Microchip Technology reported Q2 FY2025 revenue of $1.16 billion, down 48.4% year-over-year, as customers continued reducing inventory levels amid economic uncertainty. Net income declined to $78.4 million from $666.6 million last year, while gross margin contracted to 57.4% from 67.8%. The company maintained profitability despite operating at below normal capacity utilization.Management noted that most markets remained weak except aerospace, defense and AI-related data centers. The company has paused most factory expansion activities and reduced planned capital investments through fiscal 2026 due to the soft demand environment. Operating expenses decreased 18.7% year-over-year to $521.9 million through cost control measures.Looking ahead, Microchip continues to prioritize managing high inventory levels while running production facilities at lower utilization rates. The company maintained its quarterly dividend at $0.454 per share and repurchased $17.3 million of stock during Q2. Cash and equivalents stood at $286.1 million with total debt of $6.45 billion at quarter-end.

Microchip Technology reported Q2 FY2025 revenue of $1.16 billion, down 48.4% year-over-year, as customers continued reducing inventory levels amid economic uncertainty. Net income declined to $78.4 million from $666.6 million last year, while gross margin contracted to 57.4% from 67.8%. The company maintained profitability despite operating at below normal capacity utilization.Management noted that most markets remained weak except aerospace, defense and AI-related data centers. The company has paused most factory expansion activities and reduced planned capital investments through fiscal 2026 due to the soft demand environment. Operating expenses decreased 18.7% year-over-year to $521.9 million through cost control measures.Looking ahead, Microchip continues to prioritize managing high inventory levels while running production facilities at lower utilization rates. The company maintained its quarterly dividend at $0.454 per share and repurchased $17.3 million of stock during Q2. Cash and equivalents stood at $286.1 million with total debt of $6.45 billion at quarter-end.