Non-GAAP net income for the second quarter of fiscal 2025 was $250.2 million, or $0.46 per diluted share, down from non-GAAP net income of $889.3 million, or $1.62 per diluted share, in the prior year's second fiscal quarter. For the second quarters of fiscal 2025 and fiscal 2024, our non-GAAP results exclude the effect of share-based compensation, cybersecurity incident expenses, other manufacturing adjustments, 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, and losses on the settlement of debt. For the second quarters of fiscal 2025 and fiscal 2024, 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. A reconciliation of our non-GAAP and GAAP results is included in this press release.

Microchip announced today that its Board of Directors declared a record quarterly cash dividend on its common stock of 45.5 cents per share, up 3.6% from the year ago quarter. The quarterly dividend is payable on December 6, 2024 to stockholders of record on November 22, 2024.

"Our September quarter results were consistent with our guidance, as we continued to navigate through an inventory correction that’s occurring in the midst of macro weakness for many manufacturing businesses, accentuated by heightened weakness in our European business which is concentrated with Industrial and Automotive customers," said Ganesh Moorthy, President and Chief Executive Officer. "The 'green shoots' we saw in recent quarters have progressed unevenly with essentially flat sequential bookings, normalized cancellation rates and much higher expedite requests, which we believe are all positive signs for a potential bottom formation despite limited visibility."

Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our September quarter results reflect continued customer destocking efforts and sluggish end-market demand. We are maintaining strong cost discipline and balance sheet management while taking actions to ensure operational readiness for the anticipated market recovery."

Rich Simoncic, Microchip's Chief Operating Officer, said, "Our Total System Solutions approach is driving strong execution and seeing growing adoption in AI-accelerated servers in the data center markets. Our PCIe switches, SSD controllers, CXL solutions, and associated power and timing products are key to continuing to strengthen our data center portfolio. With our expanding capabilities, we believe we are well-positioned to capitalize on opportunities in this growth market."

Mr. Moorthy concluded, "For the December quarter, we expect net sales between $1.025 billion and $1.095 billion. While substantial inventory destocking has occurred, we continue to face macro uncertainties in what is historically our seasonally weakest quarter. Our design-in momentum continues to remain strong, driven by our Total System Solutions strategy and key market megatrends."

Third Quarter Fiscal Year 2025 Outlook:

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.