The following is a summary of the MACOM Technology Solutions Holdings, Inc. (MTSI) Q2 2024 Earnings Call Transcript:

Financial Performance:

• MACOM reported Q2 revenue of $181.2 million and adjusted EPS of $0.59 per diluted share.

• The company maintained cash reserve of approximately $476 million in cash and short-term investments.

• Revenue by end market for Q2 was Industrial and Defense ($90.9 million), Telecom ($47.2 million), and Data Center ($43.1 million).

• The Q2 Gross profit of $103.5 million, or 57.1% of revenue, met the expectations.

• Adjusted net income for Q2 2024 was $43.2 million whereas the adjusted earnings per fully diluted share was $0.59, slightly up from $0.58 in Q1 2024.

• Cash flow from operations for Q2 was approximately $18.2 million, a decrease from $33.1 million in Q1.

• Expected revenue for fiscal Q3 2024 is between $187 million to $193 million, with an adjusted gross margin projected to range between 56% to 58%.

Business Progress:

• MACOM secured two large contracts in Q2, suggesting a robust order pipeline.

• Despite a weaker Industrial market, Defense orders remained strong due to the company's diverse customer base.

• MACOM won a contract worth around $55 million from a leading satellite manufacturer and secured a multiyear contract of $11.4 million for advancing GaN technology.

• The company has been optimizing the acquired RF business to enhance the gross margin, with early benefits expected to boost operating margin.

• MACOM anticipates a promising fiscal year for their Data Center, which is projected to yield a near or record total revenue.

• Progress was noted in the telecom market, with increased production rates existing 5G base station customers, as well as emerging opportunities in the Metro/Long-Haul business.

• The data center business grew and diversified due to the acquisition of Wolfspeed, which is profitable and contributing to the bottom-line.

• The company is working on yield enhancement programs and cost management with high-volume production to improve the gross margins for both MACOM and the recently acquired Wolfspeed business.

More details: MACOM Technology Solutions IR

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