NASDAQ$MCHP

Microchip Technology Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Microchip reported record financial results driven by sequential and year-over-year revenue growth and strong operating margins.

Microchip Technology Incorporated announced record financial results for the third quarter of fiscal year 2023, with record net sales of $2.169 billion, up 4.6% sequentially and 23.4% from the year-ago quarter. The company achieved record GAAP gross margin, operating income, net income, and EPS, as well as record non-GAAP gross margin, operating income, net income, and EPS. Microchip paid down $719.1 million of debt and returned approximately $409.8 million to shareholders through dividends and share repurchases.

  • Record net sales of $2.169 billion, up 4.6% sequentially and 23.4% year-over-year.
  • Record GAAP EPS of $1.04 per diluted share and record Non-GAAP EPS of $1.56 per diluted share.
  • Paid down $719.1 million of debt in the December 2022 quarter.
  • Declared a record quarterly dividend of 35.8 cents per share, up 9.1% sequentially and 41.5% from the year-ago quarter.

Headline financials

Total Revenue

$2.17B

Previous: $1.76B+23.4%
EPS (adj)

$1.56

Previous: $1.20+30.0%
GAAP Gross Margin

67.8%

Previous: 66.1%+2.6%
GAAP Operating Margin

37.4%

Previous: 44.6%-16.1%
Quarterly Dividend

$0.36

Previous: $0.25+41.5%
Capital Expenditures

-$374M

Previous: -$256M-46.2%
Free Cash Flow

$207M

Previous: $97.3M+112.5%
Net Income

$580M

Previous: $353M+64.5%
Operating Income

$812M

Previous: $515M+57.6%
Gross Profit

$1.47B

Previous: $1.15B+27.5%
Cash & Equivalents

$289M

Previous: $314M-7.8%
Total Assets

$16.1B

Previous: $16B+0.4%
Stock-Based Comp

$44M

Previous: $50.9M-13.6%

Revenue & EPS history

Microchip · Revenue · Quarterly

$2.17B

Q3 2023+23.4%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Forward guidance

Microchip expects net sales in the March quarter to be up between 1% and 4% sequentially and expects to grow revenue sequentially again in the June quarter. At the mid-point of our guidance for the March quarter, net sales would be 20.6% higher than the year-ago quarter.

Tailwinds

  • Net Sales: $2.191 to $2.256 billion
  • GAAP Gross Margin: 67.8% to 68.0%
  • Non-GAAP Gross Margin: 68.1% to 68.3%
  • GAAP Earnings per Diluted Share: $1.07 to $1.09
  • Non-GAAP Earnings per Diluted Share: $1.61 to $1.63

Headwinds

  • GAAP Operating Expenses: 30.3% to 30.7% of net sales
  • GAAP Operating Income: 37.2% to 37.6% of net sales
  • Other Expense, net: $45.8 to $48.2 million
  • Income Tax Provision: $165.1 to $204.1 million
  • Diluted Common Shares Outstanding: Approximately 554.0 to 554.4 million shares

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.9%

Avg return

Earnings day

+0.3%

Avg return

5 days after

+3.3%

Avg return

30 days after

55%

40 / 73 earnings

Positive

+11.2%

Q3 2020

Best reaction

-15.0%

Q1 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2026+1.1%-2.3%-0.4%
Q3 2026-2.6%+3.5%-17.0%
Q2 2026-5.2%-6.3%+10.9%
Q1 2026-6.7%-0.7%-0.5%
Q4 2025-1.0%-5.2%+11.4%
Q3 2025-2.3%+1.4%+12.5%
Q2 2025-1.0%-2.1%-21.8%
Q1 2025-15.0%-15.9%-7.5%
Q4 2024+0.8%+0.2%+3.2%
Q3 2024-1.0%-2.3%+2.1%
Q2 2024+7.6%+6.0%+19.2%
Q1 2024-7.5%-6.4%-8.8%
Q4 2023-1.4%-4.6%+1.2%
Q3 2023+5.2%+6.6%+1.8%
Q2 2023+5.3%+11.7%+27.5%
Q1 2023+5.9%+3.3%-6.1%
Q4 2022+1.0%-0.8%+2.0%
Q3 2022-7.4%-4.6%-14.3%
Q2 2022+7.5%+3.9%+6.9%
Q1 2022+1.7%+3.3%+7.8%
Q4 2021+2.8%-0.1%+6.7%
Q3 2021+4.0%+8.7%+4.0%
Q2 2021+10.6%+7.6%+27.3%
Q1 2021-6.1%-5.6%+3.9%
Q4 2020+7.1%+2.7%+31.3%
Q3 2020+11.2%+8.9%-9.1%
Q2 2020-4.2%-3.6%-3.1%
Q1 2020+5.7%+5.1%+6.2%
Q4 2019-5.1%-11.2%-11.1%
Q3 2019+8.2%+5.8%+2.3%
Q2 2019+6.3%-0.5%+0.3%
Q1 2019-10.6%-14.0%-15.0%
Q4 2018+3.5%+4.7%+15.2%
Q3 2018-7.4%-9.5%+6.5%
Q2 2018-2.4%-2.2%-7.8%
Q1 2018+4.6%+6.0%+10.1%
Q4 2017+4.1%+4.7%+15.1%
Q3 2017+6.7%+2.5%+6.2%
Q2 2017+6.2%+4.9%+7.1%
Q1 2017+7.2%+7.0%+7.5%
Q4 2016-2.0%
Q3 2016-1.0%
Q2 2016-1.8%
Q1 2016-0.1%
Q4 2015+4.0%
Q3 2015-1.4%
Q2 2015+2.1%
Q1 2015-0.5%
Q4 2014+0.3%
Q3 2014+0.5%
Q2 2014+6.6%
Q1 2014+6.2%
Q4 2013+4.0%
Q3 2013+5.6%
Q2 2013-4.7%
Q1 2013+3.3%
Q4 2011-1.1%
Q4 2012-1.5%
Q3 2012+2.3%
Q2 2012+6.9%
Q1 2012-5.7%
Q3 2011-0.6%
Q4 2009-0.4%
Q2 2011-0.4%
Q1 2011+0.1%
Q4 2008+3.2%
Q4 2010+3.2%
Q3 2010+1.4%
Q3 2009+1.4%
Q2 2010+2.8%
Q1 2009-0.4%
Q2 2009-0.4%
Q1 2010-0.4%

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