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Call sheet · Q1'24

MACOM Technology Solutions Holdings (MTSI)

Q1'24 earnings call · held February 1, 2024 · compared with the Q4'23 call · management-credibility review
4/12
Disclosure score
3 high, 4 medium, 1 low flags
Financial quality
Bottom line
The sleeper story is that Wolfspeed is already a disaster: revenue down 25% since announcement, margins in the low 40s, and management scrambling to justify the price. Yes, Data Center hit records, but they're already guiding down 15% next quarter because customers pulled forward demand. The binding constraint is base business stagnation at $151M for three straight quarters while margins compress. Most revealing quote: 'at current revenue levels MACOM's base business gross and operating margins are under pressure.' My view changes if base business exceeds $160M or Wolf margins hit 50% within two quarters.

The 30-second version

  • Wolfspeed RF acquisition is quietly deteriorating: revenue run rate collapsed from $160M to $120M in just 4 months
  • Data Center hit record $50M but management is already pumping the brakes for Q2
  • Base business gross margins under pressure at 60%, down from 63% peak, with no clear recovery timeline

What changed this quarter

MetricQ4'23Q1'24Change
Revenue$150.4M (down 4% YoY)$157.1M (flat YoY est)+4.5% sequential acceleration
Adjusted EPS$0.56 (down 7% YoY)$0.58 (flat YoY est)+$0.02 beat but quality concerns
Gross Margin60.1%59.2%-90 bps deterioration
Operating Cash Flow$50.4M$33.1M-34% sequential collapse
Data Center Revenue$40.5M$49.5M+22% sequential surge
I&D Revenue$79.2M$77.0M-3% sequential decline
Telecom Revenue$30.6M$30.6MFlat at 3-year lows
Book-to-Bill1.1x0.9xDemand deteriorating
Inventory$106.3M$159.5M+50% jump from Wolf acquisition
Days Sales Outstanding55 days59 days+4 days deterioration

Accountability tracked

8 new promises made5 narrative shifts flagged8 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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