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Microchip data center revenue surged as company lifts 2026 outlook
Microchip expects its data center portfolio to reach about $1 billion in calendar 2026, up 69.3% from last year.
Microchip Technology said its data center business accelerated sharply, with data center revenue growing 97.8% year over year in its fiscal first quarter, after rising 77% in the prior quarter, according to an Aug. 6 earnings call discussed by Yahoo Finance.
The company now projects its total data center portfolio will reach about $1 billion in calendar 2026, which would be a 69.3% increase from last year. In the quarter, Microchip’s total results also showed broad improvement, with net sales up 38% year over year to $1.485 billion.
Microchip also reported profitability gains, with non-GAAP gross margin at 63.8%, up from 61.6% the quarter before, and adjusted earnings per share of $0.76 versus $0.27 a year earlier. On a GAAP basis, the company swung to net income of $202 million from a loss of $46.4 million in the year-ago period.
Operational and capital measures pointed to improving demand, as inventory days fell from 185 to 175, bookings ran ahead of shipments, and net debt declined by about $170 million. Yahoo Finance also noted Microchip paid $246.9 million in dividends and expects September quarter net sales to rise sequentially between 7% and 9%, based on guidance cited from CEO Steve Sanghi.