Microchip Technology Incorporated (MCHP) Q1 2024 Earnings Call Transcript

For the period ending June 30, 2023

August 3, 2023 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to the First Quarter Fiscal 2024 Conference Call. I will now turn the call over to today’s host Eric Bjornholt, Chief Financial Officer of Microchip. You may begin.

Eric Bjornholt

Good afternoon everybody. During the course of this conference call, we will be making projections and other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions and that actual events or results may differ materially. We refer you to our press releases of today, as well as our recent filings with the SEC that identify important risk factors that may impact Microchip's business and results of operations.

In attendance with me today are Ganesh Moorthy, Microchip's President and CEO; Steve Sanghi, Microchip's Executive Chair; and Sajid Daudi, Microchip's Head of Investor Relations.

I will comment on our first quarter fiscal year 2024 financial performance. Ganesh will then provide commentary on our results and discuss the current business environment as well as our guidance, and Steve will provide an update on our cash return strategy. We will then be available to respond specific investor and analyst questions.

We are including information in our press release and on this conference call on various GAAP and non-GAAP measures. We have posted a full GAAP to non-GAAP reconciliation on the Investor Relations page of our website at www.microchip.com and included reconciliation information in our earnings press release, which we believe you will find useful when comparing our GAAP and non-GAAP results.

We have also posted a summary of our outstanding debt and our leverage metrics on our website.

I will now go through some of our operating results including net sales, gross margin and operating expenses. Other than net sales, I will be referring to these results on a non-GAAP basis, which is based on expenses prior to the effects of our acquisition activities, share based compensation and certain other adjustments that are described in our earnings press release and in the reconciliation on our website.

Net sales in the June quarter were $2.289 billion, which was up to 2.5% sequentially. We have posted a summary of our net sales by product line and geography on our website for your reference.

On a non-GAAP basis, gross margins were a record at 68.4%, operating expenses were at 20.3% and operating income was a record 48.1%. Non-GAAP net income was $905.3 million and Non-GAAP earnings per share on a diluted basis was a record $1.64.