Microchip (MCHP) Q4 2026 earnings summary

Executive summary

• FY26 net sales reached $4.713 billion, up 7.1% year-over-year, with Q4 FY26 net sales at $1.311 billion, up 35.1% YoY and 10.6% sequentially, exceeding guidance midpoint.

• Focused on high-performance mixed-signal microcontrollers, analog, connectivity, and security solutions.

• Q4 FY26 GAAP net income was $116.4 million ($0.21 per diluted share), a turnaround from a net loss in the prior year; non-GAAP net income was $327.3 million ($0.57 per diluted share), up from $61.4 million.

• Strong momentum attributed to improved demand, normalized customer inventory, and disciplined execution of a recovery plan.

• Enhanced profitability through operational efficiency and a diversified, customer-driven product portfolio.

Financial highlights

• FY26 GAAP revenue was $4.713 billion, up 7.1% YoY; Q4 FY26 GAAP revenue was $1,311.2 million, up 10.6% sequentially and 35.1% YoY.

• FY26 gross margin was 58.5%, up 150 bps YoY; Q4 FY26 gross margin was 61.6%, up 112 bps QoQ and 960 bps YoY.

• FY26 operating margin was 26.3%, up 180 bps YoY; Q4 FY26 operating margin was 30.6%, up 209 bps QoQ and 1660 bps YoY.

• FY26 diluted EPS was $1.64, up 25.2% YoY; Q4 FY26 diluted EPS was $0.57, up 29.5% QoQ and 418.2% YoY.

• Free cash flow for FY26 was $871.0 million, 18.5% of net sales; adjusted free cash flow was $816.3 million, or 17.3% of revenue.

Outlook and guidance

• Q1 FY27 revenue guidance at $1,455.5 million (mid-point), with gross margin expected at 62.8% and operating margin at 33.8%.

• Q1 FY27 net sales guidance: $1.442–$1.469 billion, up 35.3% YoY and 11% sequentially at midpoint.

• Q1 FY27 EPS guidance at $0.69; non-GAAP EPS guidance: $0.67–$0.71.

• Long-term model targets 65% gross margin and 40% operating margin through cycles.

• FY27 capital expenditures expected at $100 million.