Microchip Q4 Results Beat, Raises Dividend
Microchip Q4 results showed $1.311 billion revenue, stronger Q1 guide and a $0.455 dividend, prompting traders to reprice demand recovery.
KEY TAKEAWAYS
- Q4 net sales were $1.311 billion, beating the February guidance midpoint.
- Company set Q1 FY2027 revenue midpoint $1.456 billion and non-GAAP EPS midpoint $0.69.
- Board declared a quarterly cash dividend of $0.455 per share, payable June 5, 2026.
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Microchip Technology (MCHP) reported fiscal Q4 2026 results on May 7, 2026, saying Microchip Q4 results topped its February outlook, declaring a higher quarterly dividend and issuing Q1 guidance that signaled continuing demand recovery.
Quarter Results, Profitability, and Inventory
Microchip reported net sales of $1.311 billion for the quarter ended March 31, 2026, up 35.1% year over year and 10.6% sequentially, exceeding its February guidance midpoint. GAAP gross profit was 61.0%, with non-GAAP gross profit at 61.6%. Operating income reached $217.4 million, or 16.6% of net sales, while net income was $116.4 million, producing GAAP EPS of $0.21 and non-GAAP EPS of $0.57.
For fiscal 2026, the company posted net sales of $4.713 billion, a 7.1% increase from the prior year. GAAP gross profit was 57.7%, operating income $490.1 million, net income $118.8 million, GAAP EPS $0.22, and non-GAAP EPS $1.64. The stronger fourth-quarter margins compared with the full year reflect an improving product mix and rising operational leverage late in the fiscal year.
Distribution inventory days stood at 26, near historical lows, while overall inventory days declined from 201 to 185, indicating reduced channel stocking. Steve Sanghi, president and chief executive, said, "We ended the fiscal year with strong momentum."
Guidance and Shareholder Returns
Microchip set Q1 FY2027 revenue guidance between $1.442 billion and $1.469 billion, with a midpoint of $1.456 billion. This implies 35.3% year-over-year growth and 11.0% sequential growth. Non-GAAP EPS guidance ranges from $0.67 to $0.71, with a midpoint of $0.69. The outlook assumes continued demand recovery in industrial and automotive markets, inventory normalization, and operating leverage from a nine-point recovery plan.
The board declared a quarterly cash dividend of $0.455 per share, payable June 5, 2026, to stockholders of record on May 22, 2026. The stronger fourth quarter, resumed cash return, and optimistic near-term guidance indicate Microchip views demand conditions as stabilizing and its recovery plan as beginning to deliver operating leverage.
