MACOM Reports Fiscal Fourth Quarter and Fiscal Year 2023

MACOM Reports Fiscal Fourth Quarter and Fiscal Year 2023 Financial Results

LOWELL, Mass. — (BUSINESS WIRE) — November 9, 2023 — MACOM Technology Solutions Holdings, Inc. (“MACOM”) (Nasdaq: MTSI), a leading supplier of semiconductor products, today announced its financial results for its fiscal fourth quarter and fiscal year ended September 29, 2023.

Fourth Quarter Fiscal Year 2023 GAAP Results

Revenue was $150.4 million, a decrease of 15.6%, compared to $178.1 million in the previous year fiscal fourth quarter and an increase of 1.2% compared to $148.5 million in the prior fiscal quarter;
Gross margin was 57.6%, compared to 60.9% in the previous year fiscal fourth quarter and 58.0% in the prior fiscal quarter;
Income from operations was $15.6 million, or 10.4% of revenue, compared to income from operations of $37.0 million, or 20.8% of revenue, in the previous year fiscal fourth quarter and income from operations of $17.3 million, or 11.7% of revenue, in the prior fiscal quarter; and
Net income was $24.5 million, or $0.34 per diluted share, compared to net income of $239.3 million, or $3.36 per diluted share, in the previous year fiscal fourth quarter and net income of $11.9 million, or $0.17 per diluted share, in the prior fiscal quarter. Net income for fiscal year 2022 includes a $202.8 million non-cash income tax benefit associated with the release of the valuation allowance on the majority of our deferred tax assets.

Fourth Quarter Fiscal Year 2023 Adjusted Non-GAAP Results

Adjusted gross margin was 60.1%, compared to 62.6% in the previous year fiscal fourth quarter and 60.1% in the prior fiscal quarter;
Adjusted income from operations was $37.2 million, or 24.7% of revenue, compared to adjusted income from operations of $56.9 million, or 32.0% of revenue, in the previous year fiscal fourth quarter and adjusted income from operations of $37.0 million, or 24.9% of revenue, in the prior fiscal quarter; and
Adjusted net income was $40.1 million, or $0.56 per diluted share, compared to adjusted net income of $55.1 million, or $0.77 per diluted share, in the previous year fiscal fourth quarter and adjusted net income of $38.5 million, or $0.54 per diluted share, in the prior fiscal quarter.

Fiscal Year 2023 GAAP Results

Revenue was $648.4 million, a decrease of 4.0%, compared to $675.2 million in fiscal year 2022;
Gross margin was 59.5%, compared to 60.2% in fiscal year 2022;
Income from operations was $107.4 million, compared to $132.7 million in fiscal year 2022; and
Net income was $91.6 million, or $1.28 per diluted share, compared to a net income of $440.0 million, or $6.18 income per diluted share in fiscal year 2022. Net income for fiscal year 2022 includes a $118.2 million gain associated with the sale of an equity interest and a non-cash income tax benefit of $202.8 million associated with the release of the valuation allowance on the majority of our deferred tax assets.

Fiscal Year 2023 Adjusted Non-GAAP Results

Adjusted gross margin was 61.3%, compared to 62.0% in fiscal year 2022;
Adjusted income from operations was $189.6 million, or 29.2% of revenue, compared to $211.0 million, or 31.2% of adjusted revenue, in fiscal year 2022; and
Adjusted net income was $193.3 million, or $2.70 per diluted share, compared to adjusted net income of $201.0 million, or $2.82 per diluted share in fiscal year 2022.

Management Commentary

“We believe focusing on the highest frequency, highest power and highest data rate applications will further strengthen our market position and results in fiscal year 2024,” said Stephen G. Daly, President and Chief Executive Officer.

Business Outlook

For the fiscal first quarter ending December 29, 2023, MACOM expects revenue to be in the range of $149 million to $153 million. Adjusted gross margin is expected to be between 59% and 61%, and adjusted earnings per diluted share is expected to be between $0.55 and $0.59 utilizing an anticipated non-GAAP income tax rate of 3% and 72.2 million fully diluted shares outstanding.

Conference Call

MACOM will host a conference call on Thursday, November 9, 2023 at 8:30 a.m. Eastern Time to discuss its fiscal fourth quarter and fiscal year 2023 financial results and business outlook. Investors and analysts may visit MACOM's Investor Relations website at https://ir.macom.com/events-webcasts to register for a user-specific access code for the live call or to access the live webcast. A replay of the call will be available within 24 hours and remain accessible by all interested parties for approximately 90 days.

About MACOM

MACOM designs and manufactures high-performance semiconductor products for the Telecommunications, Industrial and Defense and Data Center industries. MACOM services over 6,000 customers annually with a broad product portfolio that incorporates RF, Microwave, Analog and Mixed Signal and Optical semiconductor technologies. MACOM has achieved certification to the IATF16949 automotive standard, the AS9100D aerospace standard, the ISO9001 international quality standard and the ISO14001 environmental management standard. MACOM operates facilities across the United States, Europe, Asia and is headquartered in Lowell, Massachusetts.

Special Note Regarding Forward-Looking Statements

This press release and the associated earnings call contains forward-looking statements based on MACOM management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements include, among others, statements about MACOM’s strategic plans, priorities and long-term growth drivers, our ability to execute our long-term strategy, strengthen our position and drive market share gains and growth, our ability to better address certain markets, expand our capabilities and extend our product offerings through the acquisition of Linearizer Communications Group (“Linearizer Acquisition”), statements about the potential market and product expansion opportunities resulting from MACOM’s establishment of its European Semiconductor Center (“MESC”), the team’s capabilities and technology and expansion thereof and any potential financial benefits derived by and financial impact to MACOM from the Linearizer Acquisition or the OMMIC SAS asset acquisition and MESC establishment and the pending acquisition of the RF business of Wolfspeed, Inc., strength and competitiveness of new product introductions and technology portfolio expansion, including the anticipated rate of new product introductions, anticipated demand for our products, MACOM’s profitability, revenue targets, prospects and growth opportunities in our three primary markets, the potential impact to our business of an economic downturn or recession, anticipated financial and business improvements, the estimated financial results for our 2024 fiscal first quarter and the stated business outlook and future results of operations.

These forward-looking statements reflect MACOM’s current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause those events or our actual activities or results to differ materially from those indicated by the forward-looking statements, including our ability to develop new products and achieve market acceptance of those products; component shortages or other disruptions in our supply chain, including as a result of geopolitical unrest or otherwise; inflationary pressures; any failure to accurately anticipate demand for our products and effectively manage our inventory; our dependence on a limited number of customers; risks related to any weakening of economic conditions; our ability to compete effectively; and those other factors described in “Risk Factors” in MACOM’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements speak only as of the date of this press release, and MACOM undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Discussion Regarding the Use of Historical and Forward-Looking Non-GAAP Financial Measures

In addition to United States Generally Accepted Accounting Principles (“GAAP”) reporting, MACOM provides investors with financial measures that have not been calculated in accordance with GAAP, such as: non-GAAP gross profit and gross margin, non-GAAP operating expenses, non-GAAP income from operations and operating margin, non-GAAP EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP income tax rate and non-GAAP interest (income) expense. In this release or elsewhere, we may alternatively refer to such non-GAAP measures as “adjusted” measures. This non-GAAP information excludes the effect, where applicable, of intangible amortization expense, share-based compensation expense, non-cash interest, acquisition and integration related costs, equity method investment gains and losses, debt extinguishment costs and the tax effect of each non-GAAP adjustment.

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