MACOM’s second quarter was marked by significant revenue growth and strong market reaction, reflecting an acceleration in demand across its core end markets. Management attributed the quarter’s performance to heightened demand for high-speed connectivity in Data Center applications, robust momentum in Industrial and Defense, and continued traction in Telecom. CEO Stephen Daly noted, “Our record backlog reflects market strength as well as our progress expanding our product portfolio and better addressing customer needs.” The company’s focus on new product introductions and expanding relationships with leading industry customers were primary drivers of this quarter’s results.
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MACOM (MTSI) Q2 CY2026 Highlights:
- Revenue: $342.2 million vs analyst estimates of $335.7 million (35.8% year-on-year growth, 1.9% beat)
- Adjusted EPS: $1.40 vs analyst estimates of $1.35 (3.8% beat)
- Adjusted EBITDA: $116.7 million vs analyst estimates of $118 million (34.1% margin, 1.1% miss)
- Revenue Guidance for Q3 CY2026 is $420 million at the midpoint, above analyst estimates of $365.8 million
- Adjusted EPS guidance for Q3 CY2026 is $2 at the midpoint, above analyst estimates of $1.57
- Operating Margin: 22.5%, up from 14.9% in the same quarter last year
- Inventory Days Outstanding: 180, down from 184 in the previous quarter
- Market Capitalization: $23.73 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From MACOM’s Q2 Earnings Call
- Thomas O'Malley (Barclays): asked what drove Data Center strength and book-to-bill improvements. CEO Stephen Daly explained that growth was broad-based, with 200G PAM4 products and the ZR, ZR-lite portfolio as key drivers, especially in 1.6T and 800G platforms.
- Blayne Curtis (Jefferies): questioned when Telecom growth could accelerate with LEO satellite programs. Daly replied that two or three major LEO programs should start production later this year and early next, driving growth for the next two to three years.
- Vivek Arya (BofA Securities): inquired about the impact of potential U.S. restrictions on Chinese module makers. Daly said MACOM’s Data Center growth is tied to U.S. hyperscalers, and customer mix shifts could occur, but the company’s relationships across the industry should mitigate risk.
- Tore Svanberg (Stifel): asked which indium phosphide products were most promising for growth. Daly highlighted immediate demand for photodetectors, with significant growth potential if CW lasers enter production by 2028, describing the laser market as a multibillion-dollar opportunity.
- William Stein (Truist Securities): asked about input cost inflation and its effect on margins. Daly acknowledged higher input costs but said new product launches and operational efficiency improvements have allowed margin expansion, with further gains expected as higher-value products ramp.
Catalysts in Upcoming Quarters
Over the coming quarters, our analysts will be watching (1) the pace of Data Center product adoption and any updates on CW laser production timelines, (2) sustained gross margin progression as new manufacturing capacity comes online, and (3) the impact of regulatory or supply chain changes on customer mix and bookings. Continued success in key defense and LEO satellite programs will also be important indicators of execution.
MACOM currently trades at $308.10, up from $263.46 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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