Core Insights - Microchip Technology has launched the MPLAB® AI Coding Assistant, an AI-powered tool designed to assist software developers and embedded engineers in writing and debugging code [1][3] - The tool is a free extension for Microsoft® Visual Studio® Code (VS Code®) and is based on the leading open-source AI code assistant, Continue [1][3] - The MPLAB AI Coding Assistant features a chatbot for real-time support, advanced autocomplete, error detection, and integrated access to Microchip documentation [2][3] Product Features - The chatbot allows developers to evaluate and iterate on code directly from the sidebar, enhancing the coding experience with customized real-time assistance [2] - Unique to this tool is the ability to deliver block diagrams within the VS Code interface, streamlining the coding process and improving accuracy [3] - Additional features include an edit function for efficient code modifications and searchable documentation access within the IDE [2][3] Availability and Support - The MPLAB AI Coding Assistant is available for free, although some advanced features may require a subscription license [5] - Microchip representatives will be present at the Embedded World event from March 11-13, 2025, to provide further information and support [5] - Microchip Technology Inc. serves over 100,000 customers across various markets, including industrial, automotive, and aerospace [6]

Core Insights - Microchip Technology has launched the MPLAB® AI Coding Assistant, an AI-powered tool designed to assist software developers and embedded engineers in writing and debugging code [1][3] - The tool is a free extension for Microsoft® Visual Studio® Code (VS Code®) and is based on Continue, a leading open-source AI code assistant [1][3] - The MPLAB AI Coding Assistant features a sidebar chat functionality that provides real-time, customized support and insights on Microchip-specific products [2][3] Product Features - The chatbot allows developers to evaluate and iterate on code directly from the sidebar, enhancing the coding experience with real-time assistance [2] - Additional features include advanced autocomplete, an edit feature, error detection, and integrated access to searchable Microchip documentation [2] - Unlike other code assistants, it can deliver block diagrams directly within the VS Code interface, streamlining the coding process and improving accuracy [3] Availability and Support - The MPLAB AI Coding Assistant is available for free, although some advanced features may require a subscription license [5] - Microchip will have representatives available during the Embedded World event from March 11-13, 2025, to discuss the tool and answer questions [5] - Microchip Technology Inc. serves over 100,000 customers across various markets, providing a comprehensive product portfolio and development tools [6]

Group 1 - The previous investment outlook for Microchip Technology (NASDAQ: MCHP) was a buy rating, anticipating a turnaround that has not materialized, leading to ongoing performance weakness [1] - The investment strategy now focuses on long-term investments while integrating short-term shorts to identify alpha opportunities [1] - The investment approach is based on bottom-up analysis, emphasizing the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Microchip Technology's international operations are crucial for assessing its financial resilience and growth prospects [1][2] - The company's total revenue for the quarter was $1.03 billion, reflecting a significant year-over-year decline of 41.9% [4] International Revenue Breakdown - Revenue from Europe was $183.9 million, accounting for 17.92% of total revenue, which was a surprise decline of 19.16% compared to analyst expectations of $227.49 million [5] - Asia contributed $544.7 million, representing 53.09% of total revenue, with a positive surprise of 10.38% against expectations of $493.5 million [6] Future Revenue Projections - Analysts project Microchip Technology will generate $960.52 million in the ongoing fiscal quarter, down 27.6% from the previous year, with expected contributions from Europe and Asia at $230.31 million (24%) and $508.4 million (52.9%) respectively [7] - For the full year, total revenue is expected to be $4.44 billion, a decrease of 41.8% from the previous year, with Europe and Asia projected to contribute $942.5 million (21.2%) and $2.18 billion (49%) respectively [8] Market Performance - The company's stock has declined by 6% over the past month, while the S&P 500 composite increased by 2.1% [13] - Over the past three months, Microchip Technology's shares decreased by 17.5%, contrasting with a 1.2% increase in the S&P 500 [13]

Core Insights - Microchip Technology reported disappointing third-quarter fiscal 2025 results, with non-GAAP earnings of 20 cents per share, missing the Zacks Consensus Estimate by 28.57% and down 81.5% year over year [1][2] - Net sales were $1.03 billion, a decrease of 42% year over year, also missing the Zacks Consensus Estimate by 2.02%, and a sequential decline of 11.8% [2] - Following the results, Microchip shares fell over 6% in after-hours trading, with a 37% decline over the past 12 months compared to a 22.8% growth in the Zacks Computer and Technology sector [2] Segmental Performance - Sales from Mixed-signal Microcontroller, Analog, and Other segments accounted for 52%, 26.6%, and 21.5% of net sales, respectively [3] - Direct sales made up 57% of total sales, while distribution accounted for 43% [3] - Geographically, revenues from the Americas, Europe, and Asia contributed 29%, 17.9%, and 53.1% to net sales, respectively [3] Operating Results - Non-GAAP gross margin contracted by 830 basis points year over year to 55.4% [4] - Non-GAAP research & development expenses increased by 750 basis points year over year to 21.2% of net sales [4] - Non-GAAP selling, general & administrative expenses rose by 490 basis points to 13.7% of net sales [4] - Non-GAAP operating margin declined to 20.5% from 41.2% in the year-ago quarter [5] Balance Sheet & Cash Flow - As of December 31, 2024, cash and short-term investments totaled $586 million, up from $286.1 million as of September 30, 2024 [6] - Total debt increased to $6.75 billion from $6.42 billion over the same period [6] - Inventory days rose to 266 from 247, exceeding the targeted range of 130-150 days [6] - Cash flow from operating activities remained stable at $43.6 million, while free cash flow dropped to $22.8 million from $304.2 million in the previous quarter [7] Shareholder Returns - Microchip returned approximately $244.6 million to shareholders through dividends in the fiscal third quarter, with a quarterly dividend of 45.5 cents per share, up 1.1% from the previous year [8] Guidance - For the fourth quarter of fiscal 2025, Microchip expects net sales between $920 million and $1 billion [9] - Non-GAAP earnings are anticipated to be between 5 cents and 15 cents per share, with a gross margin forecast of 52% to 54% [10] - Non-GAAP operating expenses are projected to be 37.7% to 40.5% of net sales, with an operating margin expected between 11.5% and 16.3% [10]

Financial Data and Key Metrics Changes - Net sales for the December quarter were $1.026 billion, down 11.8% sequentially and down 41.9% year-over-year [36] - Non-GAAP gross margins were 55.4%, including capacity underutilization charges of $42.7 million [20] - Non-GAAP net income was $107.3 million, with non-GAAP earnings per diluted share at $0.20 [21] - Inventory balance at December 31, 2024, was $1.356 billion, with 266 days of inventory, up 19 days from the previous quarter [24] - Adjusted EBITDA for the December quarter was $274.9 million, representing 26.8% of net sales [28] Business Line Data and Key Metrics Changes - Revenue from microcontroller, analog, FPGA, and other businesses all experienced sequential declines [36] - The company is focusing on reducing inventory, with a target to decrease inventory balance by approximately $250 million by the end of fiscal year 2026 [11][24] Market Data and Key Metrics Changes - The company reported broad-based weakness across all major geographies: America, Europe, and Asia [36] - Distribution inventory was at 37 days, down three days from the prior quarter, indicating a sell-through of $118 million higher than sell-in [25] Company Strategy and Development Direction - The company is implementing a nine-point plan to evaluate and improve its operations, including resizing manufacturing footprint and reducing inventory [6][10] - A focus on strengthening customer relationships, particularly with the top 1,000 customers, is a key part of the strategy [15] - The company aims to provide above-market growth as excess inventory is consumed [40] Management's Comments on Operating Environment and Future Outlook - Management noted that substantial inventory destocking has occurred, but visibility remains low, and bookings are still low [38] - The guidance for the March quarter is between $920 million and $1 billion in net sales, with non-GAAP gross margin expected between 54% and 55% [39] - Management expressed confidence in the long-term business model and operating margins, but acknowledged the need to navigate through the current inventory correction [55][56] Other Important Information - The company retired $665.5 million in convertible bonds and issued $1 billion in investment-grade bonds during the December quarter [26] - The next debt maturity is a $1.2 billion bond maturing in September 2025 [27] Q&A Session Summary Question: Where are the hotspots for inventory by end market or product? - Management indicated that inventory is high across the board, with distribution inventory getting closer to historical levels, while direct customer inventory remains elevated [47][48] Question: What is the earnings power for Microchip Technology Incorporated over the next year? - Management refrained from providing specific earnings guidance but emphasized the focus on cash flow and operational efficiency [51][54] Question: Can you walk us through the gross margin and its expected recovery? - Management stated that gross margins are expected to improve as inventory levels decrease and operational efficiencies are realized [60][63] Question: What is the company's commitment to the dividend amid cash flow challenges? - Management confirmed a commitment to maintaining the current dividend level, viewing cash flow issues as short-term [152]

Microchip Technology (MCHP) reported $1.03 billion in revenue for the quarter ended December 2024, representing a year-over-year decline of 41.9%. EPS of $0.20 for the same period compares to $1.08 a year ago.The reported revenue represents a surprise of -2.02% over the Zacks Consensus Estimate of $1.05 billion. With the consensus EPS estimate being $0.28, the EPS surprise was -28.57%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to ...

Microchip Technology (MCHP) came out with quarterly earnings of $0.20 per share, missing the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -28.57%. A quarter ago, it was expected that this chipmaker would post earnings of $0.43 per share when it actually produced earnings of $0.46, delivering a surprise of 6.98%.Over the last four quarters, the c ...

Investor Presentation Fiscal Third Quarter 2025 A Leading Provider of Smart, Connected and Secure Embedded Solutions SAFE HARBOR Forward Looking Statement Safe Harbor: During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company (including our guidance) or future events, including our strategy, growth drivers, industry trends, end markets, our long-term profitability, inventory management, manufacturing cost sa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) For the quarterly period ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission F ...