MACOM (MTSI) Q3 2026 earnings summary

Executive summary

• Achieved record Q3 revenue of $342.2 million, up 18.4% sequentially and 35.8% year-over-year, with strong growth across all end markets, especially data center and industrial & defense.

• Net income for the quarter was $100.7 million ($1.28 per diluted share), up from $36.5 million a year ago; adjusted net income reached $109.8 million ($1.40 per diluted share).

• Book-to-bill ratio hit a record 1.6, reflecting robust demand and backlog.

• Strategic investments in R&D, manufacturing capacity, and supply chain, including a $61 million investment in IQE, are driving innovation and supporting rapid revenue growth.

• Management highlighted strong execution of growth strategy and improved profitability.

Financial highlights

• Adjusted gross profit was $204.2 million (59.7% margin), up 120 bps sequentially; GAAP gross margin improved to 58.3%.

• Adjusted operating income reached $107.7 million (31.5% margin), up 33.9% sequentially and 69.6% year-over-year; GAAP operating income was $77.1 million (22.5% margin).

• Adjusted net income was $109.8 million, up 30.2% sequentially; adjusted EPS rose to $1.40 from $1.09 in Q2.

• Cash flow from operations was $80 million for Q3 and $201.6 million for the nine months; cash and short-term investments totaled $663 million at quarter-end.

• Capital expenditures for Q3 were $20.8 million; FY26 CapEx expected at $60–$65 million.

Outlook and guidance

• Q4 revenue expected between $415–$425 million, with adjusted gross margin of 60–61% and adjusted EPS of $1.97–$2.03.

• Sequential Q4 growth forecast: data center +35%, industrial & defense +20%, telecom low single digits.

• Fiscal 2027 base case projects company growth in the mid-20% range, with data center potentially growing 50% year-over-year.

• Adjusted operating margin expected to reach ~37% in Q4 and targeted to exceed 40% in FY27.

• Management expects continued growth in all primary markets, driven by demand for high-performance analog, digital, and optical semiconductors.