Microchip Technology reported Q1 fiscal 2025 revenue of $1.24 billion, down 45.8% year-over-year, as adverse economic conditions led to inventory reductions by customers. Net income fell to $129.3 million from $666.4 million last year. Gross margin declined to 59.4% from 68.1% due to lower sales volumes and unabsorbed capacity charges.The company saw decreases across all product lines and geographies. Mixed-signal microcontrollers, the largest segment, fell 50.5% to $644.7 million. Analog products dropped 47.8% to $330.6 million. Management cited slowing economic activity, business uncertainty, inflation, and higher interest rates as key factors impacting results.Despite headwinds, Microchip generated $377.1 million in operating cash flow. It paid $242.6 million in dividends and repurchased $72.7 million of stock. The company paused most factory expansion plans but expects to invest $125-175 million in equipment over the next year. Management remains focused on managing inventory levels and improving operational efficiency in the challenging environment.

Microchip Technology reported Q1 fiscal 2025 revenue of $1.24 billion, down 45.8% year-over-year, as adverse economic conditions led to inventory reductions by customers. Net income fell to $129.3 million from $666.4 million last year. Gross margin declined to 59.4% from 68.1% due to lower sales volumes and unabsorbed capacity charges.The company saw decreases across all product lines and geographies. Mixed-signal microcontrollers, the largest segment, fell 50.5% to $644.7 million. Analog products dropped 47.8% to $330.6 million. Management cited slowing economic activity, business uncertainty, inflation, and higher interest rates as key factors impacting results.Despite headwinds, Microchip generated $377.1 million in operating cash flow. It paid $242.6 million in dividends and repurchased $72.7 million of stock. The company paused most factory expansion plans but expects to invest $125-175 million in equipment over the next year. Management remains focused on managing inventory levels and improving operational efficiency in the challenging environment.