Microchip Q1 sales, profit beat estimates on demand from cloud providers

Microchip Technology

07/08/2025 21:24

Overview

Microchip fiscal Q1 2026 sales of $1.0755 bln beat analyst expectations

Adjusted EPS of $0.27 for fiscal Q1 exceeds analyst estimates, per LSEG data

Company reduced inventory by $124.4 mln, improving working capital efficiency

Outlook

Microchip expects Q2 net sales of $1.110 bln to $1.150 bln

Company anticipates Q2 GAAP gross profit of 54.3% to 56.2%

Microchip forecasts Q2 non-GAAP EPS of $0.30 to $0.36

Capital expenditures for fiscal 2026 expected below $100 mln

Result Drivers

INVENTORY REDUCTION - Co reduced inventory by $124.4 mln, improving working capital efficiency

STRATEGIC IMPERATIVES - Execution of strategic imperatives under recovery plan drove sequential revenue growth

DESIGN WINS - Secured design wins with tier-one cloud providers for AI infrastructure and defense applications

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Sales
Beat
$1.08 bln
$1.06 bln (19 Analysts)
Q1 Adjusted EPS
Beat
$0.27
$0.24 (21 Analysts)
Q1 EPS
-$0.09
Q1 Adjusted Net Income
Beat
$154.70 mln
$133.40 mln (18 Analysts)
Q1 Net Income
-$46.40 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the semiconductors peer group is "buy"

Wall Street's median 12-month price target for Microchip Technology Inc is $75.00, about 11.8% above its August 6 closing price of $66.17

The stock recently traded at 37 times the next 12-month earnings vs. a P/E of 39 three months ago

Press Release: ID:nGNXqClxR

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)