MACOM Technology Solutions Holdings, Inc.

What they do

MACOM designs and manufactures differentiated semiconductor products — ICs, multi-chip modules, diodes, amplifiers, switches and RF/optical subsystems — that customers embed in systems such as wireless basestations, optical networks, data center networks, radar, medical systems, satellite networks and test equipment. It sells thousands of standard and custom devices across dozens of product lines to over 6,000 end customers. Manufacturing is a mix of internal wafer fabs (Lowell MA, Research Triangle Park NC, Ann Arbor MI, Limeil-Brévannes France) producing GaAs, GaN, InP and specialized silicon, plus external foundry and assembly/test partners. The Lowell fab holds U.S. Department of Defense Trusted Foundry accreditation.

Revenue drivers

• Data Center — Analog ICs and photonic components for intra-data-center and Data Center Interconnect at 100G, 200G, 400G, 800G, 1.6T and higher speeds. The 10-K attributes expanding AI-related data center infrastructure capital spending to rising demand for MACOM products, making this the swing factor in recent growth.
• Industrial and Defense (I&D) — Military and commercial radar, RF jammers, electronic countermeasures, communication data links and space electronics, plus multi-market industrial, medical, test and measurement and scientific applications. Trusted Foundry status in Lowell is positioned as a requirement to be a strategic supplier in these markets.
• Telecom — Carrier infrastructure including long-haul/metro, 5G and 6G, satellite communications (SATCOM) and Fiber-to-the-X/passive optical network. Products in this market include RF, microwave and optical components.
• Long-lifecycle catalog and custom devices — Thousands of standard and custom devices across dozens of product lines; some products generate revenue for over 20 years, with life cycles generally five to ten years, providing a recurring base alongside newer shorter-cycle parts.

Recent performance

Fiscal third quarter 2026 (ended July 3, 2026) revenue was $342.2 million, up 35.8% from $252.1 million a year earlier and up 18.4% from $289.0 million in the prior quarter. GAAP gross margin was 58.3% versus 55.3% a year ago; GAAP income from operations was $77.1 million (22.5% of revenue) versus $37.7 million (14.9%). Net income was $100.7 million, or $1.28 diluted EPS, compared with $36.5 million, or $0.48, a year earlier; the quarter included a $41.5 million gain on investment fair value. Non-GAAP adjusted net income was $109.8 million, or $1.40 diluted EPS, with adjusted gross margin of 59.7%. For the nine months ended July 3, 2026, revenue was $902.8 million and net income was $195.8 million, versus a $99.3 million net loss in the prior-year period that included a $193.1 million loss on extinguishment of debt.

Strategy

MACOM states its growth strategy is to expand addressable markets and product portfolio, strengthen customer relationships and capture more design wins to increase market share. It continues to develop new products and technologies for its three primary markets and expects customers to select more of its components as the portfolio and technology base grow. The manufacturing model pairs internal fabs and assembly/test with external foundries to access additional process technologies and capacity, aiming for dependable supply, quality control, lower capital investment, faster time to market and outsourced capacity. The company highlights Trusted Foundry status as a competitive advantage in I&D markets. Product longevity (five to ten years, sometimes over 20) is presented as part of the portfolio's value.

Risks

• Semiconductor cycle and AI capex dependence — The 10-K states the industry is highly cyclical and warns that if capital spending on Data Center infrastructure to support AI applications slows, demand for MACOM products may decline.
• New product dependence and price erosion — Revenue growth and gross margin are substantially dependent on timely development and release of new products, and MACOM must offset declining average selling prices with lower-cost or higher-performance products.
• Concentration in defense and government-linked demand — A meaningful share of I&D revenue comes from military radar, jammers, countermeasures and space electronics, markets tied to defense budgets and procurement cycles, where domestic fabrication may be required to remain a strategic supplier.
• Manufacturing and supply-chain execution — MACOM depends on internal fabs including compound semiconductor processes and on external foundry and assembly/test partners; interruptions or capacity constraints at either could affect supply and results.

Outlook

For the fiscal fourth quarter ending October 2, 2026, MACOM guided revenue to $415 million to $425 million, adjusted gross margin of 60.0% to 61.0%, and adjusted diluted EPS of $1.97 to $2.03, using an anticipated non-GAAP income tax rate of 3% and 78.9 million fully diluted shares. That revenue midpoint implies sequential growth from the $342.2 million reported in the June quarter. Guidance is non-GAAP and excludes items reconciled in the earnings release; the company also notes forward-looking statements are subject to risks in Item 1A of the 10-K.