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

MACOM Technology Solutions Holdings, Inc. MTSI reported first-quarter fiscal 2023 non-GAAP earnings of 81 cents per share, beating the Zacks Consensus Estimate by 2.5%. Further, the bottom line improved 26.6% from the year-ago quarter’s reported figure.

Revenues of $180.1 million surpassed the Zacks Consensus Estimate of $179.5 million. Moreover, the top line rose 12.8% from the year-ago quarter.

Top-line growth was driven by the company’s strong performance across all end-markets on a year-over-year basis.

Notably, MACOM has gained 13.3% over a year, outperforming the industry’s rally of 10.7%.

MACOM Technology Solutions Holdings, Inc. Price, Consensus and EPS Surprise

 

MACOM Technology Solutions Holdings, Inc. Price, Consensus and EPS Surprise
MACOM Technology Solutions Holdings, Inc. Price, Consensus and EPS Surprise

MACOM Technology Solutions Holdings, Inc. price-consensus-eps-surprise-chart | MACOM Technology Solutions Holdings, Inc. Quote

Top Line in Detail

Telecom Market: MTSI generated revenues of $61.45 million (34% of the total revenues) from the market, up 10.1% year over year.

Data Center Market: The market generated revenues of $41.48 million (23% of the total revenues), up 35.3% from the year-ago quarter.

Industrial & Defense Market: MACOM generated revenues of $77.17 million (43% of the total revenues) from the market, up 5.5% year over year.

Operating Details

In first-quarter fiscal 2023, the non-GAAP gross margin was 62.6%, which expanded 120 basis points (bps) from the year-ago quarter’s reported figure.

In the reported quarter, non-GAAP operating expenses were $53.9 million, which increased 10% from the year-ago quarter’s reported figure. As a percentage of revenues, the figure contracted 80 bps to 29.9%.

Consequently, MTSI’s non-GAAP operating margin was 32.7%, which expanded 200 bps from the prior-year quarter.

Balance Sheet & Cash Flow

As of Dec 30, 2022, cash equivalents and short-term investments were $594.7 million, up from $586.5 million as of Sept 30, 2022.

Inventories were $121.3 million, up from $114.9 million in the last reported quarter.

Long-term debt obligations, excluding the current portion, were $566.3 million in the reported quarter compared with $565.9 million in the previous quarter.

Cash generated from operations was $38.3 million, down from $59.9 million in the last reported quarter.

Guidance

For second-quarter fiscal 2023, MACOM expects revenues between $166 million and $170 million. The Zacks Consensus Estimate for the same is pegged at $177.7 million.

MTSI’s adjusted earnings per share are anticipated to be 76-80 cents. The Zacks Consensus Estimate for the same is pegged at 74 cents.

The non-GAAP gross margin is anticipated to be 61.5-63.5%.

Zacks Rank & Stocks to Consider

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

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Agilent Technologies A, Arista Networks ANET and Endava DAVA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies is set to report first-quarter fiscal 2023 results on Feb 28. The Zacks Consensus Estimate for Agilent’s earnings is pegged at $1.31 per share, suggesting an increase of 8.3% from the prior-year period’s reported figure. Agilent has gained 10.2% in the past year.

Arista Networks is scheduled to release fourth-quarter 2022 results on Feb 13. The Zacks Consensus Estimate for ANET’s earnings is pegged at $1.21 per share, suggesting an increase of 47.6% from the prior-year quarter’s reported figure. ANET has gained 9.1% in the past year.

Endava is scheduled to release second-quarter fiscal 2023 results on Feb 14. The Zacks Consensus Estimate for DAVA’s earnings is pegged at 68 cents per share, suggesting an increase of 7.9% from the prior-year quarter’s reported figure. DAVA has lost 26.1% in the past year.

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