Microchip Technology has projected its financial performance for the upcoming first quarter (Q1 FY26), expecting both revenue and profit to surpass analysts’ estimates. The Arizona-based semiconductor firm foresees net sales ranging from $1.02bn to $1.07bn, exceeding the average estimate of $987.6m by analysts. Similarly, the company anticipates an adjusted per-share profit between $0.18 and $0.26, compared to analysts’ projection of $0.16. Following the announcement, the company’s shares surged 8% in extended trading.
The optimistic forecast follows a robust fourth-quarter (Q4 FY25) performance, where Microchip reported net sales of $970.5m, surpassing the anticipated $962.8m. This marks a promising recovery phase after a prolonged downturn in the semiconductor industry due to overstocked chip inventories during the pandemic-induced supply chain disruptions.
Despite a sequential decline of 5.4% in fourth-quarter net sales and a 26.8% drop from the same quarter last year, the company managed to exceed its guidance midpoint of $960m provided earlier this year.
On a GAAP basis, Microchip reported a gross profit margin of 51.6%, with an operating loss of $100.3m and a net loss of $156.8m attributable to common stockholders for the fourth quarter. The company noted that its previous guidance did not account for restructuring charges and preferred stock dividend impacts.
Non-GAAP results show a gross profit margin of 52%, operating income of $136m, and net income of $61.4m, translating to an earnings per share (EPS) of $0.11 per diluted share.
“We expect even more substantial inventory reduction in the June quarter as our manufacturing optimisation actions are near completion,” said Microchip CEO Steve Sanghi.
The company is also advancing its technological offerings, including atomic clock technology, microprocessor enhancements, and expanded ethernet solutions for automotive and industrial applications.
For fiscal year 2025, Microchip reported net sales of $4.4bn, marking a 42.3% decrease from the previous year. On a GAAP basis, it recorded an operating income of $296.3m but a net loss attributable to common stockholders of $2.7m due to acquisition-related adjustments and restructuring charges.
Non-GAAP figures for fiscal year 2025 reveal a gross profit margin of 57%, operating income of $1bn, net income of $708.8m, and an EPS of $1.31 per diluted share.
Launch of new microcontroller product family
Recently, Microchip introduced the PIC16F17576 microcontroller (MCU) product family, designed to address the needs for rapid response and low power consumption in devices capturing fast-changing analog signals, particularly in battery-powered applications. The PIC16F17576 MCUs include integrated low-power peripherals and are capable of precisely measuring dynamic analog signals.
These MCUs incorporate a new low-power comparator and voltage reference combination that can function while the MCU core is in sleep mode. This feature allows for continuous analog measurement with a current consumption of less than 3.0 µA. Additionally, the Analog Peripheral Manager (APM) oversees active peripherals to reduce overall energy use, enabling effective signal monitoring in battery-operated devices without significant power depletion.
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