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Microchip
Microchip (MCHP) investor relations material
Microchip Q3 2026 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Q3 2026 earnings summary5 Feb, 2026
Executive summary
Net sales for the December quarter reached $1.186 billion, up 4% sequentially and 15.6% year-over-year, surpassing guidance and driven by improved customer demand, new design wins, and strong performance in networking, data center, FPGA, and licensing segments.
Non-GAAP operating profit and EPS grew faster than net sales, reflecting strong operational momentum and margin expansion.
Inventory levels decreased to $1.06 billion (201 days), down from $1.29 billion (251 days) at March 31, 2025, as part of an ongoing recovery plan.
Maintained 141 consecutive quarters of non-GAAP profitability, demonstrating operational consistency.
Focused on high-performance mixed-signal microcontrollers, analog, connectivity, and memory solutions, with strategic emphasis on diversified end markets including industrial, automotive, data center, and aerospace & defense.
Financial highlights
GAAP gross margin was 59.6% and non-GAAP gross margin was 60.5%, both up significantly year-over-year; operating margin improved to 28.5% non-GAAP and 12.8% GAAP.
Non-GAAP net income was $252.8 million ($0.44 per diluted share), while GAAP net income was $34.9 million ($0.06 per diluted share).
Adjusted EBITDA for the quarter was $402 million (33.9% of net sales); trailing twelve-month adjusted EBITDA was $1.23 billion.
Operating cash flow for the quarter was $341.4 million; adjusted/free cash flow was $305.6 million.
Net debt reduced by $26 million sequentially; leverage ratio improved to 4.18x.
Outlook and guidance
March 2026 quarter net sales guidance midpoint is $1.26 billion, up 6.2% sequentially and 29.8% year-over-year; non-GAAP gross margin expected between 60.5% and 61.5%, and non-GAAP EPS guidance is $0.48 to $0.52.
Long-term model targets 65% gross margin and 40% operating margin through cycles.
Capital expenditures for March 2026 quarter expected between $20 million and $23 million; full fiscal year capex at or below $100 million.
Strong backlog and bookings, with June quarter backlog already higher than March quarter at the same point in time.
Management expects continued fluctuations in operating results, gross margins, and product mix due to macroeconomic and industry conditions.
Path to 65% gross margin target?
How will debt reduction remain a priority?
Details on the nine-point recovery plan?
Detail debt reduction priority and duration
Gross margin drivers beyond factory utilization
Signs of customer inventory restocking
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Next Microchip earnings date
Q4 20267 May, 2026
Microchip
Next Microchip earnings date
Q4 20267 May, 2026
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Frequently asked questions
Microcontrollers, Processors, and More
Microchip Technology Incorporated is a provider in the field of smart, connected, and secure embedded control solutions. The company's product portfolio is extensive, encompassing general-purpose 8-bit, 16-bit, and 32-bit microcontrollers, alongside 32-bit embedded mixed-signal microprocessors and specialized microcontrollers tailored for a variety of applications. These applications range from automotive and industrial to computing, communications, lighting, power supplies, motor control, human-machine interface, security, and connectivity solutions. Microchip Technology is headquartered in Chandler, Arizona, and its shares are listed on the Nasdaq.
Founding and Growth
Founded in 1989, Microchip Technology emerged from a predecessor company, General Instrument, which was restructured to focus specifically on its microelectronics division. This strategic shift was driven by the recognition of the growing potential and demand for microcontrollers, which are integral in the operation of a myriad of electronic devices.
From its inception, Microchip adopted a unique approach by concentrating on the development of PIC microcontrollers, a type of easily programmable chip that found extensive applications in various electronic devices due to its versatility and cost-effectiveness. Over the years, Microchip Technology expanded its product line beyond microcontrollers to include analog, memory, and several other semiconductor products.
The Products
Microchip Technology Inc. manufactures a variety of electronic components, including microcontrollers, mixed-signal, analog, and Flash-IP integrated circuits. Its microcontrollers are designed to manage specific operations in electronic systems and are a fundamental component in various applications, ranging from simple tasks like controlling small household appliances to complex systems in automotive electronics, industrial machinery, and advanced communication devices. Mixed-signal products combine analog and digital functions, utilized to convert real-world inputs into digital data. Analog components are used to manage real-world signals within electronics, and their Flash-IP solutions focus on providing memory storage. Some other companies operating in the same industry are Texas Instruments, Analog Devices, and Intel.
Working With Customers
Microchip’s business model, emphasizing long-term client relationships and a commitment to providing comprehensive support and resources for developers, has played a pivotal role in its sustained growth. The company's design tools, development boards, and comprehensive technical documentation have made it easier for engineers to implement Microchip's products in their designs, fostering a loyal customer base and steady demand for its products.
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