Stock Analysis on Net
Stock Analysis on Net

Microchip Technology Inc. (NASDAQ:MCHP)

This company has been moved to the archive! The financial data has not been updated since February 2, 2023.

Common-Size Income Statement 
Quarterly Data

Microchip Technology Inc., common-size consolidated income statement (quarterly data)

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3 months ended: Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Jun 30, 2016
Net sales 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -32.20 -32.57 -33.29 -33.82 -34.38 -35.25 -35.80 -36.83 -37.45 -38.30 -39.05 -38.64 -38.99 -38.14 -38.36 -38.31 -43.29 -51.88 -47.05 -38.63 -38.94 -39.33 -39.88 -40.97 -44.24 -52.88 -56.41
Gross profit 67.80% 67.43% 66.71% 66.18% 65.62% 64.75% 64.20% 63.17% 62.55% 61.70% 60.95% 61.36% 61.01% 61.86% 61.64% 61.69% 56.71% 48.12% 52.95% 61.37% 61.06% 60.67% 60.12% 59.03% 55.76% 47.12% 43.59%
Research and development -13.02 -12.96 -13.70 -14.05 -13.96 -14.92 -15.19 -15.57 -15.54 -15.26 -15.12 -16.72 -16.86 -16.43 -16.57 -16.15 -15.84 -15.49 -14.18 -13.33 -13.23 -13.20 -13.42 -14.09 -15.87 -15.81 -18.50
Selling, general and administrative -9.35 -9.76 -9.62 -10.15 -10.10 -10.90 -11.11 -11.25 -11.40 -11.05 -11.17 -12.49 -13.26 -12.88 -12.69 -12.60 -12.72 -12.33 -13.53 -11.42 -10.97 -11.29 -11.75 -12.31 -13.31 -13.79 -19.70
Amortization of acquired intangible assets -7.72 -8.08 -8.54 -11.69 -12.27 -13.07 -13.74 -15.84 -17.13 -17.79 -17.97 -18.73 -19.32 -18.55 -18.79 -13.30 -14.09 -11.86 -11.03 -12.25 -12.17 -11.95 -12.43 -10.45 -9.92 -9.23 -10.03
Special income (charges) and other, net -0.30 -0.21 0.86 -0.49 0.02 -0.62 -0.67 0.49 -0.32 -0.33 -0.02 -1.30 -1.38 -0.27 -0.61 1.75 0.09 -1.27 -3.31 -0.02 -0.02 -1.96 0.28 -5.11 -2.51 -1.10 -2.76
Operating expenses -30.39% -31.01% -30.99% -36.38% -36.32% -39.52% -40.70% -42.18% -44.39% -44.42% -44.28% -49.25% -50.82% -48.13% -48.66% -40.29% -42.55% -40.95% -42.04% -37.02% -36.39% -38.40% -37.32% -41.96% -41.61% -39.92% -50.99%
Operating income (loss) 37.41% 36.42% 35.72% 29.80% 29.30% 25.23% 23.50% 20.99% 18.16% 17.27% 16.67% 12.12% 10.19% 13.72% 12.97% 21.40% 14.16% 7.17% 10.91% 24.35% 24.67% 22.27% 22.79% 17.07% 14.15% 7.20% -7.39%
Losses on equity method investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 -0.01 -0.01 -0.01 0.00 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01
Interest income 0.04 0.01 0.01 0.00 0.01 0.01 0.02 0.06 0.01 0.02 0.02 0.04 0.05 0.07 0.05 0.06 0.05 0.06 0.47 0.75 0.63 0.46 0.36 0.15 0.06 0.05 0.10
Interest expense -2.43 -2.57 -2.56 -3.13 -3.53 -3.93 -4.61 -5.32 -6.40 -7.12 -7.57 -8.70 -9.30 -9.69 -10.03 -10.25 -10.01 -9.68 -7.46 -5.02 -5.00 -4.89 -5.09 -4.62 -4.21 -4.03 -4.31
Loss on settlement of debt 0.00 -0.10 -0.32 -0.64 -0.92 -5.16 -0.02 -5.83 -10.51 -3.44 -2.05 -0.26 0.00 -0.01 -0.14 -0.62 -0.01 -0.29 0.00 0.00 -0.22 0.00 -1.42 -4.86 0.00 0.00 0.00
Other income (expense) -2.40% -2.66% -2.87% -3.77% -4.44% -9.09% -4.61% -11.09% -16.89% -10.55% -9.59% -8.92% -9.25% -9.62% -10.12% -10.81% -9.97% -9.90% -6.99% -4.27% -4.58% -4.43% -6.15% -9.33% -4.15% -3.98% -4.20%
Other income (loss), net 0.12 -0.04 0.09 -0.04 0.26 -0.10 0.03 -0.06 -0.03 0.05 -0.24 0.26 -0.12 -0.10 0.20 0.77 -0.18 -0.01 -0.81 -1.30 -0.30 0.57 0.46 0.22 0.01 -0.32 0.25
Income (loss) before income taxes 35.14% 33.72% 32.93% 25.98% 25.12% 16.05% 18.92% 9.84% 1.24% 6.78% 6.83% 3.45% 0.82% 4.00% 3.06% 11.37% 4.00% -2.75% 3.11% 18.78% 19.78% 18.40% 17.10% 7.95% 10.01% 2.90% -11.35%
Income tax (provision) benefit -8.39 -7.38 -7.10 -2.24 -5.05 -1.38 -2.82 -1.94 1.43 -1.16 2.60 4.08 23.34 4.14 0.77 1.77 -0.42 9.47 -0.16 -4.14 -45.03 0.29 0.45 7.21 2.86 1.19 -2.31
Net income (loss) from continuing operations 26.75% 26.35% 25.83% 23.74% 20.07% 14.67% 16.11% 7.91% 2.68% 5.62% 9.44% 7.53% 24.16% 8.14% 3.83% 13.14% 3.58% 6.72% 2.94% 14.64% -25.25% 18.69% 17.55% 15.17% 12.86% 4.08% -13.66%
Net loss from discontinued operations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.02 -0.19 -0.52
Net income (loss) 26.75% 26.35% 25.83% 23.74% 20.07% 14.67% 16.11% 7.91% 2.68% 5.62% 9.44% 7.53% 24.16% 8.14% 3.83% 13.14% 3.58% 6.72% 2.94% 14.64% -25.25% 18.69% 17.55% 15.17% 12.85% 3.89% -14.18%

Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-K (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-K (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-K (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-K (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-K (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-K (reporting date: 2017-03-31), 10-Q (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30).

The financial data indicates several notable trends in key operational and profitability metrics over the observed periods.

Gross Profit Margin
Gross profit as a percentage of net sales shows an overall increasing trend. Beginning at 43.59% in mid-2016, gross margins rose significantly, peaking above 67% by the end of 2022. This steady improvement suggests enhanced cost efficiency or favorable pricing dynamics over time.
Cost of Sales
Corresponding with the gross profit trend, the cost of sales percentage steadily declined from about 56.41% in mid-2016 to approximately 32.2% at the end of 2022. This reduction further reinforces the notion of improved cost management or changes in product mix that favor higher margins.
Research and Development (R&D) Expenses
R&D expenses relative to net sales remain somewhat variable but overall exhibit a gradual decline from -18.5% in June 2016 to roughly -13.02% in late 2022. This might indicate either improved R&D efficiency or a strategic reduction in relative R&D investment.
Selling, General and Administrative (SG&A) Expenses
SG&A expense percentages decrease notably over the period analyzed, starting near -19.7% and falling to around -9.35%. The consistent reduction suggests effective cost control in operational overheads and administration.
Amortization of Acquired Intangible Assets
This expense shows a declining pattern, significantly falling from around -10.03% in 2016 declines to under -8% by late 2022. The decrease could relate to the amortization of prior acquisitions diminishing over time or fewer acquisitions affecting the intangible asset base.
Operating Income
Operating income as a percentage of net sales demonstrates a solid upward trajectory, starting in negative territory (-7.39%) in mid-2016 but consistently improving to 37.41% by the end of 2022. This positive momentum highlights increased operational profitability, driven by margin gains and controlled expenses.
Interest Expense and Income
Interest expense as a percentage of net sales decreases sharply from over -4.3% in 2016 to approximately -2.43% by late 2022, indicating reduced debt burden or more favorable financing costs. Interest income remains marginal and fairly stable at low positive percentages.
Loss on Settlement of Debt
There are intermittent negative impacts from losses on debt settlement noted sporadically between 2017 and 2022, with some quarters showing notable charges such as -10.51% in late 2020. These spikes likely represent non-recurring costs related to debt refinancing or restructuring.
Other Income (Expense)
Other income/expense generally trends negatively, fluctuating between -4.2% to about -2.4% in later periods. There are occasional quarters with more pronounced expense impacts, notably in 2020.
Income Before Income Taxes
This metric varies significantly, starting negative at -11.35% in mid-2016, increasing to over 35% by late 2022, albeit with volatility. The upward trend correlates with improved operating income and reduced interest expense.
Income Tax Provision
Tax provisions show high variability, sometimes positive and sometimes negative, with large swings such as a -45.03% in late 2017 and positive spikes in some 2018 and 2019 quarters. This volatility suggests an inconsistent effective tax rate, possibly due to tax credits, adjustments, or one-time tax benefits.
Net Income from Continuing Operations
Net income fluctuates considerably but shows a marked recovery and improvement over the period, moving from negative figures in mid-2016 to approximately 26.75% by the end of 2022. There is a significant dip in late 2017 but a sustained upward trend thereafter, reflecting improved profitability and operational efficiency.

In summary, the data reveals a company that has significantly enhanced its profitability margins primarily through improved gross profits and effective control of operating expenses. Interest costs have declined, supporting higher net income levels. Despite occasional volatility from one-time charges and tax fluctuations, overall financial performance trends positively throughout the period under review.