MACOM Technology Solutions Holdings, Inc. (NASDAQ:MTSI) Q3 2022 Earnings Conference Call July 28, 2022 8:30 AM ET

Company Participants

Steve Ferranti – Vice President-Strategic Initiatives and Investor Relations

Steve Daly – President and Chief Executive Officer and Director

Jack Kober – Senior Vice President and Chief Financial Officer

Conference Call Participants

Tom O’Malley – Barclays

C.J. Muse – Evercore ISI

Quinn Bolton – Needham

Tore Svanberg – Stifel Nicolaus

Matt Ramsay – Cowen

Mark Lipacis – Jefferies

Harlan Sur – J.P. Morgan

Richard Shannon – Craig Hallum

Operator

Welcome to MACOM's Third Fiscal Quarter 2022 Conference Call. This call is being recorded today, Thursday, July 28, 2022. At this time all participants are in a listen-only mode.

I will now turn the call to Mr. Steve Ferranti, MACOM's Vice President of Strategic Initiatives and Investor Relations. Mr. Ferranti, please go ahead.

Steve Ferranti

Thank you, Olivia. Good morning, and welcome to our call to discuss MACOM's financial results for the third fiscal quarter of 2022. I would like to remind everyone that our discussion today will contain forward-looking statements, which are subject to certain risks and uncertainties as defined in the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those discussed today. For a more detailed discussion of the risks and uncertainties that could result in those differences, we refer you to MACOM's filings with the SEC. Management's statements during this call will also include discussion of certain adjusted non-GAAP financial information. A reconciliation of GAAP to adjusted non-GAAP results are provided in the company's press release and related Form 8-K, which was filed with the SEC today.

With that, I'll turn over the call to Steve Daly, President and CEO of MACOM.

Steve Daly

Thank you and good morning, I will begin today's call with the general company update. After that Jack Kober, our Chief Financial Officer, will review our fiscal Q3 results. When Jack is finished, I will provide revenue and earnings guidance for fiscal Q4 and then we will be happy to take some questions. Revenue for the third quarter was $172.3 million and adjusted EPS was $0.73 per diluted share. Gross and operating margins increased sequentially in the third quarter and we continue to generate strong cash flow ending the quarter with $536 million in cash and short-term investments.

Our financial performance reflects ongoing business improvements along with the growing revenue contribution for new products within our portfolio. The book-to-bill ratio for the third quarter was 1.1:1, which was the seventh consecutive quarter above 1. Our backlog remains strong providing us with good near-term visibility. While we are pleased with the bookings, I'll note that it is normal for our book-to-bill ratio to periodically fluctuate below 1.