Microchip Technology Incorporated stock research
FY2026 Q2
Microchip Technology (MCHP) Gross Margin — Quarter Ended Sep 30, 2025
Revenue remained stable compared to the prior quarter, while gross profit increased and cost of revenue rose modestly, resulting in an improved gross margin. Compared to the same quarter last year, revenue and gross profit were lower, and gross margin weakened.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2026 Q2
Revenue remained stable compared to the prior quarter, while gross profit increased and cost of revenue rose modestly, resulting in an improved gross margin. Compared to the same quarter last year, revenue and gross profit were lower, and gross margin weakened.
- The primary observable driver of the margin improvement was the increase in gross profit outpacing the rise in cost of revenue. The company's filing context notes a business recovery plan and ongoing inventory reduction, which align with this sequential margin expansion.
- Gross margin improved sequentially from the prior quarter but remained below the level achieved in the same quarter one year earlier. Revenue was flat sequentially and lower year over year.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
55.9%
Gross profit
$637.9M
Revenue
$1.1B
Cost of revenue
$502.5M
Quarter-over-quarter change
+2.3 pts
Year-over-year change
-1.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Dec 31, 2024 | $1.0B | $561.4M | $464.6M | 54.7% |
| Mar 31, 2025 | $970.5M | $501.1M | $469.4M | 51.6% |
| Jun 30, 2025 | $1.1B | $576.7M | $498.8M | 53.6% |
| Sep 30, 2025 | $1.1B | $637.9M | $502.5M | 55.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+2.3 pts
Year-over-year change
Sep 30, 2024
-1.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary observable driver of the margin improvement was the increase in gross profit outpacing the rise in cost of revenue. The company's filing context notes a business recovery plan and ongoing inventory reduction, which align with this sequential margin expansion.
Gross margin improved sequentially from the prior quarter but remained below the level achieved in the same quarter one year earlier. Revenue was flat sequentially and lower year over year.
Monitor whether gross margin can continue to recover toward the year-ago level as the company executes its inventory reduction and recovery plan.