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Dec 31, 2025
Microchip Q3 2026 Earnings Report
Microchip reported higher sequential revenue with significant margin expansion and improved profitability.
Key Takeaways
Microchip delivered a strong Q3 FY2026 with revenue growth, sharp expansion in non-GAAP margins, and a return to solid GAAP profitability, reflecting operational recovery and improved demand.
Net sales increased sequentially and year over year, exceeding prior guidance
Non-GAAP operating margin expanded to nearly 30%
Company returned to GAAP profitability after prior-year loss
Strong cash generation supported continued dividend payments
Forward Guidance
Management guided to continued sequential growth and further margin expansion in Q4 FY2026.
Positive Outlook
- Sequential revenue growth expected in the March quarter
- Non-GAAP gross margin guided to expand further
- Improving factory utilization and inventory normalization
- Strong backlog entering the next quarter
- Continued focus on debt reduction and cash generation
Challenges Ahead
- Macroeconomic uncertainty remains
- Demand visibility still subject to customer ordering patterns
- Exposure to global economic and geopolitical risks
- Ongoing pricing pressure in competitive markets
- Potential variability in operating expenses
Historical Earnings Impact
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Avg. Return Before/After Earnings
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