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1. Company Snapshot

1.a. Company Description

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications across the radio frequency (RF), microwave, millimeter wave, and lightwave spectrum in the United States, China, the Asia Pacific, and internationally.The company offers a portfolio of standard and custom devices, including integrated circuits, multi-chip modules, diodes, amplifiers, switches and switch limiters, passive and active components, and subsystems.Its semiconductor products are electronic components that are incorporated in electronic systems, such as wireless basestations, high-capacity optical networks, radar, and medical systems and test and measurement.


The company serves various markets comprising telecommunication that includes carrier infrastructure, which comprise long-haul/metro, 5G, and fiber-to-the-X/passive optical network; industrial and defense, including military and commercial radar, RF jammers, electronic countermeasures, and communication data links, as well as multi-market applications, such as industrial, medical, test and measurement, and scientific applications; and data centers.It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors.The company was founded in 1950 and is headquartered in Lowell, Massachusetts.

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1.b. Last Insights on MTSI

MACOM Technology Solutions Holdings, Inc.'s recent performance was driven by strong Q4 earnings, which surpassed expectations, with revenues rising year-over-year. The company's solid guidance for fiscal 2026 also contributed to its positive momentum. Additionally, Edgestream Partners L.P. increased its stake in the company by 21.2%, while Sequoia Financial Advisors LLC initiated a new position. MACOM's growth prospects are promising, with above-average growth in financials, positioning it for potential outperformance. The company also promoted Robert Dennehy to Chief Operating Officer, adding to its leadership strength.

1.c. Company Highlights

2. MACOM's Q4 FY '25 Earnings: Strong Revenue Growth and Margin Expansion

MACOM reported revenue of $261.2 million for Q4 FY '25, a 3.6% sequential increase and a 30.1% year-over-year increase, driven by growth across all three end markets: Industrial & Defense, Telecom, and Data Center. Adjusted gross profit was $149.1 million, or 57.1% of revenue. Adjusted EPS was $0.94 per diluted share, slightly beating estimates of $0.93. For the full year FY '25, revenue was $967 million, a 32% increase year-over-year, and EPS was $3.47, a 35% increase year-over-year.

Publication Date: Nov -13

📋 Highlights

Segment Performance

The company's Data Center segment saw revenue of $79.6 million, with strong demand for 800G and 1.6T applications. Industrial & Defense revenue was $115.6 million, and Telecom revenue was $66 million. The company reported a book-to-bill ratio of 1.1:1 for FY '25, with a record backlog. As Steve Daly mentioned, "Our recent booking trends and end markets show Q4 revenue performance by end market was as expected."

Margin Expansion and Operating Expenses

Adjusted operating income was $67 million, up 5.5% sequentially and 32.1% year-over-year. Total adjusted operating expense was $82.1 million, consisting of R&D expense of $55.6 million and SG&A expenses of $26.6 million. The company expects sequential quarterly gross margin improvements of between 25 to 50 basis points as it moves through FY '26.

Guidance and Outlook

For Q1 FY '26, MACOM expects revenue to be in the range of $265 million to $273 million, with adjusted gross margin expected to be in the range of 56.5% to 58.5%. Adjusted EPS is expected to be between $0.98 and $1.02. Analysts estimate revenue growth of 15.8% for FY '26. The company's guidance suggests continued strong performance across its end markets.

Valuation

MACOM's current P/E Ratio is -233.23, indicating potential undervaluation due to its negative earnings in the past. However, its P/S Ratio is 13.16, and EV/EBITDA is 460.37, suggesting a premium valuation. The company's ROIC is 13.18%, indicating efficient use of capital. The current valuation metrics suggest that MACOM's stock price may be influenced by its growth prospects and industry trends.

3. NewsRoom

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Edgestream Partners L.P. Has $4.79 Million Stock Holdings in MACOM Technology Solutions Holdings, Inc. $MTSI

Dec -03

Source: defenseworld.net

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MACOM Promotes Robert Dennehy to Chief Operating Officer

Nov -25

Source: globenewswire.com

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Looking for a Growth Stock? 3 Reasons Why M/A-Com (MTSI) is a Solid Choice

Nov -18

Source: zacks.com

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International Markets and M/A-Com (MTSI): A Deep Dive for Investors

Nov -17

Source: zacks.com

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MACOM Technology Solutions Holdings, Inc. $MTSI Shares Sold by Alberta Investment Management Corp

Nov -17

Source: defenseworld.net

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MACOM Technology Shares Flash Rare Bullish Signal

Nov -12

Source: fxempire.com

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MACOM Technology Solutions Holdings, Inc. (MTSI) Q4 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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MTSI Q4 Earnings Surpass Expectations, Revenues Rise Y/Y

Nov -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.98%)

6. Segments

Industrial & Defense

Expected Growth: 7.77%

MACOM's Industrial & Defense segment growth of 7.77% is driven by increasing demand for high-performance analog semiconductor solutions in defense electronics, radar, and communication systems. Additionally, growing adoption of 5G, IoT, and autonomous vehicles is fueling demand for MACOM's RF and microwave components, contributing to the segment's growth.

Telecom

Expected Growth: 9.9%

MACOM's Telecom segment growth of 9.9% is driven by increasing demand for 5G infrastructure, rising adoption of cloud-based services, and growing need for high-speed data transmission. Additionally, the company's strategic partnerships and investments in research and development have enabled it to capitalize on emerging trends in the industry, such as network function virtualization and edge computing.

Data Center

Expected Growth: 10.43%

MACOM's Data Center segment growth is driven by increasing demand for cloud computing, artificial intelligence, and 5G networks, leading to higher adoption of high-speed optical interconnects and semiconductor solutions. Additionally, the trend towards hyperscale data center expansion and edge computing further fuels growth, with MACOM's products well-positioned to capitalize on these trends.

7. Detailed Products

High-Performance Analog

MACOM's high-performance analog products include amplifiers, attenuators, switches, and other components used in a wide range of applications, including aerospace and defense, industrial, and telecommunications.

GaN on Silicon Carbide (SiC) Power Devices

MACOM's GaN on SiC power devices offer high power density, high efficiency, and high reliability, making them ideal for applications such as radar, electronic warfare, and missile guidance systems.

AlGaAs and InP Lasers

MACOM's AlGaAs and InP lasers are used in a variety of applications, including telecommunications, data centers, and industrial manufacturing.

Photodiodes and Phototransistors

MACOM's photodiodes and phototransistors are used in a range of applications, including telecommunications, data centers, and industrial manufacturing.

RF and Microwave Semiconductors

MACOM's RF and microwave semiconductors are used in a variety of applications, including aerospace and defense, industrial, and telecommunications.

Millimeterwave Products

MACOM's millimeterwave products are used in a range of applications, including 5G wireless networks, satellite communications, and radar systems.

8. MACOM Technology Solutions Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MACOM Technology Solutions Holdings, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the semiconductor industry.

Bargaining Power Of Customers

MACOM Technology Solutions Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

MACOM Technology Solutions Holdings, Inc. relies on a few key suppliers for certain components, which gives these suppliers some bargaining power. However, the company's size and scale of operations mitigate this risk to some extent.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures and technological expertise. This makes it difficult for new entrants to compete with established players like MACOM Technology Solutions Holdings, Inc.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. MACOM Technology Solutions Holdings, Inc. faces intense competition from companies like Analog Devices, Texas Instruments, and ON Semiconductor.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.63%
Debt Cost 3.95%
Equity Weight 66.37%
Equity Cost 12.15%
WACC 9.39%
Leverage 50.66%

11. Quality Control: MACOM Technology Solutions Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Rambus

A-Score: 5.1/10

Value: 0.8

Growth: 8.0

Quality: 9.0

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

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Growth: 8.6

Quality: 7.9

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Amkor Technology

A-Score: 4.3/10

Value: 4.6

Growth: 5.4

Quality: 4.8

Yield: 3.0

Momentum: 4.0

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Veeco Instruments

A-Score: 4.0/10

Value: 3.0

Growth: 5.9

Quality: 5.9

Yield: 0.0

Momentum: 5.0

Volatility: 4.3

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MACOM Tech

A-Score: 3.9/10

Value: 2.2

Growth: 6.7

Quality: 3.5

Yield: 0.0

Momentum: 6.0

Volatility: 5.0

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FormFactor

A-Score: 2.6/10

Value: 0.6

Growth: 5.2

Quality: 5.4

Yield: 0.0

Momentum: 2.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

184.1$

Current Price

184.1$

Potential

-0.00%

Expected Cash-Flows