Network chips maker MACOM Technology Solutions (NASDAQ: MTSI) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 22.5% year on year to $289 million. On top of that, next quarter’s revenue guidance ($335 million at the midpoint) was surprisingly good and 11.6% above what analysts were expecting. Its non-GAAP profit of $1.09 per share was 1.6% above analysts’ consensus estimates.
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MACOM (MTSI) Q1 CY2026 Highlights:
- Revenue: $289 million vs analyst estimates of $285.4 million (22.5% year-on-year growth, 1.2% beat)
- Adjusted EPS: $1.09 vs analyst estimates of $1.07 (1.6% beat)
- Adjusted EBITDA: $89.47 million vs analyst estimates of $93.59 million (31% margin, 4.4% miss)
- Revenue Guidance for Q2 CY2026 is $335 million at the midpoint, above analyst estimates of $300.1 million
- Adjusted EPS guidance for Q2 CY2026 is $1.34 at the midpoint, above analyst estimates of $1.15
- Operating Margin: 17.6%, up from 14.8% in the same quarter last year
- Free Cash Flow Margin: 22.7%, up from 12.9% in the same quarter last year
- Inventory Days Outstanding: 184, up from 181 in the previous quarter
- Market Capitalization: $23.24 billion
“We are pleased with our first half fiscal year results and look forward to strong revenue growth and profitability in the second half,” 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 is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, MACOM grew its sales at an impressive 13% compounded annual growth rate. 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.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. MACOM’s annualized revenue growth of 29.8% 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 22.5%, and its $289 million of revenue topped Wall Street estimates by 1.2%. Despite the beat, this was its third consecutive quarter of decelerating growth, pointing to a potential downturn in the semiconductor cycle. Company management is currently guiding for a 32.9% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 19% 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 is baking in 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 184, which is 15 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.
Key Takeaways from MACOM’s Q1 Results
We were impressed by MACOM’s optimistic revenue guidance for next quarter, which blew past analysts’ expectations. We were also happy its revenue and EPS both outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 16.3% to $360.18 immediately after reporting.
MACOM put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
