MTSI - Earnings call transcript Q4 2024 | MACOM Technology Solutions Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Stephen Daly

Welcome to MACOM's Fourth Fiscal Quarter 2024 Conference Call. This call is being recorded today, Thursday, November 7, 2024. [Operator Instructions] I will now turn the call to Mr. Stephen Ferranti, MACOM's Vice President of Corporate Development and Investor Relations. Mr. ahead. go please Ferranti,

Stephen Ferranti

to discussed Good financial welcome fiscal statements results year subject would XXXX. full Olivia. Securities Private today those our to risks contain will quarter our discuss fiscal like I materially Litigation XXXX. Act MACOM's for of of to forward-looking everyone morning, results you, that to discussion and call and remind Thank and in may defined from the the as which contained harbor safe in are Actual differ the for certain uncertainties today. forward-looking statements Reform fourth

more also of certain the we of financial Form that refer a include during the results risks differences, could today. of press adjusted non-GAAP MACOM's to adjusted the and statements with reconciliation related release filings with provided For uncertainties detailed discussion you and to filed SEC. SEC those will result A call in are Management's was the information. GAAP in X-K, which company's non-GAAP this discussion

With Steve of Daly, that, President call to the CEO MACOM. and turn over I'll

Stephen Daly

to will for Thank Jack finished, Chief today's XXXX, review guidance earnings and I quarter our QX then will first provide Financial of I year Kober, company begin that, fiscal When some and morning. good general Officer, call with will our full and revenue and our fiscal take update. After happy XXXX. you, results a Jack will be is for the questions. we

$XXX.X per and share. diluted for quarter Revenue XXXX EPS adjusted the fourth $X.XX was fiscal million of was

cash of million our held year-end, with balance on our We At million. revenue was record just ended year investments and over was fiscal in we full $XXX.X flow 'XX $XX free short-term million $X.XX. For in $XXX the quarterly QX sheet. revenues approximately cash EPS year, our FY fiscal and

within and our QX book-to-bill orders business, total revenue. X.X:X. was shipped ratio In was of turns quarter the booked our where Our XX%

some of inclusive our at is awards. record recent fiscal entering backlog program a Our large of level, XXXX

order Telecom Defense Data at was Center and Industrial certain remained demand submarkets strongest and New our weak. customers while

of I of fiscal competitiveness We last strategy fiscal briefly year, Given are supporting top and highest frequency company R&D like put, some to the XXXX. highlight priorities recap markets. on at and and for review the start Simply near- long-term goals we highest for these our is the to development to a future strategic strategy, then established some our process, portfolio's long-term and of year's X align annual our resources product new power, accomplishments would rate highest focus position in then using core and data and applications success. themes our around planning our strengthen our our

customers a is accomplishments. manufacturing of with would X Our world-class customers highlight many notable technical And to breadth MACOM. busy and new gain to provide for we strength, consider. unique them wide have goal for teams with share. like options By XXXX a and I was our year leveraging Fiscal we to year technologies unique believe closely work attract market can

purchase orders large contracts major in of X pleased First, each and our several we industry-leading we that are by awarded were customers markets.

program We over beyond. these months XX expect and will our the help support next wins growth

we leadership continue customers, space. for in Center connectivity our leaders solutions Data position this to expanded high-performance in we Second, provide solutions and the to advanced

Data a full and for record, than Data posted growth year the year. XXXX Our was Center XX% we fiscal greater Center revenue

total, and that semiconductor this of we have to our millimeter resulted more industry-leading In funding technology. competitive. recent advanced recent significantly. issued larger, and in stronger And last, the to or our market, week. our portfolio strategic MACOM we've Third, awarded SAM, press we development approximately solutions. Many advanced develop our frequency semiconductor serviceable U.S. and continue wave in of Expanding times, to government earlier support has processes, a we acquisitions have increased projects execute been products as being develop highlighted strategy million addressable microwave $XX release in

numerous are we during did past with some achievements fiscal the we And our year, recognize there that while we areas not pleased targets. are the meet

First, short automation, more times. including and work be introduce or NPI of fab More cycle and new IC streamlining to needs products we year-over-year. fell to NPI to our capacity goal done introduction our increase accelerating processes efficiencies, XX% product expanding

important MACOM's did X utilization XXXX. continuous internal be financials a not We certainly low fiscal are fabs in fully we these our we are Second, when optimal our of will addressing strongest maintain improvement fab. achieve areas wafer utilized. and mindset

analog and fiscal applications, we strategy. ramping high-speed and while in attention share defense wafer our and line aerospace the centers market high-speed utilization, on European and the our and Center our optical the leveraging applications. domestic and production international before high-performance to ensure in to Data our and track cable copper of RF the talent continuing our photodetector extending across can stay expanding arsenide our end with attract per we laser new lane for leading interfaces, and products applications, and CW comprehensive and Accelerating module completing and XXXG qualification support semiconductor further solutions business executing gallium of subsystem in leadership As applications X-inch increased product in within XXXG our to MMICs capabilities of to the operations, taking microwave key finally, X.XT optical market our include: turn introductions, XXXX, pace growing priorities calendar XXXX, applications, industry-leading our drive which recruit GaN fab

end QX markets. $XX.X and million Turning at $XX.X at Industrial expected, Telecom by million, and at performance as Center million. Data to end $XX.X Defense our market with revenue was

sequentially Data and I&D record. sequentially. I&D annual up X.X% an and and For XX.X% note, the was Center were up level quarter, revenue Telecom both was our I'll quarterly

and these Industrial of applications higher integration. market, all spanning to power bandwidth across is and continue frequencies, in higher systems. radar, the opportunities levels The secure growth electronic communications Defense towards higher We trend identify and levels, wider battlefield integrated warfare,

Threats including to V-Band from battlefield report dramatically more higher increase targeting I systems sophisticated system driving and performance. electromagnetic and to are frequency towards environment X-Band more systems am on pleased complex UAVs, that the team a congratulate earlier phased to navy S-band large milestone a and was on I dedicated major delivered our a MACOM completing this MACOM, customer. This high-power GaN-based this project. array month, for transmitter ranges, complex

system. an team our Our which power in RF supported system engineering was build resulted of design by this components and team efficient high-performance

twice that We high-power the new in our GaN contract build to transmit are pleased higher value frequency at a resulted and design array. efforts a next-generation

U.S. very mimic high market markets international we and process certain products. our frequency particular, strength. We MACOM's play into believe are with technologies for the semiconductor the In directly I&D on trends supporting focused in

and MACOM bolstered example, semiconductor defense our For presence the capacity, growth wafer expanded opening European of customers. epitaxial European with added our center, our manufacturing expertise

market Our continue grow end telecom with to some revenues bright MACOM-specific emerging. spots

seeing modestly the spending are market. XXXX decrease XXXX, currently demand While many from XG to expect compared due North American in global we strength to to

large announcements may Demand MACOM. from India Europe and benefit India which seen remains XG weak, have award although in some we

in the are driven for we receiving are advantages significant our customers satellite-based has on can share where products broadband or as at participate offer need we platforms XG demand market The by MACOM. remains we low We market products provides gaining more is in. unique new a older satellite for growth for markets normalized. importantly, inventory mainly also competitors. that LEO But This power new orbit believe the the higher MACOM's our for over access multi-band In market very communications opportunity radios earth particular, robust. lead

and for ships areas, and planes broadband access viable broadband services. service more for solution Satellite-based is rural a increasingly being emergency

are networks constructed capabilities, typically architecture are direct networks satellites. involving in which sell LEO mesh a Some incorporating also supports. thousands of to MACOM

constellations the example, could date, designed deployed more other some the new launched and years. over be large than secure has this constellations are I'll number side, leading For providers X radar service on double. satellite-based support GPS note We of to next satellites also communications, the believe LEO developed will X,XXX robust few to and DoD systems. and space-based Internet being satellite over anticipate

ground links to links the a communications. These semiconductor millimeter of as require Within satellite frequencies the solutions links. networks, provides to the linearization satellite satellite use typically some these module power link. satellite wave of to boost well optic space combination free MACOM satellite cases, as and and efficiency ground to In radio, for microwave,

We MACOM on provide networks. lines. executing Linearizer and Lightwave multiple power, solutions RF MMICs, for is ground-based product gateway our programs also today involving

Finally, the DOCSIS of to cable the midst in X.X. infrastructure market TV DOCSIS from is a X.X transition

new typically Demand are lull and through goes these through designed qualification. transitions during go a as systems

lull that wins. new new demand last with to but during seen in X and We to release time, we X design customers on continue work the that over products have years

couplers balance, fiscal certain line year from nodes in as our are TV and DOCSIS begin for starting deployments. their expect ] rollouts. see demand footers modest these products now some supply We amplifiers cable on And We growth amplifiers, our customers. revenue new to U.S. providers we [ and in XXXX the modest X.X

Center data with expenditures agnostic processors, which We some capital next-generation new centers copper favorable may Data significant these require our to continues optical centers. to can deploy interconnects the deploy large solutions. products. are electrical We number or accelerating continuing increased of be as we market cases, select The whether remain areas see growth trends with opportunities. service customers to support dynamic and Internet optical end providers data In as and/or

X.XT our optical XXXG. support are lanes per year our starting of fiscal modules are to shipments I'll in second gigabit market some was in XXX to In executed XXXX, cases, XXXG designs that production applications, In certain And position full and strong. is which, note products X ramp. we

the We design customers with expect market XXXG have we to are wins transition and certain these and of support positioned to started by solutions. X X.XT parts products, with this will well key

higher challenges linear creating perform support and major customers. to technologies thermal processing architectures, for functions, retimed power DSP-based our both While cost require products consumption retiming signal and

the technologies member. MSA, To address new and seeing we share, mind pluggable keep are LPO, this, or MACOM is equalizer founding customers joining a getting copper linear which LPO linear and optics

also CIOE We higher of links and to PCIe second pools these the computing applications successfully interfaces. MACOM shows. are some disaggregated via our have XXX to X, linear per and interfaces recent laser and expect new and per where share as technologies applications. service XXXG copper MACOM computing, these to ECOC longer XX is will supporting reach and with at can processors interconnected memories operate PCIe demonstrated and trade that gigabits see or rates respectively, take data lane The drivers support at of equalizers TIAs, X starting

content within center positioned the of for related our families of well interconnect growth bandwidth and the due ZR+ market rapidly ZR emerging One data supports driver demand coherent XXXG are support more MACOM's TIA growing ZR computing and and to cloud demand. XXXG that delivery. and ZR+ this and ZR to or and areas to XXXG specifically DCI, is ZR+ XXXG and growing

is links center Another customers of coherent less campus within use also known and XXXG. of supporting is network, to light the increasing optics XXXG TIAs and lasers CW as area with the eventually in interest than MACOM from XX-kilometer data use the coherent enable drivers for efforts cost-effective and ZR light. power, low of coherent

already and ENGIN-IC design we fabless in continues these who that. IC Deployments an our And In begun and for strategy Texas this ENGIN-IC, expectation offices with our expert XXXX design. small, support design microwave XXXG after deployed to company XXXG week, year exciting analog finally, the high-speed ramps Center module market of to announce an private, and in volume in be IC California. our summary, acquisition XX and capabilities, designers. of networks a San calendar employees located has in are expand approximately that to I'm anticipated be Dallas, will area has with that strengthen of Data the Diego, pleased completed

XX define in ago, possible industry on Since nitride their Eisen have than the and gallium X helped Nelson, who cofounders, focused applications. defense Jack years and veterans is gallium Chiles module arsenide inception supporting Steve circuit and more primarily The Chris team design. are what's

MACOM design of welcome We strengths amplifier team talented our we mutual for and around and benefit are wideband excited customers. amplifier know-how capabilities suitable to ENGIN-IC's applications. collaborating for MACOM's and look communication radar ENGIN-IC the the to complement design to narrowband forward

MACOM website ENGIN-IC. I a our about and the to a more everybody capture to is our of summary, unique, learn best-in-class enables market. strength diversified share visit build and semiconductor larger which to invite In portfolio,

now and larger will more are and our financial speed opportunities have competitors resources. help of and us that Jack beat detailed Our address ultimately more a review often provide agility results.

John Kober

morning, everyone. good you, Steve, and Thank

revenue and Before getting our increasing a year more quarterly associated EPS XXXX results, into would revenue the to year fiscal with total details increases XXXX of included over our I items with summarize few that financials. XXXX. quarterly our fiscal than was like sequential Fiscal a XX%

consistent allowed have XXXX corporate and cash flow year to available fiscal we which to cash and acquisitions During and accumulate generation, with priorities. for solid also future fund us has cash XXXX, maintained

results additional XXXX. as on our as Now full on and quarterly to XXXX our some well year our QX commentary fiscal fiscal outlook on year

million, Revenue U.S. across for of of quarter from domestic a consistent $XXX.X fiscal markets. sequentially our all X basis, geographic up fourth of our results growth the approximately represented a X.X% QX. XX% record with high based was on customers revenue fiscal end QX quarterly On

$XX.X Adjusted fiscal For from the and have are our mix customers to domestic revenue geographically working fiscal a year expense than prior and of represented $XX.X opportunities. fourth general was of points and from basis operating healthy been QX expense diversify selling, of administrative slightly in million or consisting was and of profit expense for gross business the down revenue Total $XXX.X third year. U.S. our XXXX, We've million XX quarter. pleased XX%, quarter for revenue, and adjusted million. XX% international-based to million, fiscal research $XX U.S. development of XX.X% higher

in fiscal for QX compensation-related as income expenses fiscal on in adjusted we of $XX.X continue expense year XXXX, $X.X million investments Depreciation million increase by Adjusted in to equipment. QX for primarily was sequential an the approximately basis, sequentially million in annual grow was driven $X million, QX. business. from and operating due operating expense $X.X higher XX% $XX.X million up fiscal million was to $XX.X acquired higher fiscal primarily The

income compared margin to to in million XXXX. was Resulting XXX compared in million reduction operating year point $XXX XXXX. $XXX.X basis XXXX, fiscal adjusted fiscal for adjusted For a operating fiscal

reduced margin from the year-over-year adjusted that has revenue initially, our recognize We some incremental of our from a operating acquisitions perspective. recent

as However, have that few associated and the adjusted we we been note improving quarters expected. our operating over margins past income

the on acquisitions, highlighted, over a and with approach, year. our XXXX, plans executing to of and increase our continuous improvement work to fiscal activities. course margin our our entire operating operational team incremental team For enhancement year further efficiencies yield optimize operates Steve the as And will we business further the

QX. net net interest For income fiscal million net adjusted QX, $XX $X.X had compared compared XXXX million million in Fiscal income approximately was $X.X income to of interest of interest we year million income to of $XX XXXX. adjusted in

lower be as we quarterly expect into net investment quarterly income offset consistent levels expected balances with increase flow interest move we yields. QX XXXX, interest additional to cash rates As fiscal we and through by

of adjusted and tax was rate Our million. approximately income in QX fiscal $X.X X% resulted in an expense

for Our XXXX. net million for cash the tax approximately year $X fourth quarter payments fiscal were and million $X.X

We expect XXXX. fiscal X% to our at adjusted year income for tax remain rate

to compared deferred XXXX XX, of keep as tax asset tax further end tax As to helping $XXX $X.XX, QX. $X.XX million million Adjusted to the of count share earnings in XXXX, per including share million to fiscal share diluted relatively balances, million were was asset September $XX.X We fully payments utilizing net our over our QX. into million XX.X XXXX. utilizing balances of periods. XXXX, a $XX.X our deferred to earnings QX adjusted compared shares tax adjusted these compared $XXX increased Fiscal fiscal income cash through anticipate at per low of fiscal credits, R&D and in

to flow items. and Now moving cash operational on balance sheet

collection strong $XXX.X linearity Our million to QX due from accounts balance $XXX.X million, activity in and QX fiscal improved quarter. the was shipment down receivable during

at our continues days growth prior to flat result, were to quarter. fiscal XX is XX strong backlog were $XXX.X a and million at days quarter Inventory sales compared plans our quality turns up mix strategic $XXX.X As Inventories million. and inventory XXXX. our from support were sequentially the X.Xx. outstanding for and end, The of days sequentially in

we fiscal see inventory we through move expect turns. As to in improvements XXXX,

quarter reduced fiscal $X.X of partners. slightly million annual In fiscal million this decreased have million in our up held channel $XX.X marks addition, inventories from at row the XXXX for $XX.X flow $XX.X cash was from operations and expenditures CapEx totaled fifth QX XXXX. in Capital a where $XX.X approximately of QX million we million, sequentially. Fiscal certain

to $XX As our for year. fiscal approximately XXXX, into year the expenditures million we expect capital be we move full

investments moving of for fourth to the and that sheet able up we the year other $XX.X Next, of earlier as were short-term $XXX to million acquisition short-term million cash quarter business utilize items. note Cash, more for cash RF fiscal are value convertible million, our from I'm XXXX. to September QX. in fiscal a available were notes on cash balance $XXX.X XX, comparing and net book pleased and our equivalents to position cash the than of investments our we in

to remains sound, MACOM's exercise and cash operations support margins pressure. leverage cyclical we to Our and target generation spending our through and continue ongoing balance discretionary sheet over

for are Fiscal diverse, and built company's future of XXXX was MACOM, the support accomplishments pleased and will resilient a with solid the and year performance believe we portfolio have we the growth business.

to have rate manage fiscal we in expenditures As spending or Carefully financial more capital begin areas an run fiscal XXXX, to of revenue billion and growth to of we year goals build discretionary $X company that achieve established business. annualized can the our a continue and allocate XXXX.

Sequentially flexibility levels low capital from at fiscal improved to operating EPS. and flow ensure provide quarterly operations quarterly a exceeds cost. operating structure cash margins is year Generate our XXXX optimized and increased that

merit to increases, benefits. other retirement employees offering in In promotions, addition, competitive equity programs career well opportunities, through remain committed and we care, investing bonus our development annual health as as and

I will to conversation turn Steve. the now back over

Stephen Daly

per MACOM diluted $X.XX is to XXXX and XX range $X.XX in Adjusted to is share be expects January to XX%. fully the of be margin fiscal based million. million revenue be of earnings million Jack. range gross on XX% X, in to in you, And the expected $XXX between shares. ending Thank QX adjusted $XXX expected to

all markets. of revenue end We growth in our expect sequential

growth, materially approximately performance. sequential by and sequential QX note lead Data financial Telecom I'll Industrial our XX% Center that Defense low with expect to mid-single-digit will contribute will We ENGIN-IC and followed to growth. not with

now the questions. I like take to would ask any operator to

Operator

our with [Operator question Benchmark coming first David Williams from Instructions] the The Company. And of line

David Williams

that you're about LPO bit, a solid Any script starting new and you Center. maybe mentioned first, technology I to see, talked just the I maybe support to on share if Data here. color Steve, where talked lot could to the nice guess little of and talk of performance XXXG. the But opportunity of you wanted you develop? about you Congrats around in the in some the a take seeing for that opportunities course, more

Stephen Daly

On maybe customers over months, organization last the LPO, the starting solutions. begin to LPO XX And seen increased interoperability to of what we've members really interest members. from X We've seen growth from see to about the months X in the industry. close is now up of XX testing the we're XX MSA

And we But attractive. So think over we to X early also next that of solutions. market. very LPO years, LPO will take have that for note that a the very we of find portion it's begin certain definitely X to the deployments just to

strong LPO the certainly know, we've supports it type the are in rates. been, members data intersect on a these got the of point MSA. very And XXXG We've is position. you design we I'll of of at a believe make founding we X will product market the team And and So that as last solutions. very portfolio strong

So good spot for that to be application. seems this a sweet very

we the I CW in data also well high-performance the higher introducing And as as rates of only position, optical well but feel We my photo In our the the remarks, -- are solutions. technologies, side lasers. some in changes. go obviously, with frequency, silicon as detectors very mentioned like not newer on there's terms of landscape

lines. will And these good for XXXX so particular be and product we years believe that XXXX

David Williams

X changes still on or about days side And be even to have any everything then XX the maybe different is just copper deployment or deploy the me does ways of different secondly you the in there? months thinking ago maybe customers ago. and as same noticed active terms maybe it cable for was strategies Or may

Stephen Daly

architectures, our often most emphasize say and this I that ramping programs end of very analysts And ramping and volatile changing investors think constantly customers are changing our solutions, this and Center it's markets. important that programs up we quickly. X Data volatile, to down market the is highlight, again, quickly to is always we and that

certain about terms using specifically, that from cable certainly architectures, of would In say. some say your let's of some has been discussion there less question customers large I copper in

we so that commentary. follow And certainly

of is point view, Center revenue diversified. our Data very from But our

only So we pluggable supporting active but and cables copper optical not active we're cables, various also modules.

hung too market particular And Remember, reach. overall because up diversity within deploying X the our may portion Center be strength historically so we or of been don't really Data what the short has any may of and not our get customers portfolio. on

and and remarks, new becoming you're including coherent I mentioned the short medium light. reach now seeing in with more As even prepared my reach ZR complicated protocols,

these to type medium solutions growth and is again, so for opportunity these And of length for MACOM. an connections, short overlay, start that

excited are X particular So we don't customers sure any area. overly get make all of about that our too address We're and successful. them to trying

Operator

And Piper our from Harsh next Sandler. line question coming Kumar of the with

Harsh Kumar

these in sustainable and growth numbers, you maybe that could Do good example, of double particularly eventually ACC is you LPO maybe guys it's me not guidance pick sequentially, the I as here let level but all, the fruition. end, maybe Center, come Data it kind of expect the couple seeing quarters solid the for to X congratulate X I'm growth that to guide relative me quarters to from Steve, December for or coming here. that for think you've quarters we a of And fair digits, to Data opportunities materially the for Data Center? like hit on know some of quite to. XX% sequentially but growth guided last First line, Centers down where up fantastic several for grow that next

Stephen Daly

I I sustainable. year XXXX that would a will strong very I that continuous our do fiscal expectations believe on be double-digit temper the Center. growth. would be don't for think Well, Data generally

should be full markets. in year, linear for very may it X set I deliver will be certainly fact, growth. double-digit things I never constant the And expectations the the points on our the are strong result, see think market. that And the here. volatility But of reasons important is growth. was for we end can made I growth highlight sequential about And would last it stated which a double-digit In quarter-by-quarter question, a basis. It volatility as about I on to a of very the variability fastest-growing volatile

with said, X I Now that would add comment. other

are very We seeing and seeing in area. fast definitely opportunities movement we to are some growth strong X.XT, this

we And more X.XT. will XXXX course, so think be performance strong of solid that Behind will that, very for be well. at XXXG as

X we these do year. factors, a between very So I believe could strong have

However, very would may near-term year, the visibility, as less look half say visibility clear. have to while is that our we back we strong of I obviously, fiscal

Harsh Kumar

clarification. maybe follow-up, on I've my question a for got And follow-up

that a basis, let So million run rate Or which are Did you you might me a are you $X company. Wolf billion. an $X question, the billion area hit XXXX was is you quarter? improving you about on actually that's ask Jack, talked suggesting gross for And that first. mean $XXX clarification a guys acquired, the working for whole probably margin. my then

you could when seeing help think your we're come core relative Can business some maybe through share. us Now way, business? taking you're about your normalize to those RF margins

John Kober

so to Things until run not quarter the $XXX some work of been any a And from year going was million it we're through to yes, reaching and continuing XXXX. in quite well $X X that rate have attaining far. standpoint, which would of fiscal Wolfspeed particular items. billion, And acquisition perspective, integration from clarification that equate sometime yes, a in

there. top been We quite us far. a we've seeing bottom some have where there's the work seen of still line with in thus from more we've we've through within And prepared view. been to line improvements business remarks, and of pleased point upon a bit overall, things touched what for a the work But our

Operator

And our line next the question with Tore Stifel. coming from Svanberg

Tore Svanberg

the results. Congratulations on strong

of requirement quarter? could quarter. last all, I terms said you XX% talk the you for think turns this about your First December

will to consistent trying next understand fairly Just that quarter? if number be

John Kober

Tore, this is Jack.

XX% through that range. it's gone we've past so, hovered or in the As year

don't little go tick higher that's up below. a we bit that Some it quarters, But expectation hovering. will been and where think any others we're it as go kind change that, we've there's I will will of -- forward.

Tore Svanberg

as you, question my for Steve. had follow-up, a I And

market there's optical big is between per and you everything. and the to linear great is a thing debate have these you of exposure going you to gig so versus that The So forth. versus on sort copper, so for lane moving said, all various on XXX as and quickly DSP technologies,

just your wondering, do going to think how especially market out the from per gig is optical I'm and So to perspective, lane? relation XXX you for copper, versus play

Stephen Daly

the probably question ask I'm to. that wrong person So to

to different we industry, all are that customers focused solutions the and our are a or the cost engage supplier merchant performance, a that customers lowest they take And So we modules approach. really designing of on highest can.

thin film, niobate. moving photonics some are Some of at towards want lithium are traditional them are Others use wanting to DSP-based Others looking solutions. to LPO. experiment with silicon

tackle Our all we support our circuit leverage we can will where want to provide our design those, to we value. some is capability of and philosophy customers

data at so and And high-speed at rate the there many implementations team we're fundamental that higher what And I busy up requirements our level, is good design. very is extremely unique emphasize are to have of with these a keeping interconnect solutions.

of solutions any strength the probability so the whether very first mentioned the solutions our to and designed of time previous high-volume into very, to things have success, work X able production so a they are solutions, quickly. and has the put with And that team it's essentially MACOM is customers codesign high

Center vertically as has integrated, in to our of our and the which leading and to makes Data at fast cycles of but customer some the really areas that see our looking we're year-over-year very leaders learning industry a photodetector solutions appealing the and XX% are you're larger business, that that some that company lasers technology And tremendous also seeing growth for fact and to depth, we MACOM we side, certainly have the quick deployment on including do base. ability market the with

don't on but sure want we sides win the of question. to both that we're we make So which that will know present day.

Operator

of line Srini Pajjuri And our from James. next question with is the coming Raymond

Srinivas Pajjuri

from the speak doubling? the same from business, is could Any on would be impacts to I to content? it and XXX I helpful. as you also XXX go Center then color Is and on you you to how X.X, guess, the less that, that Steve, think, somewhat that? than Or Data XXX were, it

Stephen Daly

to speaking, centers data connections, ports, the rates, architectures. individual SAM number the is generally the higher. deployments and as by of overall number of of the higher the you So the the But of the defined components go ultimately, is data pricing

So why I this the our number of generally market. growing. expanding. the -- a product It would not X the That's is market will grow of be other our we X, is speaking, it parts Center believe faster. from long out information X we're over that now seems functions that probably grow set based finite say on we say into smaller we SAM now we looking reading as that, markets, the years of sell and Data I'm solution the our is will term, business,

use systems increased is drivers integrated very a an the expansion center So example, the I that it say set point of within from And situational. on due view, systems being I'll certainly to deployed product SAM lot are number going using of the the becomes inside data would DSPs. there a but of

certain that's applications. sort SAM in shrinkage of of the So

However, there's can't inside other applications DSP. the put you driver where the

And so growing. opportunities that -- are those

our have handle the lot there's We that doing. really the detail because have get our a come we of we level of an in strategic really these our rate higher product net internal where that, of development do and eye we you to keep that items And as money invest a a is want solutions we a models. guiding these own to regarding what share use new plan to market. out don't all But as do on and long-term information on So SAM data in typically to error bit models.

Srinivas Pajjuri

Got it. then And for Jack. a maybe follow-up

On side, guiding you're margin I relatively flattish a the think gross margins. sequentially, gross for

be that is loadings of, year -- about mix improvement the terms by year. I the some end the of factory fiscal guess, for if in being is where said suboptimal. primarily that And XX% you Or curious expectation might come driven? level of next I it know the to still calendar the hitting from, mean, I Just talked this or going you

us think margins over give will should that to the quarters, could few we as be color next gross you helpful. how If some about

John Kober

a our that seen With half just think some of the numbers our out how with there of back XX% we with margin guide, -- guide gross in it's regard the XX% to over put number that the to been we've We've pleased I improvements it's gross fiscal round year 'XX. there. had of margin function we

we help a I XXXX. that if exit gross margins way have I looking XXXX improve year, as number think through way different projecting to our our margin. and a with talked think to through we're work into about as you where XXXX we've initiatives we're work of we things And at I underway our we gross look think the XX%

to. issues little we've that of We're further time still number. to in that a XX% some mix targeting just be we It's referred the through probably out going bit as work

focus for our the our of to from NPI some a touched pretty us know on out perspective. product 'XX up about feel new fab critical year products metrics for are had loading picked the Steve are obviously those fiscal gross but upon enhancing that talking things I good there. of fab, are some these introductions we initiatives on You've about and focus were improving overall Still to margin. on our that

will area future. little help further another towards improving that's look bit out as So XX% that number into a that the support we

Operator

BNP Ackerman of Karl next line And our question the from Paribas. coming with

Karl Ackerman

I seeing wanted within the good copper customer? the you Within opportunity And seeing speak set customers to expanding Within ACC datas, Center, beyond for an electrical ]. also breadth active ]. [ similarly, domain Data primary cables are are [ Center Data of on

was the I you products? could hoping to also you the both for demand active those AE's speak cables opportunity So see of with given electrical

Stephen Daly

I at rates, the are So broad market interest data ACCs. lower from the seeing on we would say in

So a yes, the term on that on point. here. use that question, And internally AEC then that's so we not

know solutions chipset typically AECs, the as as cables AOCs which competitors view manufacture our or to as ACC. active their -- some optical way. market that them they electrical refer the of and bifurcated of that think on our we cables is cables the or call those there or we So in categorize don't we We and are which side,

revenue that put bucket. therefore, an would, we in So ACC

Karl Ackerman

another I may sneak X then.

a $X the within As wireline and annual about seen within Could mix. SATCOM Telecom maybe think guess as for portion some of dynamics you address in to you you trajectory larger second. the most the Steve, the that your opportunities have I wireline those you narrow we a can the could think your portion you guide? billion wireless market about think of speak become you And revenue, from that, discuss today about towards you quarter on if as could does opportunity wireless seeing -- -- or of are as you growth you and where of that December the come also

Stephen Daly

Just MACOM. primarily But is and SATCOM terms a here in is guide, growth here has XG coming support December bigger radios the picture, from strength near-term SATCOM the long a to for potential of the the telecom of U.S. in yes, also deployments, lot within tremendous term,

As script, solutions. I have can talked communicate, satellite-based content the subsystems Chips constellations providing my a free and optics support up all way more are LEO space to modules and and these of upon we solutions ground-based solutions, optical that lot that and to application. using we're solutions,

expect our slowly year-over-year we and and PON business. strength, CATV in is The would back. bit some growth and wireline We both a wireline as seeing little consider cable we of coming are

the Our be speaking, PON full think, to year. the PON up growth market. say, seen generally in catalysts haven't a we of I we lot for slightly flat business, will of would

expectation. telecom RF over about sort term, think we the in think we a 'XX, a out. companies microwave dominate of of are we and sort muted the drop we have And So industry. seeing But as can we long

consolidation people business seeing roll segments up and into or are We exiting our that business, our it say. let's to certain goal is market and pick

can we're or is and to increase do X more other we're course, we out earlier chip Diego based opens ways and the week is share start X of I'll and will I'll MACOM. a to for MACOM immediately a to of these we This that beachheads engineering help X or where add this experience team MACOM, win leading design The going that And that thing growth. off more have our and Plano, over of is that going regions X to drive market the ENGIN-IC, capacity. hire grow will which And highlight, we now you've our new And set the IP Texas. and seen designers center company and of announced San of and the to up knowledge design base this mentioned past bring yesterday, up in tremendous module is new markets a which will that years. acquisition we

in actually And were still with while script, everything introduction we our new given year. ended this going as we we is earlier growth about rate, with product good wanted more, about more talked the had which up pretty on XX% disappointed we XX% we

products However, we do to faster rate. a recognize market we need share faster more win at

than of whole great bringing MACOM so in the like ENGIN-IC different a and has, resources and experience with And great different there addressing ideas parts team market. the

doubt leading For no And about using they amplifier efficiency that. MACOM's high processes. they experience semiconductor the industry's design wide team. example, is There have band, are

should come we to the into market and going to gain quickly they're hit share. be company, the able ground running, very So

of will warfare. expert expert wideband And are They in servicing at they industry. be where electronic is the this segment

it's area our interesting to radar-based an business. and is very this that very also microwave complementary so to is And MACOM,

Operator

Peng next question from line our coming Peter with JPMorgan. the of And

Peter Peng

results you the to recover? get run million annualized quarter you to Telecom of get incremental Can Center guidance. that Is guidance, to $X Congratulations the there your enough to recover juice that if think strong to that doesn't needs quarterly. get From rate billion there quarterly of and in December billion, on Telecom run it's revenues Data to annualized Defense and rate? your $X to do business number? Or $XX

Stephen Daly

Well, would that our growth I for want to of to think get see order from to sure. markets in end number, we all

And would sometime sequential And the and at in X% fiscal $X somewhere at run X% on include between of so you're math, 'XX. QX yes. Telecom, growth that billion or QX just basis, a if you quarterly rate apply looking

and or X% there Getting next is growth simple just math. we're sequential suggesting that's a harder, we're the lot obviously, to not have quarters. for So X% X going

end a spending We make ramping our have are products. to more customers competition. designs continue to are have on so their new in we that reasonable be competitive sure money markets that launch products state than The our to and that up

share rate tailwinds increasing believe the tailwinds an Center. at defense inside market with XG of some Data universe. with gaining there's Obviously, We we're

at is pretty caveat cycles. And would the a the has is, industry, so thing And about add it a right I where industry we're and volatile we knows, is feel then only everybody now. semiconductor good as

that is with be And then so if a industry a the a to headwind cycle, hit obviously, cycle, down plans. our would future

Peter Peng

then X, at of like your your on Center. is quarters it's follow-up up my quarters. then X, And X If and some I Data trends, down X look historical

change? lumpiness your Or your we're see coming up these that, every do device, this including you offset to your if to in be quarters for patterns potentially Center? up in that can Do we own consecutively. some leave Because guidance, Data new buying customers just going X you of quarter. model just Given probably these products you have enough our

color and give some you on kind drive you're products kind pattern? patterns new seeing So this can of maybe if buying of how

Stephen Daly

to then growth Again, these because is volatile. have I that And Data question periods ask the think exactly industry very of declines. right Center it's an important you're you steep and

has not that industry's only so been revenue. but with And revenue, the MACOM's the history,

So that I don't change. to expect

thing that So the would I be would first highlight.

Data MACOM view million. I our $XXX million. quarterly been growing was things would has rates. it suggest fiscal just and under so XXXX, revenue Center the about -- look the our at pull And 'XX, in Now are since back ended from probably And where annual $XXX growth we that fiscal

X period that of doubled revenue. have in So the years, we

'XX the of exception and effectively year. every the seen revenues with and where other growth were -- so 'XX we've And flat,

that's point an highlight. so And to important

quickly with I and very the Data would with higher that thing large need more rates of which architectures the very a very, for other more Center the industry and moment next-generation more to move bit highlight to that and where complex of people data centers, interconnectivity. the want data have to is The transformational definitely a is

of theme of for years. And expect would at we years. sort And definitely a to couple the continue so growth that last that another a is least of X secular

on our given time, in you in -- expensive long-term but position. revenues our when those deploy, business, the data go movement pretty expect don't yes, I But getting more ignore more dips. you and to That's -- a we we quarter. so say a data our would point the add some of will at we're of complicated, a future I -- good rates, we should volatile. top would in that, some products center And down are think we to is it have the view

Operator

coming Craig-Hallum. line from the Our of next question Richard with Shannon

Richard Shannon

a Maybe question Center. I'll ask on Data

contribution you As I different but 'XX, might -- you could a much think from how quantify know characterize if about wonder we characterize you won't see few it, elements. fiscal I

will here. photodetectors I contribution X.XT. see there characterize and lasers How great, would other think noticeable, most But please. be CW people also your thoughts would on it love meaningful, to hear things can just about will you've talked also material, we much you and be

Stephen Daly

areas solutions X a our faster-growing fiscal will basis. be 'XX on of we year-over-year for definitely, believe So X.XT that our

be XXX-gig course, expansion there still to business. solid will growth of base our and continue Of

customers On detectors very the that right optical we side, to many interesting have some high-end photo now. very are

CW have and fiscal contribution so components that could say, have let's We our good 'XX. and our in photodetector meaningful possible it's timing,

now early I but tell a those think little we for on to right timing that solutions. good it's have both do

with XXX gig TIAs, obviously, that That's, the equalizers, photodetectors. highlight X.XT of to gig per course, and also lane I'll this the XXX lane, the migration linear per drivers really is

resource XXX on thinking solutions per team background, per this X.XT, just hear products. on lane mentioned general as gig we and a XXX all as we're working time we when our that is gig And the last I are well. products and spending I quarter's lane of sell call, think So significant already

Richard Shannon

million the a question couple up probably the more here. My on than is here, If dollars follow-on I here. run like for is of going it seems Jack numbers OpEx guide

good your opening look December the Just I in you more if past? of momentum recent right here, little Obviously, math have in guide. I'm quarter here. a verify a up It really kind than doing the perspective just excellent some bit spigot this like the longer-term here revenues looks you're to want one, the for there's here

John Kober

as point Richard. think look fair that's I this, at we a Yes,

a seen have little a bit We step-up in expenses. of operating our

in new that add we're some of is But invest to. looking design our also activities. item. Obviously, couple to the employees capabilities to will that of of with Some additional that those a referring acquisition those regard expense additional with was to Steve operating design some bucks of

here which merit We go process, a in the through hits December us also quarter.

on support So that that there's a have going culmination of of things growth. we to a lot

do our as as our as do process budgeting a job we expenses We those expenses we able strategic operating manage pretty go to take hard process. look I planning a terms at being our well and think good through in of

those primarily areas from operating view R&D at expenses, our look also make an point growth business. of the dollars We allocating we're sure to and of

will continue go as that So forward. we

Operator

And Quinn Bolton the Needham Company. question & coming our next of line with from

Unknown Analyst

Nick Doyle Bolton. on for Quinn

] to application would those share tour question, Karl's rack-to-rack rates lower of connections? DaCs Just kind on up And from be data taking nick ACC following these what also outside using be and [ [ would ]?

Stephen Daly

That's a question. specific very

high answer I'll at very So it a level.

rack. to for interest a of we in various products whether So bottom rack it's international ACC implementations, rack our are seeing top to or

Unknown Analyst

you're inventory been the that's in of now? CATV anything demand, on expecting but supply technology and advancements a kind understand revenue then in And digestion, is of the year. growth pulling I transition there kind next chain we've about DOCSIS the lull or X.X modest

Stephen Daly

much. so Not

product of we market design that most platforms. I some industries serve, DOCSIS cycle think probably we the this the overbuying infrastructure would sort look the of we If did cycle. COVID various during next-generation cable say there's been of on multiyear across the that

down. burn it's while been so And that to for a inventory

the couple systems. been on So the years. meanwhile, that All over spend they've working of happening the next-gen past

know year backlog this expect our new for So to for platforms. revenue are And grow generate starting some we would to that product business. sets we we are with that

prior highlight DOCSIS other is architectures. I'll is bit a the different The architecture the than little thing

so bringing opportunities product And in additional MACOM. to cases, some that's

Operator

the any questions further no remarks. now at showing over I this Daly closing call turn time. back queue Mr. I'm to the for And in will

Stephen Daly

Thank you. dedication, continued the for FY In closing, their like entire Jack our results MACOM possible. has and team 'XX made would to I which thank

We a year will execute our much. our continue start customers' and as you to needs team to 'XX. work we Thank meet very as fiscal strategy

Operator

participation, may that and gentlemen, you you for does today. our and Thank now for conference conclude Ladies disconnect. your

MACOM Technology Solutions (MTSI) 7 Nov 242024 Q4 Earnings call transcript