Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 6 of last 7 quarters
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MACOM's record book-to-bill and accelerating Data Center growth (40% QoQ) underscore the ongoing buildout of AI infrastructure, particularly in optical connectivity for scale-up and scale-out networks. The company's expansion into photodetectors, CW lasers, and equalizers positions it to capture more content per AI cluster as hyperscalers move to higher data rates and more integrated architectures like NPO/XPO.
MACOM delivered record revenue of $342.2M, up 18.4% sequentially, with Data Center revenue of $137.6M (+40% QoQ), I&D of $133.4M (+11%), and Telecom of $71.3M (+2%). Book-to-bill hit a record 1.6:1, and orders booked and shipped within the quarter were 11% of revenue. Adjusted gross margin expanded 120 bps to 59.7%, and adjusted operating income reached a record $107.7M (31.5% margin). The company also invested $61M in IQE and began installing a new G10 epitaxial reactor at its European fab.
Management guided Q4 FY2026 revenue to $415M–$425M (up ~22% sequentially at midpoint), with adjusted gross margin of 60%–61% and adjusted EPS of $1.97–$2.03. They expect Data Center to grow ~35% sequentially, I&D ~20%, and Telecom low single digits. They expect ongoing quarterly sequential gross margin improvements through the remainder of fiscal 2026 and fiscal 2027. They are scoping modest CapEx to support a potential CW laser production start in late calendar 2027, and expect the adjusted tax rate to rise from 3% to mid-single digits during FY2027.
“Our Q3 book-to-bill ratio was a record 1.6:1, and orders booked and shipped within the quarter were 11% of total revenue.”
on Record book-to-bill
“We are developing plans to support a potential start to production in late calendar 2027. This includes scoping modest CapEx investments and fab space requirements to support a rapid high-volume ramp for a few strategic customers.”
on CW laser production timeline
“We expect our adjusted operating margin to be approximately 37% for the fourth fiscal quarter.”
on Operating margin guidance
What's driving strength in Data Center? Is it TIAs and drivers, or PDs? And any sneak peek into fiscal '27 growth?
Steve Daly said growth is driven by 200G PAM4 products in pluggable modules, with strong contributions from ZR/ZR-light (over 100% YoY), 100G per lane, and legacy 25G per lane products. Book-to-bill is driven by 1.6T and 800G platforms. For FY27, he noted that annualizing Q4 guidance implies mid-20s% company growth and ~50% Data Center growth as a base case.
How should we think about Telecom acceleration into next year, and what are the incremental gross margin expectations?
Steve Daly said Telecom is expected to grow double digits this year and similar or better next year, driven by LEO production programs starting late calendar 2026 and early 2027, plus new optical wins. Jack Kober said gross margins should improve 25–50 bps per quarter going forward, supported by volume and yields.
How would a proposed ban on Chinese module makers impact MACOM?
Steve Daly said MACOM's growth is driven by U.S. hyperscalers who select chips directly; if regulations shift transceiver manufacturing, MACOM would follow the business to other manufacturers. He noted MACOM has no manufacturing in China and minimal direct exposure, with most China sales exported in systems to the U.S.