MACOM Technology Q2 Earnings and Revenues Beat Estimates, Stock Up

MACOM Technology Solutions Holdings, Inc. MTSI reported second-quarter fiscal 2025 earnings of 85 cents per share, which beat the Zacks Consensus Estimate by 1.2%. This company reported earnings of 59 cents per share a year ago.

MACOM Technology’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on the other two occasions, the average surprise being 0.75%.

MTSI posted revenues of $235.89 million in the second quarter of fiscal 2025, surpassing the Zacks Consensus Estimate by 2.52%. This company reported revenues of $181.23 million in the year-ago quarter.

MACOM Technology’s better-than-expected results and upbeat guidance for third-quarter fiscal 2025 results pushed MTSI shares up by 5.55% in Thursday's trading session.

MTSI Top Line in Detail

Telecom Market: MTSI generated revenues of $65.2 million (27.6% of the total revenues) from the market, up 38.1% year over year. The telecom segment is growing on the back of high demand for its products to expand the 5G market in the United States. MACOM Technology is also experiencing significant growth in 100G/lane platforms, 800G SR8, 400G SR4, and early adoption of 1.6T platforms.

Data Center Market: The market generated revenues of $72.2 million (30.6% of the total revenues), up 67.2% year over year. MACOM Technology’s data center end market is growing on the back of strong demand for its products by Internet service providers. MACOM Technology is experiencing strong traction in its 800G, 1.6T, Linear Pluggable Optics and Active Copper Cables offerings.

Industrial & Defense Market: MACOM generated revenues of $98.5 million (41.8% of the total revenues) from the market, up 8.4% year over year. MACOM is experiencing high demand for products, including electronic warfare, secure communications and integrated battlefield systems. Additionally, MTSI is benefiting from increasing European defense exposure, with the MESC facility (France) expanding.

Operating Details

In the second quarter of fiscal 2025, MTSI’s non-GAAP gross margin was 57.5%, which expanded 40 basis points (bps) from the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

In the reported quarter, non-GAAP operating expenses were $75.8 million, which increased 8.4% from the year-ago quarter. As a percentage of revenues, the figure contracted 280 basis points to 32.1%.

Consequently, MTSI’s non-GAAP operating margin was 25.4%, which expanded 320 bps from the prior-year quarter’s figure.

Balance Sheet

As of April 4, 2025, cash equivalents and short-term investments were $681.5 million, up from $656.5 million as of Jan. 3, 2025.

Inventories were $209.3 million, up from $198.4 million reported in the year-ago quarter.

Long-term debt obligations, excluding the current portion, were $339.1 million in the reported quarter compared with $338.8 million in the previous quarter.

Guidance

For third-quarter fiscal 2025, MACOM Technology expects revenues between $246 million and $254 million. The Zacks Consensus Estimate for the same is pegged at $230.1 million. The non-GAAP gross margin is expected to be in the range of 56.5-58.5%.

MTSI’s adjusted earnings per share are anticipated to be in the band of 87-91 cents. The Zacks Consensus Estimate for the same is pegged at 84 cents.
The company also expects a non-GAAP income tax rate of 3% and 76.5 million fully diluted shares outstanding.

Zacks Rank and Stocks to Consider

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

Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting a growth of 38.6% from the year-ago quarter’s reported figure.

JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings have been revised upward to $2.09 in the past 30 days reflecting a year-over-year growth of 21.5%.

UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.

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