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CHANDLER, Ariz. - Microchip Technology Incorporated (NASDAQ:MCHP) reported second-quarter adjusted earnings that slightly exceeded analyst expectations, but shares tumbled 6% after the company issued third-quarter guidance below Wall Street estimates.
The semiconductor manufacturer posted adjusted earnings of $0.35 per share for the quarter ended September 30, 2025, beating analyst estimates by $0.01. Revenue came in at $1.14 billion, matching consensus expectations but declining 2.0% YoY, while showing a 6.0% sequential improvement from the previous quarter.
For the third quarter, Microchip forecasts revenue between $1.109 billion and $1.149 billion, below the analyst consensus of $1.18 billion. The company expects adjusted earnings of $0.34 to $0.40 per share, with the midpoint of $0.37 falling short of the $0.39 analyst estimate.
"Our second quarter results demonstrate continued momentum in our recovery, with net sales growing 6% sequentially and above the midpoint of our guidance," said Steve Sanghi, Microchip’s CEO and President. "The operational improvements we have implemented are translating into meaningful financial progress despite the broader market recovery developing more gradually than anticipated."
The company reported encouraging signs with September quarter bookings growing 10% sequentially and a book-to-bill ratio of 1.06. Customer requests for expedited shipments have also increased significantly, indicating inventory normalization is progressing.
Microchip highlighted the introduction of the industry’s first 3nm PCIe Gen 6 switch for AI and enterprise data center applications as a significant technological milestone. The company also declared a quarterly dividend of 45.5 cents per share.
Despite positive operational indicators, the company noted that December is historically its seasonally weakest quarter, which is reflected in the cautious guidance that disappointed investors.
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