Earnings

MACOM CEO Calls 80% Data Center Growth His Base Case, Eyes $2 Billion Year

CEO Steve Daly said fiscal 2027 should be a record year, with no buyback or dividend planned as the company stockpiles cash.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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MACOM CEO Calls 80% Data Center Growth His Base Case, Eyes $2 Billion Year

MACOM CEO Steve Daly said on the company's earnings call Thursday that his base case for data center revenue is about 80% growth in fiscal 2027, and that the company is "looking at that $2 billion target and trying to scratch our way there." MACOM, which makes semiconductors for data center, defense and telecom equipment, gave no formal full-year guidance.

From $1.8 billion to $2 billion

Responding to a Stifel analyst, Daly said annualizing the midpoint of first-quarter guidance gives roughly $1.8 billion, or 37% growth over fiscal 2026. "We would expect to do better than that," he said, because the second half of the year should be stronger than the first.

He cautioned that it is early and that there is "risk associated with execution and, of course, market risk." First-quarter revenue guidance is $450 million to $460 million, with adjusted earnings of $2.21 to $2.29 a share.

By segment, Daly said data center growth should top fiscal 2026's 74%. He aims to push industrial and defense above 30%, from about 28%, and expects low double-digit telecom growth. He called the telecom target "over $300 million," a fourth or fifth straight year of sequential growth, though the year starts light with softness in some broadband and other lines.

Cash piles up, no payout planned

Asked by a TD Cowen analyst about buybacks or a dividend, Daly said the company has no plans at this point for either. "Cash is king," he said, and MACOM is accumulating it. He floated a 2027 of "$2 billion and, say, $10 of earnings," and a goal of a $5 billion company by 2030 that would need new technologies, more staff and other markets.

In fiscal 2026, he said, industrial and defense was 40% of revenue, data center 38% and telecom about 20%.

For the fourth quarter, MACOM reported revenue of $424.8 million and adjusted earnings of $2.09 a share. Data center revenue was $188.1 million. Full-year revenue topped $1.3 billion, up 37%.

Fab expansion and CHIPS money

Daly said MACOM is one or two quarters from signing a final CHIPS Act funding agreement, which he said would provide significant funding for its Lowell and RTP facilities. Phase one of its Massachusetts fab expansion is about two-thirds done, and phase two, aimed at CW lasers, could start around mid-2027.

CFO Jack Kober said fiscal 2027 capital spending should run $100 million to $110 million, and he expects adjusted operating margin to exceed 40% during the year.

MACOM shares were down about 18% at $191.10 in Thursday trading, giving the company a market value of $17.8 billion. Nothing on the call ties the move to any remark.

Daly said he is confident fiscal 2027 will be a record year, and that the company has the opportunity to double its revenue and profits over the next couple of years.

Sources

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