Microchip Technology (NASDAQ:MCHP) Posts Quarterly Earnings Results, Beats Expectations By $0.03 EPS

Microchip Technology (NASDAQ:MCHP) posted its quarterly earnings results on Thursday. The semiconductor company reported $0.97 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.94 by $0.03, FiscalAI reports. Microchip Technology had a net margin of 9.34% and a return on equity of 14.97%. The firm had revenue of $1.62 billion during the quarter, compared to analysts’ expectations of $1.61 billion. During the same period in the prior year, the company posted $0.35 earnings per share. The firm’s revenue for the quarter was up 42.2% on a year-over-year basis.

Here are the key takeaways from Microchip Technology’s conference call:

• September-quarter sales rose 42.2% year over year to $1.622 billion, and non-GAAP EPS of $0.97 beat the guidance midpoint by $0.04. Results included about $53 million of one-time revenue that the company does not expect to recur in December.
• Bookings remained strong, the book-to-bill ratio was well above one, and backlog entering December was higher than entering September. Management cited broad growth across industrial, aerospace and defense, automotive, and other markets, while warning that supply constraints are delaying some shipments.
• December-quarter revenue guidance is flat to down 3% sequentially at the midpoint, with non-GAAP gross margin expected at 64%–65%, below September’s 66.5%. The company cited the absence of one-time revenue, constrained shipments of high-margin products, lower utilization, and rising supplier costs.
• Data-center sales exceeded $250 million in September, and Microchip said its data-center business is on track for $1 billion in calendar 2026. It reported 24 Gen 6 PCIe switch and retimer design wins, with shipments expected to ramp as more designs enter production next year; management noted volumes could be affected if data-center investment slows.
• Net debt declined despite funding the Hailo acquisition, and leverage was 2.36 times trailing adjusted EBITDA; management expects leverage to keep falling. The company plans to maintain its dividend for now and revisit capital returns as it moves into the next fiscal year.

Microchip Technology Stock Down 10.0%

Shares of MCHP opened at $58.35 on Friday. The company has a market capitalization of $31.68 billion, a PE ratio of 44.20, a PEG ratio of 0.52 and a beta of 1.84. The company has a current ratio of 1.92, a quick ratio of 1.11 and a debt-to-equity ratio of 0.83. The stock’s 50-day moving average price is $74.85 and its two-hundred day moving average price is $79.41. Microchip Technology has a 12 month low of $48.52 and a 12 month high of $105.91.

Microchip Technology Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 8th. Stockholders of record on Monday, November 23rd will be given a dividend of $0.4550 per share. This represents a $1.82 dividend on an annualized basis and a dividend yield of 3.1%. The ex-dividend date is Monday, November 23rd. Microchip Technology’s dividend payout ratio is presently 271.64%.

Key Microchip Technology News

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Fiscal Q2 EPS was $0.97 versus the $0.94 consensus, while revenue of $1.62 billion topped estimates and rose 42.2% year over year. Reports cited recovering industrial and data-center demand and improving margins as growth drivers. Zacks earnings report
• Positive Sentiment: Microchip declared a quarterly dividend of $0.455 per share, equivalent to $1.82 annually and a reported yield of about 3.2%. The dividend may appeal to income-focused investors.
• Neutral Sentiment: Several analysts still rate MCHP Buy or Overweight, and their revised targets remain above the cited $58.35 share price. However, the target reductions signal more cautious expectations.
• Negative Sentiment: Management’s fiscal Q3 outlook is a key concern: revenue is forecast to range from 3% below to 1% above Q2, with non-GAAP EPS of $0.87–$0.95. The midpoint was reported below consensus; supply constraints and rising costs could limit near-term growth. Benzinga analyst coverage
• Negative Sentiment: Analysts cut targets after the results, including Truist to $62 from $90 and Evercore ISI to $75 from $117. Citigroup lowered its target to $75 from $95 but kept a Buy rating; the broader reset in expectations may pressure shares despite generally higher remaining targets. Truist analyst recommendations Evercore ISI target update

Wall Street Analyst Weigh In

MCHP has been the subject of a number of analyst reports. Needham & Company LLC reduced their price target on Microchip Technology from $120.00 to $85.00 and set a “buy” rating for the company in a research report on Friday. Wall Street Zen lowered Microchip Technology from a “buy” rating to a “hold” rating in a report on Saturday. UBS Group restated a “buy” rating and set a $120.00 price objective (down from $130.00) on shares of Microchip Technology in a research report on Friday, August 7th. Weiss Ratings raised Microchip Technology from a “hold (c-)” rating to a “hold (c)” rating in a research report on Tuesday, August 11th. Finally, Zacks Research lowered shares of Microchip Technology from a “strong-buy” rating to a “hold” rating in a research report on Monday, August 17th. Three analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and seven have given a Hold rating to the company’s stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $91.64.

Insider Activity

In other Microchip Technology news, CFO James Bjornholt sold 4,112 shares of Microchip Technology stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $75.32, for a total transaction of $309,715.84. Following the completion of the sale, the chief financial officer directly owned 28,573 shares of the company’s stock, valued at $2,152,118.36. The trade was a 12.58% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.79% of the stock is currently owned by insiders.

Microchip Technology Company Profile