Results
MICROCHIP TECHNOLOGY ANNOUNCES FINANCIAL RESULTS FOR SECOND QUARTER OF FISCAL YEAR 2027
Net sales of $1.622 billion, increased 42.2% from the year-ago quarter and up 9.2% sequentially.
The midpoint of our guidance provided on August 6, 2026 was net sales of $1.604 billion.
On a GAAP basis: gross profit of 65.9%; operating income of $464.5 million and 28.6% of net sales; net income attributable to common stockholders of $373.6 million; and EPS of $0.68 per diluted share.
Our guidance provided on August 6, 2026 was GAAP EPS per diluted share of $0.53 to $0.54.
On a Non-GAAP basis: gross profit of 66.5%; operating income of $639.9 million and 39.5% of net sales; net income of $559.2 million; and EPS of $0.97 per diluted share.
Our guidance provided on August 6, 2026 was Non-GAAP EPS per diluted share of $0.91 to $0.95.
Returned approximately $247.6 million to common stockholders in the September quarter through dividends.
Quarterly dividend on common stock declared for the December quarter of 45.5 cents per share.
Completed acquisitions of Hailo, a provider of accelerated edge AI processors, on September 17th, and Vorago Technologies, a provider of radiation-hardened microcontrollers and microprocessors, on October 8th.
CHANDLER, Arizona - November 5, 2026 - (NASDAQ: MCHP) - Microchip Technology Incorporated, a broadline supplier of semiconductors committed to making innovative design easier through total system solutions, today reported results for the three months ended September 30, 2026.
8"Our September quarter net sales were above the high end of our guidance, increasing 42.2% year over year and 9.2% sequentially to $1.622 billion," said Steve Sanghi, Microchip’s President and Chief Executive Officer.
1"The momentum from the start of fiscal 2027 continued in the September quarter, with broad-based growth across our end markets, driven by industrial and data center applications.
Our growth is increasingly supported by new design wins and product innovations, which we believe positions us well for the opportunities ahead."
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Microchip Technology Reports
Second Quarter Fiscal 2027
Financial Results
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Mr. Sanghi added, “Bookings remained robust, with book-to-bill well above one, consistent with recent quarters.
4We are winning new designs across our end markets, including data center, where our PCIe Gen6 switch and retimer design wins have grown to 24 to date, up from 12 at the end of the June quarter.
We also broadened our portfolio, with a steady cadence of product and technology introductions across data center, aerospace and defense, automotive and industrial applications, which expands the foundation for future design wins."
Eric Bjornholt, Microchip's Corporate Senior Vice President and Chief Financial Officer, said, "Our September quarter results reflect ongoing operational improvements, with non-GAAP operating expenses growing well below net sales and supporting higher profitability.
We believe our existing manufacturing footprint enables us to grow with modest incremental capital investment, and we remain focused on strengthening our balance sheet while making targeted investments that accelerate our product roadmap.”
Mr. Sanghi concluded, “As we enter the December quarter, we are experiencing some normal seasonal factors in our business.
2Normal seasonality is for our revenue to be down sequentially 3% to 5% in the December quarter.
6We expect net sales for the December quarter to be between down 3% and up 1% sequentially, with a midpoint of down 1%.
7The midpoint of our December quarter guidance represents year-over-year growth of approximately 35.4%.
3Our guidance of down 1% at the midpoint needs to be considered with the fact that we had about $53 million of infrequent revenue items in the September quarter which do not repeat in the December quarter.
5Taking this into consideration, the midpoint of our guidance for the December quarter represents guidance that is 5% to 7% better than normal seasonality.
Lead times are lengthening across our supply chain, and we are working to expand capacity and secure additional wafer allocation.
We expect non-GAAP gross margin to be between 64% and 65% and GAAP gross margin to be between 62.9% and 63.9%.
Together, data center, aerospace and defense, industrials, robotics, automotive and the intelligent edge are the secular trends we see driving growth over the long-term.”
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The following table summarizes Microchip's reported results for the three months ended September 30, 2026.
(1) In millions, except per share amounts and percentages of net sales.
(2) See the "Use of Non-GAAP Financial Measures" section of this release.
Net sales for the second quarter of fiscal 2027 were $1.622 billion, up 42.2% from net sales of $1.140 billion in the prior year's second fiscal quarter.
GAAP net income attributable to common stockholders for the second quarter of fiscal 2027 was $373.6 million, or $0.68 per diluted share, up from GAAP net income attributable to common stockholders of $13.9 million, or $0.03 per diluted share, in the prior year's second fiscal quarter.
For the second quarters of fiscal 2027 and fiscal 2026, GAAP results were adversely impacted by amortization of acquired intangible assets associated with our previous acquisitions.
Non-GAAP net income for the second quarter of fiscal 2027 was $559.2 million, or $0.97 per diluted share, up from non-GAAP net income of $199.1 million, or $0.35 per diluted share, in the prior year's second fiscal quarter.
For the second quarters of fiscal 2027 and fiscal 2026, our non-GAAP results exclude the effect of share-based compensation, restructuring charges, expenses related to our acquisition activities (including intangible asset amortization, severance, other restructuring costs, and legal and other general and administrative expenses including legal fees and expenses for litigation related to our Microsemi acquisition), professional services associated with certain legal matters, (gain) loss on available-for-sale investments, and dividends on our Series A Mandatory Convertible Preferred Stock.
For the second quarters of fiscal 2027 and fiscal 2026, our non-GAAP income tax expense is presented based on projected cash taxes for the applicable fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act.
A reconciliation of our non-GAAP and GAAP results is included in this press release.
Microchip announced today that its Board of Directors declared a quarterly cash dividend on its common stock of 45.5 cents per share, which is payable on December 8, 2026 to stockholders of record on November 23, 2026.
Our Board also declared a quarterly cash dividend on Microchip's 7.50% Series A Mandatory Convertible Preferred Stock of $18.750 per share (which represents $0.9375 per depositary share) which is payable on December 15, 2026 to stockholders of record on December 1, 2026.
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Microchip also announced that, on November 3, 2026, Victor Peng informed our Board of Directors of his decision to step down from the Board due to his time commitments on other matters including serving as Chief Executive Officer of PsiQuantum.
The Board thanks Mr. Peng for his service and contributions during his tenure on the Board.
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Third Quarter Fiscal Year 2027 Outlook:
The following statements are based on current expectations.
These statements are forward-looking, and actual results may differ materially.
Microchip Consolidated Guidance
Net Sales$1.573 to $1.638 billion
GAAP (5)Non-GAAP Adjustments (1)Non-GAAP (1)
Gross Profit62.9% to 63.9%$17.7 to $18.7 million64.0% to 65.0%
Operating Expenses (2)36.7% to 37.4%$163.0 to $167.0 million26.5% to 27.0%
Operating Income25.5% to 27.2%$180.8 to $185.8 million37.0% to 38.5%
Other Expense, net$47.7 to $48.3 million$(0.2) to $0.2 million$47.5 to $48.5 million
Income Tax Provision$67.1 to $91.3 million (3)$(53.4) to $(32.4) million$34.7 to $37.9 million (4)
Net income$285.9 to $305.8 million$212.9 to $239.3 million$498.8 to $545.1 million
Dividends on Series A Preferred Stock$(27.8) million$27.8 million
Net income attributable to common stockholders$258.1 to $278.0 million$240.7 to $267.1 million$498.8 to $545.1 million
Diluted Common Shares OutstandingApproximately 551.0 to 552.0 million shares23.8 million sharesApproximately 574.8 to 575.8 million shares
Diluted net income per common share$0.47 to $0.50$0.40 to $0.45$0.87 to $0.95
(1) See the "Use of Non-GAAP Financial Measures" section of this release for information regarding our non-GAAP guidance.
(2) We are not able to estimate the amount of certain Special Charges and Other, net that may be incurred during the quarter ending December 31, 2026.
Therefore, our estimate of GAAP operating expenses excludes certain amounts that may be recognized as Special Charges and Other, net in the quarter ending December 31, 2026.
(3) The forecast for GAAP tax expense excludes any unexpected tax events that may occur during the quarter, as these amounts cannot be forecasted.
(4) Represents the expected cash tax rate for fiscal 2027, excluding any transition tax payments associated with the Tax Cuts and Jobs Act.
(5) Our GAAP guidance excludes the impact of any potential gains or charges related to our ongoing evaluation of restructuring activities including the sale of our Fab 2 wafer fabrication facility in Tempe, Arizona.
Capital expenditures for the quarter ending December 31, 2026 are expected to be about $35 million.
Capital expenditures for all of fiscal 2027 are expected to be approximately $100 million.
Consistent with the slow macroeconomic environment in fiscal 2025, we have paused most of our factory expansion actions and reduced our planned capital investments through fiscal 2027.
However, we are adding capital equipment to selectively expand our production capacity and add research and development equipment.
Under the GAAP revenue recognition standard, we are required to recognize revenue when control of the product changes from us to a customer or distributor.
We focus our sales and marketing efforts on creating demand for our products in the end markets we serve and not on moving inventory into our distribution network.
We also manage our manufacturing and supply chain operations, including our distributor relationships, towards the goal of having our products available at the time and location the end customer desires.
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Use of Non-GAAP Financial Measures: Our non-GAAP adjustments, where applicable, include the effect of share-based compensation, restructuring charges, expenses related to our acquisition activities (including intangible asset amortization, severance, other restructuring costs, and legal and other general and administrative expenses including legal fees and expenses for litigation related to our Microsemi acquisition), professional services associated with certain legal matters, (gain) loss on available-for-sale investments, and dividends on our Series A Mandatory Convertible Preferred Stock.
For the second quarters of fiscal 2027 and fiscal 2026, our non-GAAP income tax expense is presented based on projected cash taxes for the fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act.
We are required to estimate the cost of certain forms of share-based compensation, including restricted stock units and our employee stock purchase plan, and to record a commensurate expense in our income statement.
Share-based compensation expense is a non-cash expense that varies in amount from period to period and is affected by the price of our stock at the date of grant.
The price of our stock is affected by market forces that are difficult to predict and are not within the control of management.
Our other non-GAAP adjustments are either non-cash expenses, unusual or infrequent items, or other expenses related to transactions.
Management excludes all of these items from its internal operating forecasts and models.
We are using non-GAAP operating expenses in dollars, including non-GAAP research and development expenses and non-GAAP selling, general and administrative expenses, non-GAAP other expense, net, and non-GAAP income tax rate, which exclude the items noted above, as applicable, to permit additional analysis of our performance.
Management believes these non-GAAP measures are useful to investors because they enhance the understanding of our historical financial performance and comparability between periods.
Many of our investors have requested that we disclose this non-GAAP information because they believe it is useful in understanding our performance as it excludes non-cash and other charges that many investors feel may obscure our underlying operating results.
Management uses non-GAAP measures to manage and assess the profitability of our business and for compensation purposes.
We also use our non-GAAP results when developing and monitoring our budgets and spending.
Our determination of these non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP.
There are limitations associated with using these non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance.
Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results.
Generally, gross profit fluctuates over time, driven primarily by the mix of products sold and licensing revenue; variances in manufacturing yields; fixed cost absorption; wafer fab loading levels; costs of wafers from foundries; inventory reserves; pricing pressures in our non-proprietary product lines; and competitive and economic conditions.
Operating expenses fluctuate over time, primarily due to net sales and profit levels.
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Diluted Common Shares Outstanding can vary for, among other things, the trading price of our common stock, the vesting of restricted stock units, the potential for incremental dilutive shares from our convertible debentures and our mandatory convertible preferred stock (additional information regarding our share count is available in the investor relations section of our website under the heading "Supplemental Information"), and repurchases or issuances of shares of our common stock.
The diluted common shares outstanding presented in the guidance table above assumes an average Microchip stock price in the December 2026 quarter between $75 and $85 per share (however, we make no prediction as to what our actual share price will be for such period or any other period).
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