MACOM has announced its financial results for its fiscal second quarter ended March 30, 2018. They reported a revenue of $150.4 million in the 2nd Quarter of 2018 which is a decrease of 19.2% compared to $186.1 million in the 2nd Quarter of the previous fiscal year and an increase of 14.9% compared to $130.9 million in the prior fiscal quarter. The December quarter marked the bottom of the cycle for MACOM in terms of revenue and demand, as evidenced by their 15% sequential growth. Across their served markets, order intake and customer forecasts returned to more normalized patterns in the fiscal second quarter.
Following last year’s cyclical downturn in China, MACOM believes the industry is entering the next phase of global infrastructure spending driven by 5G Telecom, continued strong investment by Cloud Service Providers, and now, a surge in defense spending and industrial capital investment. They have spent the last couple of years developing a portfolio of disruptive products and technologies to service these targeted areas of secular growth. Major customers have validated their technology and capabilities and are actively sponsoring them as they work to ramp volume.
Moving forward, they expect sales across all their end markets to contribute to top line growth quarter-by-quarter throughout calendar 2018. The exact slope will be paced by their ability to scale operationally, both with their strategic suppliers and in their own factories. They believe the future contribution from these sales can provide significant operating leverage as they monetize what were previously strategic investments for the company.
In the last quarter, MACOM highlighted the impact that certain competitive developments had on their LR4 subassembly business. In response, they took proactive action to exit the manufacture and sale of optical subassemblies. Consistent with their overall goal of providing high-margin analog and photonic semiconductor components they will now sell chipsets. This action is expected to result in better overall cost structures for our TOSA customers, with improved gross margins for MACOM.
Second Quarter Fiscal Year 2018 GAAP Results
- Revenue was $150.4 million, a decrease of 19.2% compared to $186.1 million in the previous year fiscal second quarter and an increase of 14.9% compared to $130.9 million in the prior fiscal quarter;
- Gross profit was $65.6 million, a decrease of 4.7% compared to $68.9 million in the previous year fiscal second quarter and an increase of 7.6% compared to $61.0 million in the prior fiscal quarter;
- Gross margin was 43.6%, compared to 37.0% in the previous year fiscal second quarter and 46.6% in the prior fiscal quarter;
- Operating loss was $23.4 million, compared to operating loss of $33.6 million in the previous year fiscal second quarter and operating loss of $23.0 million in the prior fiscal quarter; and
- Net loss from continuing operations was $15.5 million, or $0.50 loss per diluted share, compared to net loss from continuing operations of $134.3 million, or $2.21 loss per diluted share, in the previous year fiscal second quarter and net loss from continuing operations of $17.0 million, or $0.49 loss per diluted share, in the prior fiscal quarter.
Second Quarter Fiscal Year 2018 Adjusted Non-GAAP Results
- Adjusted gross margin was 51.6%, compared to 58.5% in the previous year fiscal second quarter and 53.7% in the prior fiscal quarter;
- Adjusted operating income was $15.7 million, or 10.5% of revenue, compared to $48.6 million, or 26.1% of revenue, in the previous year fiscal second quarter and $13.4 million, or 10.3% of revenue, in the prior fiscal quarter;
- Adjusted net income was $8.5 million, or $0.13 per diluted share, compared to $39.4 million, or $0.63 per diluted share, in the previous year fiscal second quarter and $6.6 million, or $0.10 per diluted share, in the prior fiscal quarter; and
- Adjusted EBITDA was $23.4 million, compared to $56.7 million for the previous year fiscal second quarter and $20.9 million for the prior fiscal quarter.
