MCHP · Microchip Technology Incorporated

Microchip Technology's Q4 FY2026 results demonstrated significant recovery, with net sales of $1.311 billion surpassing the high end of prior guidance and growing 35.1% year-over-year from $970.5 million, driven by broad-based improvement across product lines, stronger bookings, and expedite activity as customer inventory normalized. Non-GAAP gross margin expanded to 61.6% and operating income reached $400.9 million (30.6% of sales), reflecting operating leverage from the company's nine-point recovery plan. CEO Steve Sanghi highlighted momentum from improved demand and disciplined inventory management, reducing company inventory by $320.9 million since December 2024 peak, with Q4 days at 185 and distributor days at 26, near historical lows. For full FY2026, non-GAAP operating income hit $1.238 billion on $4.713 billion sales, up 7.1% YoY, with $984 million returned to shareholders via dividends. Guidance for Q1 FY2027 signals continued strength, with sales midpoint of $1.456 billion (11% sequential growth) and non-GAAP EPS of $0.67-$0.71, supported by factory ramps and higher utilization. CFO Eric Bjornholt noted balance sheet progress, while COO Rich Simoncic pointed to design wins in data center/AI via high-speed connectivity portfolio. A quarterly dividend of $0.455 per common share was declared, payable June 5, underscoring capital return commitment amid improving visibility into seasonally stronger quarters.