Microchip Technology (NASDAQ:MCHP) Posts Quarterly Earnings Results, Beats Estimates By $0.06 EPS

Microchip Technology (NASDAQ:MCHP) announced its quarterly earnings data on Thursday. The semiconductor company reported $0.76 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.70 by $0.06, FiscalAI reports. Microchip Technology had a net margin of 4.88% and a return on equity of 10.87%. The company had revenue of $1.48 billion during the quarter, compared to analysts’ expectations of $1.46 billion. During the same quarter in the prior year, the company earned $0.27 EPS. Microchip Technology’s revenue was up 38.0% compared to the same quarter last year. Microchip Technology updated its Q2 2027 guidance to 0.910-0.950 EPS.

Here are the key takeaways from Microchip Technology’s conference call:

• Strong June-quarter results: Net sales rose 13.2% sequentially and 38% year over year to $1.485 billion, while non-GAAP EPS of $0.76 exceeded the guidance midpoint by $0.07.
• September-quarter outlook is robust, with revenue expected to increase 8% sequentially to approximately $1.60 billion and non-GAAP EPS guided to $0.91–$0.95. Bookings were the strongest in roughly four years, with a book-to-bill ratio well above one.
• Data-center revenue is projected to grow from approximately $591 million in calendar 2025 to about $1 billion in 2026, supported by broad exposure across power, memory, security, timing, networking, and PCIe products. Management cited 14 PCIe Gen 6 design wins and expects further growth as designs enter production in 2027.
• Management believes the distribution inventory correction is complete, with distributor inventory at a historically low 25 days and sell-through up 17% sequentially. Aerospace and defense demand is also accelerating, with potential for substantial multi-year growth as missile, drone, radar, and other defense programs ramp.
• Gross margin is expected to peak near 66.5% in September, aided by favorable product mix, licensing revenue, pricing, and lower underutilization charges, but management cautioned that several benefits are one-time or lumpy. Foundry, substrate, OSAT, and test-capacity constraints are also lengthening lead times, while the company plans to prioritize debt repayment over buybacks or dividend increases.

Microchip Technology Stock Up 13.9%

MCHP stock traded up $10.33 during mid-day trading on Friday, reaching $84.69. The company had a trading volume of 19,076,536 shares, compared to its average volume of 11,116,998. The firm has a fifty day simple moving average of $87.14 and a 200 day simple moving average of $81.30. The company has a debt-to-equity ratio of 0.85, a quick ratio of 1.18 and a current ratio of 2.09. The company has a market capitalization of $45.99 billion, a price-to-earnings ratio of 403.30, a price-to-earnings-growth ratio of 0.75 and a beta of 1.76. Microchip Technology has a fifty-two week low of $48.52 and a fifty-two week high of $105.91.

Microchip Technology Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, September 9th. Shareholders of record on Monday, August 24th will be given a $0.455 dividend. The ex-dividend date of this dividend is Monday, August 24th. This represents a $1.82 dividend on an annualized basis and a yield of 2.1%. Microchip Technology’s dividend payout ratio (DPR) is currently 866.67%.

Trending Headlines about Microchip Technology

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Quarterly results exceeded expectations. Microchip reported fiscal Q1 2027 earnings of $0.76 per share, above the $0.70 consensus estimate, while revenue rose 38% year over year to $1.48 billion, topping expectations of $1.46 billion. Management cited demand recovery, inventory normalization, higher factory utilization and improved cash flow. MCHP Q1 Earnings Beat Estimates, Revenues Rise on Demand Recovery
• Positive Sentiment: Forward guidance was well above Wall Street forecasts. Microchip projected fiscal Q2 EPS of $0.91-$0.95 and revenue of approximately $1.6 billion, versus consensus estimates of $0.76 EPS and $1.5 billion in revenue. The outlook reflects strengthening demand for chips used in AI data centers, industrial, automotive and aerospace applications. Microchip Tech forecasts upbeat quarterly revenue on strong demand
• Positive Sentiment: Analysts see potential for a longer growth cycle. Commentary highlighted data-center-related revenue and AI infrastructure demand as possible drivers of sustained growth. Rosenblatt reaffirmed its “buy” rating and maintained a $120 price target. Microchip’s data center-related revenue likely drives longer up-cycle
• Neutral Sentiment: Microchip declared a quarterly dividend of $0.455 per share, payable September 9 to shareholders of record August 24. The dividend provides income support and represents an annualized yield of roughly 2.2%.
• Negative Sentiment: Truist lowered its price target to $90 from $105 and retained a “hold” rating. The revision suggests some caution about how much of the recovery is already reflected in MCHP’s valuation, despite the improved outlook. Truist price-target update

Insider Buying and Selling

In other Microchip Technology news, CFO James Eric Bjornholt sold 3,667 shares of the stock in a transaction that occurred on Friday, May 22nd. The shares were sold at an average price of $90.87, for a total value of $333,220.29. Following the sale, the chief financial officer directly owned 28,573 shares of the company’s stock, valued at approximately $2,596,428.51. This represents a 11.37% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Matthew W. Chapman sold 3,000 shares of Microchip Technology stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $97.52, for a total value of $292,560.00. Following the sale, the director directly owned 17,665 shares of the company’s stock, valued at $1,722,690.80. This trade represents a 14.52% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 26,750 shares of company stock worth $2,543,170. Company insiders own 1.79% of the company’s stock.

Institutional Trading of Microchip Technology

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in MCHP. Miller Capital Partners Inc. purchased a new position in shares of Microchip Technology in the 4th quarter valued at $29,000. EFG International AG purchased a new position in shares of Microchip Technology during the fourth quarter worth approximately $29,000. Caitong International Asset Management Co. Ltd increased its holdings in shares of Microchip Technology by 4,663.6% in the 4th quarter. Caitong International Asset Management Co. Ltd now owns 524 shares of the semiconductor company’s stock valued at $33,000 after acquiring an additional 513 shares during the period. Garton & Associates Financial Advisors LLC purchased a new stake in shares of Microchip Technology in the fourth quarter valued at about $33,000. Finally, Rossby Financial LCC grew its holdings in shares of Microchip Technology by 41.1% during the fourth quarter. Rossby Financial LCC now owns 628 shares of the semiconductor company’s stock worth $40,000 after buying an additional 183 shares during the last quarter. Institutional investors and hedge funds own 91.51% of the company’s stock.

Wall Street Analyst Weigh In

Several analysts have recently commented on MCHP shares. Zacks Research raised shares of Microchip Technology from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, May 12th. Citigroup cut their target price on Microchip Technology from $113.00 to $95.00 and set a “buy” rating for the company in a research note on Friday. Susquehanna increased their price target on Microchip Technology from $95.00 to $120.00 and gave the stock a “positive” rating in a report on Friday, May 8th. TD Cowen cut their price objective on Microchip Technology from $105.00 to $90.00 and set a “hold” rating for the company in a research report on Monday, July 13th. Finally, Wells Fargo & Company reduced their price objective on shares of Microchip Technology from $95.00 to $88.00 and set an “equal weight” rating on the stock in a report on Monday, July 20th. Three analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and seven have issued a Hold rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $98.85.

About Microchip Technology

Microchip Technology Inc is a semiconductor company headquartered in Chandler, Arizona, that designs, develops and supplies a broad portfolio of embedded control and analog semiconductors. Its product lineup centers on microcontrollers (including the well-known PIC family), digital signal controllers and associated development tools and software, along with a range of mixed-signal and analog devices, nonvolatile memory, power management, timing, interface, wireless and security products. The company also provides integrated hardware and software solutions intended to simplify embedded design and accelerate time to market for OEMs and contract manufacturers.

Microchip’s products are used across a wide range of end markets, including automotive, industrial automation, consumer electronics, communications, aerospace and defense, and Internet of Things (IoT) applications.