MACOM Technology Solutions Holdings (MTSI)·Q1 2026 Earnings Summary

MACOM Beats Q1, Raises Data Center Growth to 35-40% — Book-to-Bill Hits 1.3x

February 5, 2026 · by Fintool AI Agent

MACOM Technology Solutions (NASDAQ: MTSI) delivered strong Q1 FY2026 results, beating both revenue and earnings estimates while raising its full-year data center growth outlook from 20% to 35-40%. The semiconductor supplier reported a book-to-bill ratio of 1.3x — the strongest since Q3 2021 — as demand for 1.6T optical products accelerates. Despite the beat, shares traded volatile as investors digested the results following a 33% pre-earnings rally.

Did MACOM Beat Earnings?

Yes — both revenue and EPS exceeded consensus estimates:

*Values retrieved from S&P Global

The Q1 beat extends MACOM's fifth consecutive quarter of beating both revenue and EPS. Notably, Q1 adjusted EPS crossed the $1.00 milestone for the first time in company history.

What Did Management Guide?

Q2 FY2026 guidance came in above consensus on all metrics:

*Values retrieved from S&P Global

Q2 segment outlook:

• Data Center: Low-to-mid-teens sequential growth
• Telecom: Low single-digit sequential growth
• Industrial & Defense: Low single-digit sequential growth

Why Did MACOM Raise Data Center Guidance?

The headline story: MACOM raised its FY2026 data center growth outlook from 20% to 35-40% YoY.

CEO Steve Daly explained the drivers on the call:

"The key underlying driver is 1.6T. That's where we see the most activity, the most design wins, transitioning into production runs... As we look at our data center business today, we have a very healthy backlog. We think our second half will be stronger than our first half."

What's fueling the upgrade:

• 1.6T optical transition: Strongest design win activity, moving to production ramps
• Healthy backlog: Record-level order book with programs ramping
• Hyperscaler CapEx: Robust capital investments driving 800G and 1.6T demand
• Portfolio expansion: Photodetectors ramping, CW lasers in qualification

Management noted there's upside potential beyond 35-40%, though they declined to quantify it pending Q3/Q4 visibility.

Segment Breakdown: All Three Markets at Record or Near-Record

Data Center ($85.8M, +8% QoQ): Driven by 1.6T PAM4 products and 200G per lane photodetectors. MACOM supports DSP, LPO, and LRO module architectures, and is seeing interest in 1.6T LRO implementations.

Industrial & Defense ($117.7M, +2% QoQ): Record revenue with strong GaN MMIC amplifiers for defense applications. Drone detection/defense systems creating new platform opportunities.

Telecom ($68.1M, +3% QoQ): LEO satellite demand robust with $55M contract moving to H2 2026 production. NXP's exit from 5G RF power GaN market creates share gain opportunity.

Book-to-Bill: 1.3x — Strongest Since Q3 2021

The book-to-bill ratio of 1.3x was highlighted as one of MACOM's strongest quarters in company history.

CFO Jack Kober noted: "This was one of our strongest quarterly bookings in the company's history."

Q&A Highlights: What Analysts Asked

On Data Center and CPO/NPO

Quinn Bolton (Needham): What gives you confidence to raise the data center outlook?

CEO Daly: "The key underlying driver is 1.6T... We have programs that are ramping that gives us confidence to, as a base case, hit 35%-40%. There's also upside to that number."

On CPO/NPO opportunity: "The product set we would sell into a CPO or NPO platform is very similar to what we sell into pluggable modules... A lot of these platforms are moving quickly to silicon photonics-based solutions."

On LPO Progress

Harsh Kumar (Piper Sandler): Update on LPO business and TAM potential?

CEO Daly: "We are very bullish on LPO. We now have three hyperscalers embracing LPO. We are in various phases of production with those three hyperscalers... I think it's still a small part of the market. I would expect it will remain relatively small in the next 1-2 years."

On 1.6T LPO/LRO: "LRO is more likely to happen first... There's a higher probability of LRO working than LPO working because there's just more capability from the ASIC itself."

On CW Laser Progress

Sean O'Loughlin (TD Cowen): Customer commentary on CW lasers?

CEO Daly: "We now have 2 customers that have confirmed that our CW lasers are meeting their requirements electrically. Now we are going through a qualification phase... Six months ago, we were not in a position where we had a compliant laser. Today, we do."

On Telecom and NXP Exit

Vivek Arya (Bank of America): When does NXP's RF Power exit become accretive?

CEO Daly: "I can't really comment on how much market share this will translate to. I think it will take 1 or 2 years for that to play out... We recently hired a team of experienced engineers to complement our existing RF power team."

On Full-Year Growth Outlook

CEO Daly provided informal full-year commentary:

How Did the Stock React?

MTSI traded volatile around the earnings release:

Why the initial pullback? Classic "buy the rumor, sell the news." MTSI rallied +33% from $171.28 (Dec 31, 2025) to $228.56 (Jan 30, 2026) heading into earnings. The stock had priced in a strong beat — even guidance above Street estimates wasn't enough to sustain the run.

Strategic Priorities: FY26 Goals Progress

Management outlined progress on five key FY26 goals:

Fab Operations & Margin Drivers

CFO Kober expects 25-50 bps sequential gross margin improvement through FY26:

What's driving margin expansion:

• RTP (North Carolina) fab: Continuous yield improvements, reduced scrap since acquisition
• Massachusetts fab: Improving utilization from higher demand
• French fab: Completing 3-inch to 6-inch wafer transition by June 2026
• Lowell fab: High-mix (GaAs, GaN, silicon, InP) running efficiently

Capacity expansion: Adding indium phosphide capacity for 200G per lane photodetectors, though specifics not disclosed for competitive reasons.

Balance Sheet & Capital Allocation

March 2026 Convertible Settlement: MACOM will retire 2021 convertible notes by paying $161M in cash and settling conversion premium in shares. The remaining $340M in convertible notes mature in December 2029.

Share buybacks? Not contemplated: "That is not something that we're contemplating. You should not expect that in the future."

Key Quotes from Management

On 1.6T momentum:

"1.6T is where we see the most activity, the most design wins, transitioning into production runs... There's also upside to that number, which is a bit unquantifiable right now." — CEO Steve Daly

On CW lasers milestone:

"Six months ago, we were not in a position where we had a compliant laser. Today, we do. And so we're excited about that." — CEO Steve Daly

On LPO with hyperscalers:

"We now have three hyperscalers embracing LPO. We are in various phases of production with those three hyperscalers." — CEO Steve Daly

On company strategy:

"In about 6 years, [this management team] has doubled the size of the company. Our fundamental focus has been on high power, high frequency, and high data rate. When we look ahead, we want to double the size of this company and not take 6 years." — CEO Steve Daly

Forward Catalysts

Near-term (Next 3 months):

• Q2 FY26 earnings (early May 2026)
• Data center backlog conversion in H2
• CW laser qualification progress

Medium-term (6-12 months):

• $55M LEO satellite contract production start (H2 2026)
• 5G market share gains from NXP exit
• French fab 6-inch wafer transition completion (June 2026)
• GaN4 product sampling and design wins

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This analysis is based on MACOM's Q1 FY2026 earnings call transcript dated February 5, 2026. For full details, see the earnings call transcript.