Microchip Technology Inc
Q3 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −2.07%.
Did MCHP Beat Earnings? Q3 2026 Results
Microchip Technology delivered a clean beat in fiscal Q3 2026, with revenue of $1.19 billion edging past the $1.19 billion consensus by 0.08% and non-GAAP EPS of $0.44 topping estimates of $0.43 by 2.76%, as the company's ongoing recovery continued to gain traction. Revenue climbed 15.6% year over year, driven in large part by CEO Steve Sanghi's nine-point recovery plan, which management credits for improved factory utilization, inventory normalization, and non-GAAP gross margin expansion to 60.5% from 52% just two quarters prior. The company also posted GAAP net income of $34.90 million, compared to a net loss of $53.60 million in the year-ago period, a notable shift reflecting the scale of the operational improvement underway. PCIe Gen 6 design wins, including one projected to generate over $100 million in 2027 revenue, add longer-term conviction to the recovery narrative. <a href="https://247wallst.com/investing/2026/02/05/microchip-technology-live-complete-coverage-of-mchps-q3-earnings/">Looking ahead</a>, management guided fiscal Q4 net sales to a midpoint of $1.26 billion, representing approximately 6.2% sequential growth, with non-GAAP EPS expected in the range of $0.48 to $0.52.
- Broad-based recovery across end markets
- Nine-point recovery plan execution driving margin expansion
- Non-GAAP gross margin expansion from 52% in March 2025 to 60.5% in December 2025 quarter
- Inventory reduction improving operational efficiency
- Non-GAAP operating profit growing faster sequentially than net sales
- Operating cash flow resumed covering debt obligations and dividend payments
“Our fiscal third quarter results exceeded our expectations, with net sales of $1.186 billion growing 4% sequentially, and 15.6% year-over-year, well above our original guidance. We believe the broad-based recovery across our end markets, combined with significant margin expansion, demonstrates the tangible impact of our nine-point recovery plan execution. Our non-GAAP operating profit grew sequentially more than our net sales did in the December quarter, highlighting the operational momentum we have in our business.”
Microchip Technology CEO, on the earnings call
Forward Guidance & Outlook
For fiscal Q4 2026 (March quarter), Microchip guided net sales of $1.240 billion to $1.280 billion (midpoint $1.260 billion), representing approximately 6.2% sequential growth and 29.8% year-over-year growth at the midpoint. Non-GAAP gross profit margins are expected at 60.5% to 61.5%. Non-GAAP EPS is guided at $0.48 to $0.52. GAAP EPS is guided at $0.08 to $0.12. Capital expenditures for the March quarter are expected between $20 million and $23 million, and for all of fiscal 2026 at or below $100 million. Management noted March quarter starting backlog is substantially better than December quarter levels with strong booking momentum. Non-GAAP gross margins are expected to continue expanding toward a long-term target of 65%.
MCHP YoY Financials
Figures from SEC filings and company reports. Not investment advice.