Network chips maker MACOM Technology Solutions (NASDAQ: MTSI) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 24.5% year on year to $271.6 million. On top of that, next quarter’s revenue guidance ($285 million at the midpoint) was surprisingly good and 3.4% above what analysts were expecting. Its non-GAAP profit of $1.02 per share was 2.2% above analysts’ consensus estimates.
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MACOM (MTSI) Q4 CY2025 Highlights:
- Revenue: $271.6 million vs analyst estimates of $269 million (24.5% year-on-year growth, 1% beat)
- Adjusted EPS: $1.02 vs analyst estimates of $1.00 (2.2% beat)
- Revenue Guidance for Q1 CY2026 is $285 million at the midpoint, above analyst estimates of $275.6 million
- Adjusted EPS guidance for Q1 CY2026 is $1.07 at the midpoint, above analyst estimates of $1.03
- Operating Margin: 15.9%, up from 8% in the same quarter last year
- Free Cash Flow Margin: 11%, down from 28.1% in the same quarter last year
- Inventory Days Outstanding: 181, in line with the previous quarter
- Market Capitalization: $16.13 billion
“We delivered a solid start to fiscal year 2026,” said Stephen G. Daly, President and Chief Executive Officer, MACOM.
Company Overview
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, MACOM’s 12.8% annualized revenue growth over the last five years was solid. Its growth beat the average semiconductor company and shows its offerings resonate with customers, a helpful starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. MACOM’s annualized revenue growth of 27.8% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, MACOM reported robust year-on-year revenue growth of 24.5%, and its $271.6 million of revenue topped Wall Street estimates by 1%. Beyond the beat, this marks 8 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 20.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 13.1% over the next 12 months, a deceleration versus the last two years. Still, this projection is above average for the sector and suggests the market sees some success for its newer products and services.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, MACOM’s DIO came in at 181, which is 16 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from MACOM’s Q4 Results
It was encouraging to see MACOM’s revenue guidance for next quarter beat analysts’ expectations. We were also happy its adjusted operating income outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $215.10 immediately after reporting.
MACOM had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
