Executive Summary
Microchip Technology reported a challenging QQ2 2025 quarter with revenue of $1.1638 billion, representing a year-over-year decline of 48.37% and a sequential drop of 6.24%. Despite the pronounced top-line weakness, gross profit remained robust at $668.5 million, delivering a gross margin of approximately 57% on the period. Operating income was $146.6 million (operating margin ~12.6%), with net income of $78.4 million and earnings per share of $0.15. EBITDA stood at $335.9 million, underscoring that profitability persists even as volumes sag.
Key Performance Indicators
QoQ: -6.24% | YoY:-48.37%
QoQ: -9.28% | YoY:-56.23%
QoQ: -33.09% | YoY:-83.44%
QoQ: -39.37% | YoY:-88.24%
QoQ: -37.50% | YoY:-87.80%
Key Insights
Revenue: $1.1638B; YoY change: -48.37%; QoQ change: -6.24%\nGross Profit: $668.5M; Gross Margin: ~57% (668.5/1163.8)\nOperating Income: $146.6M; Operating Margin: ~12.6%\nEBITDA: $335.9M; EBITDA Margin: ~28.9% (EBITDA/revenue)\nNet Income: $78.4M; Net Margin: ~6.74%\nEPS: $0.15; Diluted EPS: $0.14\nCash Flow: Operating cash flow $43.6M; Capex $20.8M; Free cash flow $22.8M\nBalance Sheet: Cash and equivalents $286.1M; Total debt $6.4576B; Net debt $6.1715B; Current ratio 0.884; Quick ratio 0.477;...
Financial Highlights
Revenue: $1.1638B; YoY change: -48.37%; QoQ change: -6.24%\nGross Profit: $668.5M; Gross Margin: ~57% (668.5/1163.8)\nOperating Income: $146.6M; Operating Margin: ~12.6%\nEBITDA: $335.9M; EBITDA Margin: ~28.9% (EBITDA/revenue)\nNet Income: $78.4M; Net Margin: ~6.74%\nEPS: $0.15; Diluted EPS: $0.14\nCash Flow: Operating cash flow $43.6M; Capex $20.8M; Free cash flow $22.8M\nBalance Sheet: Cash and equivalents $286.1M; Total debt $6.4576B; Net debt $6.1715B; Current ratio 0.884; Quick ratio 0.477; Cash ratio 0.0871\nLiquidity/Leverage: Total debt to capitalization ~50.7%; Debt to equity ~1.03; Interest coverage ~2.51x\nCapital Allocation: Dividends paid $243.7M; Share repurchases $17.3M; Net financing cash flow negative $8.4M; Net change in cash −$29M; Ending cash $286.1M
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.16B |
-48.37% |
-6.24% |
| Gross Profit |
668.50M |
-56.23% |
-9.28% |
| Operating Income |
146.60M |
-83.44% |
-33.09% |
| Net Income |
78.40M |
-88.24% |
-39.37% |
| EPS |
0.15 |
-87.80% |
-37.50% |
Key Financial Ratios
operatingProfitMargin
12.7%
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$0.04
priceEarningsRatio
136.47
Management Commentary
Note: The provided dataset does not include an earnings call transcript. Consequently, there are no management quotes or theme-based highlights to extract. In a typical Microchip QQ2 2025 call, investors would expect themes around demand environment (auto/industrial vs. consumer), product mix evolution (MCUs/analog), capital allocation strategy, and progress on any long-term structural initiatives (foundry/outsourcing, licensing of nonvolatile memory, etc.).
Forward Guidance
No explicit forward guidance for the remainder of 2025 was provided in the supplied data. Given the revenue decline and leverage position, the near-term trajectory hinges on stabilization or upturns in core end-markets (notably automotive and industrial/IoT applications) and improved end-market visibility. Monitoring factors include: (1) demand recovery in MCU/analog segments, (2) pricing/mix stability, (3) capital allocation discipline to deleverage (free cash flow improvement, potential asset monetization), and (4) supply-chain resilience. Absent explicit guidance, investors should treat the outlook as contingent on macro conditions stabilizing and end-market demand improving in the second half of 2025.