Microchip Technology (0K19.L) Q1 2025 Earnings Report

Microchip Technology reported QQ1 2025 revenue of $1.2413 billion, marking a substantial year-over-year decline of 45.76% and a sequential decrease of 6.37%. Despite the sharp top-line reduction, the company delivered solid profitability and strong free cash flow generation, underscoring the cash-generative nature of its embedded control platform. Gross margin stood at approximately 59.37%, with an operating margin of 17.65% and a net margin of 10.41%. EBITDA reached $410.3 million, yielding an EBITDA margin of 33.05%. Free cash flow (FCF) reached $304.2 million, supported by $377.1 million of operating cash flow, and capital expenditure of $72.9 million. The balance sheet reflects a high asset base with meaningful goodwill and intangible assets, and a substantial debt load (total debt of $6.2029 billion; net debt of $5.8878 billion) offset by a cash balance of $315.1 million. Liquidity is decent with a current ratio of 1.94 and a quick ratio of 1.08, though leverage remains a point of focus. Management commentary is not included in the provided transcript data; accordingly, the forward view relies on macro expectations for end-market demand (auto, industrial, IoT) and the company’s ability to leverage free cash flow for deleveraging and strategic investments.