Microchip’s Q1 FY2026 results (ended June 30, 2025) show a recovery: net sales hit $1.0755 billion (+10.8% QoQ, beating guidance), though down 13.4% YoY. Non-GAAP net income was $154.7 million (EPS $0.27), down YoY.
CEO Steve Sanghi cited a strong start, with revenue growth validating their nine-point recovery plan, as the firm emerges from the downturn.
Key inventory progress: Total inventory dropped $124.4 million; distribution days fell to 29 (-4 days), boosting flexibility for demand recovery.
CFO Eric Bjornholt noted 76% non-GAAP gross margin and 82% operating margin on incremental revenue, with leverage to drive profitability as demand improves.
Sanghi highlighted a "triple effect" (distributor sell-through, narrowed gaps, normalized client inventory) fueling growth, with backlogs up and July bookings at a 2022+ high.
Q2 forecast: $1.13B sales (±$20M, +~5.1% QoQ). It will pause most factory expansions, cap full-year capex at $100M, and focus on selective equipment additions and R&D.
ICgoodFind: Microchip’s Q1 results beat expectations, signaling a clear recovery—worth watching ahead.
