Summary
Microchip Technology Inc. (MCHP) reported its financial results for the period ending September 30, 2025. The company experienced a decrease in net sales for both the three-month and six-month periods compared to the prior year, primarily due to customers managing high inventory levels and delaying orders, exacerbated by adverse economic conditions such as slow economic activity, business uncertainty, inflation, and high interest rates. Despite the revenue decline, the company's gross profit margin saw a decrease in both comparative periods, influenced by an unfavorable net impact of sales volume, product mix, and geographic mix, as well as unabsorbed capacity charges. Research and development expenses increased, driven by higher employee compensation costs, including share-based compensation, partially offset by restructuring efforts. Selling, general, and administrative expenses also rose, primarily due to higher acquisition-related and employee compensation costs. The company is actively managing inventory levels, which decreased both in dollar amount and days of inventory on hand. The company continues to focus on its strategic goal of developing smart, connected, and secure embedded control solutions while navigating a challenging macroeconomic environment.
Financial Highlights
56 data points| Revenue | $1.14B |
| Cost of Revenue | $502.50M |
| Gross Profit | $637.90M |
| R&D Expenses | $262.30M |
| SG&A Expenses | $172.30M |
| Operating Expenses | $549.00M |
| Operating Income | $88.90M |
| Net Income | $41.70M |
| EPS (Basic) | $0.03 |
| EPS (Diluted) | $0.03 |
| Shares Outstanding (Basic) | 540.00M |
| Shares Outstanding (Diluted) | 545.00M |
Key Highlights
- 1Net sales decreased by 2.0% for the three months ended September 30, 2025, and by 7.9% for the six months ended September 30, 2025, compared to the same periods in the prior year.
- 2Gross profit margin decreased to 55.9% for the three months and 54.8% for the six months ended September 30, 2025, down from 57.4% and 58.4%, respectively, in the prior year periods.
- 3Research and development expenses increased by 9.0% for the three months and 7.3% for the six months ended September 30, 2025, driven by higher employee compensation and share-based compensation.
- 4Selling, general, and administrative expenses increased by 9.7% for the three months and 7.8% for the six months ended September 30, 2025.
- 5Total assets decreased from $15,374.6 million as of March 31, 2025, to $14,469.7 million as of September 30, 2025.
- 6Total current assets decreased to $2,350.3 million from $2,991.3 million, and current liabilities decreased to $1,043.8 million from $1,155.1 million over the same periods.
- 7The company paid $52.9 million in dividends on Series A Preferred Stock and $491.3 million in dividends on common stock during the six months ended September 30, 2025.