Slides
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Investor Presentation Fiscal First Quarter 2026 A Leading Provider of Smart, Connected and Secure Embedded Solutions
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SAFE HARBOR Forward Looking Statement Safe Harbor: During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company (including our guidance) or future events, including our strategy, growth drivers, industry trends, end markets, our long-term model, market size, PIC64 opportunity, 10Base-T1S opportunity, market megatrends, disruptive growth trends, long process technology and life cycles, high -quality revenue streams, durable markets, aerospace and defense market, TSS solutions, capital return strategy including debt paydown, d ividends, and buybacks. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actua l results to differ materially, including, but not limited to: any continued uncertainty, fluctuations or weakness in the U.S. and world economies (including China and Europe) due to changes in the scope and level of tariffs, interest rates or high inflation, actions taken or which may be taken by the Trump administration or the U.S. Congress, monetary policy, political, geopolitical, trade or other issues in the U.S. or internationally (including the military conflicts in Ukraine-Russia and the Middle East), further changes in demand or market acceptance of our products and the products of our customers and our ability to respond to any increases or decreases in market demand or custo mer requests to reschedule or cancel orders; the mix of inventory we hold, our ability to satisfy any short-term orders from our inventory and our ability to effectively manage our inventory levels; foreign currency effects on our business; changes in utilization of our manufacturing capacity and our ability to effectively manage our production levels to meet any increases or decreases in market demand or any customer requests to reschedule or cancel orders ; the impact of inflation on our business; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; our ability to realize the expected benefits of our long -term supply assurance program; changes or fluctuations in customer order patterns and seasonality; our ability to effectively manage our supply of wafers from third party wafer foundries to meet any increases or decreases in our needs and the cost of such wafers, our ability to obtain additional capacity from our suppliers to increase production to meet any future increases in market demand; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions; the impact of any future significant acquisitions or strategic transactions we may make; the costs and outcome of any current or future litigation or other matters involving our acquisitions (including the acquired business, intellectual property, customers, or other issues); the costs and outcome of any current or future tax audit or inv estigation regarding our business or our acquired businesses; the impact that the CHIPS Act will have on increasing manufacturing capacity in our industry by providing incentives for us, our competitors and foundries to build new wafer manufacturing facilities or expand existing facilities; the amount and timing of any incentives we may receive under the CHIPS Act, the impact of current and future changes in U.S. corporate tax laws (including the One Big Beaut iful Bill Act, the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017); fluctuations in our stock price and trading volume which could impact the number of shares we acquire under our share repurchase program and the tim ing of such repurchases; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally. For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip's website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after the date of this presentation or to reflect the occurrence of unanticipated events. Use of Non-GAAP Financial Measures: In this presentation, we have included certain non-GAAP financial information, including for example, adjusted EBITDA, non-GAAP gross profit margin and operating profit margin and adjusted free cash flow. Our non-GAAP results exclude the effect, where applicable, of share-based compensation, cybersecurity incident expenses, COVID-19 shelter in place restrictions on manufacturing activities, manufacturing excursion, other manufacturing adjustments, restructuring charges, expenses related to our acquisition activities (including intangible asset amortization, severance, and other restructuring costs, and legal and other general and administrative expenses associated with acquisitions including legal fees and expenses for litigation and investigations related to our Microsemi acquisition), professional services associated with certain legal matters, IT security remediation costs, non-cash interest expense on our convertible debentures, losses on the settlement of debt, gains and losses related to equity investments, and dividends on our Series A Mandatory Convertible Preferred stock. For the first quarters of fiscal 2025 and fiscal 2026, our non-GAAP income tax expense is presented based on projected cash taxes for the applicable fiscal year, excluding transition tax payments under the Tax Cuts and Jobs Act. Our determination of our non-GAAP measures might not be the same as similarly titled measures used by other companies, and it should not be construed as a substitute for amounts determined in accordance with GAAP. There are limitations associated with using non-GAAP measures, including that they exclude financial information that some may consider important in evaluating our performance. Management compensates for this by presenting information on both a GAAP and non-GAAP basis for investors and providing reconciliations of the GAAP and non-GAAP results. Non-GAAP measures should not be considered in isolation or as an alternative to net income, cash from operations or other measures of profitability, liquidity or performance under GAAP. Certain supplemental information and reconciliations are available on our website at www.microchip.com/investors under the heading “Supplemental Financial Information”.
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$6.8 Billion Corporate Overview • High-performance standard and specialized Mixed-Signal Microcontroller, Digital Signal Controller and Microprocessor solutions • Mixed-Signal, Analog, Interface and Security solutions • Clock and Timing solutions Leading Total Systems Solutions Provider 3 • Wireless and Wired Connectivity solutions • FPGA solutions • Non-volatile EEPROM and Flash Memory solutions • Flash IP solutions • $4.4 billion in FY25 net sales • Enhanced profitability through operation efficiency • Anchored in market with long-term growth drivers • Consistent focus on shareholder value creation
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Net Sales Growth 4 $Millions 13.0% CAGR 139 consecutive quarters of Non-GAAP profitability!
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First Quarter FY2026 Revenue Mix 5 • Organic growth efforts focused on TSS and Megatrends • Synergistic product portfolio empowers disruptive growth trends • Diversified product portfolio with long process technology and life cycles • Customer driven obsolescence policy create high-quality revenue streams Net Sales by Product Line Net Sales by Geography Net Sales by Channel
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Revenue By End Market Microchip Proprietary and Confidential FY24 FY25 Durable End Markets
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Fiscal 1st Quarter 2026 Results (Non-GAAP) • GAAP Revenue of $1,075.5 million; up 10.8% QoQ anddown13.4% YoY • Gross Margin of 54.3%; increased by ~240 basis points QoQ • Operating Margin of 20.7%; increased by ~670 basis points QoQ • Diluted Earnings Per Share of $0.27; increased by 145.5% QoQ • Net debt increased by $30.2 million QoQ • Adj. TTM EBITDA* of $1,166.8 million or 27.5% of TTM sales • Adj. Free Cash Flow**of $244.4 million or 22.7% of net sales • Total cash return of $245.5 million in common dividends • Announced common stock dividend of 45.5 cents per share for Q2FY26 *Adjusted EBITDA is as defined in the Company’s Amended and Restated Credit Agreement **Adjusted Free Cash Flow is defined as cash flow from operations less capital expenditures, cash collected under long-term supply arrangements, and amortization of capped call issued in connection with our 0.75% 2024 Sr. Convertible Debt and our 7.50% Series A Mandatory Convertible Preferred Stock For our GAAP results, please refer to the reconciliations referred to in the safe harbor statement7
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*Represents guidance provided on August 7, 2025 Additional guidance metrics can be found in the Q1 FY2026 earning release. Click here Long Term Model (Through Cycles) Q1 FY26 Actual Q2 FY26 Guide @ mid-point $1,075.5 $1,130.0 Industry Gr. Plus Gross Margins 54.3% 56.0% 65.0% Operating Margins 20.7% 23.4% 40.0% Earnings per share $0.27 $0.33* Operating Expenses 33.7% 32.6% 25.0% Fiscal 2nd Quarter 2026 Guidance (Non-GAAP)* GAAP Revenue ($Millions) 8
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Consumer Sustainability Defense Industrial Data Center Communication Infrastructure Space Medical Aviation Automotive Empowering Innovation In Diverse, Durable Markets 9
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Providing Total System Solutions Portfolio of Hardware, Software and Services 10 Wireless Wi-Fi® Bluetooth® LoRa® ZigBee® /MiWi Power Drivers Motor Drivers Encryption & Security LED Drivers Amplifiers Sensors Filters A/D D/A Precision Voltage Reference Auto/Industrial Communication MOST® RS232/485 CAN/LIN DC-DC Converters Supervisors & Ref. LDOs, Battery Mgt. Discretes & Modules Power Management High Voltage I/Os Memory EEPROM Serial Flash Serial SRAM RFICs MMICs USB Smart Hubs Switches Transceivers Bridges Smoke Detector & Piezoelectric Horn Drivers Timing Oscillators Clock Generators Clock Buffers Network Sync Microcontrollers Microprocessors FPGA/ SoCs Ethernet Switches Controllers EtherCAT ® PHYs PoE Touch Sensing Proximity/3D Buttons/Slider Touch Screen Optical Networking Storage PCIe® Switches Adapters Controllers Voice & Audio Processing Digital Potentiometer
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Strategic Focus and In-Depth Knowledge © 2024 Microchip Technology Inc. and its subsidiaries11 Communications Data Center & Computing Consumer Appliance Industrial Aerospace & Defense Automotive Megatrends End Markets
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24 July 2025 Microchip Technology Inc. and its subsidiaries© Aerospace and Defense MarketMicrochip is a Leading Supplier of Semiconductor Devices to the Aerospace and Defense (A&D) Industry > 71K High-Reliability products for A&D market > 100 Microchip components on NASA’s Perseverance rover and Ingenuity helicopter > 60 Years of space innovation and heritage* A&D Industry Leader > 1000 A&D customers worldwide *>60 year of space heritage includes combined experience from Microchip and acquired companies, including Vectron International and other aerospace-focused acquisitions.
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13 Aerospace & Defense Megatrends Commercialization of Space Comm. Constallations, Earth Observation, Research, Exploration National Security Information/Communications Proliferation Hypersonics & Missile Defense Space Defense Electrification of Aircraft Advanced Air Mobility (AAM) More Electric Aircraft (MEA) Aviation Microchip Proprietary and Confidential Images for illustrative purposes only
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Addresses a Wide Range of End Markets Satellites Rovers/LandersSpacecraft Defense Aviation Industrial Automotive Communications Consumer Scalable Compute Multiple Mission Profiles Diverse End Markets Rad-Hard Rad-Tolerant Pre Flight Proto 2k DMIPs 5k DMIPs 26K DMIPs Scalable Radiation Performance 64bit Embedded Processing TAM ~$5 Billion*
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10BASE-T1S addressing a Wide Range of End Markets 15 Scalable Interfaces MII, RMII SPI OA3p Pre-Programmed MCUs Control Lighting Audio Diverse End Markets Diverse Applications Industrial Automotive Defense In-cabinet Microphones LED Lighting Battery Robotics Autonomous PHY MACPHY TRX LAN8660 LAN8662 LAN8661 First to Market! Emerging Markets Significant Growth Opportunity
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16 Debt Paydown $7.3 billion Dividends Paid ~$4.4 billion Shares Repurchased ~$2.4 billion ‒ Reduced debt 23 out of last 28 quarters ‒ Current leverage ratio of 4.22x ‒ 91 consecutive quarters of dividends paid Adjusted Free Cash Flow (FCF)* Generation FY2019 – Q1 FY2026 ~$13.3 billion** *Adj. FCF is defined as cash flow from operations less capital expenditures, cash collected under long-term supply arrangements, and amortization of capped call issued in connection with our 0.75% 2024 Sr. Convertible Debt and our 7.50% Series A Mandatory Convertible Preferred Stock ** Capital return figures reflect total cash deployed including debt financing for dividend payments and preferred equity pro ceeds used for debt paydown. Consistent, Disciplined and Balanced Capital Return Strategy ‒ Total cash return in FY2025of $1.07 billion
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A Leading Provider of Smart, Connected and Secure Embedded Solutions Follow us @microchiptechnology