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1. Company Snapshot

1.a. Company Description

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications across the radio frequency (RF), microwave, millimeter wave, and lightwave spectrum in the United States, China, the Asia Pacific, and internationally.The company offers a portfolio of standard and custom devices, including integrated circuits, multi-chip modules, diodes, amplifiers, switches and switch limiters, passive and active components, and subsystems.Its semiconductor products are electronic components that are incorporated in electronic systems, such as wireless basestations, high-capacity optical networks, radar, and medical systems and test and measurement.


The company serves various markets comprising telecommunication that includes carrier infrastructure, which comprise long-haul/metro, 5G, and fiber-to-the-X/passive optical network; industrial and defense, including military and commercial radar, RF jammers, electronic countermeasures, and communication data links, as well as multi-market applications, such as industrial, medical, test and measurement, and scientific applications; and data centers.It sells its products through direct sales force, applications engineering staff, independent sales representatives, resellers, and distributors.The company was founded in 1950 and is headquartered in Lowell, Massachusetts.

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1.b. Last Insights on MTSI

MACOM Technology Solutions Holdings, Inc.'s recent performance was positively driven by its Q1 earnings surpassing expectations, with earnings jumping 29% year-over-year and revenues climbing 24.5%. The company's strong margins and upbeat Q2 outlook also contributed to its growth. Additionally, its ties to the Department of Defense and thematic ties to the AI trade have added to its bull case. Bryan Ingram's hire and a "Moderate Buy" rating from brokerages have also been positive drivers. Furthermore, the company's growth attributes make it an attractive buy for growth investors.

1.c. Company Highlights

2. MACOM Technology Solutions Holdings' Q1 FY2026 Earnings: A Strong Start to the Year

MACOM Technology Solutions Holdings, Inc. reported a robust Q1 fiscal year 2026, with revenue reaching $271.6 million, a 4% sequential increase and a 24.5% year-over-year growth, driven by its three end markets: industrial and defense, data center, and telecom. The company's adjusted EPS was $1.02 per diluted share, surpassing estimates of $0.99. The adjusted gross profit was $156.5 million, or 57.6% of revenue, indicating a strong profitability. The company's book-to-bill ratio was 1.3 to one, one of its strongest quarterly bookings in its history.

Publication Date: Feb -09

📋 Highlights
  • Revenue Growth: Q1 2026 revenue reached $271.6 million, up 4% sequentially and 24.5% year-over-year, driven by all three markets: industrial/defense ($117.7M), data center ($85.8M), and telecom ($68.1M).
  • Data Center Expansion: Raised growth outlook to 35–40% in 2026, fueled by 1.6T PAM4 demand, with a $55M satellite contract and strong backlog.
  • Strong Cash Position: $768 million in cash and short-term investments, $268 million net cash, and Q2 cash flow from operations projected above $60 million.
  • Gross Margin Improvements: Q1 adjusted gross margin hit 57.6% ($156.5M), with sequential improvements of 25–50 bps expected in 2026 due to volume and fab efficiency.
  • Debt Management: Retired $161 million in convertible notes in mid-March, leaving $340 million remaining, while maintaining a 3% tax rate and no share buybacks.

Segmental Performance

The data center segment saw significant growth, with revenue increasing to $85.8 million. The company raised its data center year-over-year revenue growth base case from 20% to 35-40%, driven by strong demand for its 800G and 1.6T PAM4 products. The industrial and defense segment also performed well, with revenue reaching $117.7 million, driven by growth in the defense segment. The telecom segment revenue was $68.1 million, with growth expected in the 5G segment.

Guidance and Outlook

The company expects revenue in fiscal Q2 to be in the range of $281 to $289 million, with adjusted gross margin in the range of 57 to 59%, and adjusted earnings per share between $1.05 and $1.09. The company anticipates sequential revenue growth in each of its three end markets. The data center business is expected to achieve low to mid-teens growth, while telecom and industrial and defense are expected to achieve low single-digit growth.

Valuation

With a P/E Ratio of 108.88 and an EV/EBITDA of 69.14, the company's valuation appears to be high, indicating that the market has already priced in significant growth expectations. Analysts estimate next year's revenue growth at 17.1%, which may not be sufficient to justify the current valuation. The company's ROE is 12.6%, which is a positive indicator of its profitability.

Growth Opportunities

The company sees significant growth opportunities in SATCOM and ACCs, with SATCOM expected to drive growth in the telecom segment and ACCs contributing to data center growth. The company's SATCOM business is expected to grow significantly by 2027, driven by multiple LEO programs in the design phase. The data center business is also seeing significant growth, particularly in 1.6T applications, driven by the company's 200 gig per lane portfolio and photodiodes.

Capital Allocation

The company has a strong balance sheet, with $768 million in cash and short-term investments and a net cash position of more than $268 million. The company expects to retire its 2021 convertible notes in mid-March by paying $161 million of principal value in cash and settling any conversion premium with shares of its common stock. The remaining debt balance is approximately $340 million of convertible notes, which mature in December 2029.

3. NewsRoom

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MACOM's Microwave and Optical Comprehensive Solutions on Display at SATShow Week 2026

Mar -18

Source: globenewswire.com

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MACOM Announces Two New 448G per Lane Drivers for 3.2T Data Center Connectivity

Mar -17

Source: globenewswire.com

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Boothbay Fund Management LLC Raises Holdings in MACOM Technology Solutions Holdings, Inc. $MTSI

Mar -17

Source: defenseworld.net

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MACOM Enables High Density Copper Interconnects for Next Generation Scale-Up Connectivity

Mar -16

Source: globenewswire.com

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MACOM Technology Solutions Holdings, Inc. $MTSI is Analog Century Management LP’s 10th Largest Position

Mar -14

Source: defenseworld.net

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MACOM Introduces Industry's First PCIe® 7.0 Linear Equalizers, Extending the Reach of Copper at 128 GT/s

Mar -12

Source: globenewswire.com

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MACOM Technology Solutions Holdings, Inc. $MTSI Shares Sold by Dimensional Fund Advisors LP

Mar -12

Source: defenseworld.net

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MACOM to Showcase Innovative Connectivity Solutions at OFC 2026

Mar -11

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.98%)

6. Segments

Industrial & Defense

Expected Growth: 7.77%

MACOM's Industrial & Defense segment growth of 7.77% is driven by increasing demand for high-performance analog semiconductor solutions in defense electronics, radar, and communication systems. Additionally, growing adoption of 5G, IoT, and autonomous vehicles is fueling demand for MACOM's RF and microwave components, contributing to the segment's growth.

Telecom

Expected Growth: 9.9%

MACOM's Telecom segment growth of 9.9% is driven by increasing demand for 5G infrastructure, rising adoption of cloud-based services, and growing need for high-speed data transmission. Additionally, the company's strategic partnerships and investments in research and development have enabled it to capitalize on emerging trends in the industry, such as network function virtualization and edge computing.

Data Center

Expected Growth: 10.43%

MACOM's Data Center segment growth is driven by increasing demand for cloud computing, artificial intelligence, and 5G networks, leading to higher adoption of high-speed optical interconnects and semiconductor solutions. Additionally, the trend towards hyperscale data center expansion and edge computing further fuels growth, with MACOM's products well-positioned to capitalize on these trends.

7. Detailed Products

High-Performance Analog

MACOM's high-performance analog products include amplifiers, attenuators, switches, and other components used in a wide range of applications, including aerospace and defense, industrial, and telecommunications.

GaN on Silicon Carbide (SiC) Power Devices

MACOM's GaN on SiC power devices offer high power density, high efficiency, and high reliability, making them ideal for applications such as radar, electronic warfare, and missile guidance systems.

AlGaAs and InP Lasers

MACOM's AlGaAs and InP lasers are used in a variety of applications, including telecommunications, data centers, and industrial manufacturing.

Photodiodes and Phototransistors

MACOM's photodiodes and phototransistors are used in a range of applications, including telecommunications, data centers, and industrial manufacturing.

RF and Microwave Semiconductors

MACOM's RF and microwave semiconductors are used in a variety of applications, including aerospace and defense, industrial, and telecommunications.

Millimeterwave Products

MACOM's millimeterwave products are used in a range of applications, including 5G wireless networks, satellite communications, and radar systems.

8. MACOM Technology Solutions Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MACOM Technology Solutions Holdings, Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the semiconductor industry.

Bargaining Power Of Customers

MACOM Technology Solutions Holdings, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

MACOM Technology Solutions Holdings, Inc. relies on a few key suppliers for certain components, which gives these suppliers some bargaining power. However, the company's size and scale of operations mitigate this risk to some extent.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures and technological expertise. This makes it difficult for new entrants to compete with established players like MACOM Technology Solutions Holdings, Inc.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. MACOM Technology Solutions Holdings, Inc. faces intense competition from companies like Analog Devices, Texas Instruments, and ON Semiconductor.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.63%
Debt Cost 3.95%
Equity Weight 66.37%
Equity Cost 12.15%
WACC 9.39%
Leverage 50.66%

11. Quality Control: MACOM Technology Solutions Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Axcelis Technologies

A-Score: 5.2/10

Value: 4.5

Growth: 8.6

Quality: 7.9

Yield: 0.0

Momentum: 6.5

Volatility: 4.0

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Rambus

A-Score: 5.0/10

Value: 1.0

Growth: 7.9

Quality: 9.0

Yield: 0.0

Momentum: 9.5

Volatility: 2.3

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Amkor Technology

A-Score: 4.5/10

Value: 4.2

Growth: 5.4

Quality: 4.9

Yield: 2.0

Momentum: 7.5

Volatility: 3.0

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Veeco Instruments

A-Score: 4.0/10

Value: 3.0

Growth: 5.9

Quality: 5.9

Yield: 0.0

Momentum: 5.0

Volatility: 4.3

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MACOM Tech

A-Score: 3.8/10

Value: 2.0

Growth: 4.4

Quality: 3.8

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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FormFactor

A-Score: 3.6/10

Value: 0.8

Growth: 5.2

Quality: 5.4

Yield: 0.0

Momentum: 8.0

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

218.96$

Current Price

218.96$

Potential

-0.00%

Expected Cash-Flows