbewertung hindeuten – oder auf schwache Margen.
- Ein hohes KUV kann hohe Erwartungen widerspiegeln – oder übermäßigen Optimismus.
- Besonders sinnvoll bei Wachstumsunternehmen, bei denen der Gewinn oder Free Cashflow (noch) keine Aussagekraft hat.
📘 Unternehmenswert zu Umsatz (EV/Sales)
📈 Was ist das?
EV/Sales zeigt, wie viel Anleger für 1 € Umsatz eines Unternehmens zahlen, wenn man auch Schulden und Cash berücksichtigt – es ist eine kapitalstrukturbereinigte Version des KUV.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl eignet sich besonders für den Vergleich von Unternehmen mit unterschiedlicher Verschuldung – sie zeigt, wie teuer ein Unternehmen tatsächlich im Verhältnis zum Umsatz ist.
🧮 Berechnung
Enterprise Value = 19,84 Mrd. $ | Umsatz (TTM) = 1,16 Mrd. $
Enterprise Value = 19,84 Mrd. $ | Umsatz erwartet = 1,34 Mrd. $
🎯 Was bedeutet das für Anleger?
- EV/Sales ist neutral gegenüber der Kapitalstruktur und eignet sich gut für Unternehmensvergleiche.
- Ein niedriges Verhältnis kann auf eine günstig bewertete Aktie hindeuten – ein hohes Verhältnis auf hohe Erwartungen oder Überbewertung.
- Besonders nützlich bei wachstumsstarken, noch nicht profitablen Firmen.
📘 Unternehmenswert zu Free Cashflow (EV/FCF)
📈 Was ist das?
EV/FCF zeigt, wie viele Jahre es dauern würde, bis ein Unternehmen seinen Unternehmenswert durch freien Cashflow „zurückverdient”.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Unternehmen auf Basis ihrer tatsächlichen Cash-Erträge zu bewerten – unabhängig von Bilanzierungsregeln oder buchhalterischem Gewinn.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriges EV/FCF deutet auf eine günstige Bewertung bei starker Cashgenerierung hin.
- Ein hohes EV/FCF kann entweder auf Optimismus oder auf temporär schwachen Cashflow hindeuten.
- Besonders hilfreich bei reifen, profitablen Unternehmen mit stabilen Cashflows.
📘 Kurs-Buchwert-Verhältnis (KBV)
📈 Was ist das?
Das KBV zeigt, wie hoch der Marktwert eines Unternehmens im Verhältnis zu seinem bilanziellen Eigenkapital ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Das KBV ist besonders bei Substanzwerten (z. B. Banken, Industrie) relevant. Es hilft Anlegern zu erkennen, ob ein Unternehmen unter oder über seinem buchhalterischen Vermögen bewertet ist.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein KBV unter 1 kann auf Unterbewertung oder schwache Rentabilität hindeuten.
- Ein KBV über 1 zeigt, dass der Markt dem Unternehmen Mehrwert über den Buchwert hinaus zuschreibt (z. B. Marken, Patente, Wachstum).
- Das KBV eignet sich besonders gut für Unternehmen mit stabilen, materiellen Vermögenswerten.
📘 Eigenkapitalquote
📈 Was ist das?
Die Eigenkapitalquote zeigt, wie hoch der Anteil des Eigenkapitals an der Bilanzsumme eines Unternehmens ist – also wie stark es sich aus eigenen Mitteln finanziert.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Eine hohe Eigenkapitalquote steht für finanzielle Stabilität, Krisenfestigkeit und gute Bonität. Sie ist besonders relevant bei der Beurteilung der Verschuldung.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalquote signalisiert finanzielle Stabilität – besonders in Krisenzeiten.
- Ein niedriger Wert kann auf ein höheres Risiko oder eine aggressive Verschuldung hinweisen.
- Wichtig: Die Eigenkapitalquote sollte immer gemeinsam mit der Eigenkapitalrendite betrachtet werden. Nur so lässt sich beurteilen, ob ein Unternehmen nicht nur solide, sondern auch effizient wirtschaftet.
📘 Eigenkapitalrendite (ROE)
📈 Was ist das?
Die Eigenkapitalrendite zeigt, wie effizient ein Unternehmen mit dem Kapital seiner Aktionäre arbeitet – also wie viel Gewinn es pro Euro Eigenkapital erwirtschaftet.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Eigenkapitalrendite ist eine zentrale Rentabilitätskennzahl. Sie hilft Anlegern zu erkennen, ob das Unternehmen eine attraktive Verzinsung auf das eingesetzte Eigenkapital erwirtschaftet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Eigenkapitalrendite spricht für ein starkes, effizientes Geschäftsmodell.
- Besonders interessant ist sie bei kapitalintensiven Firmen oder solchen mit hoher Eigenkapitalquote.
- Wichtig: Ein sehr hoher ROE kann auch auf hohe Schulden hinweisen – daher sollte sie immer im Kontext mit der Eigenkapitalquote betrachtet werden.
📘 Return on Capital Employed (ROCE)
📈 Was ist das?
ROCE misst die Gesamtrentabilität eines Unternehmens – also wie effizient es das eingesetzte Kapital (Eigen- und Fremdkapital) zur Gewinnerzielung nutzt.
🧮 Wie wird es berechnet?
Das eingesetzte Kapital ist das gesamte betriebsnotwendige Kapital, unabhängig von der Finanzierungsquelle.
🏛️ Wofür ist es wichtig?
ROCE eignet sich besonders gut für den Vergleich unterschiedlich finanzierter Unternehmen. Es zeigt, wie effektiv ein Unternehmen Kapital investiert – unabhängig von der Kapitalstruktur.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROCE zeigt, dass ein Unternehmen sein Kapital effizient einsetzt – unabhängig davon, ob es durch Eigen- oder Fremdkapital finanziert ist.
- Je höher der ROCE im Vergleich zu ähnlichen Unternehmen, desto mehr Wert schafft das Unternehmen mit seinem investierten Kapital.
- Besonders wichtig ist der ROCE bei Firmen mit hohen Investitionen – z. B. in Industrie, Energie oder Infrastruktur.
📘 Return on Invested Capital (ROIC)
📈 Was ist das?
ROIC zeigt, wie effizient ein Unternehmen das Kapital investiert, das langfristig im operativen Geschäft gebunden ist – unabhängig davon, ob es aus Eigen- oder Fremdkapital stammt.
🧮 Wie wird es berechnet?
- NOPAT = „Net Operating Profit After Taxes“
- Investiertes Kapital = operatives Vermögen abzüglich nicht-verzinster Schulden
🏛️ Wofür ist es wichtig?
ROIC ist eine der präzisesten Kennzahlen zur Bewertung der Kapitalrendite – besonders im Vergleich zur Eigenkapitalrendite, weil es Verzerrungen durch Schulden vermeidet. Er zeigt, ob ein Unternehmen Mehrwert für alle Kapitalgeber schafft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher ROIC zeigt, wie gut ein Unternehmen mit dem tatsächlich investierten (betriebsnotwendigen) Kapital wirtschaftet.
- Im Unterschied zu ROCE wird nur Kapital betrachtet, das wirklich zur Finanzierung operativer Aktivitäten dient – und verzinst werden muss.
- Besonders hilfreich, um die Kapitalrendite von Unternehmen mit viel „überschüssigem“ Kapital oder zinsfreien Verbindlichkeiten realistisch zu vergleichen.
📘 Verschuldungsgrad (Leverage Ratio)
📈 Was ist das?
Der Verschuldungsgrad zeigt, wie stark ein Unternehmen durch verzinsliche Schulden (z. B. Kredite und Anleihen) im Verhältnis zum Eigenkapital finanziert ist.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Kennzahl hilft, das finanzielle Risiko und die Abhängigkeit von Fremdkapital zu beurteilen. Ein hoher Verschuldungsgrad kann die Eigenkapitalrendite steigern – birgt aber auch erhöhte Risiken bei Zinsanstiegen oder Liquiditätsengpässen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Verschuldungsgrad steht für finanzielle Stabilität und Unabhängigkeit.
- Ein hoher Wert kann auf erhöhte Risiken hinweisen – insbesondere bei schwankenden Zinsen oder konjunkturellen Schwächen.
- Wichtig: Immer im Kontext zur Branche und Kapitalintensität bewerten.
📘 Umsatz
📈 Was ist das?
Der Umsatz zeigt, wie viel ein Unternehmen insgesamt mit seinen Produkten und Dienstleistungen verdient – also den Bruttoerlös vor Abzug von Kosten.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Umsatz ist eine der zentralen Kennzahlen zur Einschätzung der Unternehmensgröße, Marktstellung und Wachstumskraft.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein wachsender Umsatz zeigt eine steigende Nachfrage und kann ein guter Frühindikator für Gewinnsteigerungen sein.
- Vergleiche von aktuellem und erwartetem Umsatz geben Hinweise auf das Marktumfeld und Analystenerwartungen.
- Wichtig: Starker Umsatz allein genügt nicht – auch Margen und Profitabilität zählen.
📘 EBITDA
📈 Was ist das?
EBITDA steht für „Earnings Before Interest, Taxes, Depreciation and Amortization“ – also Gewinn vor Zinsen, Steuern und Abschreibungen. Es zeigt das operative Ergebnis eines Unternehmens, bereinigt um bilanztechnische und finanzierungsbedingte Effekte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBITDA ist eine verbreitete Kennzahl zur Beurteilung der operativen Leistungsfähigkeit – insbesondere bei kapitalintensiven Unternehmen oder im internationalen Vergleich.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes oder wachsendes EBITDA spricht für starke operative Erträge – unabhängig von Bilanzierung oder Steuerlast.
- EBITDA ist besonders nützlich, um Unternehmen branchenübergreifend zu vergleichen.
- Wichtig: EBITDA ist keine offizielle Gewinnkennzahl – Abschreibungen und Finanzierungskosten werden ausgeklammert.
📘 EBIT
📈 Was ist das?
EBIT steht für „Earnings Before Interest and Taxes“ – also Gewinn vor Zinsen und Steuern. Es zeigt das operative Ergebnis eines Unternehmens nach Abschreibungen, aber vor Finanzierungs- und Steueraufwand.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
EBIT ist eine zentrale Kennzahl zur Beurteilung der Profitabilität aus dem Kerngeschäft – unabhängig von Kapitalstruktur oder Steuersystem.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hohes EBIT deutet auf ein profitables Kerngeschäft hin – vor Zinslasten oder steuerlichen Effekten.
- Es erlaubt objektivere Vergleiche zwischen Unternehmen mit unterschiedlicher Finanzierung.
- Im Vergleich mit EBITDA zeigt EBIT bereits den Einfluss von Abschreibungen auf das operative Ergebnis.
📘 Nettogewinn
📈 Was ist das?
Der Nettogewinn ist der verbleibende Jahresüberschuss (oder -fehlbetrag) eines Unternehmens – nach Abzug aller Kosten, Steuern, Zinsen und Abschreibungen
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der Nettogewinn ist die zentrale Erfolgskennzahl – er zeigt, wie profitabel ein Unternehmen nach allen Kosten tatsächlich arbeitet.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein steigender Nettogewinn zeigt, dass das Unternehmen effizient wirtschaftet – trotz aller Kosten.
- Die Entwicklung des Gewinns beeinflusst z. B. direkt das KGV und weitere Kennzahlen.
- Im Zeitverlauf lässt sich ablesen, wie stabil und profitabel ein Geschäftsmodell wirklich ist.
📘 Free Cashflow (FCF)
📈 Was ist das?
Der Free Cashflow gibt Aufschluss über die echte finanzielle Stärke eines Unternehmens – unabhängig von Bilanzierungsregeln. Er zeigt, wie viel Spielraum für Dividenden, Aktienrückkäufe oder Schuldenabbau besteht.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow bedeutet, dass ein Unternehmen echte Finanzkraft besitzt – unabhängig vom bilanzierten Gewinn.
- Er ist oft die solideste Grundlage für nachhaltige Dividenden und Aktienrückkäufe.
- Sinkender FCF kann ein Warnsignal sein – auch wenn der Gewinn stabil aussieht.
📘 Umsatzwachstum
📈 Was ist das?
Das Umsatzwachstum zeigt, wie stark sich die Erlöse eines Unternehmens im Vergleich zum Vorjahr verändert haben – tatsächlich (TTM) und auf Prognosebasis (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (Umsatz erwartet ÷ Umsatz Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein wachsender Umsatz ist ein zentrales Signal für steigende Nachfrage, Geschäftsausweitung und Marktanteilsgewinne – besonders bei Wachstumsunternehmen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachstum ist der Motor langfristiger Wertsteigerung – besonders bei Technologie- und Wachstumsaktien.
- Wichtig ist nicht nur das aktuelle Wachstum, sondern auch dessen Nachhaltigkeit.
- Prognosen zeigen, ob Analysten weiteres Potenzial erwarten – oder eine Verlangsamung.
📘 EBITDA-Wachstum
📈 Was ist das?
Das EBITDA-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens vor Zinsen, Steuern und Abschreibungen im Vergleich zum Vorjahr gestiegen oder gesunken ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBITDA ÷ EBITDA Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Ein steigendes EBITDA ist ein Zeichen für verbesserte operative Ertragskraft – unabhängig von Finanzierungsstruktur oder Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Starkes EBITDA-Wachstum signalisiert operative Effizienz und Skalierung – besonders relevant in Wachstumsphasen.
- EBITDA-Wachstum ist ein Frühindikator für Margen- und Gewinnentwicklung – sollte aber stets im Zusammenhang mit Umsatz und EBIT betrachtet werden.
📘 EBIT Wachstum
📈 Was ist das?
Das EBIT-Wachstum zeigt, wie stark das operative Ergebnis eines Unternehmens (nach Abschreibungen, aber vor Zinsen und Steuern) im Vergleich zum Vorjahr gewachsen ist.
🧮 Wie wird es berechnet?
Erwartet = (erwartetes EBIT ÷ EBIT Vorjahr − 1) × 100
Erwartetes Wachstum basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Das EBIT-Wachstum ist ein direkter Indikator für die wirtschaftliche Entwicklung des operativen Geschäfts – unter Berücksichtigung der Kapitalintensität (Abschreibungen).
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Steigendes EBIT signalisiert wachsende operative Rentabilität – auch unter Berücksichtigung von Abschreibungen.
- Das EBIT-Wachstum ist ein wichtiges Maß zur Beurteilung von Geschäftsmodellen mit hohen Investitionskosten.
- Im Zusammenspiel mit Umsatz- und EBITDA-Wachstum ergibt sich ein umfassendes Bild zur operativen Entwicklung.
📘 Nettogewinn-Wachstum
📈 Was ist das?
Das Nettogewinn-Wachstum zeigt, wie stark der Jahresüberschuss eines Unternehmens gegenüber dem Vorjahr gestiegen oder gesunken ist – sowohl tatsächlich (TTM) als auch auf Basis von Prognosen (erwartet).
🧮 Wie wird es berechnet?
Erwartet = (erwarteter Nettogewinn ÷ Nettogewinn Vorjahr − 1) × 100
Der erwartete Wert basiert auf Analystenschätzungen für das laufende Geschäftsjahr.
🏛️ Wofür ist es wichtig?
Der Gewinn ist die entscheidende Ergebnisgröße für ein Unternehmen. Ein wachsender Nettogewinn deutet auf steigende Effizienz, stabile Kostenkontrolle und nachhaltige Ertragskraft hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Wachsender Nettogewinn stärkt die Bewertung, Dividendenfähigkeit und Kursfantasie.
- Stagnierender oder rückläufiger Gewinn trotz Umsatzwachstum kann auf Margendruck hinweisen.
📘 Free Cashflow-Wachstum
📈 Was ist das?
Das Free-Cashflow-Wachstum zeigt, wie sich der freie Mittelzufluss eines Unternehmens im Vergleich zum Vorjahr verändert hat – also der Betrag, der nach allen operativen Ausgaben und Investitionen übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Free Cashflow ist der echte, verfügbare Geldzufluss. Wachstum in diesem Bereich ist ein Zeichen für finanzielle Stärke und steigende Flexibilität bei Dividenden, Rückkäufen oder Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Sinkender Free Cashflow kann auf steigende Investitionen, höhere Kosten oder stagnierende operative Erträge hindeuten.
- Besonders bei Dividendenwerten ist das FCF-Wachstum wichtig – denn Dividenden werden letztlich aus dem verfügbaren Cash gezahlt.
- Ein negativer Trend sollte genauer analysiert werden – er ist nicht zwangsläufig schlecht, aber potenziell ein Warnsignal.
📘 Bruttomarge
📈 Was ist das?
Die Bruttomarge zeigt, wie viel vom Umsatz nach Abzug der direkten Herstellungskosten (Material, Produktion) als Bruttogewinn übrig bleibt – also der „Rohgewinn“ eines Unternehmens.
🧮 Wie wird es berechnet?
Auch: Bruttomarge = Bruttogewinn ÷ Umsatz × 100
🏛️ Wofür ist es wichtig?
Die Bruttomarge gibt Aufschluss über die Profitabilität eines Produkts oder Geschäftsmodells vor Fixkosten, Steuern und Zinsen. Sie zeigt, wie effizient ein Unternehmen produzieren oder einkaufen kann.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Bruttomarge deutet auf starke Preissetzungsmacht und effiziente Herstellung hin.
- Sinkende Bruttomargen können auf Kostensteigerungen oder Preisdruck hindeuten.
- Besonders im Vergleich zu Wettbewerbern liefert die Bruttomarge wertvolle Einblicke in die Geschäftsqualität.
📘 EBITDA-Marge
📈 Was ist das?
Die EBITDA-Marge zeigt, wie viel vom Umsatz als operativer Gewinn vor Zinsen, Steuern und Abschreibungen (EBITDA) übrig bleibt. Sie misst die operative Effizienz – ohne Verzerrungen durch Finanzierung oder Buchwerte.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBITDA-Marge hilft zu verstehen, wie viel operativer Gewinn ein Unternehmen aus jedem Euro Umsatz erzielt – unabhängig von Kapitalstruktur oder steuerlichem Umfeld.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBITDA-Marge zeigt starke operative Ertragskraft – unabhängig von Bilanzierungseffekten.
- Die Marge ermöglicht gute Vergleiche zwischen Unternehmen und Branchen.
- Ein stabiler oder wachsender Wert kann auf effiziente Kostenkontrolle und Skalierbarkeit hindeuten.
📘 EBIT-Marge
📈 Was ist das?
Die EBIT-Marge zeigt, wie viel Prozent des Umsatzes als operativer Gewinn nach Abschreibungen, aber vor Zinsen und Steuern übrig bleiben.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die EBIT-Marge misst die operative Ertragskraft eines Unternehmens unter Berücksichtigung der Kapitalintensität (z. B. Maschinen, Anlagen). Sie eignet sich gut zum Vergleich von Geschäftsmodellen mit unterschiedlich hohen Abschreibungen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe EBIT-Marge zeigt, dass ein Unternehmen auch nach Abschreibungen effizient arbeitet.
- Sie ist besonders relevant in kapitalintensiven Branchen.
- Langfristig stabile oder steigende Margen sind ein Zeichen wirtschaftlicher Stärke und Preissetzungsmacht.
📘 Nettomarge
📈 Was ist das?
Die Nettomarge zeigt, wie viel vom Umsatz am Ende als „Reingewinn“ übrig bleibt – also nach Abzug aller Kosten, Zinsen, Steuern und Abschreibungen.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Die Nettomarge gibt an, wie effizient ein Unternehmen über alle Stufen hinweg wirtschaftet. Sie zeigt, wie viel Gewinn tatsächlich je Euro Umsatz übrig bleibt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Nettomarge zeigt, dass ein Unternehmen nicht nur operativ stark ist, sondern auch seine Finanzierung und Steuerbelastung im Griff hat.
- Vergleiche mit Wettbewerbern geben Einblicke in die wirtschaftliche Qualität.
- Sinkende Nettomargen trotz Umsatzwachstum können ein Warnsignal sein – etwa für steigende Kosten oder sinkende Effizienz.
📘 Free Cashflow Marge
📈 Was ist das?
Die Free-Cashflow-Marge zeigt, wie viel vom Umsatz nach Abzug aller operativen Ausgaben und Investitionen tatsächlich als freier Mittelzufluss übrig bleibt.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Diese Marge misst die echte Liquidität, die ein Unternehmen erwirtschaftet – unabhängig von Bilanzierungsregeln oder Abschreibungen. Sie ist besonders relevant für Dividenden, Rückkäufe und Investitionen.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Eine hohe Free-Cashflow-Marge zeigt, dass ein Unternehmen nachhaltig liquide Mittel erwirtschaftet.
- Sie ist ein starkes Signal für finanzielle Stabilität und Ausschüttungspotenzial.
- Wichtig ist der langfristige Trend – sinkende Werte können auf steigende Investitionen oder rückläufige operative Effizienz hindeuten.
📘 Ergebnis je Aktie (EPS)
📈 Was ist das?
Das Ergebnis je Aktie (EPS) zeigt, wie viel Gewinn auf eine einzelne Aktie entfällt – und ist eine der wichtigsten Kennzahlen zur Bewertung von Unternehmen.
🧮 Wie wird es berechnet?
Die verwässerte Aktienanzahl berücksichtigt auch potenzielle neue Aktien, etwa durch Optionen, Wandelanleihen oder andere Umtauschrechte.
🏛️ Wofür ist es wichtig?
EPS bildet die Basis für viele Bewertungskennzahlen wie KGV, PEG oder Payout Ratio. Es macht den Gewinn für Aktionäre vergleichbar – unabhängig von der Unternehmensgröße.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- EPS hilft, die Profitabilität pro Aktie zu erfassen – und ist besonders wichtig im Zeitvergleich oder im Vergleich mit Analystenschätzungen.
- Steigendes EPS kann ein Zeichen für stabiles Wachstum oder Aktienrückkäufe sein.
- Wichtig: Verwende verwässertes EPS für realistische Bewertungen – besonders bei stark aktienbasierten Vergütungssystemen.
📘 Free Cashflow je Aktie (FCF je Aktie)
📈 Was ist das?
Der Free Cashflow je Aktie zeigt, wie viel freier Mittelzufluss einem Unternehmen pro Aktie zur Verfügung steht – nach Investitionen, aber vor Dividenden oder Schuldentilgung.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Der FCF je Aktie zeigt, wie viel liquide Mittel pro Aktie tatsächlich im Unternehmen verbleiben – wichtig für Dividenden, Aktienrückkäufe oder Schuldentilgung. Im Gegensatz zum Gewinn ist er schwerer manipulierbar und daher besonders aussagekräftig.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Free Cashflow je Aktie ist ein Zeichen für hohe finanzielle Flexibilität.
- Er zeigt, wie viel Kapital ein Unternehmen effektiv einsetzen oder ausschütten kann.
- Besonders relevant für dividendenstarke Unternehmen oder solche mit starker Kapitalrendite.
📘 Short Interest
📈 Was ist das?
Short Interest zeigt, wie viele Aktien eines Unternehmens aktuell leerverkauft wurden – also von Investoren geliehen und verkauft, in der Erwartung fallender Kurse.
🧮 Wie wird es berechnet?
Der Wert zeigt den Anteil der Aktien, der aktuell auf fallende Kurse spekuliert wird.
🏛️ Wofür ist es wichtig?
Short Interest dient als Stimmungsindikator: Ein hoher Wert deutet auf Skepsis oder negative Erwartungen gegenüber dem Unternehmen hin – kann aber auch zu einem „Short Squeeze“ führen, wenn der Kurs plötzlich steigt.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein niedriger Short Interest deutet auf Vertrauen in das Unternehmen hin.
- Ein hoher Wert kann ein Warnsignal sein – oder eine Chance, wenn sich die Stimmung dreht.
- Besonders spannend in volatilen Märkten oder vor wichtigen Quartalszahlen.
📘 Employees
📈 Was ist das?
Die Mitarbeiteranzahl zeigt, wie viele Personen ein Unternehmen weltweit beschäftigt – ein Indikator für Größe, Struktur und Geschäftsmodell.
🧮 Wie wird es berechnet?
🏛️ Wofür ist es wichtig?
Sie hilft bei der Einschätzung von Skaleneffekten, Effizienz und Personalkosten. Zusammen mit Umsatz und Gewinn lassen sich Kennzahlen wie Produktivität je Mitarbeiter ableiten.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Viele Mitarbeiter bedeuten große operative Komplexität – aber auch hohes Umsatzpotenzial.
- Produktivität je Mitarbeiter ist ein wichtiger Indikator für Effizienz.
- Besonders spannend bei stark wachsenden Tech- oder Industrieunternehmen.
📘 Umsatz je Mitarbeiter
📈 Was ist das?
Der Umsatz je Mitarbeiter zeigt, wie viel Erlös ein Unternehmen durchschnittlich pro Beschäftigtem erwirtschaftet – eine Kennzahl für Effizienz und Produktivität.
🧮 Wie wird es berechnet?
Die Mitarbeiterzahl stammt in der Regel aus dem letzten verfügbaren Jahresbericht.
🏛️ Wofür ist es wichtig?
Diese Kennzahl hilft, Geschäftsmodelle zu vergleichen – insbesondere zwischen arbeitsintensiven und technologiegetriebenen Unternehmen. Ein hoher Wert deutet auf Automatisierung, Effizienz oder hohen Wertschöpfungsanteil hin.
🧮 Berechnung
🎯 Was bedeutet das für Anleger?
- Ein hoher Umsatz je Mitarbeiter spricht für ein skalierbares und margenstarkes Geschäftsmodell.
- Ein niedriger Wert kann auf arbeitsintensive Prozesse oder geringere Wertschöpfung hinweisen.
- Besonders hilfreich beim Vergleich von Tech- vs. Industrieunternehmen.
MACOM Technology Solutions Holdings, Inc. Aktie Analyse
Analystenmeinungen
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Analystenmeinungen
24 Analysten haben eine MACOM Technology Solutions Holdings, Inc. Prognose abgegeben:
MACOM Technology Solutions Holdings, Inc. Events
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MACOM Technology Solutions Holdings, Inc. — Q3 2026 Earnings Call
1. Management Discussion
Welcome to MACOM's Third Fiscal Quarter 2026 Conference Call. This call is being recorded today, Thursday, August 6, 2026. [Operator Instructions] I will now turn the call to Ms. Steve Ferranti, MACOM's Senior Vice President of Corporate Development and Investor Relations. Mr. Ferranti, please go ahead.
Thank you, Olivia. Good morning, and welcome to our call to discuss MACOM's financial results for the third fiscal quarter of 2026.
I would like to remind everyone that our discussion today will contain forward-looking statements, which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. For a more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC.
Management's statements during this call will also include a discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today.
With that, I'll turn over the call to Steve Daly, President and CEO of MACOM.
Thank you, and good morning. I will begin today's call with a general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q3 results for fiscal year 2026. When Jack is finished, I will provide revenue and earnings guidance for the fourth quarter of FY '26, and then we will be happy to take some questions.
Revenue for the third quarter of fiscal 2026 was $342.2 million and adjusted EPS was $1.40 per diluted share. Demand for our products is strong across our three end markets, and our backlog continues to build. Our sequential financial performance improved across most key metrics in Q3, including gross and operating margins. Our Q3 book-to-bill ratio was a record 1.6:1, and orders booked and shipped within the quarter were 11% of total revenue. All three end markets had exceptional bookings with notable out-performance in the Data Center. Our record backlog reflects market strength as well as our progress that we are making to expand our product portfolio and better address our customer needs.
We are pleased with the customer order trends. Our strategy of strengthening our core technologies and expanding our product portfolio around three central themes: highest power, highest frequency and highest data rate is proving to be effective. We believe the breadth in our technology and product portfolio, coupled with our unique manufacturing capabilities enable a strong and durable business model. MACOM is well positioned in three large markets, namely Data Center, Industrial and Defense and Telecom. In total, these markets contain thousands of potential customers with a combined SAM that we now estimate to be in the range of $15 billion in 2027.
To address the large SAM opportunity, we have been and will continue to invest in R&D and expand our engineering and manufacturing teams. We continue to align and expand our engagements with customers that are industry leaders. 2 years ago, we had approximately 8 customers with $10 million in revenue. Today, we have over 20 customers above $10 million and a few in the range of $50 million to $100 million. While we are growing revenue by over 30% per year, our year-to-date top 10 end-customers still represent less than 40% of our total revenue. Our customer base continues to grow and remain diversified.
Now turning to recent market trends. Q3 revenue performance by end market was as expected, with all end markets growing sequentially. Data Center revenue was $137.6 million, Industrial and Defense was $133.4 million and Telecom was $71.3 million. Data Center increased approximately 40% sequentially, I&D increased 11% sequentially and Telecom increased 2% sequentially. Both Data Center and I&D revenues are at record levels.
Next, I'll take a moment to review each of our three core markets in more detail, starting with the Data Center. Our Data Center business is growing due to increased demand for high-speed connectivity using our 800G and 1.6T PAM4 products. As a reminder, our portfolio is highly diversified, supporting NRZ, PAM4 and coherent modulations across EML, silicon photonics and VCSEL-based architectures. Our connectivity solutions include IC and photonic semiconductors with the photonic products being produced in our internal fabs. We see multiple trends in the industry, including the proliferation of optical links as hyperscalers are moving from passive copper to fiber connectivity in scale-up applications. This trend represents a large SAM expansion opportunity for MACOM as we currently do not promote passive copper solutions.
Another contributor to our SAM expansion is the need for higher-density interconnects that support both fast and slow data rates. In many cases, our newest products are designed for highly integrated architectures like NPO and XPO. These applications typically require smaller chips, more lanes of data and lower power consumption compared to pluggable modules. These architectures often include LPO and LRO using single mode or multimode modulation. We practice the be first, be fast approach. We also strive to provide options, including lower power, smaller chip size and multiple channels using flip chip, bump chip or through silicon via technologies, all to ensure our customers meet their size, manufacturability and performance goals.
Additionally, we are constantly innovating and improving our products to achieve better performance. As an example, today, we are sampling our latest generation of 200G and 400G per lane TIAs and driver products for various advanced interconnect applications. Interest in our Indium Phosphide products is growing as optical connectivity expands inside the data center. Our near-term and long-term growth strategy is to gain market share with new lasers and higher-speed photodetector products and to install necessary manufacturing capacity to meet demand. Our team is having strong results with our 200G photodetectors, which are ramping in volume production and becoming a meaningful contributor to our overall Data Center growth.
In addition, our 400G photodetectors are receiving very positive customer feedback. Our 75-milliwatt CW laser qualification efforts continue. Our laser team is actively working to lock down a production process. And while we cannot declare success yet, we are gaining confidence in our ability to meet our customers' reliability and performance requirements. Customers have been providing us with positive feedback on our products' performance, and there is intense interest and customer pull to get us into production. We are developing plans to support a potential start to production in late calendar 2027. This includes scoping modest CapEx investments and fab space requirements to support a rapid high-volume ramp for a few strategic customers. I will provide an update on the CW laser activities in the coming quarters.
On a related note, we are seeing increased demand from our 25G DFB laser products, which serve the 100G QSFP, CWDM4 and LR4 applications. These products launched a few years ago and in some cases, were previously qualified by customers. Customers are coming to us with urgency due to the general supply shortage of indium phosphide DFB lasers. We believe our Indium Phosphide Photonics product lines represent a large growth opportunity for MACOM, and we expect to gain meaningful market share over the next 3 years.
We continue to promote linear equalizer products that help optimize copper interconnects at 800G, 1.6T and beyond. We are working closely with customers to address their program-specific requirements and various use cases. This includes copper cables and on-board equalizers. We are also seeing growing interest in Coherent Light Solutions as coherent modulation can enable higher bandwidth and better link budgets in short-reach data center applications with the potential to optimize power efficiency as data rates scale beyond 1.6T.
In summary, we see many new large opportunities in the data center. High-speed connectivity is growing in complexity, and in the future, systems will operate at data rates above 1.6T. Our strategy is to collaborate with the leaders in the industry and support their connectivity needs, whether it's scale up, scale out or scale across.
Turning to our I&D business. We see many growth opportunities across the Industrial and Defense markets, primarily in the Defense segment. Our Defense customer base is large and very broad, and we typically support radar systems, missile and missile defense systems, drone and drone defense systems, communication systems and a wide and wideband electronic warfare systems. Last year, our Defense business grew by 19%. And this year, we expect it to grow by approximately 25%. The U.S. defense electronics market is projected to grow significantly over the next few years, and we are in a great position to benefit. In addition, we believe European countries will spend more on existing and new defense systems. We have a growing team of application and design engineers that can support our defense customers and offer the full scope of MACOM's capabilities. Our primary focus is providing unique solutions that improve overall system performance to give our customers an advantage.
As an example of the type of products we develop, at this year's International Microwave Symposium, also known as IMS in June, we showcased an X-band front-end module, which utilized a combination of MACOM's GaN ICs in a highly integrated multichip module assembly. The X-band frequency is ideal for precise target detection and discrimination and is often used for defense radar applications. Our product can deliver 16-watts of transmit power and over 40% power added efficiency. The receive side features industry-leading recovery time and exceptional linearity in noise figure. This product's small footprint can support compact high-volume radar systems. Our R&D team works to push the limits of our semiconductor technology. And in recognition of our efforts this past quarter, we received incremental funding from the Air Force Research Labs, or AFRL, to support millimeter wave GaN-on-silicon carbide production maturation. This effort is directly in line with our high-frequency and high-power strategy and further aligns MACOM with the needs of the defense industry.
Over the past few quarters, we have also seen an increase in demand from our Industrial market segments, including test and measurement, medical, automotive and general multi-market products. We believe our test and measurement customers are seeing increased demand from the market, primarily driven by expanding microwave SATCOM and AI-related engineering and production facilitization. Notably, our Automotive business, which is one of our smaller submarkets, is expected to double its revenue this year, primarily driven by market penetration and increased design wins.
Now moving to Telecom. Within the Telecom end market, satellite-based broadband access and direct-to-device or D2D opportunities remain robust with numerous LEO networks in the planning or production stages. These systems support consumer, enterprise, government and defense requirements. Today, we are supporting a variety of these LEO networks, and we expect our revenue in this market segment to continue to grow. I'll note that our commercial RF power team, which is traditionally focused on 5G base station opportunities, is now targeting the LEO market given the significant similarities and requirements. Our 5G technology is directly applicable to LEO D2D systems. LEO networks typically use microwave or millimeter wave frequencies and free space optics or FSO communications for satellite to satellite or satellite-to-ground communications. Notably, on the business development side, this quarter, our team was selected to support a next-generation satellite optical communication platform. This new award establishes MACOM as a strategic partner and will contribute to our growing LEO business.
Why did this customer select MACOM? Because we are capable of solving their technical and production problems and because all the critical ICs for the system could be sourced from MACOM. This win exemplifies how we continue to penetrate the LEO market with our unique technology. Ground stations are a key part of LEO networks. In many cases, ground-to-satellite links prefer linearization of SSPAs or TWTs to boost the linear power efficiency of the link. At this year's IMS exhibition, we demonstrated how to linearize a high-power V-Band TWT. The demonstration showcased how to improve linear power and efficiency for microwave transmitters used in satellite communications, defense and other ground and space-based applications.
At IMS, MACOM also demonstrated a complete W-band transmit and receive signal chain. LEO satellites are increasingly turning to W-band frequencies, which is approximately 75 gigahertz as this spectrum enables multi-gigabit communication links, high-resolution imaging, more precise sensing and improved spectrum reuse.
A few more highlights to share. First, in Q3, we began installing our new G10 epitaxial reactor at MACOM's European Semiconductor Center, or MESC, to support future growth and technology development. MESC being located in France, is well positioned to support the European continent's commercial and defense markets. Second, recently, our engineering teams demonstrated how AI can be used to support the chip design process. We are aggressively developing AI capabilities to accelerate our time to market and to make MACOM a more formidable competitor. Third, last week, over 50 summer interns presented the results of their summer projects. Our talented interns were recruited from top universities across the U.S. and Europe. Special thanks to our HR team and everyone who has been involved to support another successful internship session. We view this program as a core activity directly tied to growing our talented workforce. And last, in mid-July, the management team published its 2026 to 2030 Growth Strategy Plan to our Board of Directors. Like prior years, we refined and updated our plans based on lessons learned, market dynamics and evolving business priorities and opportunities.
In summary, we continue to build a best-in-class and diversified company. Jack will now provide a more detailed review of our financial results.
Thank you, Steve, and good morning. MACOM again achieved multiple new quarterly records associated with our financial performance during our fiscal third quarter. Benefits from ongoing customer demand and operational improvements across the organization have again increased revenue, profitability and cash flow.
Fiscal Q3 revenue was $342.2 million, up 18.4% sequentially and up 35.8% year-over-year, driven by growth across all 3 of our end markets with Data Center leading, followed by I&D and Telecom. The strong bookings across all our end markets resulted in a book-to-bill of 1.6:1. As a result, we continue to have strong visibility across the business and Q3 marks our highest quarterly bookings ever. Adjusted gross profit for fiscal Q3 was $204.2 million or 59.7% of revenue. This represents a gross margin increase of 120 basis points over the prior quarter. We have and continue to expand our manufacturing capacity to meet growing customer demand. We expect to add new capacity across our operations during the remainder of fiscal 2026 and into fiscal 2027. These expansion actions will help ensure that we meet our operational and financial growth plans. The product demand increases across the business have resulted in enhanced utilization of our fabs, helping to drive higher gross margins. As we move forward, we expect ongoing quarterly sequential gross margin improvements through the remainder of fiscal 2026 and fiscal 2027.
Total adjusted operating expense for our third quarter was $96.5 million, consisting of research and development expenses of $65.3 million and selling, general and administrative expenses of $31.2 million. As anticipated, the sequential increase in adjusted operating expense compared to Q2 was primarily driven by ongoing R&D investments and employee-related costs. As our business expands, we expect to continue to leverage our existing OpEx functions. We will efficiently manage our SG&A and prioritize future R&D investments to support our growth objectives. Adjusted depreciation expense for fiscal Q3 2026 remained relatively stable at $9 million, in line with the prior quarter. Adjusted operating income in fiscal Q3 was another record coming in at $107.7 million, up 33.9% sequentially from $80.5 million in fiscal Q2 2026 and up 69.6% year-on-year. This increase in adjusted operating income further reflects the leverage in our operating model as the business continues to scale.
I would like to note that our Q3 fiscal year 2026 adjusted operating margin was 31.5% and over the past year has increased from 25.2% in Q3 fiscal year 2025. We expect our adjusted operating margin to be approximately 37% for the fourth fiscal quarter.
For fiscal Q3, we had adjusted net interest income of $5.5 million, a decrease of approximately $1 million sequentially from $6.5 million in Q2. This lower interest income was partially due to the planned repayment of our 2026 convertible notes in March 2026 as well as our $61 million investment in [ IQE ] during the June quarter. Our adjusted income tax rate in fiscal Q3 was 3% and resulted in an expense of approximately $3.4 million. We expect our adjusted income tax rate to remain at 3% for our fiscal Q4 2026. I would like to highlight that due to the increasing profitability, we currently estimate our adjusted income tax rate will increase in fiscal 2027. Depending on the jurisdictional mix of our income, we anticipate our adjusted tax rate will begin to rise from our current 3% to mid-single digits as we progress through fiscal year 2027.
And to close out our fiscal Q3 2026 income statement discussion, I am pleased to note our adjusted net income increased 30.2% to $109.8 million compared to $84.3 million in fiscal Q2 2026. Adjusted earnings per fully diluted share was $1.40, [ utilizing ] a share count of 78.4 million shares compared to $1.09 of adjusted earnings per share in fiscal Q2 2026. We strive to optimize the business' performance, which has contributed to sequential increases in our adjusted operating income and EPS over the past 12 quarters.
Now on to operational balance sheet and cash flow items. Our Q3 accounts receivable balance was $179.1 million, up over $19.5 million compared to our fiscal Q2 2026 balance. Our days sales outstanding averaged 48 days compared to the previous quarter at 50 days. Inventories were $281.5 million at quarter end, up sequentially from $252.2 million to support increasing demand across the business. Inventory turns increased to 2x, up 0.1x from the preceding quarter. Fiscal Q3 cash flow from operations was approximately $80 million, up $1.3 million sequentially. We expect that our Q4 cash flow from operations will be in excess of $100 million. Capital expenditures totaled $20.8 million for fiscal Q3. We estimate fiscal year 2026 CapEx to be in the range of $60 million to $65 million.
MACOM has been disciplined with its CapEx in recent years, investing $22.4 million in fiscal year 2024 and $42.6 million in fiscal year 2025. A majority of this CapEx has been focused on expanding capacity at our production facilities and enhancing our R&D capabilities in support of customer demand. I would like to highlight that our capital plans are focused on expanding existing fab manufacturing capacity and capabilities. Typically, our new capacity CapEx is installed and online in less than 1 year from the start of each project. We believe this approach will support all of our growth objectives, minimize financial risk while maximizing profitability and shareholder value.
Next, moving on to other balance sheet items. Cash, cash equivalents and short-term investments as of the end of the third fiscal quarter were $663 million. We view our cash balance as a strategic asset that can be used to help fund ongoing investments to support our growing business. An example of this can be seen in the $61 million investment we made in [ IQE ] during the third quarter. We believe this investment will strengthen our supply chain resilience and competitive position. I would also like to note that this investment resulted in a $41 million noncash gain associated with the GAAP accounting fair value remeasurement of the investments from the investment date through the end of our fiscal quarter on July 3, 2026. This noncash gain was excluded from our non-GAAP results. We are in a net cash position of approximately $322.5 million as of July 3, 2026, when comparing our cash and short-term investments to the book value of our remaining $340.5 million of convertible notes, which mature in December 2029.
As we move into our fiscal fourth quarter of 2026 and into fiscal 2027, we remain confident in our ability to keep building upon our strong and diversified foundation to deliver continued financial improvements for MACOM. We acknowledge and appreciate the ongoing hard work and dedication of the MACOM team who make these results possible.
I'll now turn the discussion back over to Steve.
Thank you, Jack. MACOM expects revenue in fiscal Q4 ending October 2, 2026, to be in the range of $415 million to $425 million. Adjusted gross margin is expected to be in the range of 60% to 61%, and adjusted earnings per share is expected to be between $1.97 and $2.03 based on 78.9 million fully diluted shares. We expect approximately 35% sequential growth in Data Center, approximately 20% sequential growth in Industrial and Defense and low single-digit sequential growth in Telecom. I would now like to ask the operator to take any questions.
[Operator Instructions] Our first question coming from the line of Tom O'Malley with Barclays.
2. Question Answer
Congrats on the really good results. I wanted to ask specifically within Data Center, what's driving strength. You mentioned across the PAM4 portfolio. Is it TIAs and drivers? Is it the PDs getting better in the near term? And what's driving the increased book-to-bill in that portfolio? Just want to get a little flavor of where the strength is coming from specifically in the quarter and the guide?
Sure. Thanks, Tom, for the question. And just to remind everybody, our Data Center business has been growing quite rapidly over the past 3 years. In 2024, we grew by 35% in '25, 48%. And now we are -- it looks like we're trending towards about 74% this year. So there's been a lot of moving parts, a lot of new products coming into production. If you pull back and look at our growth from, let's say, fiscal '25 to fiscal '26, the primary driver is 200-gig PAM4 products, primarily in pluggable optical modules. We have seen tremendous growth from other parts of our portfolio for the Data Center in no particular order.
Certainly, our ZR, ZR-light business is growing quite rapidly over 100% year-over-year. Our other data rates, sort of slower data rates, 100-gig per lane, not only multimode, but single mode, all very strong high double-digit growth. And some of our legacy products, our 25-gig per lane products that support 100-gig FR and LR4 type platforms also exhibiting very strong growth. So what you're seeing is tremendous growth across all of the different data rates and really hitting all of our different product lines. In terms of the book-to-bill within the business, if you're asking specifically around the Data Center, I would say it's primarily driven by 1.6 and 800-gig platforms. That is the main driver.
And then good results -- bring questions on future good results. Traditionally, you've given a little bit of a sneak peek as the fiscal year closes. Just curious if you have any color for where you see the business kind of trending next year? It's been 2 really good years in a row of above 30% growth. I know you're very much execute as time goes along, but any peek into the growth trajectory into fiscal year '27?
Right. Thank you, Tom. So a few things there. You're right, it's a little early to talk about our fiscal '27. We're still very much focused on closing out Q4. With that said, if you were just to take the midpoint of our Q4 guidance and annualize that into our fiscal '27, you're going to see numbers that are in the mid-20s, 27%, 28% as a company. If you drill down and look at our highest growth market, which is our Data Center business, that number then trends to 50% year-over-year growth.
So for us, sort of from where we stand today, that's very much a base case. When we look at our business, our book-to-bill, as you highlighted, has been quite strong this year. Q1, it was 1.3. Q2, it was 1.5. And this past quarter, it was 1.6. So when you look at those numbers, it certainly suggests that we are starting our fiscal '27 or should start our fiscal '27 in a very strong position for growth.
Our next question in the queue coming from the line of Blayne Curtis with Jefferies.
Also congratulate you on the results. I wanted to ask on Telecom. I mean, I feel bad asking because everything seems to be firing on all cylinders. Just kind of curious, I mean, you highlighted the LEO opportunity I think I'm just kind of curious when you think that Telecom business may accelerate into next year and how to think about that LEO driver layering in?
Yes, you're right. The Telecom segment, which is today our smallest segment is forecasted to grow by sort of double digits this year. We would expect similar performance or better performance next year. We do have, as we've talked about in the past, two or three major LEO programs that will start production at the end of this calendar year and at the beginning of next. I talked about in my script, picking up a really nice optical product position at a large satellite OEM that's a leader in the industry, and we feel like that's going to drive growth for the next 2 to 3 years. And we also see several other programs coming online. There's probably 4 or 5 major customers within the LEO market that we're servicing.
In some cases, it's direct to sell, which is the lower frequency, high-power products. In some cases, it's the millimeter wave backhaul links. We're getting more and more involved in the optics, including free space optics. And I'll remind everybody about 1.5 years ago at a SATCOM show, we demonstrated a very high-power optical amplifier. And we are getting a lot of interest from OEMs that want to build high-power optical ground stations. So we're very excited to see that product generate some revenue over the next 1 to 2 years. And then the last thing I'll say is we continue to offer these customers the full suite of our manufacturing capability. So they look to us not only as a chip supplier, but also as a module and a subsystem supplier.
Excellent. And then maybe one for Jack. Just how do you think about -- you said gross margins should increase sequentially all next year. How do you think about the incremental gross margins in the business?
Yes. Thanks for that, Blayne. We've been pleased with the gross margin improvement. I think we've been having some conversations throughout this fiscal year with regard to those sequential improvements. Obviously, looking back over the past quarter, 120 basis point improvement in gross margins is something we've been pleased with. That's been supported through some of the increases in volumes that we've seen, but also a lot of hard work in terms of trying to improve yields and other efficiencies along the way. So as we look out into the future, if you look at the midpoint of our guide for the fourth quarter, that has us increasing about 130 basis points, once again, supported through the volume increases on the revenue line.
As we look further out, it's hard to tell, but we would expect to see some of those sequential improvements on a quarterly basis, similar to what we had seen during 2026. But we try to be a little bit more measured as our gross profit gets a little bit higher, gross margins get a little bit higher, it's harder to get things out at such a larger rate. So we think in the 25 basis points to 50 basis points per quarter range going forward.
Our next question coming from the line of Vivek Karia with Bank of America Securities.
Steve, there was recently something in the news about the proposed ban on the Chinese module makers for pluggable transceivers. We don't know whether there is anything more to it, but assuming there are those kind of restrictions, how does that impact MACOM in either direction when there are restrictions on some of your potential customers, but then also opens up more opportunities for other U.S.-based customers?
That's right. And thank you for the question. And we're also reading the same news you're reading. I'll sort of make a few points here. First, our Data Center business and our growth is really driven by U.S. hyperscalers as well as the enterprise and compute OEMs here in the U.S. These end users are typically directly involved in supply chain decisions in selecting chips for their hardware. And as you know, MACOM is selected due to the performance of our products, the uniqueness, our ability to scale, the quality cost, things like that.
Our thinking is that if the hyperscalers have to shift the market share from their supply chain between different transceiver companies due to new regulations, then we would expect to follow that business to those other manufacturers. And so from our point of view, I think we would see a customer mix shift. And I'll just highlight, we have relations with all of the transceiver companies in the industry, including companies that -- in some of our business areas, we actually compete with. So where the transceivers or the NPO or XPO engines are designed and built is a little bit out of our control. As you know, it could be China, Thailand, Taiwan, Vietnam or here in the U.S. But I think it's important to highlight that the hyperscalers recognize MACOM as a strategic supplier. We have compelling products and manufacturing capability. So we'll continue to monitor this. But at this point, we're keeping our head down and it's business as usual. So that's sort of the first point on that.
And then the second, I'll just highlight, which is pulling back a little bit and looking at our overall exposure to China. We have no manufacturing today in China. We have about 85 employees. They are primarily focused in the application sales and some logistics areas. And the team really is focused in two areas. The first is servicing a few Scandinavian telecom companies that have very large design centers in China that support a lot of the 5G base station infrastructure build-outs globally. And so our teams support those locations with application support. It's primarily our RF products and high-power products. And then the second, of course, is we -- our team focuses on the optical industry. And to your point, there's numerous Chinese transceiver companies as well as U.S. and European transceiver companies in China. And so that team is supporting all of those accounts. So the last point I'll make just regarding our overall China exposure is the vast majority of what we sell into China for products is exported out of China in systems, which are typically headed to the U.S. It's the vast majority of our business.
Got it. The second question is you gave us a number for your served addressable market or SAM for '27. And I'm curious, what is that SAM equivalent number for 2026? And do you expect to gain share in '27?
Right. It's a great question. And really, our numbers for 2027 and really, we have numbers out through 2030 came from the work we did over the past 4 months developing and updating our strategic plan. We did -- I would say we did a bit of a reset on some of our market-based numbers. We brought up our Industrial and Defense numbers for obvious reasons. There's a lot of spending going on right now. We talked about that in the script. And we also brought up our Data Center business. So we sort of have sort of a $6 billion number pegged to the Industrial and Defense and the $6 billion in Data Center and then the balance of about $3 billion for Telecom.
I would say that's up about 20% to 30% from '26 to '27. We've seen a lot of new and exciting platforms coming our way. We are absolutely expanding our portfolio to address the market. So our SAM by definition is growing. And I'll just give a few examples. And really, these examples are what I would consider the accelerators for the next 3 to 5 years, which is, number one, more 200-gig per lane products for PAM4. We're adding capacity for our Indium Phosphide products. We talked about that. There are new programs we're involved in that are both scale up and scale-out and to some degree, scale-across. And we think NPO is going to start to grow significantly starting in 2028. We've talked in the past about coherent light. And then there's other interesting applications, including PCIe 6 and also some of the equalizers that we talked about. So those are all very much specific to the Data Center.
On the defense side, it's our exposure to the Defense systems, primarily radar-based. So you see big programs like Golden Dome. You see lots of refreshing and rebuilding of the U.S. Armaments and Missile Systems. There's been a lot of discussion about stockpiles coming down. And then the last sort of really game changer is the work that we're doing with drones and anti-drone technology. So those sort of in aggregate are reasons why we decided to bump up our SAM.
Our next question in queue coming from the line of Quinn Bolton with Needham & Company.
Steve, you mentioned NPO several times on the call, and I think we're hearing this from others in the industry. And so maybe can you spend a minute talking about MACOM's position in NPO, what you're supplying? Is it TIA driver arrays? Are you looking at other types of solutions? Would you ultimately provide a full optical engine for NPO, but maybe just a little bit more color on your efforts there?
Sure. Thanks for the question. So I can tell you, we are not going to be building engines and supplying engines to the market. So we -- in the case of the Data Center, we are a chip supplier, not a multichip assembly or module supplier. We've seen an evolution go from sort of pluggable transceivers with DSPs to LPO platforms, which is removing the DSP. That is now morphing into, as you sort of pointed out, an engine or a smaller package-less NPO platform. And those architectures still need, as you pointed-out, drivers and TIAs. And what's different here is the density that's required to bring all of this interconnect to bear.
So as I said in my script, customers want smaller parts. They want more channels. They want lower power. They want these products in different form factors. Some customers want to use wire bonds, some want to use bumped devices, some use flip chip devices. And so we're engaged with pretty much well, I won't say all, but probably most of the OEMs that are developing NPO solutions. And what we're finding is these solutions are becoming very specific to the architectures that the hyperscalers are driving. And so those slowdowns are coming directly to us. So we have numerous over, I would say, somewhere between 10 and 20 active NPO development projects that are servicing various customers and use cases. And so I think that's a general trend. A lot of this revenue will kick in, in our estimation sometime in '28. Some of these programs will never make it to production, some will. We'll have to wait and see.
And then just looking at the acceleration in the Data Center business kind of coming out of fiscal '26, I guess, any thoughts about -- you've got 3 years of accelerating Data Center growth. Certainly, it looks like fiscal '27 is going to be a good year. But what would it take to see a further acceleration in Data Center revenue in '27? Is it just continuation of trends, market share gains? Kind of what are the puts and takes looking into next year?
Right. And I think we will answer that question probably more completely next quarter at the end of our fiscal year and the beginning of '27. We'll probably follow the same methodology we did this year where we'll talk about sort of a base case level of business. And then as we move into the year, as we bring on capacity, as we see these design wins go to production, we will modulate up or down our Data Center business.
I suspect it will be going up. There's more good things happening than, let's say, negative things happening. But we'll really just have to wait and see. I'll also highlight that something that's very important to our Data Center business and overall MACOM growth, which is the amount of R&D spending we're doing as a company. And if you go back just 3 years in 2023, we were spending as a company about $132 million in R&D. This year, we're going to spend almost $250 million. So we've doubled the amount of R&D spending in about 3 years. And as we look ahead and as we try to grow into this $15 billion SAM, we will continue to build-out and staff our design centers with the best chip designers we can. And we've been very fortunate to be able to really bulk up on our chip design capability, which is really going to pay dividends over the next 2 to 3 years.
So we'll follow the market dynamics. I'm not sure I'm really completely answering your question, but we do have a lot of projects in the works. We talked a lot about the PDs. We are thinking, as I mentioned, that the CW laser activity is quite positive right now. We are well into the back half of a high-temperature operating light test and HTOL test, which typically is 5,000 hours, and the data looks exceptional. So we are building our confidence that we have a winner.
Our next question coming from the line of Tore Svanberg with Stifel.
Yes. Let me echo congratulations on the very strong results. Steve, in your prepared remarks, you sounded much more positive on some of the indium phosphide projects that you have, including new lasers and high-speed PDs. Can you maybe rank order which ones you're more excited about over the next couple of years?
Well, that's a great question. And if you're asking specifically about the PDs or the lasers, the PDs right now are ramping, and we're seeing tremendous demand, and we expect that demand to continue. And we've been adding incremental capacity to support that demand. That has been a great door opener to other strategic relationships with major accounts. So we're very pleased about that. If we're able to bring a CW laser into production in 2028, that's a watershed moment. That will be a big number that will really drive tremendous growth. You can put the laser market in the billions of dollars of revenue. And so if we can get a fraction of that to start and then grow into it over time, I think we'll be quite happy.
Yes, that's great color. And you also mentioned that you're now basically installed with some capacity in Europe to support that market. I'm just curious, when do you expect to -- for especially EU Defense revenue to become more material revenue?
Probably sometime in '28, that Defense number will start to grow. We are, as an example, this year, finishing up the conversion of the production line from 3-inch to 6-inch. So we've completed the transition of one process set, and we have two more to go, which should be done in the next, I would say, 4 to 6 months. A lot of the defense contractors that we engage with today are waiting for us to do that. And so the reason why that's important to those customers is our quality goes up, our cost goes down and our capacity doubles. So we're very excited to sort of bring that to bear to the European market.
Most of the business that we do with the European defense contractors are custom design related, whether we're doing those designs or whether it's a foundry relationship. And I think over the next month or 2, I'm told we're going to get one of the largest orders in MESC's history for a U.K. defense company that's working on airborne defense systems. So very excited about the prospects of that business and that technology. And just to remind everybody, our strategy is the highest power, highest frequency and highest data rate and the MESC technologies, which, in some cases, are sub-100-nanometer gate links checks the box of the highest frequency. So we will leverage that into the U.S. market, the European market and the satellite market. And those markets are growing and need that technology. So we do expect good things in the future.
And just one last point on that. When we acquired that site, we acquired that site from the French government. We paid about EUR 38 million. The land was worth about EUR 25 million, and they had about $100 million of capital equipment installed in their fab, and they had a broken business. And so it was really, from our point of view, a fixer-upper that we've been working on over the next -- over the past 3 years, and it will start to pay dividends probably in about a year from now.
Our next question coming from the line of Sean O'Loughlin with TD Cowen.
Congrats on the very solid numbers. I also wanted to ask about Telecom, but I wanted to see if there's a way to understand the growth drivers outside of LEO, whether it's 5G, the RF power opportunity from your competitors' exit, wired or even cable TV? I think investors have been keenly interested in the LEO business for obvious and good reasons, but we've been seeing some solid numbers coming from others in the cable TV industry from the DOCSIS transition. And just are we maybe under-appreciating the non-LEO growth drivers in Telecom as an investor base? And maybe brief thoughts on how we should size those buckets within the business?
Yes. I think that's a very good question. And certainly, we are very focused on the LEO platforms because there's a whole wide array of optical RF, microwave opportunities for us, and those customers are very active right now.
But you're correct to highlight that there are other submarkets within our Telecom. 5G today is the biggest portion of the Telecom business that we have. We have seen competitors exit. We've seen 2 competitors exit in the last 3 to 4 years. We would expect to pick up some of that market share. I'll highlight that our GaN 4 technology, which is the latest technology suite that our team has developed, is directly applicable to 5G massive MIMO platforms. And today, we actually have very little business on the MIMO side. Most of our 5G business is on the macro side. So we see a huge opportunity to actually perhaps more than double our 5G revenue as we start to win these MIMO sockets over the next few years. That market is a bit slow moving. In aggregate, it's probably not growing, but our strategy there is to take market share with a combination of picking up new programs that perhaps a competitor may have had in the past or bringing in new technologies like our GaN 4.
You mentioned cable infrastructure. Our Cable Infrastructure business is doing quite well this year. It's actually year-over-year will be around 40% growth. So that has been a very strong piece of our Telecom business. And then the other sort of bright spot inside of Telecom is our metro long-haul business, which is over 50% growth this year. So there is a lot of work we have to do to really capture some of these other applications. As I talked about R&D spending, I think that's a big part of it. We need -- the Telecom market is a very focused market. In some cases or in many cases, their SoCs or system-on-chips or highly integrated silicon, either CMOS or bi-CMOS or SIE products. And we tend to shy away from those applications. And so that is an area as we get bigger as a company, we will start to address more of those applications.
That's all really helpful. And maybe even related to that as a follow-up, if I could just quickly ask on fiscal '27, not on the revenue side, but any early plans on the expense side, whether OpEx or CapEx? I know Jack mentioned potentially related to the CW Laser business towards the end of the year, but any early benchmarks we should think about for expenses next year?
Yes. I think that's a fair question. So the one thing I'll highlight, and Jack mentioned this, and I think it's worth repeating, we're exiting the year over 60% gross margin. We'll have operating margins that are just below 40%. And so you can imagine that our target for next year is to breach operating margins or breach the 40% operating margin level. So that is certainly something we're excited to do.
When we think about the expansion, and Jack mentioned this and especially adding capacity to our fabs, we are very focused on spending the least amount of capital to get the maximum amount of producibility. So when we look at our capital spending for next year, it won't be too dissimilar to this year, sort of in that $60 million range. And that includes stepping up some of the infrastructure to support a laser ramp. So we're very judicious. Some people call Jack [indiscernible], I don't know. But I can tell you that we are very careful with the capital spending.
Related to that, I'd just like to highlight one other point. So if you remember back in January of 2025, we actually issued a press release saying that we had signed a PMT with The CHIPS Office, and we had developed an investment plan for the North Carolina and the Massachusetts fabs, where the total investment over 5 years was going to be about $345 million. And half of that was going to be paid for by the U.S. government and the other half MACOM. Well, that plan was written actually in early and mid-2024. And so it's been almost 3 years, 2.5, 3 years. We have completely updated that project plan, and we have resubmitted it to The CHIPS Office because a lot of things have changed regarding our capabilities. And we have taken our own actions to support the market. For example, when Wolfspeed decided to shut down their Durham fab, we were able to get a significant amount of equipment at pennies on the dollar. So we took advantage of that, and that equipment is now being put into service.
We also have been spending a lot of money here in [ Lowell ] to expand the capacity in our fab. So with all of those various moving parts as well as a fresh look at what our needs are over the next 3 to 5 years, we are now reengaging with The CHIPS Office with a completely rewritten project plan. And so we will continue to work with them and see if we can close the deal. We still have a lot of work to do. There's terms in what they call their DFA definitive agreement, which are sort of nonstarters for us. So we're continuing to negotiate a deal in this regard. And I mentioned this only because that will certainly be a huge benefit to MACOM as it relates to saving capital money, capital spending. Did you want to add anything?
Just to build upon your, I think, operating expense question, Sean, we've added some operating expenses over the past year. It's been at a much lower rate than the revenue growth that we've seen over that time period. We'll continue to be very disciplined in terms of how we look at our operating expenses. I think in my prepared remarks, I made reference to looking to leverage our OpEx where we need to, but also making sure that we're putting the investments in place where we think it's needed, more specifically from an R&D point of view. And as you look out into the future, and I think we've talked about this adding a couple, $3 million dollars per quarter as we go forward, all dependent upon how the business continues to grow and scale. I can give you a rough order of magnitude in terms of where our OpEx would be as we look out into the future.
Our next question in queue coming from the line of Christopher Rolland with Susquehanna.
I guess my first question is on copper. If you guys could perhaps talk on the opportunity for linear equalizers, both in ATC cable form and then also on PCB, what you kind of see for the rest of the year and into next year would be great?
Great question. Yes, we definitely see opportunities with equalizers that can be, as you highlighted, can be used in a cable environment or a copper cable environment. Some people refer those applications as ACCs as well as on PC boards. And so we are absolutely seeing opportunities there. There is one large hyperscaler that is looking to deploy that type of a solution -- is cable solution. The volumes are quite large, and we would expect to be part of that when that moves into production.
Excellent. And then on the cash situation, you have strong cash flow generation for sure. I was wondering what [indiscernible] would like to do with this growing cash pile.
Yes. And by the way, I don't think he's [indiscernible], Jack. I think you're one of the best CFOs in the industry. And we are -- and he and I are like-minded in being very conservative as we think about making investments, right? In terms of the cash, our philosophy is you can never have enough cash, and we want to build that. And we've been making strategic investments, including the one we made in IQE about a quarter ago. And with that, I'll see if Jack, do you want to continue that.
Yes. I mean we've also looked to utilize our cash to pay down some of our debt as we go forward. We still have some debt to repay internal investments, both from a capital and from an operating expense perspective as we grow the business are top of mind. We've done a number of tuck-in type acquisitions over the past number of years that seems to suit us well in terms of how we round out our portfolio. So I think you'll see some of the same as we go forward from a capital deployment and cash utilization standpoint.
Our next question coming from the line of William Stein with Truist Securities.
Congrats on the good results and the great guidance. I'm hoping you could talk a little bit about input cost inflation, whether you're seeing this influence your need to spend on cost of goods and whether that's met with easy pass-through to customers or whether it's a bigger fight or any color around that, please?
Yes. We definitely are seeing input costs increase, whether it be labor, electricity, general utilities, raw materials, costs are absolutely going up and our supply chain and operations team, I think, do a very good job managing to optimize and minimize our costs. We try to pass those costs on to customers when possible. That's not always possible, as you highlighted. And the good news is even during the last year or so, as we've seen inflation increase, we've been able to expand our gross margins. And so if we continue to launch products that have strong pricing, are best-in-class, are non-commodity, then we should be able to continue to improve the profitability of the company. Jack, do you want to add to that?
No, I think you hit the nail on the head with our improving gross margin.
Great. And a follow-up is directly related to that. We're seeing margins continue to improve. In the past, I think this was a story around industrial demand and utilization at [ Lowell ]. Can you maybe update and level set me on that? Going forward, is this driven more by mix or utilization? Any color would be helpful.
Sure. The utilization at our RTP, North Carolina and Lowell, Massachusetts fabs continues to increase and all during a period where we're adding capacity. And so the good news is we have ample room to grow to meet our targets. Utilization rates are definitely driving some of our lead times out. So we are quoting longer lead times for products that are manufactured inside of MACOM.
But generally speaking, we have these things under control. The mix here in the Massachusetts fab is a combination of Telecom, Defense and now Data Center. This is sort of a new trend as we're really ramping up our Indium Phosphide products here. And yes, that mix will have a bearing on our overall profitability. These PD laser devices, as an example, are quite small. And so we're able to produce a lot of devices with not so many wafers, let's say. So we are cognizant of the mix shift. We're managing that. We actually think during '27, it will improve and continue to improve. And then when we bring the lasers on board, things should get even better. Jack, do you want to add to that?
I think just in terms of us being able to leverage some of the existing costs that we have in our existing manufacturing facilities as the top line grows, you're seeing that come through on the gross margin side. So we're pleased with how we've been able to leverage those costs.
Our next question coming from the line of Karl Ackerman with BNP Paribas.
I have two, if I may. Steve, your [ Telecom ] business is certainly breaking out. You're well exposed to address all merchant transceiver suppliers, but are you beginning to see a meaningful ramp of orders of optical components and lasers from hyperscalers design their own in-house optical transceivers?
Yes. So we are not a high-volume manufacturer of lasers today. So that is -- right now, we are developing CW lasers primarily for silicon photonic applications. The type of lasers that we are producing today are for LR4, the 25-gig DFB lasers also for CWDM4. So the classical 100-gig module market is more of a merchant market where we're selling those lasers into the, let's say, the merchant market with companies that do not make their own lasers. That is today our business. What happens in the future is TBD. We'll service -- we'll certainly service any company that wants to buy our laser, whether they make their own or not.
Steve, historically, you suggested that [ datacom ] might be a smaller portion of your segment with more volatility than Telecom or I&D. But given your commentary that datacom could grow 50% or so next year and you've got growing R&D investments in this area, do you think datacom could be, in fact, the largest opportunity for you over the next few years?
Yes. I'm not sure you got the -- my commentary quite right in your question. But I'll say that when we look at the SAMs, the I&D and the Data Center SAMs are about the same at approximately $6 billion. So that's the opportunity we're chasing. And our ability to capture that market share will very much depend on timing of our successes, the design wins, our ability to beat competition, time to market and things of that nature.
But the growth opportunity in both of those large markets is quite big. Clearly, the Data Center market moves very fast. So one would expect that, that in the near term will potentially outgrow the I&D. But we would expect over the long term, those markets and our revenue to double in those markets. There's no doubt about it. And that will happen. It's just a matter of when.
Our last question in queue will come from the line of Tim Savageaux with Northland Capital Markets.
Congrats on the results. My question is about optical content in data center on the module front. lasers and detectors relative to what you see currently on your TIA and driver ICs, it seems like that content could be larger, maybe significantly larger. And given your -- what I think is a pretty meaningful change in tone here, relative to the laser opportunity, I'd be interested in kind of your estimate of what kind of content you're chasing? And I'll have a real quick follow-up.
Yes. I'm not sure I would agree that the laser and detector opportunity is larger than the driver and TIA. We've not made that statement, and I don't want you to think that's what we're thinking. So -- and we haven't specifically sized those product line categories and how big their SAM is. That's something that we have internal numbers and we have our thinking about that, but we've never said publicly which one we think is bigger.
At the end of the day, they're both classes of products are, in our mind, multibillion-dollar product areas that we can service, and we have unique technology, whether it's our chip design capability or our internal indium phosphide manufacturing capability. So we're sort of equally excited about both. We have different teams working on those technologies. The indium phosphide teams are primarily material scientists, fab engineers, process engineers and very experienced optical designers. The TIAs and drivers is very much a different set of talent. These are chip designers that have very good experience, long experience working with high-speed interconnect and highly integrated devices that has various attributes, including programmable memory, digital content, high-speed analog, very high [ FTE CT ] processes. And those chip designers have an expertise with the various protocols. So whether it's multimode, which has historically been a strength of MACOM and now single mode and then, of course, coherent and coherent light.
So those chip designers need to speak that language to develop the type of parts that our customers want. And it's a completely different capability, and we're very fortunate to have very strong teams in both areas, and we would expect both product areas to grow significantly in the years to come.
And just a follow-up on the photodetectors is where you've gained your current foothold. Are we at a point as you look at the second half, either the results you just reported and/or the guide, where PDs are making a material impact in your growth currently and maybe by material, tens of millions type thing? Or are we not there yet?
Yes. We just want to be a little careful breaking out revenue by product line because of the competitive nature. So I don't really want to comment on that. I did say in my script that it's a more meaningful number, and that number will grow significantly in the quarters ahead.
So yes, I think it's an important part of MACOM. It's certainly helping drive growth here in our Massachusetts fab. Not only do we have what we believe to be one of the industry's best 200-gig PDs, but we've also launched higher data rate PDs, including a 400-gig PD, which is now in the hands of perhaps a dozen customers as they think about the next-generation interconnects. So we are on the very front edge of the market as it relates to photodiodes.
And the genesis of that is our Ann Arbor Michigan facility has been building the most sensitive photodiodes for over a decade. They have an MBE. They grow their own epitaxy. They understand the science around light emission and light detection. And that team has done a phenomenal job spending close to a decade perfecting this product, which today has industry-leading sensitivity, amazing dark currents, extremely reliable and the customers certainly are enjoying the performance of those products.
And that's all the time we have for our Q&A session. I will now turn the call back over to Mr. Daly for any closing comments.
Thank you. In closing, I'd like to thank the MACOM team for making these results possible. Have a nice day.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.
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MACOM Technology Solutions Holdings, Inc. — Q3 2026 Earnings Call
Starkes Q3: Rekord‑Bookings, deutliche Umsatz‑ und Margensteigerung; Q4‑Guide bestätigt weiteres beschleunigtes Wachstum.
📊 Quartal auf einen Blick
- Umsatz: $342,2 Mio. (+35,8% YoY, +18,4% QoQ)
- Adj. EPS: $1,40 pro Aktie (bereinigt, non‑GAAP)
- Brutto‑Marge: 59,7% (↑120 Basispunkte QoQ)
- Book‑to‑bill: Rekord 1,6:1; Bestellanteil im Quartal 11% des Umsatzes
- Cash: $663 Mio. Liquide Mittel; Netto‑Kassenposition ~ $322,5 Mio.
🎯 Was das Management sagt
- Strategie: Fokus auf "höchste Leistung, höchste Frequenz, höchste Datenrate" – Ausbau von Chip‑ und Photonikportfolios für Data Center, Industrial & Defense (I&D) und Telecom.
- Produkt & Fertigung: Ausbau interner Fertigung (Indium‑Phosphid, MESC in Frankreich, G10‑Reaktor), R&D‑Aufstockung und gezielte CapEx‑Erweiterungen zur schnellen Hochskalierung.
- Marktposition: Diversifizierung der Kundenbasis (>20 Kunden > $10M), starke Nachfrage insbesondere Data Center (800G/1.6T PAM4), Defense‑Wins und zunehmende LEO‑Aufträge.
🔭 Ausblick & Guidance
- Q4‑Umsatz: $415–425 Mio.
- Q4‑Marge: Adjusted Bruttomarge 60–61%; bereinigtes EPS $1,97–$2,03 (78,9 Mio. verwässerte Aktien)
- Segmenttrend: Erwartete QoQ‑Wachstumsbeiträge: Data Center ~+35%, I&D ~+20%, Telecom niedrig einstellig
- Operative Ziele: Q4 Adjusted Operating Margin Ziel ≈37%; FY26 CapEx erwartet $60–65 Mio.; Q4 Operativer Cashflow > $100 Mio.; bereinigte Steuerquote aktuell 3%, Anstieg auf mittlere einstellige Prozentsätze in FY27 möglich.
❓ Fragen der Analysten
- Data Center‑Treiber: Wachstum angetrieben von 200G PAM4 (pluggable) sowie stärkeren PDs, TIAs/Driver; Book‑to‑bill und breite Produktakzeptanz treiben Visibility.
- NPO & Integrationspfad: MACOM liefert Chips (TIAs, Driver, PDs), keine vollständigen Engines; zahlreiche NPO‑Entwicklungsprojekte, Produktionsumsätze eher 2028 erwartbar.
- Laser‑Risiko vs. Chance: CW‑Laser in Qualifikation; Management plant mögliche Produktionsvorbereitung Ende 2027/2028, Erfolg noch nicht garantiert.
⚡ Bottom Line
- Implikation: MACOM zeigt starke operative Hebelwirkung: Rekordbestellungen, beschleunigtes Umsatz‑ und Margenwachstum sowie klare Investitionen in Photonik‑Fertigung. Hauptchancen sind Data Center (800G/1.6T, PDs, Laser) und Defense/LEO; Hauptrisiken sind erfolgreiche Laser‑Qualifikation, Ausbringungs‑/Lieferkapazität und steigende Steuerquote.
MACOM Technology Solutions Holdings, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Welcome to MACOM's Second Fiscal Quarter 2026 Conference Call. This call is being recorded today, Thursday, May 7, 2026. [Operator Instructions]
I will now turn the call to Mr. Steve Ferranti, MACOM's Senior Vice President of Corporate Development and Investor Relations. Mr. Ferranti, please go ahead.
Thank you, Olivia. Good morning, and welcome to our call to discuss MACOM's financial results for the second fiscal quarter of 2026.
I would like to remind everyone that our discussion today will contain forward-looking statements, which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. For a more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC.
Management's statements during this call will also include a discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today.
With that, I'll turn over the call to Steve Daly, President and CEO of MACOM.
Thank you, and good morning. I will begin today's call with a general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q2 results for fiscal year 2026. When Jack is finished, I will provide revenue and earnings guidance for the third quarter of FY '26, and then we will be happy to take some questions.
Revenue for the second quarter of fiscal 2026 was $289 million, and adjusted EPS was $1.09 per diluted share. Demand for our products is strong across our 3 end markets, and our backlog continues to build. Our sequential financial performance improved across most key metrics in Q2, including gross and operating margins. Our Q2 book-to-bill ratio was 1.5:1 and orders booked and shipped within the quarter was 18% of total revenue. All 3 end markets had exceptional bookings with notable outperformance in the Data Center. Our backlog remains at a record level, and we believe this strength reflects that we are in the right markets with the right products at the right time.
Turning to recent market trends. Q2 revenue performance by end market was as expected, with all end markets growing sequentially. Industrial and Defense was $120.7 million, Data Center was $98.2 million,and Telecom was $70.1 million. Data Center was up approximately 14.5% sequentially, Telecom was up 3% sequentially and I&D was up 2.5% sequentially. Both I&D and Data Center revenues are at record levels.
As we look to the second half of our fiscal year, we expect Data Center and I&D revenues to continue to lead our growth. With the exceptional first half bookings, we are positioned for a strong second half. Additionally, we expect to see momentum from our Telecom segment as we enter our fiscal 2027 due to the anticipated timing of LEO space production programs and associated revenues. We believe our growth strategy of strengthening our core technologies and expanding our product portfolio around 3 central themes: Highest power, highest frequency and highest data rate, is working. We believe we are establishing ourselves as a differentiated strategic supplier to our customers.
Next, I'll quickly summarize progress on our 5 goals for FY '26, which we outlined on our last call. First, taking advantage of the data center opportunity. We continue to enhance our design and manufacturing capabilities to support our customers in this market. And we are pleased to raise our Data Center FY '26 revenue growth base case from 35% to 40% to over 60%.
Second, expanding our 5G market share. We have developed 2 new process technologies, which will provide us with both performance and cost benefits. GaN 4 is our next-generation process for high-power linear amplifiers for 5G base stations, and we expect our new IPD processes will enable us to in-source these components while achieving better electrical performance at a lower cost. Our technology teams have done a great job making these processes a reality.
Third, extending our leadership in I&D. I am pleased that we recently received a Defense Manufacturing Technology Achievement Award sponsored by the Joint Defense Manufacturing Technology panel. The panel includes members from various armed services and the Office of the Secretary of Defense. This award reflects our progress to increase manufacturability of advanced GaN technology. Our team continues to innovate, and we look forward to introducing a wide range of advanced GaN MMIC products in the next 12 to 18 months.
Fourth, continued development of advanced III-V semiconductor technologies. We continue to strengthen our semiconductor processing expertise and capabilities. As an example, our team has done amazing work on OMMIC regrowth for advanced high-efficiency GaN amplifiers. In addition, we are developing advanced indium phosphide epitaxial stacks for our next-generation optical products for the data center.
And last, management of our capital and investments. As we discussed last quarter, we have numerous strategic investment activities that we believe will support our fiscal 2027 and 2028 revenue growth objectives. We take a disciplined approach to managing capital investments for near- and long-term success.
Next, I'll take a moment to review each of our 3 core markets in more depth. Data Center. Based on customer engagements and general market trends, we expect 1.6T deployments inside the Data Center to continue to be strong throughout calendar 2026. Today, our revenue growth is primarily being driven by increased pluggable optical modules and optical cable production volumes using our 800 and 1.6T PAM4 products. As a reminder, our portfolio is highly diversified, supporting NRZ, PAM4 and coherent modulations across EML, silicon photonics and VCSEL-based architectures. We are also seeing modest growth from our lower data rate 100G single-mode and multimode products.
Demand for our 200 gig per lane photodetectors continues to grow, supporting 800G and 1.6T optical connectivity. Part of our near-term and long-term growth strategy is to expand our photonics portfolio with both higher-speed photodetectors and CW lasers.
We are seeing growing interest in coherent light solutions as coherent modulation can enable higher bandwidth performance with significantly improved power efficiency, especially in shorter-reach applications. We believe coherent light solutions will expand, and we are well positioned to support this trend. We continue to promote linear equalizer products to help extend the reach of copper interconnects at 800G and 1.6T. We are working closely with customers to address their specific program requirements and various use cases.
In many cases, our newest products are designed for co-packaged and highly integrated architectures like CPO and NPO. We can differentiate in this market based on our strong customer relationships, IC and system design expertise as well as our unique photonic materials.
In summary, as we look ahead, we see many new large opportunities in the Data Center. We believe our SAM is increasing due to the combination of AI-driven market growth, combined with our product portfolio expansion. Our strategy is to collaborate with the leaders in the industry and support their connectivity needs, whether it's scale up, scale out or scale across.
Turning to our I&D business. We are seeing many growth opportunities across the Industrial and Defense markets, primarily in the Defense segment. Comparing our first half results of FY '26 with the first half of FY '25, our I&D business grew by 22%. Overall demand remains healthy and notably, we expect revenues from our top 25 defense customers to significantly increase from FY '25 to FY '26. Our Defense customer base is large and very broad, and we typically support radar systems, missile and missile defense systems, drone and drone defense systems, communication systems and wideband electronic warfare systems.
Today, we support a wide range of production programs across a diverse range of applications. We are also involved with redesigns and upgrades of existing platforms to improve performance against new threats and to improve overall system performance with more capable and modern electronics.
Finally, the DoD is pushing our customers for rapid design and deployment of new systems and capabilities, spanning from modern radars to better electronic warfare systems, new space-based sensors and even more secure communications. These systems are typically using higher frequencies, higher RF or microwave power levels and higher levels of integration. In some cases, high-performance optical systems are deployed such as RF over fiber for remote antenna systems.
The pace of innovation in the Defense market is accelerating by both the traditional defense primes and the newer, more nimble defense companies. These demanding requirements play directly to MACOM's strengths, and we offer our customers turnkey support from custom chip design to subsystem solutions. All of this is driving incremental semiconductor content growth opportunities and opening up new design win opportunities.
MACOM has numerous competitive advantages within the I&D market. At the heart of these is MACOM's deep expertise in high-performance IC design capabilities spanning RF, microwave, millimeter wave and optical domains. We have a growing team of system designers with architectural knowledge, which enable us to engage much earlier in our customers' project design cycles, and we present the full scope of MACOM's capabilities to help solve the customers' technical challenges.
MACOM also offers European and U.S.-based wafer fab and U.S.-based hybrid manufacturing capabilities at scale with proven technology, reliability and long-term supply assurance, factors that are increasingly important as defense customers prioritize domestic sourcing and supply chain security.
Within the Telecom end market, satellite-based broadband access and direct-to-device, or D2D, opportunities remain robust with numerous LEO networks in the planning and production stages. The number of LEO satellites planned to be launched continues to grow as more companies compete to provide commercial broadband data, voice and video communications by satellite. These networks typically use microwave or millimeter wave frequencies and free space optics or FSO communications for satellite-to-satellite or satellite-to-ground communications.
Today, we are supporting LEO broadband constellations and D2D programs that are either in development, low rate initial production, or LRIP, or full production. LEO and MEO constellations have many key areas where MACOM can contribute, including large phase array antennas with active beam steering, D2D links operating at UHF or S-bands, data center-like electronics with high-speed optical links transferring data within or across the satellite, free space optics for satellite-to-satellite communications and ground terminal and gateway linearization for high-power transmitters.
I'll note the backhaul networks for these constellations continues to move higher in frequencies. The 40-nanometer GaN technology, which MACOM recently licensed from Hughes Research Lab, HRL, is being transferred to MACOM's fab. This technology will enable high-capacity satellite links using E-band, W-Band and D-band.
Ground stations and gateways are also a key part of the LEO networks. MACOM specializes in designing products and solutions that overcome nonlinearity of RF, microwave and millimeter wave signal transmission for satellite communication systems. In many cases, ground-to-satellite links prefer linearization of SSPAs or TWTAs to boost the linear power efficiency of the link.
Turning towards the 5G segment of Telecom. Our global team continues to secure new business and macro base stations, driven by the need for high-performance amplifiers and multiband radios. Our RF power team is now sampling our new GaN 4 products to customers, which we believe will further improve our competitiveness. We expect the global RAN market will be flat in 2026 with some regional variations. However, for MACOM, we expect our future 5G growth will be driven by content and market share gains as we have; one, recently added new resources; two, roll out new products and technologies like GaN 4, SOI control products and power amplifier modules or PAMS; and three, gain market share in high and low-power macro and MIMO amplifiers. We are making good progress improving the overall performance and competitiveness of our base station portfolio, especially in the 2.7 to 3.5 gigahertz bands.
And last, we believe the cable TV infrastructure market segment is also improving. We have been releasing new products and working with customers on design wins to support the upgrades from DOCSIS 3.1 to DOCSIS 4.0.
Before turning it over to Jack, I would like to quickly highlight how teamwork across the organization directly impacts our financial results with operations and engineering being a great example. Our North Carolina fab has been increasing wafer production while simultaneously improving yields and lowering cycle times. This performance is driving improved customer satisfaction and contributing to new business and enabling us to win new customers.
Our Massachusetts fab has been installing complex processing equipment to support production ramps in some areas while maintaining production continuity in other areas. Seamlessly adding this capacity is enabling us to gain market share from our competitors. Our global planning team continues to partner with key suppliers and partners to ensure that customers are getting the deliveries they need on time. This results in brand loyalty and enables us to fully leverage our entire technology portfolio into the market and capture market share. These examples illustrate how dedication, commitment to excellence, teamwork and coordination of our manufacturing, engineering and planning community is directly leading to market share gains and revenue growth.
In summary, our strategy is to continue to build a best-in-class diversified semiconductor portfolio that will enable MACOM to capture a larger share of the 3 markets we focus on. Our agility and strong teamwork across our organization helps us address opportunities and ultimately beat the competition that are often larger and have more resources.
Jack will now provide a more detailed review of our financial results.
Thanks, Steve, and good morning to everyone. The results from our second quarter improved from Q1, and MACOM again achieved multiple new quarterly records associated with our financial performance. We have seen operational improvements across the organization, which is driving increased revenue growth and profitability.
Fiscal Q2 revenue was $289 million, up 6.4% sequentially and up over 22% year-on-year, driven by growth across all 3 of our end markets, with Data Center leading followed by I&D and Telecom. The strong bookings across all our end markets resulted in a book-to-bill of 1.5:1. This was the largest quarterly bookings in the company's history.
Adjusted gross profit for fiscal Q2 was $169 million or 58.5% of revenue. This represents a gross margin increase of 90 basis points over the prior quarter. We continue to make solid progress to increase our capacity and improve product yields, and we expect to see ongoing incremental progress across our fab operations during the remainder of fiscal 2026.
The increase in product demand across the business have resulted in improved utilization of our operations and supported the recent gross margin improvement. As we move forward, we expect ongoing sequential gross margin improvements through the remainder of fiscal 2026.
Total adjusted operating expense for our second quarter was $88.6 million, consisting of research and development expense of $59.1 million and selling, general and administrative expenses of $29.5 million. The anticipated sequential increase in adjusted operating expense compared to Q1 was primarily driven by ongoing R&D investments and employee-related costs.
As our business expands, we expect associated OpEx growth will be primarily related to increased R&D investments and higher variable costs. Consistent with past practice, we will remain very focused on managing our OpEx to balance long-term revenue growth and profitability with continued investment in the business to support all of our end markets.
Depreciation expense for fiscal Q2 2026 remained relatively stable at $9 million, slightly above the prior quarter. Adjusted operating income in fiscal Q2 was another record coming in at $80.5 million, up 8.8% sequentially from $74 million in fiscal Q1 2026 and up 34.5% year-over-year.
I would like to note that our Q2 adjusted operating margin was 27.8% and has increased over the last 3 fiscal quarters. We expect our adjusted operating margin to be approximately 30% next quarter, highlighting the leverage in our financial operating model.
For fiscal Q2, we had adjusted net interest income of $6.5 million, a decrease of approximately $200,000 sequentially from $6.7 million in Q1. The slight decrease was primarily due to the planned repayment of $161 million of our 2026 convertible notes during the quarter. We are pleased to have been able to retire this debt and further delever our balance sheet.
Our adjusted income tax rate in fiscal Q2 was 3% and resulted in an expense of approximately $2.6 million. We expect our adjusted income tax rate to remain at 3% for the remainder of fiscal 2026. As of April 3, 2026, our deferred tax asset balances were $202 million. We anticipate further utilizing our deferred tax asset balances, including R&D tax credits through the remainder of fiscal 2026 and beyond. Depending on the jurisdictional mix of our income, we expect the U.S. government's recent tax legislation to support a low to mid-single-digit adjusted tax rate for the next few fiscal years.
Fiscal Q2 adjusted net income increased approximately 7.8% to $84.3 million compared to $78.2 million in fiscal Q1 2026. Adjusted earnings per fully diluted share was $1.09, utilizing a share count of 77.6 million shares compared to $1.02 of adjusted earnings per share in fiscal Q1 2026. We continue to optimize the business' performance, which has contributed to sequential increases in our adjusted operating income and EPS over the past 11 quarters.
Now on to operational balance sheet and cash flow items. Our Q2 accounts receivable balance was $160 million, consistent with our Q1 2026 balance. Our days sales outstanding averaged 50 days compared to the previous quarter at 54 days. Inventories were $252.2 million at quarter end, up sequentially from $238.9 million, largely driven by additional work-in-process inventory at our fabs as well as higher balances to support increasing demand across the business. Inventory turns remained steady at 1.9x, the same level as the preceding quarter.
Fiscal Q2 cash flow from operations was approximately $78.7 million, up $35.8 million sequentially. The sequential change was primarily due to the typical timing of supplier payments and other changes in working capital balances. We expect that our Q3 cash flow from operations will be in excess of $80 million.
As our business continues to grow, there will be variations in cash flow from quarter-to-quarter. MACOM's business model has demonstrated strong cash flow from operations over the past few years. As an example, our cash flow from operations was $163 million in fiscal year 2024, $235 million in fiscal year 2025, and we believe we are on track for our cash flow from operations to exceed $300 million for fiscal year 2026.
Capital expenditures totaled $13.2 million for fiscal Q2. We estimate fiscal year 2026 CapEx to be in the range of $55 million to $65 million as we expand capacity to meet demand requirements across our end markets and also upgrade and enhance our production and engineering equipment as well as our facilities.
Next, moving on to other balance sheet items. Cash, cash equivalents and short-term investments as of the end of the second fiscal quarter were $664.9 million. We view our cash balance as a strategic asset that can be used to help fund ongoing investments to support our growing business. We are in a net cash position of approximately $325 million as of April 3, 2026, when comparing our cash and short-term investments to the book value of our remaining $340 million of convertible notes, which mature in December 2029.
Our strategy has been to focus on growing our profitability and managing our operating asset base, which has supported an improved return on invested capital over the past several years, demonstrating our goal of building long-term financial strength for the company.
During the first 2 fiscal quarters of 2026, the entire MACOM team has contributed to helping achieve these record financial results. This hard work has established a strong foundation for us to build upon, and I look forward to the second half of our fiscal 2026.
I will now turn the discussion back over to Steve.
Thank you, Jack. MACOM expects revenue in fiscal Q3 ending July 3, 2026, to be in the range of $331 million to $339 million. Adjusted gross margin is expected to be in the range of 59% to 60% and adjusted earnings per share is expected to be between $1.31 and $1.37 based on 78.5 million fully diluted shares.
We expect sequential revenue growth in each of our 3 end markets. We expect that Data Center will achieve approximately 35% sequential growth, and we expect Industrial and Defense to achieve growth approaching 10% and Telecom to achieve low single-digit sequential growth.
As Jack highlighted, we are excited to deliver more growth and profitability during the second half of FY '26. As we continue to scale the business, we expect to see increased operating margins and profitability.
I would now like to ask the operator to take any questions.
[Operator Instructions] Our first question coming from the line of Blayne Curtis with Jefferies.
2. Question Answer
Great results. Maybe I want to start on gross margin. Obviously, there's a lot of revenue drivers, but 100 basis points in the quarter. Can you just talk about volume and then mix? And obviously, Data Center is outperforming, so that must be a driver. I just want to see how to think about it, particularly as you go through the rest of the calendar year.
Yes. Thank you for the question, Blayne. So certainly, volume is contributing to the improvements in the gross margins. We are seeing that our Lowell fab as well as our North Carolina fab have been increasing outputs, and so that's certainly having a positive effect on gross margins.
The other thing I'll add is you're correct to notice that our Data Center revenue as a total percentage of our revenue is increasing. In some instances, that's contributing to the improvements in gross margins. And in other areas, it isn't. So we -- in all of our market segments, we have a normal distribution of gross margins.
But generally speaking, the team has been very focused on yield enhancement, efficiencies, cost reductions as we're scaling across a whole wide range of technologies, some of which I talked about in the prepared remarks. So generally speaking, a lot of great work. As Jack mentioned in his commentary, we expect continued improvements in gross margin. A few quarters ago, we had said publicly, we were setting a target to exit the year around 59%. And I think today, we're updating that number to be most likely closer to 60%. And Jack, maybe you can comment further.
I think you covered off on it, Steve. There's definitely multiple factors that are helping to drive our gross margin improvements that we've seen here in the March quarter, where we were up 90 basis points. And then if you look to the midpoint of the guide being up 100 basis points. It does become a bit more challenging as the gross margins go up to squeeze more savings out of it, but our teams are continuing to work hard. And as Steve had mentioned, we expect to see further gross margin improvements as we work our way through this year and into next year.
And then I wanted to ask, you mentioned coherent light. There's a lot of talk about scale across these days. Kind of just curious your thoughts on how that market is developing? And then maybe a silly question, is it in Data Center or Telecom?
So we would put coherent light in the Data Center category. And as you know, historically, we have put the metro/long haul, which is more DCI in the Telecom segment. So we are definitely focused on that, and this is an area where MACOM has really nice differentiation. And so historically, there's been more ZR type platforms, and now they're moving to really higher data rate, higher gigabaud data rates. And just in the last 3 years, you've seen platforms go from 64 gigabaud all the way up to 128 gigabaud. Now even people are talking as high as 192 gigabaud.
So this is an area of strength for MACOM. And depending on what hyperscalers do in terms of deploying coherent light, we want to participate. So we are in a very good position. It does touch a number of our product lines where we really have differentiated technology.
Our next question coming from the line of Tom O'Malley with Barclays.
My first is on the SATCOM business in LEO. Through the earnings period here, you've heard companies talk about 7,000 to 10,000 launches over the next 3 years. Would you agree with that number?
And then maybe if you could spend some time talking on the content per satellite, if that's possible. You mentioned a lot of the different products, the phase array antennas, optical electronics, et cetera. But just some framework for thinking about the upside that could offer you.
And then on the timing of that, it looks like Telecom is up low single digits in June, but you mentioned it improves in the back half of the fiscal year. Do you see a substantial step-up in the September quarter there?
Thanks for those questions, Tom. There's a lot there. Let me try to address as many as I can. I think it's important to put in perspective that MACOM has been servicing the space market for decades. And so we are a known entity, not only on the defense side, but more and more so on the commercial side. I think you're correct to highlight that there's growth in terms of the pure number of LEOs being launched, and these are typically smaller satellites going on affordable launch vehicles and whether it's servicing broadband, direct to sell or even future talk about data centers in space, we want to participate in those.
So we don't necessarily want to comment on what the absolute quantities are. I think there's a lot of information in the market about how much this market is growing. So I think there's good information out there that's probably more accurate than ours. But I would just highlight that we are absolutely engaged with the major players across the market. And as I mentioned in my commentary, it really plays to our strengths. So yes, there's certainly huge demand, and we're trying to focus on getting wins as best we can.
In terms of the timing of our various programs, I would just say that we have active LEO production programs today. We have more that are in the sort of LRIP phase. One of the larger programs that we've talked about in the past is in the phase of delivering what we call EM modules. So basically, our customers sort of finalizing their system design. And we do expect that to go into full rate production later this year or early next year, which is consistent with what we've said in the past.
I don't think you should expect a step-up. You're going to see a ramp-up, and that will happen during the course of calendar 2027.
And just as a reminder to everybody, we're involved in really 3 pieces of the puzzle for these networks. The first is on the satellite, what people refer to as the payload. The second is the gateways. And then the third is that we are seeing opportunities in the terminals with some of our components. And so a very exciting time for MACOM to be participating across so many different customers and our module and our chip design team is very busy satisfying the requirements in this market.
Our next question coming from the line of Tore Svanberg with Stifel.
Congratulations on the strong results. I had a question on the Data Center growth now basically targeting more than 60%. Just curious, above and beyond just higher CapEx from some of your end customers, what's some of the delta here, some of the new revenue that's layering in?
Very much the expansion of our product portfolio. And we have talked about really over the last 12 months, the ramp-up of some of our optical components. And so that has certainly helped drive some of the growth. But I would say, generally speaking, our focus is on 1.6T, 800 gig. These are areas where we're seeing a lot of strength. We expect that strength to continue. And in fact, we're seeing more and more demand as we sort of enter our second half.
In terms of the new revenue or the new categories of revenue for our fiscal '27, certainly, the higher data rates, so 3.2T, possibly some coherent light ramp-ups. And also depending on the work that we're doing with our laser portfolio, we may be able to add some revenue to our fiscal '27 or even fiscal '28 on CW lasers.
So a lot of good activity there. We have been also, as everybody knows, engaged with people that are deploying copper and providing equalizers not only onboard the PC boards, but also cable-based. So very excited about those opportunities as well.
Very good. And as my follow-up, Steve, you talked more than usual on this call about team collaboration, making sure capacity is in place. It sounds like your operations execution is allowing you to gain some share. Just curious why you brought that up on this particular call. Are you seeing competitors perhaps not have enough capacity and not good planning to keep up? Or is there something else that's driving that inflection point?
Well, I think Jack and I are just privileged to be able to represent our employees. And so I think it's important to highlight the work that they're doing in collaborating to make these results happen. And so as you know, last year, the company grew by over 30%. And this year, we're on a path certainly to be in that range or higher. And we have a lot of different technologies ramping at the same time. And that absolutely requires coordination, collaboration, good, clean discussions with customers to set proper expectations. So we just wanted to highlight that.
In terms of sort of opportunities, I'll just note that because there is certainly some constraints within the Data Center market, we believe that's opening up interesting opportunities for MACOM, including, by the way, what I would consider the legacy class of lasers as med customers are, and competitors, are pivoting to more, let's say, the higher power or CW lasers to support silicon photonics, that's creating a little bit of a gap in DFB lasers. And we have a very strong broad DFB laser portfolio that can support what I would consider legacy data center 100-gig modules. And so that could be a great business for us over the next 1 to 2 years, and those products are ready today.
And Our next question in queue coming from the line of Quinn Bolton with Needham & Company.
Steve, I just wanted to follow up on the laser question. I think in the past, you said you had a couple of customers that were evaluating your CW lasers. You thought it would still sort of be a 6- to 12-month eval process. But could you give us any update on how you're feeling about the CW laser opportunity? Are you more confident that those could ramp and contribute to fiscal '27 growth?
Yes. I don't think too much has changed in the last 3 months. We have excellent optical performance of our 75-milliwatt class lasers. Customers have tested and validated performance. What our fab is doing today is dialing in a process of record. That work is not complete. So we continue to tweak the process to optimize really reliability. It's all about reliability. Typically in these systems, the weakest link is the laser. And so you need to make sure you have a very robust laser.
So there's a lot of qual work running in parallel with developing a process of record. And so that work continues, and that's all MACOM internal work. When we're ready and we feel like we have a reliable product, then we'll start working with module customers so that they can start their module quals. And then after that comes the hyperscaler qualification.
So when you add all that up and look at the time line, you're really talking about potentially, and this is assuming everything goes well and oftentimes it doesn't, a fiscal '27 or '28 time frame of contribution. We are absolutely getting pull from the market. We know there's demand. And so we just have a lot of work to do to convince ourselves that we're ready to ramp this kind of a product into high volume.
So I would, at this stage, not put your CW laser in your models, certainly not for fiscal '26 or I would say even '27. I think there's going to be a lot of other great things happening that will allow us to perhaps not only do as well as we've done this year in terms of growth, but maybe even exceed it next year because we have a lot of other irons in the fire.
And then I guess I wanted to come back on the utilization rates. I think over the past couple of years, you had mentioned the Lowell utilization rate was sort of suffering from some puts and takes in a couple of the larger defense programs and I think lower demand on the industrial side, MRI in particular. Has that utilization rate come back with the I&D business recovering? Or do you still feel like there's further room for improvement in the utilization rates of Lowell and obviously, that could be a margin tailwind as utilization increases.
I think you're correct in those comments, and we are seeing increased utilization on our traditional Lowell-based defense business. And our Defense business this year is trending to certainly over 20% full year growth. And that -- much of that, not all of it, but much of it is coming out of our Lowell fab. So that is beneficial to the sort of gross and operating margins.
Your commentary about our MRI business, which we categorize as industrial, is also improving. And we have a very strong franchise for high-voltage, nonmagnetic really kilovolt level diodes that are used in these MRI coils. We are seeing positive trends on that business, and we expect those trends to continue. So yes, those 2 things are definitely helping the Lowell utilization.
There's 2 other important things going on in our Lowell fab as well. The first is developing the advanced GaN that I talked about in my prepared remarks. And the second is the ramping up of our optical product line within the Lowell, which is an indium phosphide-based product.
Our next question coming from the line of Sean O'Loughlin with TD Cowen.
Congrats on the really solid results and momentum. First question, I just wanted to get maybe an update or offer you the opportunity to update some of your comments on the fiscal '26 segment growth other than datacom. We got the 60% growth, but I think last quarter, we talked about high teens growth in I&D. You kind of just alluded to maybe over 20% and high single digits in Telecom. Any updated thoughts there? Is that still what we should be thinking about?
Yes. I'll make some comments and then maybe Jack can also talk about sort of P&L-related items. So I do think we have a solid plan for 2026. As I mentioned, our revenue growth is going to be driven by Data Center and Defense. Today, we're definitely trending towards top line in that sort of 30% range. I can tell you that last year, we did about 32%, and it would be nice to beat that. And we also ideally would like to exit the year with at least 60% margin. We're not sure if that's going to happen. We still have a lot of wood to chop between now and the end of September, which is the end of our fiscal year. But we do see a path to having strong revenue and earnings growth. Earnings growth should be quite nice this year, certainly coming from the second half.
In terms of your commentary specifically about I&D and Telecom, I think we're thinking above 20% today for I&D, and we're going to try to push Telecom to be low double digit.
I think the only other item I would add, and obviously, the Defense piece has been quite strong for us over the past year plus. Industrial, we've been working our way through that. We touched upon the medical piece of Industrial with the last question. But more broadly, within Industrial, it is a fairly broad category. We have seen a bit of an uptick there that's helping out with our Lowell utilization. It's also driving some of that revenue or top line improvement that we see in that combined Industrial and Defense end market.
And really, as we look at filling out the rest of the P&L with some of that revenue growth, we are very much focused on improving those earnings and improving the leverage and the drop-through from an operating income and also from an EPS perspective as we work our way through the remainder of '26 and then focus more on '27 as well.
That's helpful color. A quick follow-up. Just on the input side, I know that indium phosphide is one of the materials that you use. And so I don't want to over-index to these comments, but we've had some comments from public substrate suppliers about price increases and just maybe generally across your manufacturing footprint, is that something that you're either having to absorb and there's a timing mismatch? Or is the pricing environment for a lot of these products such that you're able to sort of pass those through? Or is that not really something that you're seeing outside of the indium phosphide?
I'm not sure we want to get into the cost basis of any materials we buy. We're constantly buying gases, precious metals, gold, indium phosphide substrates, silicon carbide substrates, and we have a very strong supply chain that works very closely with our partners to make sure we're getting what we want when we need it at a fair price.
Although I will mention maybe one thing. You may have seen recently where MACOM announced a small investment in a company called IQE. We put out a press release on April 27, and this is sort of somewhat related to your question. And people may not be familiar with IQE. So they are a U.K.-based company that provides epitaxial services, and they went through a -- recently, they went through a fundraising event where MACOM participated. They raised GBP 80 million. We participated with a GBP 45 million investment.
And just to break that out very quickly, it was GBP 30 million in equity for about 11% ownership and a GBP 15 million convertible note. And ultimately, what we did as part of this transaction is put in place a long-term supply agreement to make sure that we have adequate supply of the technologies that we're currently acquiring from them and from others. And so the why we did it really revolves around your question, which is what is MACOM doing to ensure we have strong supply chain security and resiliency. And I think this is a great example of a strategic transaction, which is going to shore up not only our business regarding indium phosphide, but also the silicon carbide.
And so where we stand right now with that is it's going through regulatory approval. There will be a shareholder vote, and it's expected to close in the next 30 to 60 days. And so this is sort of an example of MACOM proactively looking at risk and retiring risk. And so this will backstop our expected growth, not only as it relates to indium phosphide-based products, but also silicon carbide-based products and some other technologies as well.
And our next question coming from the line of Will Stein with Truist Securities.
Congrats on the very strong outlook. The main thing I wanted to ask about was, Steve, in your prepared remarks, you talked about addressing the user terminal market within the LEO satellite industry. And this is, I believe, a pretty big change in strategy, at least relative to what I've heard the company talk about. We had the message previously that your focus was going to be essentially in infrastructure, the satellites and the gateways. User terminals, of course, look more like it's customer premise equipment, right, and sort of the consumer market. That's sort of uncharacteristic for you. So can you talk about what changed? What makes you want to address that market? What products you're selling and sort of timing to ramp there?
Yes. I think that's a great question. And to be clear, when we look at that market, we're looking to be opportunistic. And so we are seeing some AESA technology basically using a wide range of control products, which would fit very nicely into our AlGaAs diode-based portfolio. So you're correct to conclude we're not chasing SoCs or receivers or highly-integrated customized chips for user terminals. That is not the case. But we are seeing inbound requests for some of our control products. And so we will opportunistically look at that.
Great. And then as a follow-up, I guess, the big-picture question is you had a huge book-to-bill this quarter. Obviously, that's not all for delivery in fiscal Q3. Can you talk about the spread across end markets and the duration of that? What's changing there?
Well, certainly, as I mentioned, the strongest portion of our new orders was in the Data Center. But I will say that all 3 markets had a very strong booking event. Typically, these orders will be spread out over multiple quarters. And so I don't really want to get into any more detail than that.
We typically, just as a practice, only recognize bookings that are within a 12-month period as well. So this 1.5 book-to-bill really reflects orders that would be delivered within 12 months.
And our next question in queue coming from the line of Christopher Rolland with Susquehanna.
Congrats. I wanted to drill down on Data Center, particularly in June. So it's just absolutely inflecting. I don't think we've seen this kind of growth before. And so my question is, why now? It sounds like a lot of it is optical. When it comes to discrete components, I'm just trying to figure out kind of why the inflection? Is it just a units play? Is there something here like new DSPs that don't contain TIAs and drivers? Or is it really this move to 1.6? What's really driving that over $30 million inflection in Data Center sequentially? Why now?
Yes. Thank you for the question. And so if we pull back and look at the general trends of our Data Center business over the last 3 years, in 2024, we grew our Data Center business by 35%. In 2025, we grew it by 48% and now we're, in '26, forecasting over 60%. So the trend is there to see in terms of the long-term growth. And clearly, we're investing in a variety of technologies that would be suitable for this market. We tend to gravitate towards the highest data rate type products. We were one of the early suppliers to the 1.6T rollout, and that is paying big dividends right now as that use case expands across the data center and various hyperscalers. And so we're able to solidify strong positions there.
And of course, we're overlaying our optical components. We talked about the PDs, the photodetectors. We're working on the lasers. They're not quite there yet. So I don't know that there's an inflection point rather than a trend. And the trend is that our portfolio is broad in nature, and we're gaining traction at a wide range of customers selling a variety of functions.
And as part of our strategy, we want to be diversified. So as you know, we don't sell DSPs just for the record, but we want to support module manufacturers that are, for example, using LPO or if a particular customer wants to electrify copper or maybe they want to experiment with coherent or coherent light.
So these are all things that we're very focused on. These are long-term activities that are now starting to pay dividends. So it's not really an inflection point. I would say it's consistent with really the unit growth within the market as well. And so we're just trying to keep up with the growth, and that's some SAM expansion as well as portfolio expansion.
The only other item I would add, Steve, is, yes, the higher speeds are definitely helping to contribute to the growth that we've seen, but also some of the lower speeds, 100G and below has continued to hang in there over the past number of quarters and would expect that trend to continue as well.
Excellent. Perhaps as a follow-up on copper this time. If you could talk about engagements, particularly on kind of large-scale architectures, whether they're trending towards ACC or LE and kind of your outlook for this market? Do you think this is kind of the next big thing? Or this is, at this point, a little bit more of a TBD?
Yes. I would put it in the category of a TBD, and we are seeing real demand, real hardware, real production ramps on the optical side. And that is certainly the vast majority of our revenue today. So the electrified cable is a great opportunity for us and will be additive in the future. And of course, as I mentioned, we are going after equalizers not only for sort of traditional high-speed 1.6T, but also PCIe and other applications that are closer to compute, let's say.
So we are very active with our equalizer portfolio at various accounts, and there is a wide range of use cases that we're chasing.
And our next question coming from the line of Timothy Savageaux with Northland Capital Markets.
And I'll add my congrats on that guide, pretty spectacular. My question or at least first is just trying to understand more about the size of your photonics or optical device business, which we're talking about more and more here. And I don't know what kind of color you're able to provide. Does that business get to 10% of Data Center revenue in any one of these quarters in the second half? That seems possible? Or is it already there? Or as you look at your sequential growth here in Q3 and heading into the second half of the year, is that a meaningful proportion coming from the optical device side? And then I'll follow up.
Great. Thanks for the question. And just to highlight that we don't typically break out revenue by product line, and that would be a very -- mainly for competitive reasons. And that -- so that would -- what you're asking is a very specific question that we would prefer to not answer so directly.
I will say that we have a very strong product. I think our PD has definite advantages over what we're seeing in the market in terms of our ability to mass produce these with industry-leading dark currents, [indiscernible] chips, lens integrated onto the device. We have developed in our Ann Arbor fab, a very strong epi recipe that is providing the industry with very high levels of sensitivity. So all of those things are certainly playing into some of the successes we're having with the PDs.
The other thing I'll note is we demonstrated, I think, a year ago at OFC, the idea of stacking the PDs on our TIAs. And so that has certainly been beneficial in terms of supporting not only TIA growth, but also PD growth.
But we do have a diversified portfolio. We're not going to break out how much is concentrated on any one product at any one time because it's constantly changing.
Okay. But it sounds like it's getting to be material. Maybe we can get a binary answer on that. But either way, I do have a follow-up about kind of the inflection. And the question is about within Data Center, customer diversification, right? I mean you have a very big customer in China is doing extremely well, and that could be a lot of it. But could you address maybe your reach throughout other major module suppliers in other places? And to what extent is that a big factor versus growth in your current major module customers?
Right. And I think embedded in that question is really what's your exposure to the hyperscalers because that -- and so it really starts there in understanding what their needs are and understanding who they're using within their supply chain, and then we try to align ourselves with both. And depending on the hyperscaler, the platforms, the technology they're working, we try to align ourselves either directly to their road maps or to their vendors' road maps.
I will say that from maybe a year or 2 years ago, our diversity today is far stronger. And so we see revenue today in scale up, scale out and scale across. So we are actively positioned in each one of these different areas. And that exposure varies by the module manufacturers, certainly varies by the hyperscaler. But at the end of the day, a lot of this is 1.6T. That is sort of the main event. Today, it's going to continue, as I mentioned, throughout the course of our fiscal '26, calendar '26 and even into '27. And if we pull back and we look at the work that we're doing there, as I mentioned earlier, I think we have potential to do really well in our fiscal '27, where obviously, we'll have to wait and see how things go. But we are getting large orders that go out in time that support real production programs.
And our next question coming from the line of Karl Ackerman with BNP Paribas.
I have two, if I may. Steve, your book-to-bill of 1.5 appears to be a record, certainly multiyear record anyway. Should we expect meaningful capital investments in fabs to support this backlog? Or do you have the necessary capacity and assurance of supply to address this growth?
So we are investing in our fabs, and that's -- I think that's a very interesting question to ask, and let me just very briefly talk about that. So about a year ago, we talked about increasing the wafer production capacity in our North Carolina fab by 30%. We said that would take 15 months. That work should be done by the end of this calendar year. And so we invested less than $20 million. That was about $15 million to $16 million. We had the opportunity to buy heavily discounted fab equipment from the market. So that's baked into our numbers and the capital numbers.
When you look at our Massachusetts fab, we are investing in equipment for advanced GaN. We're investing in equipment to expand indium phosphide capacity and production, and we're doing general modernization. And then in our French fab, we're moving the entire product line from 3-inch to 6-inch. That equipment is already in place. There's been very little money spent to do that. However, we are installing a new MOCVD reactor in France to support some of the volumes that we anticipate in the next couple of years.
So there is definitely moderate investments. As we think about our business and being diversified, you will not see us greenfielding -- building a new fab, building a new factory. We think -- we have a target. Now that we hit $1 billion of revenue, we want to hit $2 billion. And we don't need to buy a fab or build a fab to do it. What we need to do is expand incrementally capacity within the walls of our existing facilities.
And that's a very -- and that's why, as Jack mentioned in his commentary, you're going to start to see tremendous earnings growth. Capital should be in that 4% to 5% of revenue range, and we have no major big investments planned. Do you want to add to that, Jack?
That's correct. So we're -- I think the guide that we put out for the remainder of our fiscal year '26 was $55 million to $65 million, depending on the timing of the completion of some of these items and when the capital was purchased. But we've been very disciplined and don't expect the CapEx number to exceed that 5% of revenue. And I think history has demonstrated that we'll be very prudent with what we're doing, but also opportunistic to make sure we can meet the capacity requirements that are out there.
Yes. Very clear. For my follow-up, last quarter, you spoke about how one of your competitors had exited the RF power game market. Do you believe that remains a tailwind for you throughout the second half of this year? Or has the benefit now largely been realized?
So the benefit has not been realized, and it won't -- if there is a benefit, right? If there is -- so it won't -- it hasn't been realized yet. It won't happen in '26. The revenue will start to shine through in '27. And the reason for that is as we see some of the customers pivot and engage MACOM on new platforms, it takes time for those design wins to translate into revenue. So it's really, I would say, best case, a back half of '27 contribution.
And as that competitor exited the market, they put in place last time buys, they built inventory for customers. They're doing it very responsibly. So really, what we're intersecting is new programs and new opportunities as opposed to existing programs that are in flight or in production.
And our next question coming from the line of Vivek Arya with Bank of America Securities.
This is [indiscernible] on behalf of Vivek. Congrats on the results as well. A follow-up on earlier gross margin question. And clearly, you said you're investing a lot in incremental capacity. At the same time, you're really scaling a lot in volume and you're improving yields. So I just wanted to know the puts and takes into what really goes inside gross margin medium to long term as you're already kind of at that target model level?
Yes. Not sure if we've put a target model out there, but definitely been working to try and improve our gross margin. As I've stated previously, there's a lot of moving pieces that contribute to the gross margin, right? We've got some of the normal costs that are out there, including labor, facility costs, equipment depreciation, those types of things as well as material costs that's all working its way through our gross margin.
So yes, we've been pleased with the progress we've made over the past few quarters. And as we look out to the remainder of '26, look for continuing improvements on gross margin and also as we work our way through 2027.
Got it. And then more of a longer-term question. So obviously, fiscal '26 is really looking exceptional. As we look into '27, and I think a lot of the same drivers should relatively remain. So the 1.6T transition, the 200G PDs and et cetera. So do you see any other potential risks that would lead to results otherwise? So for example, I think an earlier question to supply availability, maybe some component cost increase or any quarterly lumpiness or just your customer exposure mix. Any help in understanding how next year should traject should be helpful.
Thank you. And I think, yes, to all of those elements that you described, that those are things we deal with on a regular basis. And that's also why we're always hesitant to talk about long-term targets and growth because there's a lot of variables that are outside of our control.
But that said, we are in a position where we have -- as I mentioned on my script, we're in the right place at the right time with a great product portfolio, and we have a lot of interest across the 3 markets. So we do expect our fiscal '27 to be a strong year. And we don't think that this growth we're seeing in this quarter is sort of a onetime event. We expect to see solid growth in 2027.
I think it's the normal list of risks that you brought up. There's always geopolitical, supply chain type issues that you have to deal with, and we think we do that reasonably well. So that's also, of course, offset by new growth opportunities. And the Defense market right now is very active, not only here in the U.S., but also overseas. We have a growing customer base in Europe. When we were looking at our recent growth rates, between North American and European Defense customers, they're both growing at the same rate, and we are very pleased to see that. So the Europeans are spending more money on electronics and defense systems, and we're participating in that. So that's certainly going to help next year.
The Data Center, we're not expecting a slowdown. The hyperscalers continue to invest. That's clear. And on the Telecom side, we're well positioned in SATCOM to have a very strong year in our fiscal '27.
Thank you. And there are no further questions in the queue at this time. I will now turn the call back over to Mr. Daly for any closing comments.
Thank you. In closing, I would like to thank all of our dedicated and talented employees who made these results possible. Have a nice day.
That does conclude our conference for today. Thank you for your participation, and you may now disconnect.
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MACOM Technology Solutions Holdings, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Welcome to MACOM's First Fiscal Quarter 2026 Conference Call. This call is being recorded today, the Thursday, February 5th 2026. [Operator Instructions] I will now turn the call to Mr. Steve Ferranti, MACOM's Senior Vice President of Corporate Development and Investor Relations. Mr. Ferranti, please go ahead.
Thank you, Olivia. Good morning, and welcome to our call to discuss MACOM's financial results for the first fiscal quarter of 2026. I would like to remind everyone that our discussion today will contain forward-looking statements which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those discussed today. .
For a more detailed discussion of the risks and uncertainties that result in those differences, we refer you to MACOM's filings with the SEC. Management's statements during this call will also include a discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today. With that, I'll turn over the call to Steve Daly, President and CEO of MACOM.
Thank you, and good morning. I will begin today's call with a general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q1 results for fiscal year 2026. When Jack is finished, I will provide revenue and earnings guidance for the second quarter of FY '26, and then we will be happy to take some questions.
Revenue for the first quarter of fiscal 2026 was $271.6 million and adjusted EPS was $1.02 per diluted share. Demand for our products is strong across our 3 end markets, and our backlog continues to build. Our financial performance improved across most key metrics in Q1. At quarter end, we held approximately $768 million in cash and short-term investments on our balance sheet.
Our Q1 book-to-bill ratio was 1.3:1, and orders booked and shipped within the quarter was 23% of total revenue. Our Q1 turns business was higher than recent quarters due to strong early quarter bookings. Our current backlog remains at record level. Turning to other recent trends. Q1 revenue performance by end market was as expected and all end markets grew sequentially.
Industrial and Defense was $117.7 million. Data center was $85.8 million, and telecom was $68.1 million. Data center was up approximately 8% sequentially, Telecom was up 3% sequentially and IND was up 2% sequentially. Both IND and data center revenues were at record levels. As we review our full fiscal year forecast, we are gaining confidence that our data center revenue could achieve 35% to 40% year-over-year growth.
Hyperscalers capital investments are robust, which is driving demand for our 800 and 1.6T optical and high-speed analog products. To capitalize on this opportunity, we have been expanding, and we will continue to expand our data center product portfolio. As a reminder, our portfolio currently supports NRZ and PAM4 in coherent modulations and we provide products that support VCSEL, EML and silicon photonic-based optical transmission technologies as well as electrical connectivity solutions over copper.
Revenue growth inside the data center is robust, primarily in pluggable optical modules and optical cables with our 800G and 1.6T PAM-4 products. We support our customers DSP, LPO and LRO module architectures. We also support customer requirements for coherent DCI hardware, including ZR and ZR Light. MACOM's coherent light solutions designed for shorter-reach coherent applications enable higher bandwidth performance with significantly improved power efficiency compared to traditional coherent systems.
Interest in LPO continues to spread, and we are further supporting customers as they leverage the benefits of a low-power and low latency 400G and 800G optical interconnect solution. In addition, we see interest in enabling a similar value proposition at 1.6T using LRO or LPO implementations.
In this case, a 200 gig per lane solution would be used. We're also supporting LPO use in PCIe and NPO implementations as the industry strives to optimize interconnects for both scale up and scale out. And notably, we are starting to see interest in LPO from telecom fronthaul applications. Demand for our 200 gig per lane photodetectors continues to grow supporting 800G and 1.6T connectivity.
As I highlighted on our last earnings call, we are adding manufacturing capacity to keep up with our customers' forecasted demand. We have indications that demand will remain strong in calendar 2027 into calendar 2027. Further, MACOM is positioning itself to support next-generation optical receiver platforms at speeds beyond 200 gig per lane.
Part of our near-term and long-term growth strategy is to expand our photonics portfolio with higher speed photodetectors and new CW lasers. We are also seeing renewed interest in our linear Equalizer products that help extend the reach of copper interconnects in 800G and 1.6T.
Linear equalizers enable longer reach active copper cables or ACCs, and can enhance signal integrity when used in backplane applications. We are working closely with multiple customers to address their program-specific requirements and various use cases. MACOM's road map extends to 3.2G technologies and we have aligned our product road maps and resources with our customers' needs to ensure we deliver the right technology at the right time.
Our future products are increasingly optimized for co-packaged and highly integrated architectures like CPO and NPO. We can differentiate in this market based on our strong customer relationships, IC and system design expertise as well as our unique photonic materials and product design expertise. And finally, we have successfully launched a PCIe 6 optical chipset that supports sideband data streams over fiber, and we have expanded the portfolio with a new PCIe 7 equalizer.
These ICs provide new exposure to the compute side of the data center network. These products and associated solutions will be on display at the design can show in Santa Clara, California later this month. Similar to the data center, we see many growth opportunities across the industrial and defense markets, but primarily in the Defense segment.
Advanced radars, electronic warfare and new communication systems are using higher frequencies, higher RF or microwave power levels and higher levels of integration. These requirements play to our strengths, and we offer our customers turnkey support from custom chip design to subsystem solutions. We are a supplier of choice among many of the large U.S. defense OEMs and we continue to work to expand MACOM's presence and brand in Europe. The pace of innovation in the defense market is accelerating by both the traditional defense primes and the newer, more nimble defense companies.
As an example, new risks from drone attacks are driving the need for an entirely new platform to detect, identify, track and respond to these threats. MACOM has a portfolio of products and system engineering capabilities to support our customers' fast design and manufacturing time lines. Our defense customer base is large and very broad, and we typically support radar systems, missile and missile defense systems, drone and drone defense systems and wideband electronic warfare systems.
I'll illustrate 4 examples where our products have a competitive advantage in the defense market. MACOM has developed a family of industry-leading, high-efficient wideband game mimic amplifiers that significantly reduce the transmitters heat dissipation. This is critical for small form factor applications.
Our GaN technology supports directed RF energy solutions, our 7-kilowatt devices lead the industry. Our RF over fiber products enabled distribution of RF and microwave signals over long distances using linear photonics. Our products are typically used in phased array radars, remote antennas and tow decoy applications.
And when it comes to receiver protection diodes, whether in a radio or a radar, MACOM is the golden standard in the industry for performance and quality. We like to combine our proprietary core technologies with microwave systems engineering capabilities. This enables us to engage much earlier in our customers' project design cycles and presents the full scope of MACOM's capabilities to help solve the customers' technical challenges.
Within the telecom end market, satellite-based broadband access and direct to sell opportunities remain robust with numerous LEO networks in the planning stages. The number of LEO satellites planned to be launched continues to grow as more companies compete to provide commercial broadband data, voice and video communications by satellite.
These networks typically use microwave or millimeter wave frequencies and free space optics or FSO, communications for satellite to satellite or satellite to ground communications. LEO and MEO constellations have many key areas where MACOM can contribute, including large phased array antennas with active beam steering, direct-to-device links operating at UHF or S-band, backhaul links operating at Ka, CV and E-band data center-like electronics with high-speed optical links transferring data within or across the satellite, free-space optics for satellite to satellite communications and ground terminal and gateway linearization for high-power transmitters.
Ground stations and gateways are a key part of the LEO networks. MACOM specializes in designing products and solutions that overcome nonlinearity of RF, microwave and millimeter wave signal transmission for satellite communication systems. In many cases, ground to satellite links prefer linearization of SSPAs or TWTAs to boost the linear power efficiency of the link. I would like to update investors on the status of our $55 million satellite contract that we were awarded and announced previously.
Production is planned to start in the second half of calendar 2026. The schedule delay is primarily driven by satellite system changes flow down from our customer, which impact the design of the hardware we deliver. Overall, we view this as a positive because the system changes can add new functionality, which broadens the application space for the Constellation.
Turning towards the 5G segment we serve. Our global team continues to secure new business in the macro base station market, driven by the need for high-performance amplifiers and multi-band radios. We are making good progress improving the overall performance and competitiveness of our base station portfolio with major improvements in the 2.7 and 3.5 gigahertz bands.
Our RF power team is sampling products using our new GaN 4 technology, which will further improve our competitiveness. We recognize the 2 major European base station OEMs expect global -- the global RAN market to be flat in 2026 with regional variations. Both companies recently commented on a significant potential upside from the EU's high-risk vendor replacement initiative, and this might provide MACOM upside growth over the long term.
Future base station demand is supported by additional 5G rollouts, growing AI-driven connectivity needs and emerging mission-critical defense markets. We believe the cable infrastructure market segment is also improving. Cable Networks are in transition from DOCSIS 3.1 to DOCSIS 4.0, and we have been releasing new products and working with customers on design wins to support this upgrade. We expect the cable TV market will be a modest contributor to our telecom revenue growth in FY '26.
Next, I'll quickly summarize progress on our 5 goals for FY '26 and which we outlined on our last earnings call. First, take advantage of the data center opportunity. We continue to enhance our design teams and expand our presence in the data center and we are raising our data center year-over-year revenue growth base case from 20% to 35% to 40%. Second, to expand our 5G market share.
We are excited to be sampling our next-generation GaN 4 products to our customers. In addition, we see that one of our competitors is exiting the 5G RF power GaN market, and we hope to benefit from this competitive landscape shift. Related to this event, we recently hired a team of experienced engineers to complement our existing RF power team. Third, extend leadership in A&D.
Our defense business continues to grow, and our team continues to win large IC module and subsystem programs. Fourth, continue to develop advanced 35 semiconductor technologies. Our technology teams are making progress developing advanced GaN on silicon processes while also installing new equipment to modernize and expand manufacturing capabilities. And last, to manage our capital and investments.
As Jack will note, our return on capital metrics and trends continue to improve, and we plan to manage investments to achieve superior returns. In summary, our strategy is to continue to build a best-in-class and diversified semiconductor portfolio that will enable MACOM to capture a larger share of the 3 markets we focus on.
Our agility and strong teamwork across our organization helps us address opportunities and ultimately beat our competitors that are often larger and have more resources. Jack will now provide a more detailed review of our financial results.
Thanks, Steve, and good morning, everyone. The results from our first quarter were solid and MACOM achieved a few new quarterly records associated with our financial performance. Our teams continue to focus on executing our strategic plan and driving increased revenue and profitability. Fiscal Q1 revenue was $271.6 million, up 4% sequentially and up 24.5% year-over-year, driven by growth across all 3 of our end markets. .
We have seen continued strong bookings across all of our end markets, resulting in a book-to-bill which increased to 1.3:1. This was one of our strongest quarterly bookings in the company's history and our highest quarterly book-to-bill ratio since Q3 2021. On a geographic basis, revenue from U.S. domestic customers represented approximately 45.6% of our fiscal Q1 results.
A slight increase over both the prior quarter and Q1 of fiscal year 2025. Adjusted gross profit for fiscal Q1 was $156.5 million or 57.6% of revenue. Through the diligent and consistent hard work of our dedicated operations team, we have continued to increase our capacity and improve yields and we expect to see ongoing incremental progress across all 4 of our fab operations during fiscal 2026.
The increase in product demand across our internal fabs has resulted in improving utilization and associated incremental gross margin improvement. As a result, we continue to expect sequential quarterly gross margin improvements of between 25 to 50 basis points as we move through the remainder of fiscal 2026. These improvements include any potential offsets to cost increases, such as gold and other precious metals, depreciation and labor costs.
Total adjusted operating expense for our first quarter was $82.5 million, consisting of research and development expense of $55.8 million and selling, general and administrative expense of $26.7 million. The anticipated sequential increase in adjusted operating expense compared to Q4 was primarily driven by ongoing R&D investments and employee-related costs.
As our business continues to grow, we expect associated OpEx growth, primarily related to higher R&D and higher variable costs. Consistent with our practice, we will remain very focused on managing our OpEx to balance long-term revenue growth and profitability with continued investment in the business.
Depreciation expense for fiscal Q1 2026 remained stable at $8.7 million, the same as the prior quarter. Adjusted operating income in fiscal Q1 was another record coming in at $74 million, up 10.4% sequentially from $67 million in fiscal Q4 2025 and up 33.5% year-over-year. For fiscal Q1, we had adjusted net interest income of $6.7 million, a slight decrease of less than $100,000 sequentially from $6.6 million in Q4.
Our adjusted income tax rate in fiscal Q1 was 3% and resulted in an expense of approximately $2.4 million. As of January 2, 2026, our deferred tax asset balances remained at $208 million. We anticipate further utilizing our deferred tax asset balances, including R&D tax credits, through fiscal 2026 and beyond, helping to keep our cash tax payments relatively low over these periods.
We expect our adjusted income tax rate to remain at 3% as we continue through fiscal 2026. Depending on the jurisdictional mix of our income, we expect the U.S. government's recent tax legislation to support a low to mid-single-digit adjusted tax rate for the next few fiscal years.
Fiscal Q1 adjusted net income increased approximately 9.6% to $78.2 million compared to $71.4 million in fiscal Q4 2025. Adjusted earnings per fully diluted share was $1.02, utilizing a share count of 76.7 million shares compared to $0.94 of adjusted earnings per share in fiscal Q4 2025. I'll note, exceeding $1 per share of quarterly EPS is a milestone for the company.
Our team continues to optimize the business' performance which has resulted in sequential increases in our adjusted operating income and EPS over the past 10 quarters. Now on to operational balance sheet and cash flow items.
Our Q1 accounts receivable balance was $160 million, up from $148.6 million in fiscal Q4 2025. The increase in our accounts receivable balance was driven by sequential quarterly revenue growth as well as timing of customer shipments and payments.
Our days sales outstanding averaged 54 days compared to the previous quarter at 52 days. Inventories were $238.9 million at quarter end, up sequentially from $237.8 million, largely driven by additional work in process inventory at the RTP and [indiscernible] as well as higher balances to support anticipated future demand across the business.
Inventory turns remained steady at 1.9x the same level as the preceding quarter. Fiscal Q1 cash flow from operations was approximately $42.9 million, down $26.7 million sequentially. The sequential decrease was primarily due to the typical timing of supplier and employee-related payments as well as other changes in working capital balances during the quarter.
We expect that our Q2 cash flow from operations will be in excess of $60 million. Capital expenditures totaled $12.9 million for fiscal Q1. We continue to estimate fiscal year 2026 CapEx to be in the range of $50 million to $55 million as we upgrade and enhance our production and engineering equipment, facilities and expand capacity where needed.
Moving on to other balance sheet items. Cash, cash equivalents and short-term investments for the first fiscal quarter were $768 million. We are in a net cash position of more than $268 million as of January 2, 2026, when comparing our cash and short-term investments to the book value of our convertible notes.
In mid-March, we anticipate retiring our 2021 convertible notes by paying out $161 million of principal value in cash and settling any conversion premium with shares of our common stock. Shares associated with this settlement have been included in our fully diluted share count as well as our guidance for Q2. Our remaining debt balance is approximately $340 million of convertible notes, which mature in December 2029. I would like to highlight that over the past several years, we have been focused on growing our profitability and carefully managing our operating asset base, resulting in an improving return on invested capital.
We feel this ROIC improvement demonstrates the effectiveness of our business strategy and furthers our goal of building long-term financial strength for the company. Thanks to the entire MACOM team for their contributions to help make this another quarter which included the achievement of additional record results. Now back over to Steve.
Thank you, Jack. MACOM expects revenue in fiscal Q2 ending April 3, 2026 to be in the range of $281 million to $289 million. Adjusted gross margin is expected to be in the range of 57% to 59%, and adjusted earnings per share is expected to be between $1.05 and $1.09 based on 77.7 million fully diluted shares. .
We expect sequential revenue growth in each of our 3 end markets. We expect that data center will achieve low to mid-teens sequential growth, and we expect telecom and industrial and defense will achieve low single-digit sequential growth.
As Jack highlighted, we expect to make incremental progress improving our profitability and financial performance in Q2. And last, I would like to welcome Brian Ingram, who joined our Board of Directors on January 12. Brian's industry experience and strategic acumen managing large, multibillion-dollar businesses will be an asset to our management team and the Board.
I would now like to ask the operator to take any questions.
[Operator Instructions]
First question coming from the line of Quinn Bolton with Needham & Company.
2. Question Answer
Congratulations on the nice results. Steve, I wanted to ask, obviously, a nice uptick in your annual outlook for the data center business from 20% to $35 million to 40% this year. I wonder if you could just spend a minute talking what gives you the confidence to raise that outlook? Is it just sort of the rising tide you now have better visibility as orders have filled in? Is it driven by share gains? What's driving the improved outlook in data center?
Thanks, Quinn for the question. And to some degree, it's a little bit of all of the above for your question. But the key underlying driver is 1.6T. That's where we see the most activity, the most design wins transitioning into production runs. So I would just highlight 1.6T is really the long term or near -- I would say the long-term trend that will be very favorable to MACOM and you're correct that as we look at our data center business today, we have a very healthy backlog.
We think our second half will be stronger than our first half. In terms of the overall absolute dollars of revenue shifted. So we are in a very good position. We have programs that are ramping that gives us confidence to -- as a base case hit 35% to 40%. There is also upside to that number, which is a bit unquantifiable right now.
And we'll update everybody certainly on our next call as to more specific guidance for Q3 and Q4.
Excellent. And Steve, you mentioned -- I mean, there's been a lot of talk about CPO in the past couple of weeks and months, I guess. You mentioned NPO maybe even CPO in your prepared script, but maybe just spend a minute talking about how MACOM could benefit to the extent we start to see a shift more towards either near packaged or co-packaged optics.
Yes. And the product set that we would sell into a CPO or NPO platform is very similar to what we sell into pluggable modules. So it's the same drivers, TIAs, photodetectors and possibly lasers. I will highlight that a lot of these platforms are moving quickly to silicon photonic-based solutions, which is putting heavy demand on the optic -- certainly the CW laser and the photo detector optical chips.
And so we have a very competitive photo detector today. It's ramping in production, primarily for pluggables and we're making very quick progress on our CW lasers. We now have 2 customers that have confirmed that our CW lasers are meeting their requirements electrically.
And so now we are going through a qualification phase, which will last some number of months and also looking at the production readiness of our fab. These are 75-milliwatt lasers. These are not what I would consider the higher power 400-milliwatt class lasers. Those are not the type of lasers that we make today.
But we do think that the CPO and the sort of transition is a benefit to MACOM. I'll also add that from an overall architecture, you see many, many channels in a smaller form factor. So a lot of the traditional chips that we sold into pluggables are becoming more complex for NPO and CPO.
There's far more channels per chip. And this is a change that we have a lot of strength and in terms of a design capability. And then the last thing I'll add is some of these systems are actually moving towards coherent modulation and coherent light specifically.
And so in this case, we have a very strong design capability given the history with our metro long-haul chips that we've been shipping for years.
Next question coming from the line of Vivek Arya with Bank of America Securities.
See, you were nice enough to give us the prospects for data center growth this year. I was hoping you could give us kind of some similar growth potential in your other 2 segments also.
And I'm particularly interested in the telecom side because of this RF power exit that NXP announced, I think they had close to $300 million or so business last year, which is larger than your entire telecom segment. So I'm curious, when do you think you can start to gain some share? When does it start to really become accretive to your base telecom business?
Yes. So it was certainly a fortunate stroke of serendipity that one of our competitors is exiting the business. I can't really comment on how much market share this will translate to, I think it will take 1 or 2 years for that to play out.
And so our goal is to strengthen our design team, accelerate product development, go to the market with more intensity to try to maximize the opportunity. But I think it's sort of premature today to put a dollar value on that. I think the 5G market space is a relatively slow-moving market where it might take 1 year to get a design win and then after that, you have a ramp.
And so we want to basically engage the same customer base that we have today with more intensity. And we also want to let them know that we're going to be there not only for the current 5G generation, but also the next-generation platforms.
And as they move to different architectures, some of which will include more fiber right up to the remote radio unit, we want to be there and offer the full suite of products and so we do find this to be sort of a very exciting time to be addressing the market. Now with that said, the market is flat, as I mentioned in our -- my prepared remarks, so the overall number of radios being manufactured per year is relatively flat, but we believe we can grow through share gains.
And so that is certainly front of mind for us. The other important area that we focus on in the telecom space is SATCOM. And as I mentioned, we have a very large backlog. We have a LEO program moving into production in the second half of calendar '26 and we have many, I would say, significant opportunities that we're working on, which will really provide growth in our 2027 and beyond time frame.
And what we basically see is an incredible amount of investment going into LEO constellations for direct-to-device applications. And we think that there's certain structural reasons why the market wants space-based direct-to cell connectivity.
And we want to make sure that we offer the full suite of products to these different satellite systems. And every customer is doing something a little different. Our content varies dramatically from customer to customer, but we have just a really rich treasure trove of technology we can offer our customers here.
And anything on the overall segment growth for this year? And if I could just kind of squeeze in my second question there on the gross margins. If your mix shifts to data center and more optical components, several of your peers tend to have somewhat lower margins, but I don't know what is the right way to do apples-to-apples margin comparison between several of your optical there because they sell complete transceivers and modules as well, which you don't -- so I'm just curious if the mix shifts to data center, what that does to gross margins and if Steve, if you could help us with just kind of the overall growth prospects for IND this year.
Sure. And why don't I start with the first part of that question, and then Jack can address the second part. So we don't give full year guidance, and I think you're sort of asking what is the rest of our fiscal '26 look like. And as you know, last year, we grew by 32% and in fact, that was driven a lot in part by our telecom business that grew over 40% last year.
This year, we don't expect the same level of growth. It's more likely going to be high single digit, maybe low double digit, but we'll have to wait and see on the timing of some of the programs that I've talked about. But it is growing, as I talked about, the market opportunities for us not only in 5G, but also the SATCOM and of course, cable improving is providing us with those growth opportunities.
And then the last segment, just for completeness, I'll talk about is our IND. IND last year also did very well, close to 20% year-over-year growth. And as we look out into the second half of the year and our look at the tea leaves, again, we probably are unlikely to hit 20% growth.
It's probably somewhere between 15% and 20% if we sort of look at our backlog and all the different moving parts. So collectively, MACOM should grow and we have internal targets that put us somewhere in the 20% range, plus or minus.
But of course, all of this is dependent on booking orders, ramping successfully, executing on various programs. But there are fundamental growth opportunities that are intact, the movement to higher data rates inside the data center, the movement to more optics in the data center. This is a tailwind for us.
And our IND more and more again on silicon carbide, and we're providing more modules and subsystems to our customers. And then in the telecom space, as I talked about, we see opportunities with LEO in 5G. So these are really the primary pieces that we get excited about. And then on the profitability side and [indiscernible] further.
And back to the root of your question, Vivek, with regard to our profitability versus some of our other peers. We're going to be different in terms of how those peers may look, whether it's within the data center end market or within IND and telecom.
So the mix of fabs that we have versus things that are maybe fab externally, may create a different answer. As Steve had mentioned that 25 to 50 basis points of sequential quarterly increases on the gross margin side, is comprised of a number of different items that we've got, which we think are working in our favor, including some volume increases as well as some new product introductions across the business that is supporting that expected gross margin improvement as we work our way through the remainder of the year.
Our next question coming from the line of Tom O'Malley with Barclays.
I just wanted to dive a little bit more on the gross margin line. You pulled in the RTP fab in-house. You talked previously about bringing more products into that fab that they can use to run externally. Can you maybe give us an update on how that's going so far? And then you've guided that 25 to 50 basis points of incremental improvement.
Over time, do you think that RTP could contribute a little bit more to the upside on that gross margin profile? Any update there would be helpful.
Thanks for the question, Tom. Just to highlight, since we closed that acquisition of the RTP fab, our team in North Carolina has been incrementally improving the profitability ever since we purchased the fab. So almost every quarter, we have seen positive movement in terms of cost of manufacturing, improving yields, lowering the scrap improving overall efficiencies throughout the building and removing costs.
And so the team has done a phenomenal job there. The improvements that we're seeing this year and going into next year for gross margins, well, I think, primarily revolve around improving the utilization of our Massachusetts-based fab and to some degree, our French-based fab. We do see increased demand, and that is improving the overall gross margin and operating margin models.
And that's being driven by the market. I will say that there's significant more work to do at our North Carolina fab. One of the primary goals there is to increase output. We have a very aggressive plan to increase output by 30%. We have bought some amount of equipment to support that. But a big part of that added capacity will be reducing the cycle times. That is that site's #1 corporate priority is to speed up not only development wafers but also production wafers. And that just has so many benefits to the business.
So that is a key focus for that particular fab. As it relates to in-sourcing some of the components that we currently outsource, those benefits have not hit the P&L. They won't those items will really come on, most likely into 2027 and beyond because you're talking about taking IPDs or capacitors from a third-party vendor and replacing it in new products with MACOM content.
And so that has to go through a design cycle and those benefits will come on incrementally over time. It's not -- you're not seeing that shine through today. The last thing I'll highlight is our French fab is doing a phenomenal job with the transition of their technology from a 3-inch wafer to a 6-inch wafer.
And we are just about ready to wrap up that work and release to production all of the different processes. We sort of have a goal of -- by June of 2026. Everything will be fully qualified and released to production. And so as we go into 2017, that will also provide a benefit, not only from a quality point of view and efficiency point of view, but just -- we're also seeing improved performance of some of our chips in the processes as we migrate to newer equipment.
In our low fab, I'll just add one other item. It's a high mix fabs. So we're running gas, and silicon, indium phosphide. And we continue to -- the team here does a phenomenal job balancing all of the different technologies so you're starting to see that come through now, Tom, is a conclusion. And Jack I know that was a long-winded answer. Do you want to add to that?
I think the short answer, Tom, is it's not any one specific item that we have that's helping to drive the improvement that we see in front of us. It's a combination of a lot of things happening across the entire organization, where we're looking to take out costs where it makes sense, try and be more efficient, work with our suppliers.
So there's a lot of contributing factors to this as we go forward from a gross margin standpoint.
Super helpful. Just as a follow-up, I'm going to cheat here and kind of ask 2 at once, but 2 growth drivers where people are really focused this year, SATCOM and then also ACCs. It's difficult to get the relative sizing of these given they live within larger buckets historically, you haven't really broken that out.
But any help on the relative sizing of those 2 drivers? And then as you look into the out year, I think you talked about strong telco growth and pointed to SATCOM specifically. You spent most of your time on the data center talking about modules and optical side, maybe a little bit on the ACC market and how that can contribute to data center growth as well.
Sure. And certainly, I tried to address the ACC question in my prepared remarks. I'll just add to that, that as we look at our revenue for Q1, there was no ACC revenue in there. In terms of the SATCOM market, it is a growth market, not only on the commercial side, I'll add, but also on the military side and the DoD side. And so we do expect our SATCOM business to grow very nicely as we move into 2027.
We have multiple SATCOM LEO programs in the design phase today. And by the way, I'll also highlight that the telecom revenue last year, growing by 40%. One of the drivers, not the only, but one of the drivers was some of our LEO business. We don't -- and then last time, we don't typically size product lines or market segments. We have our own -- I mean, we do it internally, but we don't typically share that externally. I know there's certainly a lot of very good information in the industry about sort of peeling the onion back on those market sizes, and we would deflect the answer to maybe having you look at those -- that other information. But we don't typically give out Sam's by product line or market segment.
Our next question coming from the line of Karl Ackerman with BNP Paribas.
Yes. Two for me as well, please. Steve, going back to SATCOM, if I could, for a moment. You indicated that satellite system changes can support more functionality than before. Is it fair to assume the size of the satellite program is the same or larger than your previous view? And as you address that, could you also speak to the breadth of seat programs that you are engaged on.
So we think that if you're referring to the large contract that I mentioned, we believe our customers adding functionality that will bring new customers to that constellation, which is a positive for the long-term prospects of that platform.
And so I hope I answered that particular question. And what was the second part -- second question?
Just the breadth of satellite programs that you have engaged on?
Yes. So we have multiple, as I mentioned. We are addressing not only on the microwave side, which would be either a backhaul link ground to satellite. Also, we're engaged with satellite to satellite communications.
We're engaged with optics we're pretty much -- it's probably fair to say that we are engaged at some level with all of the major LEO constellations today. Some of that is narrow support, maybe it's direct-to-device or direct to sell circuitry or electronics. Some of it's on the optics side. Some of it is on the microwave side.
Some of it is on the ground station side. But it's fair to say that we have blanketed the major players as well as the up and coming companies that are trying to produce their first satellites. So it's a strategic focus for the company. we have a lot to offer.
And I think over time, the business will grow. And just maybe more specifically on that larger contract. I think we said previously it was a $55 million contract with the potential of an additional $25 million add-on. And in our minds, what we think will happen is once we're in steady-state production, will be turned on for additional orders that will dovetail onto the back end of the contract.
And our next question, coming from the line of David Williams with the Benchmark Company.
Let me add my congratulations to a really solid progress and demand here. I guess maybe first gentlemen, thinking about your demand across the data center. Is there a way to kind of think about that from a regional perspective? And are there transitions or maybe the pace of transition that's happening in terms of the speeds between the different regions you service?
There is. There is certainly a geographic spread, but I would highlight maybe more one area that we focus on and the way we look at the data is also by data rate. And so a significant portion of our data center revenue is 400 gig and above with the fastest-growing portion of the market being the 1.6T applications.
Now we do, as you know, still service a lot of the other traditional older-style data centers. For example, we still sell today 25 gig per lane NRZ chips with CDRs. That business is hanging in there and doing reasonably well. our 50 gig per lane PAM-4 business is also, I would say, sort of flat, not really growing.
Our traditional 100 gig per lane PAM4 business is solid, both in multimode and single mode fiber. And then, of course, the real actions at 200 gig per lane PAM4 and also some of the next-generation coherent systems is an area of intense focus for us. I would also just add that it's fair to say that we are supporting all of the hyperscalers here in the U.S. as well as international hyperscalers.
So we typically find our products being sold into people building modules, AOCs or cables, and they are disseminated across the various hyperscalers.
Great. And then maybe just secondly, in terms of shortages and pricing environment. Can you talk maybe about just what you're seeing in terms of your supply on the IMP side? And anything that's impacting there? And is pricing -- how is the pricing environment as we kind of think about going through the rest of the year? .
Yes. I think on the pricing side, I think our competitors in MACOM are being rational. So I don't think there's any news there. It's certainly -- all of our markets are very competitive. The customers are price sensitive.
We try to balance our pricing with the value we're offering. But I would say we're in an environment where there is scarcity in some areas. And in that case, one would generally not be lowering their prices, but that's not always the case.
And then on the supply side, we are absolutely in ramp mode in various programs, and there's always stress on the supply chain as well as on the execution side and our global supply chain management team does an outstanding job making sure we have what we need when we need it. So it's certainly a key area of focus, especially as it relates to, as you mentioned, indium phosphide, but also other exotic materials. We're always keeping an eye on availability and potential constraints around those areas.
Our next question coming from the line of Harsh Kumar with Piper Sandler.
Congratulations on very good results and possibly even better guidance. Maybe, Jack, one for you, housekeeping, and then I'll ask my real question. the 1.3 book-to-bill is very strong. I think you mentioned, Steve, that it's the strongest probably in the last 4, 5 years. Is that primarily driven by data center? Or are there other components that you're seeing within that?
And then I wanted to kind of -- for my main question, I wanted to go back to the one that Vivek asked about gross margins on the data center business. Is it fair for me to assume that your margins on the data center business are below your corporate goal of 60%.
Yes. Thanks for the question, Harsh. And with regard to the book-to-bill we generally don't break it out by end market. But obviously, based on the guide that we put out there and some of the other items, we did see a fair amount of strength within the December quarter as it relates to the data center book-to-bill.
So things are definitely going in the right direction there. In terms of the data center margin profile, as I said, we manage a portfolio of products and gross margins will vary across the business. And Steve, I don't know if there's any other commentary that you'd like to add on that.
That's a perfect answer, Jack.
Okay. Great. And maybe one thing that you can get touched upon on the call is the LPO business. So I think you -- you mentioned in one of the earlier quarters that you were expecting revenues, I think, maybe last quarter already. If you can just update if you already have commercial revenues? And then also, I wanted to ask about kind of how you're thinking about the OPO business.
You talked about it in your commentary. It seems like a lot of exciting things going on. what kind of market size do you think LPO can deserve for your company or TAM or however you want to scope it in the next 2 to 3 years?
Thanks for the question. So we are very bullish on LPO. In fact, we now have 3 hyperscalers embracing LPO and we are in various phases of production with those 3 hyperscalers. Just to remind everybody, these are typically or in all cases, 100-gig per lane for generally 800 gig modules.
And so we also see that LPO will evolve to NPL and CPO or XPO, if you want to include everything. And so we're following that trail into different form factors. So we like to -- we're finally getting success here I think it's still a small part of the market and some -- we get various data points from various resources about how big the market could be.
But I think today, it's small, I would expect it will remain relatively small in the next 1 to 2 years and maybe over time, it grows. But it is a -- you have to be careful with the use case it is certainly compelling. The power savings that you're getting with LPO is compelling for the end users.
But we, again, as I mentioned earlier, we're a little hesitant to size the market because we really have to wait and see. But we do have a full suite of products here and the fact that we have 3 hyperscalers in production or at various stages is great. And I think the one thing maybe that I should highlight in my answer is -- we're also seeing our customers investigate LRO at 1.6T using 200 gig per lane chips. And so that is exciting for us, and that is an area of focus currently.
Our next question coming from the line of Blayne Curtis with Jeffrey.
I just want to go back to the strength in the data center. Obviously, 1.6T is ramping. The market is very strong. I'm just kind of curious for you, in particular, whether there's a share aspect as well to the growth you're seeing in 1.60T for the analog components, which I'm assuming is the bulk of that growth.
I'm not sure it's so much share growth per se. I mean, as we look at our dashboards and where we have content and where we don't have content, we see competitors on all sides. And so I wouldn't necessarily say that this is a share gain.
I think it's -- the market's growing. We're winning designs. We always go up against the same competitors. And it's -- it's a combination of timing and support and having new products. I mean, one of the key growth drivers for MACOM, of course, is the 200 gig per lane portfolio, but also on the optics side. And we do see significant opportunities with our photodiodes. And as I mentioned, we have I think, arguably one of the best 200-gig PDs in the market today, and we are working on higher speed PDs to support higher data rates.
And then last, as I mentioned, we have 2 customers that are very excited about our CW lasers for their silicon photonics solutions, and this would certainly be picking up market share because today, we don't sell lasers into 1.6T applications.
Perfect. And then maybe just some housekeeping with Jack. I just want to understand the impacts, I would say modeling converts. So when you look at March, and maybe just comment on -- I think you said the shares to settle are already in the share count.
What's the impact positive or negative on OI&E? Just trying to triangulate kind of how the rest of the P&L and OpEx is guided. And then -- maybe you could just also talk about capital returns. I think you had signaled maybe you'd do some share buybacks, but I'm assuming the debt retirement takes precedent in March. How are you thinking about it for the rest of the year?
Yes. Thanks for the question, Blayne. Yes, with regard to the share count, yes, there's a number of factors that can contribute to share count as we go forward.
Part of it is just our normal employee equity that's awarded, and we've kept pretty well control over that in terms of adding to our outstanding share count over the past number of years. And then the convert is another piece. And we've been adding some of the additional shares to the share count as we work our way through the year and leading up to the final settlement, which we expect to be in mid-March.
And then with regard to your capital allocation question. Yes, I think our primary focus is getting through this debt repayment, which is $161 million in the mid-March time period.
And I'll just add to that, that -- as it relates to share buybacks, that is not something that we're contemplating, and you should not expect that in the future.
Next question coming from the line of Tore Svanberg with Stifel.
Congrats on the record results. Steve, I wanted to come back to a comment you made on growth in telecom for this year? I mean, I know it wasn't guidance per se, but it just feels like high single digit, low double digit for telecom growth this year. Seems quite conservative, especially given your position in SATCOM, 5G coming back and so on and so forth. So I mean, is that kind of just like a really base case number? Anything you can add that would be great.
Yes. I think also keeping in perspective that last year, we had about 40% growth. So we're coming off a pretty high base there. I highlighted that the RAN market is sort of relatively flat with us having potential to pick up market share.
We have a great position in the SATCOM market. And these are generally long design cycle complex builds that take time and a lot of the growth in SatCom, I would say, is more of a late '26 early '27, which makes it difficult for us today to sort of settle in on, let's say, a best case number. So I think thinking below 10% is a good way to think about it today.
That's fair. And then as my follow-up, I believe last year at OFC, you guys were sampling a 1.6T LPO solution. Now when you talk about LP with 1.6%, there's more references to LRO. So I'm just curious, based on your conversations -- are we going to see 1.6T LPO? Or is the thinking now that LRO is probably the better way to go specifically for 1.6.
Yes, I would have to go back and check on that. I know we certainly were demonstrating 1.6T ACCs and AOCs, but I have to go back, Tore and check on the at the LPO version of that. Certainly, we were demonstrating 400 and 800 gig modules in the booth from our customers.
I think that the answer to your question is the customers are evaluating both right now, but there's significant benefits even with LRO, and it gets down to the specifics around really the DSP, the power budget, the link length.
And so it's really TBD. And so there's a higher probability of LRO working than LPO working because there's just more capability from the ASIC itself, let's say, to support the interface. So we would -- from a probability point of view, I would say LRO is more likely to happen first. and then LPO and there's still more work that needs to be done there. But we see that work happening at our customers.
Our next question coming from the line of Sean O'Loughlin with TD Cowen.
Congrats on a nice set of results. I had a quick question about the CW laser customer commentary. Just wanted to clear up, are those customers if you're able to disclosed. Are we talking about module maker customers? Or was that a reference to more hyperscale-type customers?
Yes. I mean I would say that we're engaging with more of the former. So it's really the module customers that are our first line of entry. So we want to make sure that they are able to use our laser. They're getting good module level results.
The next step is to collect a large body of reliability data and when our customer is happy with that data set, then they go to the hyperscalers and run through a PCN process to get us on the approved vendor list, let's say. And so we're early in that phase.
But it is a watershed moment because 6 months ago, we were not in a position where we had compliant laser today we do. And so that -- we're excited about that. Now we also recognize there's a process to get into production, and it's -- we're in the early stages of that.
Great. Yes, it's great to hear on the progress there. And then just sort of a blue sky question, I was interested to hear you mentioned front haul as an application for LPO as you've often reminded us that LPO is typically suited for short-reach applications within the data center. .
Typically, I don't think of front haul as a short-reach applications. So I'd love to hear just any more details on that application potential for a linear pluggable option?
Yes. And I think your question speaks to the fact that the -- our customers are critically looking at the network connections and where they use optics. For their next-generation systems and how do they reduce cost and complexity. And LPO in brings that benefit.
So we have to -- so yes, we are going through design and trials with various customers to see if it works in system. The benefit they see, quite frankly, is that it is a low latency solution. So there's it's more of a real-time transmission, let's say, than a retime solution.
So we'll have to wait and see as AI starts to creep into the networks and as things move towards the edge a lot of the optical interconnect becomes more relevant. And then the other sort of tangent I'll add is we are engaged also to help customers rearchitect remote radios where you bring fiber right to the radio, and we want to be involved in that part of the network as well.
Our next question coming from the line Christopher Rolland pollen with Susquehanna.
I guess my question here is around linear equalizers. I think on PCB, which you mentioned in your prepared remarks, if you could talk a little bit more about that, the growing interest there. Do you think this could be a bigger product than ACCs, linear equalizers and ACC and what is that -- what do the economics here look like for you versus the ACC approach?
Yes. So adding the linear equalizers to various back planes is of interest to lots of customers, not only in not only, let's say, in the traditional sort of AI construct but also closer to the -- as you get into the compute, we see opportunities to eliminate retimers and various compute connections. That's number one.
Number two, as things move to 400 gig per lane having equalization on these boards is going to be very important. And so customers recognize there's trace losses and interface issues, and they're going to need something to compensate.
And so the use case at a 400 gig lane speed is compelling. Today, though, with our 200-gig per lane, you're looking to augment passive DAC is something we're looking at. But I don't think all of those things combined will be as big as the ACC opportunity where it becomes architectural and there's lots of cables, and we just see that as sort of a bigger growth opportunity.
So the volumes that some talked about on the ACC side are quite large compared to, let's say, the back plane applications. And then the last thing I'll add is we also have customers looking at AECs and asking themselves, do I can I convert this to an AC and we're trying to help them with those -- answer that question as well.
Very helpful. And then I was wondering if maybe you could just provide kind of a big picture answer here. You have such a diverse product set. You also have new products coming on to your road map. What are the -- in your opinion, like biggest needle-moving new offerings that you think is really going to make a difference on the top line for MACOM over the next couple of years.
Well, I think that's a great question. And I'll just highlight that this management team in about 6 years has doubled the size of the company. Our fundamental focus has been on high power, high frequency and high data rate. When we look ahead, we want to double the size of this company and not take 6 years. We want to do it faster. So we're trying to execute our strategic plan that gets us to $2 billion with a reasonable CAGR, and we want to double the share price. The earnings per share.
And so -- that is our focus, and that means noncommodity differentiated products stay with the large growing markets, but also diversify and that is a big part of our story here, and that differentiates us, I think, from a lot of the companies that are very focused on, let's say, indium phosphide components for the data center.
These are structural organizations that do not have diversity. And our approach to these large opportunities is to bring the diversity. So when you look at our fabs, as an example, they're running lots of different technologies, and there'll be periods where some technologies grow very quickly in periods where they don't.
So fundamental to our business model is diversification in product lines and geography end markets.
Our next question will come from the line of Tim Savageaux with Northland Capital Markets.
Congrats on the results and good timing here given you just mentioned indium phosphide. That's my question. Actually, as you mentioned capacity addition. I wondered -- I'm really looking for kind of magnitude and timing for that capacity addition, say, from the beginning to the end of the fiscal year, what are you targeting there?
And as a quick follow-up, how material are those optical devices within the overall data center unit right now? And where do you expect that to go?
Thank you. So we're not going to really disclose the amount of capacity we're adding for competitive reasons. I can tell you that our Indium phosphide PD business is growing rapidly. It's primarily focused on 200 gig per lay. But we -- I don't really want to sort of talk about the number of wafer starts or where we started the fiscal year, and we will end the year. I will say that there's -- it's a major focus to bring on capacity, and we've been doing that. .
And so the results of that will be reflected in the guide in our general comments. In terms of -- and again, akin to that, the materiality of that business, we really don't disclose the revenue by product line or by technology.
Again, I would just highlight that we -- as I just mentioned, we do have a diversified business. And when we look at our data center revenue, today, it consists of TIAs, drivers, combo chips that are basically TIAs and CDRs. We've now added photo diodes or photodetectors.
The next step is to add lasers. We also have in the back room, we're working on EML lasers, and we have various versions of that in test right now. So I think you should think of our data center business as diversified by end customer by data rate and by product family, both on the optical side and on the electrical side.
And we do recognize, as an example, there's opportunities for us on the compute side of the network, and we're investigating and designing products for things like PCIe 6 that will also add new growth vectors.
Our last question will come from the line of William Stein with Truth Securities.
Great. Two quick questions. First, on the LEO satellite business. Can you talk about average dollar content per satellite and the duration between your rev rec and the satellite launch. Is that like a quarter or like a year? Any color there would help.
Sure. Well, we recognize the revenue when we ship our products to the customer. It's hardware deliverable. So that it's a hardware shipment. We don't wait for the customer to launch the satellite to take our revenue. And then in terms of the dollar content per satellite, it varies quite a bit. .
As I mentioned, there's a lot of variation in the construct of these satellites. Some of them have very large beam steer to raise. Some of them have very complex optics. Some of them have data center-centric electronics, so moving high-speed data across the bus of the satellite.
Some are using linear risers to communicate back to the ground. So it would be very difficult to put a dollar value on that. So it varies quite a bit. And I'll also argue that as I mentioned earlier, we're dealing with all the major constellations in different ways.
Some -- as an example, some customers want to buy wafers from us. They want to be a foundry customer. And we have other customers that want us to design an entire subsystem. So we have the full gamut.
To clarify the first part of my question, I fully understand that you rev rec when you ship, but we don't necessarily get alerts to that, whereas we do get alerts as to launches. And so I'm just trying to line up when we see a launch happen what that relates to in terms of your revenue.
Is that revenue that you would have recognized a quarter ago, a month ago, a year ago so we can try to sort of align the parts of the market that are visible to us with your revenue generation?
Yes. I mean, I think those are dots that it would be difficult for us to connect here on the call, but I understand. Certainly, it's measured in many months. And beyond that, we would have to do work, and it would be very situational. Jack, did you want to add to that?
Even though it will be situational probably wouldn't be accurate either just based on the ebbs and flows of this end market.
And I'm showing no further questions at this time. I will now turn the call back over to Mr. Steve Daly for any closing remarks.
Thank you. In closing, I would like to thank all of our employees for their continued hard work and dedication which has made these results possible. Have a nice day.
This concludes conference call. Thank you for your participation. You may now disconnect.
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MACOM Technology Solutions Holdings, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Welcome to MACOM's Fourth Fiscal Quarter 2025 Conference Call. This call is being recorded today, Thursday, November 6, 2025 I will now turn the call over to Mr. Stephen Ferranti, MACOM's Vice President of Corporate Development and Investor Relations Mr. Ferranti, please go ahead.
Thank you, Olivia. Good morning, and welcome to our call today to discuss MACOM's fourth quarter and year-end financial results for fiscal year 2025. I would like to remind everyone that our discussion today will contain forward-looking statements, which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those discussed today. For a more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC.
Management's statements during this call will also include discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results is provided in the company's press release and related Form 8-K, which was filed with the SEC today.
With that, I'll turn over the call to Steve Daly, President and CEO of MACOM.
Thank you, and good morning. I will begin today's call with a general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q4 and full year results for fiscal 2025. When Jack is finished, I will provide revenue and earnings guidance for the first quarter of fiscal 2026, and then we will be happy to take some questions.
Revenue for the fourth quarter of fiscal 2025 was $261.2 million and adjusted EPS was $0.94 per diluted share. For the full year, FY '25 revenue was $967 million, more than a 32% increase year-over-year; and EPS was $3.47, more than a 35% increase year-over-year. We generated $193 million in free cash flow, and we finished the year with approximately $786 million in cash and short-term investments on our balance sheet.
Q4 book-to-bill ratio was just over 1.0:1. In our turns business, or orders booked and shipped within the quarter was 14.5% of total revenue. For the full fiscal year 2025, our book-to-bill was 1.1:1, and our current backlog remains at a record level.
Turning to our recent booking trends and end markets. Q4 revenue performance by end market was as expected, with industrial and defense at $115.6 million, telecom at $66 million and data center at $79.6 million. For the quarter, IND was up approximately 7% sequentially, data center was up approximately 5% sequentially, and telecom was slightly down sequentially. Both IND and data center revenues were annual and quarterly records.
A few years ago, we set a goal to achieve $1 billion in annual revenues. And I'm pleased to report that with our Q1 2016 guidance, we expect to achieve this goal based on trailing 12-month performance. Congratulations to all our employees as we near this milestone and more importantly, for building upon our strong foundation to enable continued growth and improved profitability.
New products are the lifeblood of future growth. In FY '25, we launched over 200 new products, which was a record. In addition, we executed numerous custom-designed projects across our 3 core markets.
Our ability to provide competitive new products in a timely manner, ultimately drives our financial performance. Metrics show our new product introductions or products less than 3 years old as a group, have outpaced MACOM's overall revenue growth and are accretive to MACOM's gross margins.
We continue to focus on technology and product differentiation across our portfolio, which often leads us to the development of IC products that operate at the highest frequency, highest power or highest data rates. The secular growth trends across our end markets coupled with our expertise in IC design and manufacturing, are driving an increased number of revenue opportunities.
To capitalize on this, we have been increasing R&D spending, hiring more engineers in acquiring companies that have specialized complementary design capabilities. In keeping with this trend, over the next couple of months, we plan to open 2 additional IC design centers, one in Southern California and the other in Central Europe, where we were able to secure specialized talent and teams.
Hiring best-in-class engineers with complementary skills will help enable us to increase our SAM and execute on the growth opportunities ahead. I'll note that we prioritize recruiting designers with advanced silicon design expertise and experience.
On Tuesday, we announced an agreement with HRL, or Hughes Research Laboratories, to transfer their 40-nanometer GaN on silicon carbide process known as T3L to MACOM. As part of this agreement, MACOM will be an exclusive licensee with rights to manufacture the T3L process.
T3L is an industry-leading high-frequency GaN on silicon carbide process, and it was developed with DARPA, DoD and HRL funding. T3 was engineered to achieve exceptional high-power performance at very high frequencies. HRL recently completed long-term reliability studies and qualified the process, and it is now ready to transition to production.
The T3L 40-nanometer process perfectly complements our existing GaN portfolio because it allows us to address applications at higher frequencies than our 140-nanometer GaN process. We anticipate that licensing this technology will also accelerate our ability to launch other sub 100-nanometer GaN processes, including 90-nanometer.
We believe this transaction is a win-win because HRL, primarily a research organization, will be able to commercialize the process technology they spent years developing. And MACOM can industrialize and ramp the process into production.
Many of our mutual customers in the defense and space markets want to see T3L process in production -- in a production wafer fab in order to address their volume needs. This strategic transaction supports one of our core tenets, which is to produce the industry's highest frequency semiconductors. We believe this part of the GaN mimic market is growing and we are seeing new requirements at Q, v, E, and W band driven by both commercial and defense applications. We believe the T3L process will help us capture significant market share over time.
And finally, related to GaN on silicon carbide, over the past few quarters, we were awarded several new and add-on development programs for advanced GaN on silicon carbide process technologies. Across the DoD agencies, MACOM is recognized as a leader in developing advanced compound semiconductors and our pipeline of funded technology development contracts is growing.
I'll note, in the defense radar and electronic warfare markets, our GaN-based components and products experienced over 50% year-over-year revenue growth. This growth leverages our high-power GaN portfolio, where we maintain a competitive position in low- and mid-band applications. Our goal is to expand into the higher-frequency airborne radar market where we believe share gain opportunities exist.
To support this strategy, we recently upgraded the RTP fab G28-V5 115-nanometer GaN on silicon carbide process to include atomic layer deposition, passivation or ALD, ALD is a hermetic coating process that enables mimic products to pass moisture and has tests. This process is one of the most reliable and rugged processes in the market, and it is ideal for ground-based radar systems and Satcom links and is now ready for airborne radars.
Across the defense market, the trend for new systems is toward higher frequencies, higher power levels, wider bandwidth and higher levels of integrations; factors that all play to MACOM strengths.
We collaborate with most major U.S. defense contractors across a wide range of applications. For example, we have been collaborating with a customer that produces a drone defense system, and we look forward to their expected production ramp-up in 2026, utilizing our high-power GaN technology.
We also continue to build new relationships with major European defense contractors, who are increasingly focused on securing a European supply of critical semiconductors for their systems. We believe our manufacturing facility in France can play an important role in enabling MACOM to win market share with these customers.
Generally speaking, the industrial markets are stable and beginning to improve, although we do not expect significant growth in the near term compared to the data center, defense, 5G and Satcom sectors.
Within the telecom end market, satellite-based broadband access and direct-to-sell opportunities remain robust with numerous LEO networks in the planning or development stages. These networks typically use microwave or millimeter wave frequencies and free space optics, or FSO, communications for satellite-to-satellite or satellite-to-ground communication links. In some cases, the satellite transmitters require analog microwave linearization to boost the transmitted signal and improve Link margin.
I'll note the number of LEO constellations continues to grow, and more companies compete to provide commercial data, voice and video communications by satellite or defense intelligence and functionality. Almost a dozen different companies are now planning to launch LEO Constellations supporting direct-to-sell or direct-to-device communications.
Again, these LEO constellations have many areas where MACOM can contribute including direct-to-device links operating at UHF or S-band, backhaul links operating a Ka, QV and E-band, high-speed optical links transferring data within the satellite and free space optics for satellite-to-satellite communications and gateway linearization for high-power transmitters.
Depending on the customer preferences and capabilities, we position ourselves to support them at any level in the supply chain from foundry services, custom IC design, standard products and even full module and subsystem design and manufacturing.
Demand from our cable TV infrastructure market is also improving. Cable networks are in the early days of a transition from DOCSIS 3.1 to DOCSIS 4.0. We've spent the last 2 years releasing new products and working with customers on design wins to support this upgrade.
We are beginning to see new orders on our DOCSIS 4.0 products. Our portfolio today includes amplifiers, balance, couplers and filters for line amplifiers and nodes in these new deployments. We expect the cable TV market to be 1 of the contributors to our telecom revenue growth in fiscal year '26.
We continue to see strong demand from our data center portfolio, particularly within 800G and 1.6 T applications. We expect the ramp of 1.6 T optical solutions to continue to support both scale up and scale out interconnects, and we believe demand is growing rapidly. Within these solutions, MACOM provides drivers and TIAs that support EML and silicon photonic architectures.
In addition, over the course of FY '26, we expect year-on-year demand for our photonic semiconductor products to significantly increase. As an example, we are pleased with the growing traction of our 200 gig per lane photo detector products that support advanced 800 and 1.6 T optical
connectivity. MACOM's 200-gig PD has industry-leading sensitivity and dark current performance, enabling our customers to achieve better manufacturing margin and optical receiver sensitivity performance.
We believe we have had a breakthrough where our cloud customers and their supply chain recognize the strategic value of MACOM's proprietary indium phosphide technology and high-volume manufacturing capabilities to produce photonic products. We are pleased to have PD design wins at all major module manufacturers supporting 800G and/or 1.6T applications.
A few quarters ago, we initiated a transfer of the 200-gig PD process from our smaller Michigan fab to our larger Massachusetts fab to ensure we could support the forecasted demand. Today, our [ Ann Arbor ] fab is approaching maximum capacity, and our Massachusetts fab is qualified and ramping volume production.
In addition to our focus on ramping PDs, we have intensified our CW laser development efforts as customers and the industry look for strategic suppliers that have CW laser technology and high-volume manufacturing capabilities. We also see a steady adoption of single-mode LPO 100-gig per lane solutions. Today, we have multiple customers in production, and we expect to transition more customers into production in fiscal '26.
Additionally, we continue to support new architectures, including near packaged optics or NPO, utilizing non-retimed LPO solutions.
As data centers continue to disaggregate memory and compute, we believe the adoption of PCIe 6 solutions will create an opportunity for MACOM. At this year's ECOC trade show in September, we demonstrated our latest linear optical PCIe chipset, consisting of a VCSEL driver in TIA that support sideband data streams over fiber.
We also continue to expand our portfolio in the area of electrical high-speed connectivity. As data speeds move to 200 gig per lane and beyond, copper-based solutions such as direct-attach cables begin to reach their functional limit. MACOM provides a family of linear equalizer products that can help extend the reach of copper interconnects at 1.6T.
Over the course of FY '26, as 1.6T deployments expand, we believe these solutions will be of interest to some of the major cloud vendors who are deploying next-generation solutions. Additionally, we are seeing opportunities for these products in backplane applications to enhance onboard signal integrity.
As we turn our attention to FY '26, our priorities include: first, taking full advantage of the data center growth opportunity in servicing our customers with differentiated solutions. This includes expanding our portfolio into new product areas such as PDs and lasers, where we can add value.
In the near term, we will seek to increase market share in 800G and 1.6T high-speed analog solutions, expand our customer base for linear equalizers and PCIe solutions, ramp photonic products and support customer LPO launches. We will also continue the design work to establish a leadership position in 300 and 400 gig per lane connectivity ICs and for future 1.6 and 3.2T systems.
Second, we will seek to expand our market share in 5G applications by leveraging our new and improved GaN process. Our next-generation base station products will be updated with in-sourced IPD and matching circuits to: one, improved performance; and two, lower our manufacturing costs.
Third, extending our leadership in A&D and winning market share in microwave and optical RF over fiber applications across all major accounts in the U.S. and working to expand our business across Europe and support new defense and space programs like Iris Squared.
Fourth, continue to develop advanced semiconductor technologies for high-frequency mimics, high-power diodes and high-speed optical semiconductors. Our goal in FY '26 is to make meaningful progress on [ Hut via ], flip chip, bump technologies like copper pillar to enable MACOM to lead the industry in advanced chip scale package solutions.
Fifth, carefully managing our capital expenses and prioritizing investments that, one, expand our existing manufacturing capabilities; and two, support new technology developments. As an example, we intend to purchase and install a modern MOCVD epi reactor in our European Semiconductor Center, or MSC. This reactor will support our 6-inch production transition and the growing volumes of GaN on silicon and other gas processes.
In summary, our strategy is to build a diversified semiconductor portfolio that enables MACOM to capture a larger share of the markets we serve. Our strong organizational foundation along with our speed and agility, help us win opportunities and ultimately beat our competitors that are often larger and have more resources.
Jack will now provide a more detailed review of our financial results.
Thank you, Steve, and good morning, everyone. Before getting into our fourth quarter results, I would like to summarize a few items regarding our full fiscal year, which ended on October 3, 2025.
We achieved record revenue of $967 million, which grew more than 32% over fiscal 2024. Our annual adjusted operating margin grew by 140 basis points to 25.4%. Adjusted earnings per share grew by more than 35% to $3.47. Cash flow from operations continued to strengthen and increased by 45% to $235.4 million. We refinanced and extended the maturity of the majority of our convertible note debt at favorable rates.
Our workforce, which now totals approximately 2,000 employees, grew by 17% over the past year as we have expanded our research and development and production employees to support our growing business.
Now on to fourth quarter results as well as some additional commentary on the full fiscal year 2025 and outlook on fiscal year 2026.
Q4 revenue again reached record levels with strong financial performance across all 3 end markets and record revenue across data center and industrial and defense. This sustains a trend of consistent revenue growth, improving operating income and ongoing cash generation.
Fiscal Q4 revenue was a new quarterly record of $261.2 million, up 3.6% sequentially and up 30.1% year-over-year, driven by growth across all 3 of our end markets. Our overall book-to-bill for Q4 was 1:1.
On a geographic basis, revenue from U.S. domestic customers represented approximately 43% of our fiscal Q4 results. Our full fiscal year 2025 U.S.-based revenue was approximately 44%. Adjusted gross profit for fiscal Q4 was $149.1 million or 57.1% of revenue. Through the hard work and our dedicated operations team, we have continued to increase capacity and improve yields, and we expect to see ongoing incremental progress across all 4 of our fab operations.
I'll note, we are seeing an improvement in product demand across our internal fabs, which is driving higher production volumes and associated utilization. As a result, we expect sequential quarterly gross margin improvements between 25 to 50 basis points as we move through fiscal 2026. These gross margin improvements include any offsets to cost increases, such as gold and other precious metals, depreciation and labor costs.
Total adjusted operating expense for our fourth quarter was $82.1 million, consisting of research and development expense of $55.6 million and selling, general and administrative expenses of $26.6 million. The sequential increase in adjusted operating expenses compared to Q3 was primarily driven by ongoing R&D investments and employee-related costs.
As we continue to grow our revenue, we will remain very focused on managing our OpEx. Depreciation expense for fiscal Q4 2025 was $8.7 million compared to $6.9 million in Q3 2025. The increase was primarily due to taking control of the RTP fab during the quarter.
As a reminder, since we have taken control of the RTP fab, we have shifted from purchasing wafers from a third party to manufacturing wafers, resulting in MACOM now incurring all of the associated manufacturing costs, including labor, facilities and depreciation, to mention a few.
Adjusted operating income in fiscal Q4 was $67 million, up 5.5% sequentially from $63.5 million in fiscal Q3 2025 and up 32.1% year-over-year. For fiscal Q4, we had adjusted net interest income of $6.6 million, a net decrease of $200,000 sequentially from $6.8 million in Q3, primarily driven by lower interest rates and interest expense associated with new leases.
Our adjusted income tax rate in fiscal Q4 was 3% and resulted in an expense of approximately $2.2 million. As of October 3, 2025, our deferred tax asset balances, which includes R&D tax credits, were $208 million as compared to $212 million at the end of fiscal 2024.
We anticipate further utilizing our deferred tax asset balances through fiscal 2026 and beyond, helping to keep our cash tax payments relatively low over these periods. We expect our adjusted income tax rate to remain at 3% as we enter fiscal 2026.
Depending on the jurisdictional mix of our income, we expect the U.S. government's recent tax legislation to support a low to mid-single-digit adjusted tax rate for the next few fiscal years.
Fiscal Q4 adjusted net income increased approximately 4.7% to $71.4 million compared to $68.2 million in fiscal Q3 2025. Adjusted earnings per fully diluted share was $0.94, utilizing a share count of 76.2 million shares compared to $0.90 of adjusted earnings per share in fiscal Q3 2025. Our team continues to optimize the business' performance, which has resulted in sequential increases in our adjusted operating income and EPS over the past 9 quarters.
Before moving on to balance sheet items, I would like to note that during the fourth fiscal quarter, in connection with the RTP fab transfer, we recorded a $10.1 million gain on acquired assets, which is recorded below operating income on our income statement. This gain, which has been excluded from our adjusted operating results, primarily represents the difference between the fair value of inventory we received from the prior fab owner on July fifth 2025 as compared to the estimated value we established in December 2023 at the time of the RF business acquisition.
Now on to operational balance sheet and cash flow items. Our Q4 accounts receivable balance was $148.6 million, up from $129.5 million in fiscal Q3 2025. The increase in our accounts receivable balance was driven by revenue growth as well as the timing of customer shipments and payments. Our day sales outstanding averaged 52 days as compared to our previous quarter at 47 days.
Inventories were $237.8 million at quarter end, up sequentially from $215.4 million, largely driven by additional work-in-process inventory at the RTP fab as well as higher balances to support anticipated future demand across the business. Inventory turns decreased to 1.9x from 2.0x in the preceding quarter.
Our fiscal Q4 cash flow from operations was approximately $69.6 million, up $9.2 million sequentially and an increase of more than $7.3 million over fiscal Q4 2024. The sequential increase was primarily due to increased net income combined with fluctuations in working capital.
Capital expenditures totaled $20.2 million for fiscal Q4, up $11.5 million sequentially. The major driver of this increase was the anticipated purchase of $12 million of surplus equipment at the RTP fab from the previous owner. We anticipate that the installation of this and other equipment will allow us to expand our RTP fab capacity and capabilities by up to 30% over the next 12 to 18 months.
Our fiscal year 2025 CapEx was $42.6 million, and we estimate fiscal year 2026 CapEx to be $50 million to $55 million as we upgrade and enhance our production equipment, facilities and expand capacity where needed.
Next, moving on to other balance sheet items. Cash, cash equivalents and short-term investments for the fourth fiscal quarter were $786 million, up $50.7 million from Q3. We are in a net cash position of more than $285 million as of October 3, 2025, when comparing our cash and short-term investments to the book value of our convertible notes.
Over the next couple of quarters, we anticipate paying off the $161 million of principal value of our remaining March 2026 notes as they become due under the terms of the original agreement from 2021.
And finally, I'd like to recognize that the results we have achieved during fiscal year 2025 would not have been possible without the contributions from the entire MACOM team. We remain committed to investing in our employees through annual merit increases promotions, bonuses and stock awards as well as offering competitive healthcare, retirement and other benefits.
I will now turn the conversation back over to Steve.
Thank you, Jack. MACOM expects revenue in fiscal Q1 ending January 2, 2026, to be in the range of $265 million to $273 million. Adjusted gross margin is expected to be in the range of 56.5% to 58.5%, and adjusted earnings per share is expected to be between $0.98 and $1.02, based on 76.6 million fully diluted shares.
We expect sequential revenue growth in all our end markets. Data center will lead with approximately 5% sequential growth, followed by telecom and industrial and defense with low single-digit sequential growth.
As Jack mentioned, we expect to see increased operating leverage over the course of fiscal '20 and through a combination of top line growth and improving gross margins due to increased fab utilization and launching more profitable products. We will maintain operating discipline even as we continue to invest in the growth of the business.
Given our talented and experienced team, our core technologies and the secular growth trends in our market, we are confident we will achieve our goals.
I would now like to ask the operator to take any questions.
[Operator Instructions] Our first question coming from the line of Tom O'Malley with Barclays.
2. Question Answer
This is Kyle Busen on for Tom O'Malley. I just wanted to start off with the telecom business. I think through earnings, you've seen a couple of companies point to traditional telecom being better.
So I just wanted to kind of get your sense of how you think about that business through the fiscal year kind of the biggest pull factors you're seeing there?
Thank you for the question. The two main pull factors for MACOM this year will be 5G continuing to grow, and that's a core business for MACOM. And second would be the satellite communications and LEO business.
If you're referring to the RF-related telecom part of the market, if you're talking about the metro long-haul piece, we are seeing continued growth in that business, and we expect that trend to continue during the year.
And then just for my follow-up, last quarter, I think you talked about broadening some of the ACC engagements. Can we kind of get an update on how that's been progressing over the past 90 days? Have you seen any of those engagements or the customers? And just how we should kind of think about that business through the next fiscal year?
Yes, we continue to be engaged across the industry with all different product lines, including the chipset we put inside the ACC product line. I would say, generally speaking, we have great engagements with the major hyperscalers, and we're certainly excited about some of the potential within that product set. And we'll see how that plays out as we move into the course of the year.
We don't generally comment on, let's say, pre-revenue topics. We would always talk about our successes retrospectively, and that would be our approach here as well.
Our next question coming from the line of David Williams with the Benchmark Company.
Congrats on the $1 billion run rate. Let me first -- just kind of the transition and the demand pool between the 100G and 200 gig moves that next genome of solution, how are you seeing that? And maybe [indiscernible] developing as you would have expected or maybe accelerated a bit.?
Thank you for the question. So our core 100G business, last year, was very stable and actually grew quite nicely. And as we look out into our fiscal '26, we would expect the 100G growth trend to continue.
However, the massive growth is really at the higher data rates. So that would be 200 gig per lane servicing primarily 1.6T. And we are very early in the cycle of the rollout of those interconnects. And so that is one of the fastest-growing parts of our data center business. It was last year, and we believe it will be as well again in fiscal '26.
Great. And then just maybe on some of the new capabilities you talked about acquisition in the quarter, just any color there around the magnitude of that and really the capabilities you can see that range? And you talked about some of them. But just the additional color, I think, would be helpful.
Yes. You were referring to the HRL IP license agreement. Is that right?
Yes, yes, I'm sorry. That's correct.
Yes. So thank you for the question. Very interesting technology. as I highlighted in the script, it very much complements what we're doing with our -- what we call our GSIC140 process, which we launched a couple of years ago. And we're continuing to improve that process even today.
The HRL technology was a combination of U.S. government and HRL funding to really develop a technology that would be able to operate at higher power levels at the highest frequency. So this is a technology that really begins to shine above 40 gigahertz.
And why we felt this transaction would be important is it allows us to service the higher-frequency Satcom bands, which are becoming more and more critical for the LEO constellations. And there will be a transition from, what I would consider, PHM gas technology at these frequencies to GaN technology, and we will be leading that transition.
And the reason why you would want to make that transition is a GaN amplifier on this process will have a higher power density, almost 2x what PHM can do, and you'll also get 10 points of higher efficiency on that particular amplifier.
So there's a compelling reasons why we believe the LEO constellations will -- and our customers will want to adopt this technology as soon as it's ready in our fab.
Our next question coming from the line of Harsh Kumar with Piper Sandler.
Congratulations on some great results. Steve, if I look at your guidance, I think there's a little bit of a step-up in growth. Just at a broad level, I mean you talked about multiple drivers. But if I had to be specifically ask you about what is driving the step-up in growth, how would you characterize that? And I have a follow-up.
Are you referring to Q1 specifically or in general?
Yes, yes, [ December number ].
Well, I think it's, first and foremost, driven by the continued rollout of 1.6T and 800-gig platforms across various customers with various products. That is absolutely driving the growth.
And then I would say the other factor is we're seeing a little bit of a bounce back in telecom. As you know, going Q3 to Q4, it was sequentially down a little bit, really due to the timing of orders and also just continued strength in our defense business.
And then the other thing I'll add, as we really are at the beginning of our fiscal '26, our October bookings were one of the best months we've had in years. And so we're really excited to start the year with a strong backlog and a lot of momentum.
Fair enough. And Steve, you talked a lot about satellite on this call, something you haven't done. You've talked about -- you mentioned satellite, but not to this extent. And you talked a lot about LEO satellites.
I guess, could you help us understand the timing of some of these new products, the scale? Where is the business at today? And how big could it be?
And also, I was wondering, part 2, the standard question LPO, you started shipping seems like -- could you help us size that market for 2026?
Yes. Thanks, Harsh. So I would say that the current LEO business is included in the telecom numbers that we're currently reporting. We don't particularly want to break out that particular submarket within telecom. So I would say, the timing is now, and it's -- we're ramping. And the LEO business that we have is expected to grow over the next 12 to 18 months.
How big could it be? It can be hundreds of millions of dollars in size. This is not a small market, it's a large market. As I mentioned, we support this business at the chip level, the module level and even the subsystem level.
And when we talk about LEO constellations, I also have to highlight it includes not only the payload on the satellite, but it also includes the ground gateways and the terminals, which also have very high value-added products.
In terms of the LPO question you mentioned -- you asked, we talked about having one customer in production on our last conference call. I can tell you, that number has tripled. So now we have 3 and growing. And so we would expect that number to continue to increase as the industry adopts LPO.
We don't necessarily want to size the market. It really depends on what the customers do in terms of their deployments, and that's a very difficult number to put out there. We have our own internal models. But we would rather -- we're sure that there's error associated with those estimates.
I will say that our competitive advantage with LPO shines very very well because there's no DSP. So the landscape and the competitive dynamics changed quite dramatically when you remove the DSP. And then the other thing I'll just highlight, the LPO solutions today are running at 100-gig per lane.
Our next question coming from the line of Karl Ackerman with BNP Paribas.
Steve, you spoke of record backlog, but does that include a record backlog for datacom products such as TIAs, drivers and PDs? And as you address that, can you quantify the level of order visibility with your customers, perhaps in terms of quarters as you seek to add capacity to fulfill this customer demand?
Yes. Thank you. We don't really break the backlog out by product line or market per se. But you can imagine that coming off of a year where we had 50% year-over-year growth in the data center, and there's a lot of momentum that the data center backlog is growing nicely.
Some of our other end-markets like defense, they typically have longer lead times and manufacturing cycle time. So we typically would build backlog with our defense customers at the beginning of the year. So overall, a healthy backlog, and we really can't break it out any further than that.
Got it. That's fair. Jack, perhaps one for you, if I may. Just on the RF business, any updated thoughts on the timing of yield enhancements and operational performance? Would you anticipate this business going to be margin neutral once these yield enhancements are complete perhaps before you add the planned 30% of wafer capacity?
Yes, I think what you're referring to, Karl, is some of the gross margin improvements, and we talked about it in our prepared remarks, the sequential improvements that we expect to see on a quarterly basis of anywhere from 25 to 50 basis points. As we've also discussed, we've completed the RTP fab conveyance. So that's part of the MACOM portfolio.
And through a combination of enhancements to our gross profits and cost reductions and yield improvements across all of MACOM, including facilities like [indiscernible] and our other 2 fab manufacturing locations, are going to be helping to contribute to some of those gross margin improvements that we had talked about earlier.
So it's more of a global effort that we have as opposed to being focused on any one area of the business.
Our next question coming from the line of Tore Svanberg, Stifel.
And let me add my congrats on the record results. Steve, I know you typically don't guide more than a quarter out, but just so many irons in the fire here across all 3 segments. So directionally, how should we think about growth in the 3 segments next year, especially also in light of the more than 40% growth in both data center and telecom this year?
Thank you for the question, Tore. As you know, we don't typically give full-year guidance. But I'd be happy to make some general comments on our expectations for 2026. And maybe before I do so, I think there's some important trends to highlight, and I think you mentioned a few.
Number one, we had very strong growth year-over-year, 32% growth on the top line. And that really represented the 4 out of 6 years in a row, we've had double-digit growth. and we're excited about that. Our CAGR over the last 6 years has been in the mid-teens, and we're pleased with that type of performance.
As we think about '26, we have various scenarios, we have our base case scenarios and our improved or best case scenarios. But if I just focus on the base case for a minute, we would certainly expect double-digit growth with no less than mid-teens on the top line. We believe the growth will be driven by the data center business. It will have -- it will be our strongest market, then followed by industrial and defense and telecom. And it will be a year where you begin to see leverage on -- of our business model and improved operating income and earnings growth. So we're very excited about that as well.
Great. And as my follow-up, it sounds like you turned about 14%, 15% of the revenue this quarter. I'm just curious, given the strong momentum, the order rates, are you starting to see some tightness, whether that's with your own fabs or lead times starting to stretch? Because obviously, the growth momentum seems to be accelerating. So I just want to make sure that everything is on track as far as capacity is concerned.
Yes. Well, we're growing as quickly as we are. There's always stress points throughout our operations and supply chain, and we have an outstanding team that can manage those tactical and strategic issues quite well. So we're very pleased with the team's performance, and we're able to get the things we need and have the capacity available.
I highlighted as an example with our 200 gig per lane photo detector. We recognized last year that we were going to have some very strong growth in the next 24 months. And so we took actions to move that product to our large [indiscernible] facility here, where we have really unlimited manufacturing capability to produce PDs to support the industry.
So we're taking those steps. A lot of those things you see behind the scenes, where we're making sure we have a front-end, back-end test capacity in place, there's always areas where we need to do more and pinch points. And the team is managing those very well.
So yes, it's always a challenge in a high-growth environment, but I think we have it under contro
l.
Our next question coming from the line of Blayne Curtis with Jefferies.
I want to ask you, I mean, obviously, very strong comments about growth in fiscal '26. The book to bill just over 1%, I guess, I think you said maybe there's some function with the defense business. But I'm just kind of curious, is that the case across all 3 segments? Is there something that's down? Or is that just timing-wise and if that should improve?
Yes. We track the book-to-bill for each of our markets and submarkets and customers on a very granular level. And every quarter, it's a different setup. And so over the long term, is really what matters. And over fiscal year '25, our book-to-bill ratio was 1.1, to be clear. And that's a very strong number.
And we started fiscal '26 in October with one of our best Octobers and as long as I can remember. So we're not -- you have to read through the noise. I wouldn't get too fixated on any particular quarter's book-to-bill. And if you remember a few years ago, we had a -- we had a quarter where we had 0.5 book-to-bill, and we survived that quite nicely. But -- so that's the nature of the business.
Some of our markets are a little volatile. Some of them have different timing of orders, and customers have different schedules, and we just try to blend it all together and report the results.
And then I wanted to ask on the gross margin, the 25 to 50 basis points improvement. Obviously, you took over the Wolfspeed fab, and there was some lifting to do there. Maybe you could just talk about the contribution from those improvements versus just what it looks like overall, volumes are going up as well
.
Yes. Thanks for that. And I'll just highlight on a go-forward basis, we don't really want to talk about the gross margins by fab. I think that -- our business is too complicated than that.
I know, before the closing of the fab and during the transition, we were very transparent about the puts and the takes on the RTP site specifically. But now that it's in the MACOM tent and we're changing so many things, including the mix, the customer base, the focus, as I highlighted as an example, we took 1 of the RTP 15-nanometer GaN on silicon carbide processes and we upgraded it by adding an ALD covering and now that's going to open up a new market segment and that will lead to great things; so there's just a lot of moving parts at each one of the fabs. And to get fixated on any particular fabs, near-term performance is -- could be limiting.
So I think we take a broader approach and we're not really going to be discussing gross margins by fab because that could be a tell on the profitability of those associated products, which we don't want to disclose.
Now the other thing I'll highlight is a big part of our business uses external fabs. And we are working with the leading fabs across the U.S., Europe and Asia to support a lot of our high-speed business, primarily data center centric, as well as various tests -- very high-performance test chips or products for broadcast video or other high-speed trading-type chips that are very high-speed matrices that are used in high-speed trading.
So we have a lot of high-end chips that we externally sourced from 4 to 5 different fabs, depending on the technology. And that -- those product lines also contribute quite nicely to our business and can also affect the overall corporate gross margins.
Jack, I don't know whether you want to add to that?
I think just maybe just providing a little bit more color in terms of RTP, right, when we had talked about it last quarter, we had only had it for 2 weeks. So it came in line with our expectations. It allowed us to also derisk the business in terms of being able to take control of that business. So the team has done a fantastic job with everything that's going on there.
Our next question coming from the line of Sean O'Loughlin with TD Cowen.
Thanks for letting me hop on and ask a question and like my peers, I'll congratulate you on the excellent results. I wanted to ask -- two of your, I guess, I'll call them sort of competitors announced a merger last week, a question that we've gotten from investors is whether you anticipate much changing on the competitive landscape following that merger.
Obviously, you don't compete in the handset market, but maybe as you think about those companies' respective broad markets businesses coming together, does that change much? Or is it too early to say with any certainty?
Yes. Thank you for the question, and congratulations to both companies. And you're right, we're not in the handset business, so it shouldn't affect us. Neither companies are customers or suppliers to us, so there's no sort of impact there. So we don't really see a direct impact.
We have noticed that each of those companies is closing down their fabs, and I imagine over the course of time, there'll be some restructuring. And so it's possible that, that could create an opportunity for us to maybe win some more sockets or hire some great talent. So we'll see how it goes. And we again, congratulate both companies on that deal.
Great. And then as a follow-up, I wanted to ask an AI question that is actually not about the data center market. if you can believe that. But in telecom, one of the themes that our colleagues on the comm infrastructure side of the house have been exploring is the potential impact of some of these deployments and the data center builds on access and long-haul networks as bandwidth increases either due to distributed training or more 2-way inference traffic.
Are you -- I guess, put simply, are you seeing that at all? Or do you anticipate that in the future? And then maybe how should we be thinking about the puts and takes of those trends as it relates to MACOM?
Well, we have very good relations with the major RAN manufacturers that are deploying 5G and working on 6G. We also have a very strong understanding of the front-haul network itself because that's a big part of our business. And we're very, very strong with RF over fiber. And in some future generations, there may be more RF over fiber directly to the radio.
And so all of these things would contribute to moving high-speed data or large blocks of data faster. And so we are definitely working with customers and trying to keep up with their investigations of different architectures like the ones you mentioned.
So we do have -- again, I think the key point here is that trend would most likely be a long-term trend, and we think we have the right technology, given the highest speed, highest data rate, highest frequency. A lot of these applications might also deploy very high frequencies. And so we think we're in a good spot to take advantage of that.
And our next question coming from the line of William Stein with True Securities.
And also congratulations on the strong results and outlook and perhaps especially on the fiscal '26 commentary, which sounds good.
Steve, I was hoping that you might reflect on the one hand, relatively light comments about the industrial end market performance, while on the other hand, gross margin sounds like they're going to be tracking better consistently over the coming year. I've historically sort of associated these two things together that that low in the industrial end market has been sort of a weight on gross margins.
Is that still the case? Is that part of the thinking behind expanding gross margins next year or recovery in that market? And if any other details you could provide around that thinking, would be helpful.
Yes. And I think you're thinking about it the right way. And historically, we've had a lot of our industrial revenue was internal fab centric. And that's because it would be servicing markets like test and measurement or medical markets where they use a nonmagnetic high-voltage diodes, which we have a very strong position in the market on, as well as factory automation and other wireless platforms.
And so as that market improves, that benefits the loading and can have a benefit on the gross margins. Generally speaking, I would -- with that said, generally speaking, as we look into '26, we think there will be some positive trends in industrial, but more importantly, stronger trends in defense, And that will also be a tailwind on our gross margins
That's helpful. Maybe as a follow-up, can you maybe help us understand the diversification in the data center end market? And maybe explore a little bit where the design wins come from. Are they more from module makers, from semiconductor suppliers, from the cloud service providers? And maybe give us an idea of the diversification and the types of customers that you're actually getting design wins from and transacting with.
Thank you for the question. We address to the back half of your question, all three of those customer categories. So that would be the module manufacturers or cable manufacturers, semiconductor companies and the cloud or the hyperscalers directly. So we engage it all in all of those categories.
And so when you take that and add that all up, you'll see that there's a lot of mix of what those different companies would want in terms of product for MACOM.
As we look at the market, we break it up into really three segments, it would be the multi-mode market itself, which is generally short reach; single mode, which is medium, long reach; and then metro long haul and coherent. And so as we look down and service these different companies in those different categories you mentioned, depending on what they're focused on, we'll try to be a merchant supplier and sell them chips. It might be a driver, it might be a laser, it might be a photo detector or TIA.
And so that is -- there's about a half a dozen primary product lines, let's say, that we service the data center with, and that's how we go to market.
Our next question coming from the line of Peter Pang with JPMorgan..
All right. I will go on to the next person in queue, next person of coming from the line of Tim Savageaux Northland Capital Markets.
Okay, just made it. Congrats on the results. And indeed, we've seen some pretty positive results across this optical landscape thus far this week, even with a lot of references to step-function accelerations and demands, I think, both inside and outside the data center. And I think maybe that marries up well with your very strong October bookings commentary, I think,
I guess the question is, in that environment, so you're guiding data center to high 20s growth, maybe 28% growth in Q1; and I guess given this environment that we're seeing and what seems to be a bit of a title wave of demand, is that type of growth rate sustainable for the year in fiscal '26? Or can it even increase?
Yes, I think it can increase. And we have a base case, and then we have our sort of best case. And we're setting guidance on it, I would say, our base case are more conservative which even provides strong sequential growth coming off of a very strong Q4. And so we would expect that to continue.
There are scenarios, as we model our fiscal '26, where our data center can actually really outperform and have very strong performance similar to last year. But we're not forecasting that now. We know a lot of things have to happen, including various ramps have to occur and things of that nature.
So we're not forecasting that sort of super strong growth. We're going to start the year and look at our backlog and plan accordingly. But you're correct, and those trends are there, and it's primarily around 1.6T. That's where the volume is, that's where the demand is, that's where the shortage of supply in some key technologies is. And quite frankly, that's where MACOM can be a strategic partner
Our next question coming from the line of Quinn Bolton with [indiscernible] Company.
I guess maybe, Steve, just coming out of the ECOC Optical Show a few weeks back, there was some chatter about market share shifts in the TIA and the driver side at 800 gig and 1.6T modules.
I just wonder if you could address how do you feel about your relative share position across TIA drivers? Have you seen any shifts? Do you feel like you're still pretty well holding share or maybe even taking share? But any comment just how you're doing in the PMDs for optical modules at 800 and 1.6T?
Thank you for the question. I think we're doing well. I think we have differentiated product, and it's a very competitive landscape. So you have to earn every socket based on performance, timing, price, and I think we're bringing our best game to the market.
So holding share?
I'm not going to comment on particular product lines, whether we're gaining or losing market share.
There are no further questions at this time. I will now turn the call back over to Mr. Steve Daly for any closing remarks.
Thank you. In closing, Jack and I would like to thank the entire MACOM team for their continued dedication, which made our FY '25 results possible. We will continue to work as a team to meet our customers' needs and execute our strategic plan as we start fiscal year '26. Thank you very much, and have a nice day.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.
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Finanzdaten von MACOM Technology Solutions Holdings, Inc.
Umsatz
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Umsatz (TTM) einfach erklärtDirekte Kosten
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Bruttoertrag
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Forschungs- und Entwicklungskosten
Die Forschungs- und Entwicklungskosten (engl. research & development costs, kurz R&D) geben Auskunft darüber, wie viel das Unternehmen in die Forschung und die Entwicklung seiner Produkte investiert. Vor allem prozentual vom Umsatz und im Vergleich zu direkten Wettbewerbern sind die Kosten interessant.
EBITDA
Das EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) ist der Gewinn des Unternehmens vor Zinsen, Steuern und Abschreibungen. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von der EBITDA-Marge.
Abschreibungen
Abschreibungen stellen Wertminderungen von Vermögensgegenständen des Unternehmens dar (z.B. durch Abnutzung von Maschinen).
EBIT (Operatives Ergebnis)
Das EBIT (engl. Earnings Before Interest and Taxes) ist der Gewinn des Unternehmens vor Zinsen und Steuern, das auch als operatives Ergebnis bezeichnet wird. Berechnet man den prozentualen Anteil vom Umsatz, spricht man von
der EBIT-Marge.
Nettogewinn
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Nettogewinn einfach erklärtaktien.guide Premium
| Jul '26 |
+/-
%
|
||
| Umsatz | 1.164 1.164 |
28 %
28 %
100 %
|
|
| - Direkte Kosten | 506 506 |
23 %
23 %
43 %
|
|
| Bruttoertrag | 658 658 |
33 %
33 %
57 %
|
|
| - Vertriebs- und Verwaltungskosten | 167 167 |
22 %
22 %
14 %
|
|
| - Forschungs- und Entwicklungskosten | 263 263 |
18 %
18 %
23 %
|
|
| EBITDA | 229 229 |
67 %
67 %
20 %
|
|
| - Abschreibungen | 18 18 |
7 %
7 %
2 %
|
|
| EBIT (Operatives Ergebnis) EBIT | 211 211 |
79 %
79 %
18 %
|
|
| Nettogewinn | 241 241 |
445 %
445 %
21 %
|
|
Angaben in Millionen USD.
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Firmenprofil
MACOM Technology Solutions Holdings, Inc. beschäftigt sich mit dem Design, der Entwicklung, Herstellung und Vermarktung von Halbleitern und Modulen. Zu ihren Produkten gehören integrierte Schaltkreise (IC), Multi-Chip-Module (MCM), Leistungspaletten und Transistoren, Dioden, Verstärker, Schalter und Schalterbegrenzer, passive und aktive Komponenten sowie komplette Subsysteme. Das Unternehmen wurde am 25. März 2009 gegründet und hat seinen Hauptsitz in Lowell, MA.
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| Hauptsitz | USA |
| CEO | Mr. Daly |
| Mitarbeiter | 2.000 |
| Gegründet | 2009 |
| Webseite | www.macom.com |


