Analyst Conference Summary

semiconductors

conference date: February 5, 2026 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2025 (Q3, third fiscal quarter 2026)

Forward-looking statements

Overview:

Basic data (GAAP):

Revenue was $ billion, up % sequentially from $1.14 billion, and down % from $ billion in the year-earlier quarter.

Net income was $ million, up sequentially from negative $13.9 million, and down % from $ million in the year-earlier quarter.

EPS (diluted earnings per share) were $, up sequentially from negative $0.03, and down % from $ year-earlier.

Guidance:

Conference Highlights:

CEO Steve Sanghi said ""

Declared a 45.5 cent dividend for shareholders of record on ?, payable ?, 2025. Going forward expects for cash flow to exceed the dividend, and excess will be used to pay off debt.

Revenue was % from mixed signal MCUs; % analog; % other. By end market % industrial, % data center, % defense, % automotive, % consumer appliance, % communications.

Microchip closed Fab 2 in mid-May. It is on rotating schedules at Fabs 4 and 5. CHIPS Act activity has been paused.

days of inventory at end of quarter, down sequentially from 199 days. Targetting 130 to 150 days. Inventory at distributors is also declining at days. Lead times are very short. Inventories at Microchip ended the quarter at $ billion. Believes substantial inventory reduction has also taken place at end customers.

As usual, many new products were added in the quarter, including 64-bit controllers and high speed peripherals. Also expanding in AI, military and aerospace. Microchip conserving capital but supporting new, fast-growing products.

Non-GAAP numbers: Net income was $ million, up % sequentially from $199 million and down % from $ million year-earlier. EPS was $, up % sequentially from $0.35 and down % from $ year-earlier.

Cash and investments ended at $ million, down sequentially from $237 million. Cash flow from operations was $ million. $ million capital spend in quarter. $ million free cash flow. Long term debt was about $5.4 billion. $ million used for dividends. $0 million used for stock repurchases.

GAAP cost of goods sold was $ million, leaving gross profit of $ million. Operating expenses of $ million consisted of: research and development $ million; selling, general and administrative $ million; amortization $ million; and special charges $ million. Leaving operating income of $ million. Other expense $ million. Income tax benefit $ million.

Q&A selective summary:

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