MACOM Technology Solutions (NASDAQ:MTSI) reported fiscal first-quarter 2026 revenue of $271.6 million and adjusted earnings per diluted share of $1.02, as management pointed to strong demand across its industrial and defense, data center, and telecom end markets and a backlog that remains at record levels.
President and CEO Steve Daley said the company’s “financial performance improved across most key metrics in Q1,” highlighting a 1.3-to-1 book-to-bill ratio and noting that 23% of revenue came from orders that were booked and shipped within the quarter. CFO Jack Kober described the bookings as among the strongest in company history and the highest quarterly book-to-bill since Q3 2021.
Q1 segment performance and demand commentary
- Industrial & Defense (I&D): $117.7 million (up ~2% sequentially), with Daley saying I&D revenue was at a record level.
- Data center: $85.8 million (up ~8% sequentially), also at a record level.
- Telecom: $68.1 million (up ~3% sequentially).
Daley said demand remains strong and that MACOM is adding manufacturing capacity to keep up with customer forecasts, adding that the company has indications demand could remain strong into calendar 2027. The CEO also said “turns” business was higher than recent quarters due to strong early-quarter bookings.
Data center: raised growth expectations, 1.6T focus, and optical roadmap
Daley said the company is “gaining confidence” that data center revenue could reach 35% to 40% year-over-year growth, raising the company’s base case from a previously discussed 20%. He attributed the increased confidence in part to hyperscaler capital investment and demand for MACOM’s 800G and 1.6T optical and high-speed analog products.
In Q&A, Daley said the “key underlying driver” behind the higher data center outlook is 1.6T, citing activity, design wins, and transitions into production runs. He added that MACOM has a “very healthy backlog” and expects the second half of the fiscal year to be stronger than the first in absolute revenue dollars, while noting there is “upside” that is difficult to quantify at this stage.
Management detailed multiple areas of data center product focus discussed during the call, including:
- Support for NRZ, PAM4, and coherent modulation and multiple optical transmission technologies (VCSEL, EML, silicon photonics) as well as copper connectivity.
- Growth in pluggable optical modules and optical cables tied to 800G and 1.6T PAM4.
- Support for DSP, LPO and LRO module architectures, and coherent DCI hardware such as ZR and ZR Lite.
- Growing demand for 200G-per-lane photodetectors supporting 800G and 1.6T, along with work toward receiver platforms beyond 200G per lane.
Daley also discussed near-packaged and co-packaged optics (NPO/CPO). He said the product set for these platforms is similar to what MACOM sells into pluggable modules—drivers, TIAs, photodetectors, and potentially lasers—while noting silicon photonics-based solutions increase demand for CW lasers and photodetector optical chips. Daley said MACOM has two customers that have confirmed its 75-milliwatt CW lasers meet electrical requirements and that the company is now in qualification and production-readiness steps that will take “some number of months.”
On LPO, Daley said MACOM now has three hyperscalers “embracing LPO,” with the company in various stages of production on 100G-per-lane designs typically used for 800G modules. He characterized LPO as still a small part of the market and said MACOM expects it to remain relatively small over the next one to two years, while also noting customer evaluation of LRO at 1.6T using 200G-per-lane chips.
Industrial & defense and telecom: defense momentum, satellite timing update, and 5G positioning
In industrial and defense, Daley emphasized defense demand tied to higher frequencies, higher RF/microwave power, and greater integration, and said MACOM provides support ranging from custom chip design to subsystem solutions. He described MACOM as a supplier of choice among large U.S. defense OEMs and said the company is working to expand in Europe. Daley outlined examples of defense technologies where MACOM believes it has an advantage, including wideband GaN MMIC amplifiers, RF-over-fiber products, and receiver protection diodes.
In telecom, Daley highlighted satellite broadband and direct-to-cell opportunities, stating that numerous low-earth-orbit (LEO) networks remain in planning stages and that planned satellite launches continue to grow. He also provided an update on a previously announced $55 million satellite contract, saying production is planned to start in the second half of calendar 2026 following a schedule delay driven by customer system changes that affect delivered hardware design. Daley said he views the changes positively because they can add functionality and broaden the constellation’s application space. In Q&A, he added the company previously referenced potential for an additional $25 million add-on and said MACOM expects additional orders once in steady-state production.
For 5G, Daley said the company continues to secure new business in macro base stations and is improving performance and competitiveness in the 2.7 GHz and 3.5 GHz bands. He said MACOM is sampling products using its new GaN 4 technology and noted management sees an opportunity from a competitor’s exit from the 5G RF power GaN market, though he cautioned it could take one to two years to play out and that it is premature to assign a dollar value. He also said the global RAN market is expected to be flat in 2026, with potential long-term upside tied to Europe’s high-risk vendor replacement initiative.
Margins, cash, and capital allocation notes
Adjusted gross margin was 57.6% in Q1, with adjusted gross profit of $156.5 million. Kober said improvements in capacity and yields across fab operations, along with higher utilization, have supported incremental gross margin improvement. He reiterated an expectation for 25 to 50 basis points of sequential quarterly gross margin improvement through fiscal 2026, inclusive of potential offsets from input and operating cost increases.
Adjusted operating income was a record $74.0 million, and adjusted net income was $78.2 million. MACOM ended the quarter with $768 million in cash, cash equivalents, and short-term investments. Kober said the company expects to retire its 2021 convertible notes in mid-March by paying $161 million of principal in cash and settling any conversion premium with shares, and noted shares associated with the settlement were included in diluted share count and Q2 guidance. The remaining convertible notes total approximately $340 million and mature in December 2029. On capital returns, Kober said share repurchases are not being contemplated and investors “should not expect that in the future.”
MACOM guided fiscal Q2 revenue to $281 million to $289 million, adjusted gross margin to 57% to 59%, and adjusted EPS to $1.05 to $1.09 based on 77.7 million diluted shares. Daley said the company expects sequential revenue growth in each end market, with data center up low-to-mid teens sequentially and telecom and industrial and defense up low single digits.
About MACOM Technology Solutions (NASDAQ:MTSI)
MACOM Technology Solutions is a semiconductor company specializing in high-performance analog, microwave, millimeter-wave and photonic semiconductor solutions. Its product portfolio includes amplifiers, switches, modulators, detectors and integrated circuits designed to optimize signal integrity, power management and data transmission. MACOM’s offerings address both digital and optical domains, providing critical building blocks for next-generation communications infrastructure.
The company’s solutions serve a diverse set of end markets, including wireless and wireline telecom, data centers, satellite communications, aerospace and defense, industrial and automotive applications.
