(2) See the "Use of Non-GAAP Financial Measures" section of this release.
Net sales for the fourth quarter of fiscal 2024 were $1.326 billion, down 40.6% from net sales of $2.233 billion in the prior year's fourth fiscal quarter.
GAAP net income for the fourth quarter of fiscal 2024 was $154.7 million, or $0.28 per diluted share, down from GAAP net income of $604.0 million, or $1.09 per diluted share, in the prior year's fourth fiscal quarter. For the fourth quarters of fiscal 2024 and fiscal 2023, GAAP net income was adversely impacted by amortization of acquired intangible assets associated with our previous acquisitions.
Non-GAAP net income for the fourth quarter of fiscal 2024 was $310.3 million, or $0.57 per diluted share, down from non-GAAP net income of $907.8 million, or $1.64 per diluted share, in the prior year's fourth fiscal quarter. For the fourth quarters of fiscal 2024 and fiscal 2023, our non-GAAP results exclude the effect of share-based compensation, 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 fourth quarters of fiscal 2024 and fiscal 2023, 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.
Net sales for the fiscal year ended March 31, 2024 were $7.634 billion, a decrease of 9.5% from net sales of $8.439 billion in the prior fiscal year.
GAAP net income for the fiscal year ended March 31, 2024 was $1.907 billion, or $3.48 per diluted share, a decrease of 14.8% from net income of $2.238 billion, or $4.02 per diluted share in the prior fiscal year. Fiscal 2024 and fiscal 2023, GAAP net income was significantly adversely impacted by amortization of acquired intangible assets associated with our previous acquisitions and loss on debt settlement associated with our debt refinancing activities.
Non-GAAP net income for the fiscal year ended March 31, 2024 was $2.698 billion, a decrease of 19.5% from net income of $3.353 billion in the prior fiscal year. Non-GAAP earnings per diluted share for the fiscal year ended March 31, 2024 were $4.92, a decrease of 18.3% from the $6.02 per diluted share in the prior fiscal year. See the "Use of Non-GAAP Financial Measures" section of this release.
Microchip announced today that its Board of Directors declared a record quarterly cash dividend on its common stock of 45.2 cents per share, up 18.0% from the year ago quarter. The quarterly dividend is payable on June 5, 2024 to stockholders of record on May 22, 2024.
"We experienced a major inventory correction in fiscal 2024, leading to a 9.5% decline in revenue to $7.6 billion. Despite this, our resilient operating model and rapid adjustment to the adverse business environment enabled us to navigate these challenges to achieve a non-GAAP operating margin of 43.9%," said Ganesh Moorthy, President and Chief Executive Officer. "We remained committed to our capital return program, returning $1.89 billion through dividends and share buybacks during fiscal 2024, up 15.4% from the prior year, and we are tracking towards achieving our goal of returning 100% of adjusted free cash flow to shareholders by the current fiscal year-end."
Mr. Moorthy added, "We believe we are under shipping to end market demand, as customers and channel partners continued to reduce inventory. This situation has required us to implement ongoing austerity measures, including taking actions to reduce factory utilization, that will persist into the June quarter. Despite these challenges, our commitment to maintaining our competitive edge and positioning ourselves for future revenue growth remains steadfast. We continue to focus on innovation, as demonstrated by the significant product announcements and two tactical acquisitions we made during the June quarter. These initiatives aim to expand our product portfolio and reinforce our leadership across the diverse end markets we serve, helping to ensure that we are well-prepared to capitalize on opportunities when market conditions improve."
Eric Bjornholt, Microchip's Chief Financial Officer, said, "Our fourth quarter performance reflects our commitment to operational efficiency and disciplined execution, allowing us to deliver in-line results in a challenging environment. We continued to work on optimizing our capital structure by issuing $1 billion in senior notes due in 2029 at an interest rate of 5.05%. During fiscal year 2024, we reduced gross debt by $447.4 million while at the same time significantly increasing our capital returns to our shareholders. We remain committed to further enhancing our capital structure in fiscal 2025 as additional portions of our outstanding debt mature."
Mr. Moorthy concluded, "As we enter fiscal 2025, we see early signs of demand stabilization but are experiencing low business visibility due to our short lead times and the continued macro uncertainty. We anticipate June quarter net sales between $1.22 billion and $1.26 billion. We believe that the June 2024 quarter marks the bottom of the cycle for Microchip and that our business will return to sequential revenue growth in the September 2024 quarter. Despite near-term challenges, we believe our solutions remain the engine of innovation for our target markets, and our focus on Total System Solutions and key megatrends continues to drive strong design win momentum. We remain committed to executing our Microchip 3.0 strategic imperatives, which we believe will deliver sustained growth and provide substantial shareholder value."
Microchip's Highlights for the Quarter Ended March 31, 2024:
- Earned certification in ISO/SAE 21434 road vehicle—cybersecurity engineering standard from UL Solutions. Such certified security products can help Tier 1s and OEMs prove cybersecurity risk management compliance.
- Introduced a Silicon Carbide (SiC) 3.3 kV XIFM plug-and-play mSiC™ gate driver to accelerate the adoption of high-voltage SiC power modules. The highly integrated digital gate driver is designed to work out-of-the-box with high-voltage SiC-based power modules to simplify and speed system integration.
- Unveiled our low-cost PolarFire® SoC Discovery Kit to make RISC-V and FPGA design more accessible for a wider range of embedded engineers. The cost-sensitive development platform helps students, beginners and seasoned designers work with emerging technologies.
- Launched 10 multi-channel remote temperature sensors with the MCP998x family representing one of the largest automotive-grade remote temperature sensor portfolios available from a single vendor.
- Unveiled our next-generation family of Ethernet switches featuring Time Sensitive Networking (TSN) and scalable port bandwidths from 46 to 102 Gbps. The LAN9694, LAN9696 and LAN9698 devices are integrated with High-availability Seamless Redundancy (HSR) and Parallel Redundancy Protocol (PRP) for ease of design.
- Expanded our serial SRAM portfolio to larger densities and increased speeds offering a lower-cost alternative to parallel SRAM with up to 4 Mb density and 143 MHz SPI/SQI™ communications.
- Increased our TrustFLEX family with CEC1736 real-time platform root of trust devices. The TrustFLEX devices along with the Trust Platform Design Suite tool can simplify the enablement of root of trust from concept to production in a wide range of applications.
- Released a Qi® v2.0 standards-compliant dsPIC33-based reference design, a wireless dual-pad charging design that supports both extended power profile and magnetic power profile with a single controller.
- Announced our next generation of easily configurable enterprise storage backplane management processors for data center and storage applications. The updated family of EEC1005-UB2 Universal Backplane Management devices complies with latest SFF-TA-1005 V. 1.4 specifications.
- Launched our new dsPIC® DSC-based integrated motor drivers that bring controllers, gate drivers and communications to a single device. A corresponding ecosystem of support tools are designed to help simplify motor control system development and accelerate time to market.
- Extended our IEEE®-1588 grandmaster portfolio with the TimeProvider® 4500 series grandmaster—the industry’s first grandmaster to provide high-speed network interfaces up to 25 Gbps. It also enables precise time accuracy to less than one nanosecond.
- Released the next evolutionary step in customizable logic through the introduction of the PIC16F13145 family of MCUs. The new Configurable Logic Block (CLB) module offers tailored hardware solutions and helps eliminate the need for external logic components.
