MACOM Technology Solutions Holdings, Inc. Q1 FY2025 earnings call

• General company update: Revenue for Q1 2025 was $218 million, adjusted EPS was $0.79 per diluted share, free cash flow was approximately $63 million, and at quarter end, cash and short term investments were $657 million. - End market performance: Industrial and Defense revenue approaching $100 million per quarter driven by defense business growth; Data Center revenue on pace for strong growth with secular trends from cloud providers; Telecom has GaN on silicon carbide solutions for 5G, products for satellite based broadband, and focus on multiple telecom segments. - Wafer fab capital investment plan: Plans to modernize Lowell, MA fab with advanced node GaN on silicon carbide and expand North Carolina fab, seeking to take advantage of CHIPS Act and state funding. - European Semiconductor Center: Awarded MMIC development project funded by French government.

For the first fiscal quarter of 2025, revenue was $218 million. Revenues by end market: Industrial and Defense was $97.4 million (44.68% of total revenue); Data Center was $65.3 million (29.95% of total revenue); Telecom was $55.4 million (25.32% of total revenue). Data Center was up 16% sequentially, Telecom was up 7% sequentially, and I&D was up 5% sequentially. Both I&D and Data Center quarterly revenues were at record levels.

• MACOM expects revenue in fiscal Q2 ending April 4, 2025 to be in the range of $227 million to $233 million. - Adjusted gross margin is expected to be in the range of 57% to 58%. - Adjusted earnings per share is expected to be between $0.82 and $0.86. - Expect sequential revenue growth in all end markets, with data center leading with approximately 10% growth, followed by telecom and industrial and defense both with low to mid-single digit sequential growth.

• Risk related to the CHIPS program: There is a risk that the whole program could be canceled due to dynamics in Washington. - Risk associated with wafer fab modernization and expansion plans: There could be headwinds to the P&L during the execution of these plans, such as unforeseen issues affecting the expected benefits.

Q: Thomas O'Malley wanted to start on the data center side, asking about the progress with ACC and LPO.

A: Steve Daly said data center growth is driven by optical side, ACC has market architecture changes but early adopters show interest in the technology, LPO is a late 2025 and 2026 contribution to data center revenue Q: David Williams asked about DoD satellite programs and data center spending A: Steve Daly said strength in DoD satellite programs will continue for 3 - 5 years with demand from established and new satellite manufacturers, and on data center spending, MACOM is bullish on capital spending with opportunities in PCIe 6 and 7 and automotive high speed connectivity