MACOM Technology Solutions Holdings, Inc.

Welcome to MACOM's first fiscal quarter 2026 conference call. This call is being recorded today, Thursday, February 5th, 2026. At this time, all participants are in listen-only mode. I will now send a call to Mr. Steve Ferranti, MACOM's Senior Vice President of Corporate Development and Investillations. Mr. Ferranti, please go ahead.

Thank you, Olivia. Good morning and welcome to our call to discuss MACOM's financial results for the first fiscal quarter of 2026. 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 result in those differences, We refer you to MACOM's filings with the SEC. Management statements during this call will also include a 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 8K, which was filed with the SEC today. With that, I'll turn over the call to Steve Daley, President and CEO of MACOM.

Thank you, and good morning. I will begin today's call with a general company update. After that, Jack Kober, our Chief Financial Officer, will review our Q1 results for fiscal year 2026. When Jack is finished, I will provide revenue and earnings guidance for the second quarter of FY26, and then we will be happy to take some questions. Revenue for the first quarter of fiscal 2026 was $271.6 million, and adjusted EPS was $1.02 per diluted share. Demand for our products is strong across our three end markets, and our backlog continues to build. Our financial performance improved across most key metrics in Q1. At quarter end, we held approximately $768 million in cash in short-term investments on our balance sheet. Our Q1 book-to-bill ratio was 1.3 to 1 in orders booked and shipped within the quarter and was 23% of total revenue. Our Q1 turns business was higher than recent quarters due to strong early quarter bookings. Our current backlog remains at record level. Turning to other recent trends, Q1 revenue performance by end market was as expected, and all end markets grew sequentially. Industrial and defense was 117.7 million, data center was 85.8 million, and telecom was 68.1 million. Data center was up approximately 8% sequentially, telecom was up 3% sequentially, and IND was up 2% sequentially. Both IND and data center revenues were at record levels. As we review our full fiscal year forecasts, we are gaining confidence that our data center revenue could achieve 35% to 40% year-over-year growth. Hyperscalers' capital investments are robust, which is driving demand for our 800 and 1.6T optical and high-speed analog products. To capitalize on this opportunity, we have been expanding, and we will continue to expand our data center product portfolio. As a reminder, our portfolio currently supports NRZ, PAM4, and coherent modulations. And we provide products that support VIXL, EML, and silicon photonic-based optical transmission technologies, as well as electrical connectivity solutions over copper. Revenue growth inside the data center is robust, primarily in pluggable optical modules and optical cables with our 800G and 1.6T PAM4 products. We support our customers' DSP, LPO, and LRO module architectures. We also support customer requirements for coherent DCI hardware, including ZR and ZR Lite. MACOM's Coherent Lite solutions, designed for shorter-reach coherent applications, enable higher bandwidth performance with significantly improved power efficiency compared to traditional coherent systems. Interest in LPO continues to spread, and we are further supporting customers as they leverage the benefits of a low-power and low-latency 400G and 800G optical interconnect solution. In addition, we see interest in enabling a similar value proposition at 1.6T using LRO or LPO implementations. In this case, a 200G per lane solution would be used. We're also supporting LPO use in PCIe and NPO implementations as the industry strives to optimize interconnects for both scale-up and scale-out. And notably, we are starting to see interest in LPO from telecom front-haul applications. Demand for our 200 gig per lane photo detectors continues to grow, supporting 800G and 1.6T connectivity. As I highlighted on our last earnings call, we are adding manufacturing capacity to keep up with our customers' forecasted demand. we have indications that demand will remain strong into calendar 2027. Further, MACOM is positioning itself to support next-generation optical receiver platforms at speeds beyond 200 gig per lane. Part of our near-term and long-term growth strategy is to expand our photonics portfolio with higher-speed photodetectors and new CW lasers. We are also seeing renewed interest in our linear equalizer products that help extend the reach of copper interconnects in 800G and 1.6T. Linear equalizers enable longer-reach active copper cables, or ACC's, and can enhance signal integrity when used in backplane applications. We are working closely with multiple customers to address their program-specific requirements and various use cases. MACOM's roadmap extends to 3.2T technologies, and we have aligned our product roadmaps and resources with our customers' needs to ensure we deliver the right technology at the right time. Our future products are increasingly optimized for co-packaged and highly integrated architectures like CPO and NPO. We can differentiate in this market based on our strong customer relationships, IC and system design expertise, as well as our unique photonic materials and product design expertise. And finally, we have successfully launched a PCIe 6 optical chipset that supports sideband data streams over fiber, and we have expanded the portfolio with a new PCIe 7 equalizer. These ICs provide new exposure to the compute side of the data center network. These products and associated solutions will be on display at the DesignCon show in Santa Clara, California later this month. Similar to the data center, we see many growth opportunities across the industrial and defense markets, but primarily in the defense segment. Advanced radars, electronic warfare, and new communication systems are using higher frequencies, higher RF or microwave power levels, and higher levels of integration. These requirements play to our strengths, and we offer our customers turnkey support from custom chip design to subsystem solutions. We are a supplier of choice among many of the large U.S. defense OEMs, and we continue to work to expand MACOM's presence and brand in Europe. The pace of innovation in the defense market is accelerating by both the traditional defense primes and the newer, more nimble defense companies. As an example, new risks from drone attacks are driving the need for an entirely new platform to detect, identify, track, and respond to these threats. MACOM has a portfolio of products and system engineering capabilities to support our customers' fast design and manufacturing timelines. Our defense customer base is large and very broad, and we typically support radar systems, missile and missile defense systems, drone and drone defense systems, and wideband electronic warfare systems. I'll illustrate four examples where our products have a competitive advantage in the defense market. MACOM has developed a family of industry-leading, high-efficient, wideband gain mimic amplifiers that significantly reduce the transmitter's heat dissipation. This is critical for small form factor applications. Our GaN technology supports directed RF energy solutions. Our 7-kilowatt devices lead the industry. Our RF over fiber products enable distribution of RF and microwave signals over long distances using linear photonics. Our products are typically used in phased array radars, remote antennas, and towed decoy applications. And when it comes to receiver protection diodes, whether in a radio, or a radar, MACOM is the golden standard in the industry for performance and quality. We like to combine our proprietary core technologies with microwave systems engineering capabilities. This enables us to engage much earlier in our customers' project design cycles and presents the full scope of MACOM's capabilities to help solve the customer's technical challenges. Within the telecom end market, satellite-based broadband access and direct-to-sell opportunities remain robust with numerous LEO networks in the planning stages. The number of LEO satellites planned to be launched continues to grow as more companies compete to provide commercial broadband data, voice, and video communications by satellites. These networks typically use microwave or millimeter wave frequencies and free space optics, or FSO, communications for satellite-to-satellite or satellite-to-ground communications. LEO and MEO constellations have many key areas where MACOM can contribute, including large phase array antennas with active beam steering, direct-to-device links operating at UHF or S-band, backhaul links operating at KA, Q, V, and E band, data center-like electronics with high-speed optical links transferring data within or across the satellite, free space optics for satellite-to-satellite communications, and ground terminal and gateway linearization for high-power transmitters. Ground stations and gateways are a key part of the LEO networks. MACOM specializes in designing products and solutions that overcome nonlinearity of RF, microwave, and millimeter wave signal transmission for satellite communication systems. In many cases, ground-to-satellite links prefer linearization of SSPAs or TWTAs to boost the linear power efficiency of the link. I would like to update investors on the status of our $55 million satellite contract that we were awarded and announced previously. Production is planned to start in the second half of calendar 2026. The schedule delay is primarily driven by satellite system changes flowed down from our customer, which impact the design of the hardware we deliver. Overall, we view this as a positive because the system changes can add new functionality, which broadens the application space for the Constellation. Turning towards the 5G segment we serve, Our global team continues to secure new business in the macro base station market, driven by the need for high-performance amplifiers and multiband radios. We are making good progress improving the overall performance and competitiveness of our base station portfolio, with major improvements in the 2.7 and 3.5 gigahertz bands. Our RF power team is sampling products using our new GAN4 technology, which will further improve our competitiveness. We recognize the two major European base station OEMs expect the global RAND market to be flat in 2026 with regional variations. Both companies recently commented on a significant potential upside from the EU's high-risk vendor replacement initiative, and this might provide MACOM upside growth over the long term. Future base station demand is supported by additional 5G rollouts, growing AI-driven connectivity needs, and emerging mission critical defense markets. We believe the cable infrastructure market segment is also improving. Cable networks are in transition from DOCSIS 3.1 to DOCSIS 4.0, and we have been releasing new products and working with customers on design wins to support this upgrade. We expect the cable TV market will be a modest contributor to our telecom revenue growth in FY26. Next, I'll quickly summarize progress on our five goals for FY26, which we outlined on our last earnings call. First, take advantage of the data center opportunity. We continue to enhance our design teams and expand our presence in the data center, and we are raising our data center year-over-year revenue growth base case from 20% to 35% to 40%. Second, to expand our 5G market share. We are excited to be sampling our next generation GAN4 products to our customers. In addition, we see that one of our competitors is exiting the 5G RF power GAN market, and we hope to benefit from this competitive landscape shift. Related to this event, we recently hired a team of experienced engineers to complement our existing RF power team. Third, extend leadership in A&D. Our defense business continues to grow and our team continues to win large IC module and subsystem programs. Fourth, continue to develop advanced 3-5 semiconductor technologies. Our technology teams are making progress developing advanced GaN on silicon processes while also installing new equipment to modernize and expand manufacturing capabilities. And last, to manage our capital and investments. As Jack will note, Our return on capital metrics and trends continue to improve, and we plan to manage investments to achieve superior returns. In summary, our strategy is to continue to build a best-in-class and diversified semiconductor portfolio that will enable MACOM to capture a larger share of the three markets we focus on. Our agility and strong teamwork across our organization helps us address opportunities and ultimately beat our competitors in that are often larger and have more resources. Jack will now provide a more detailed review of our financial results.