Network chips maker MACOM Technology Solutions (NASDAQ: MTSI) reported Q4 CY2025 results beating Wall Street’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)
- Adjusted EBITDA: $82.63 million vs analyst estimates of $86.73 million (30.4% margin, 4.7% miss)
- 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
- Inventory Days Outstanding: 181, in line with the previous quarter
- Market Capitalization: $17.09 billion
StockStory’s Take
MACOM delivered a positive Q4, with revenue and non-GAAP earnings per share both outperforming Wall Street’s expectations, as reflected by a significant post-earnings gain in its share price. Management credited strong demand across data center, industrial and defense, and telecom end markets, highlighting record revenues in both the data center and industrial and defense segments. CEO Stephen Daly pointed to robust order flow and a building backlog, noting, “Our Q1 book-to-bill ratio was 1.3 to one, and orders booked and shipped within the quarter were 23% of total revenue.” The company’s expanding product portfolio and operational improvements were central to driving performance this quarter.
Looking forward, MACOM’s upbeat guidance is anchored by management’s confidence in continued demand for its high-speed optical and analog products, particularly within hyperscale data center projects. Daly emphasized, “We are raising our data center year-over-year revenue growth base case from 20% to 35 to 40%,” citing ramping 1.6T solutions and growing traction with hyperscaler customers. Management also expects sequential revenue increases in all end markets and incremental improvements in gross margin, while ongoing investment in manufacturing capacity and product development are intended to support further growth in 2026 and beyond.
Key Insights from Management’s Remarks
Management attributed the quarter’s strong results to accelerated demand for next-generation data center products, operational efficiencies, and robust momentum in industrial and defense programs.
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Data center portfolio expansion: MACOM’s growth was driven by its expanding suite of products for high-speed optical connectivity, particularly pluggable optical modules and cables supporting 800G and 1.6T PAM4, as well as new PCIe 6 and PCIe 7 solutions that enhance exposure to compute infrastructure.
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Record industrial and defense performance: The company saw continued traction in advanced radar, electronic warfare, and communication systems, with its high-efficiency amplifiers, GaN technology, and RF over fiber solutions meeting growing requirements for higher frequencies and integration in defense applications.
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Telecom market tailwinds: MACOM is positioned to benefit from large satellite contracts and the exit of a competitor from the 5G RF power GaN market, which management expects will enable share gains in both telecom and SATCOM (satellite communications) segments as network investments continue.
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Manufacturing and operational improvements: Ongoing enhancements in internal fab utilization, especially at the North Carolina and France sites, led to improved yields and lower costs, contributing to margin expansion and supporting higher production output to meet customer demand.
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Product development and technology leadership: The company highlighted successful launches and customer validation of new continuous wave (CW) lasers, photodetectors, and linear equalizers, positioning MACOM to address evolving customer needs across both traditional and emerging network architectures, including co-packaged optics and high-speed backplane applications.
Drivers of Future Performance
MACOM expects robust demand in data center, defense, and telecom to drive revenue growth, with margin expansion supported by manufacturing efficiencies and new product introductions.
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Hyperscaler and optical demand: Management anticipates strong adoption of 1.6T technologies and expanded optical module deployments will drive data center growth, supported by a healthy backlog and increasing interest in low-power solutions from major customers.
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Telecom and defense opportunities: The company forecasts incremental share gains in telecom due to a competitor’s exit and robust satellite program activity, though notes that full benefits from 5G and SATCOM contracts may be realized over a multi-year period as design cycles mature.
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Margin expansion and operational execution: Sequential gross margin improvements are expected as internal fab utilization increases and new product introductions ramp, with management emphasizing continued focus on cost containment and operational efficiency as key levers for profitability.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will watch (1) the pace of adoption for MACOM’s 1.6T and low-power optical solutions among hyperscalers, (2) execution of manufacturing capacity expansion and operational improvements in internal fabs, and (3) progress in converting telecom and SATCOM design wins into revenue as large contracts begin production. The company’s ability to successfully commercialize new photonics and analog products remains a key marker of future performance.
MACOM currently trades at $228.74, up from $215.03 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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