Microchip Technology (MCHP) Q4 2025 Earnings
How Did MCHP Stock React to Q4 2025 Earnings?
S&P 500 over the same 30 days: +6.56%.
Did MCHP Beat Earnings? Q4 2025 Results
Yes. Microchip Technology reported Q4 2025 earnings of $0.11 a share on May 8, 2025, beating the $0.10 consensus estimate by 5.3%. Revenue was $970.5M against a $960.8M estimate.
Microchip Technology posted a better-than-expected fiscal fourth quarter, with revenue of $970.50 million edging past the $951.29 million consensus by 2.02% and non-GAAP EPS of $0.11 beating the $0.10 estimate by 10%, even as both metrics reflected the ongoing severity of an industry downcycle that pushed net sales down 26.8% year over year. The clearest signal of a potential inflection came from the demand side, where the company recorded its first positive book-to-bill ratio in nearly three years, with April bookings exceeding any month in the March quarter, giving management confidence that the period marks a cyclical trough. Inventory reduction also stood out, with overall inventory dollars falling $62.80 million and balance sheet inventory days declining by 15 days sequentially. On the balance sheet, a mandatory convertible preferred offering helped reduce total net debt by roughly $1.30 billion during the quarter. Looking ahead, Microchip guided Q1 fiscal 2026 revenue of $1.02 billion to $1.07 billion, a return to sequential growth, though analysts remain divided on whether the valuation fully reflects the risks that still linger, including tariff uncertainty and a prolonged recovery timeline.
- Nine-point plan driving operational efficiency improvements in manufacturing and inventory management
- Inventory reduction strategy — overall inventory dollars down $62.8 million, distribution inventory days reduced by 4 days to 33 days
- First positive book-to-bill ratio in nearly three years
- April bookings higher than any month in the March quarter
- Net debt reduction of approximately $1.3 billion through mandatory convertible preferred offering
“Our March quarter revenue of $970.5 million exceeded the midpoint of our guidance, and we believe marks the bottom of this prolonged industry down cycle for Microchip. The decisive actions we have taken under our nine-point-plan are enhancing our operational capabilities through more efficient manufacturing, improving inventory management, and a renewed strategic focus. As we move forward from a challenging fiscal year, we believe Microchip is better positioned to capitalize on growth opportunities as market conditions evolve.”
Microchip Technology CEO, on the earnings call
What Was Microchip Technology's Outlook in Q4 2025?
For Q1 fiscal 2026 (quarter ending June 30, 2025), Microchip guides net sales of $1.020 billion to $1.070 billion, representing a return to sequential growth. Non-GAAP gross profit margin is expected at 52.2% to 54.2%, with non-GAAP operating income margin of 17.4% to 20.8%. Non-GAAP EPS is guided at $0.18 to $0.26. GAAP diluted loss per share is expected between ($0.15) and ($0.07). Capital expenditures for Q1 FY2026 are expected between $20 million and $25 million, and at or below $100 million for all of fiscal 2026. Management noted the first positive book-to-bill ratio in nearly three years, with April bookings exceeding any month in the March quarter, though geopolitical concerns and tariff impacts remain non-quantifiable risks.
MCHP YoY Financials
| Metric | Q4 2025 | Q4 2024 | Year over year |
|---|---|---|---|
| Revenue | $970.5M | $1.3B | −26.8% |
| Gross Profit | $501.1M | $789.9M | −36.6% |
Figures from SEC filings and company reports. Not investment advice.