Ganesh Moorthy
President & Chief Executive Officer at Microchip Technology
Thank you, Eric, and good afternoon, everyone. Our September quarter results continued to be strong, with the revenue growing 5.1% sequentially, to achieve another all-time record at $1.65 billion. September quarter revenue would've been even stronger, but for constraints due to some of our capacity improvements coming in later than we wanted. On a year-over-year basis, our September quarter revenue was up 26%.
Non-GAAP gross margin was another record of 65.3%, up 50 basis points from 64.8% in the June quarter and above the high-end of our guidance as we continue to ramp our internal factories and benefit from improved fixed cost absorption, as well as product mix changes. Non-GAAP operating margin was also a record at 42.5%, up 80 basis points from 41.7% in the June quarter and above the high-end of our guidance.
Our consolidated non-GAAP EPS was a split-adjusted record $1.07 per share and was up 37.6% from the year-ago quarter. Adjusted EBITDA at 46.2% of revenue and free cash flow at 32.3% of revenue were both very strong, continuing to demonstrate the robust profitability and cash generation capabilities of our business. This, in turn, enabled us to pay down another $415.6 million in debt, and bring our net leverage ratio down to 2.99% in the September quarter.
With the progress we've already made and progress we expect to continue making in bringing down our debt and leverage ratio, we believe we are well positioned to achieve an investment grade rating in the coming months.
The September quarter marked 124th consecutive quarter of non-GAAP profitability. I would like to thank all our stakeholders who enabled us to achieve these outstanding and record results in the September quarter, and especially thank the worldwide Microchip team, whose tireless efforts not only delivered our strong financial results, but also supported our customers to navigate a difficult supply environment, and who work constructively with our supply chain partners to find creative solutions in an extremely constrained and challenging environment.
Taking a look at our revenue from a product line perspective. Our microcontroller revenue was sequentially down 0.9%, as compared to the June quarter. In part, due to the very strong shipments in the June quarter, when this business was sequentially up 10.7%, and in part due to supply constraints in the September quarter. On a year-over-year basis, our September quarter microcontroller revenue was up 27.1% and microcontrollers represented 54.2% of our revenue in the September quarter.
Our Analog revenue was sequentially up a strong 13.6% as compared to the June quarter, setting another record in the process. On a year-over-year basis, our September quarter analog revenue was up 35.8%. Analog represented 29.8% of our revenue in the September quarter. During the quarter, we completed our acquisition of our Iconic RF, a Belfast, Northern Ireland based small early-stage private company.
Iconic RF makes innovative high-performance gallium nitride and gallium arsenide monolithic microwave integrated circuits, focused on the aerospace and defense market. And we believe will further strengthen our position in this market. Revenue contribution from Iconic RF is not material. The purchase price was in the mid-single-digit million ranges with possible future performance-based earn-outs.
This acquisition is akin to acquiring intellectual property along with domain experts to help us accelerate our business agenda in specific laser-focused areas.
Taking a look at our revenue from a geographic and end-market perspective, Americas was up 12.5% sequentially. Europe was up 4.8% sequentially, which is better than typical seasonal performance for a September quarter. Asia was up 2.1% sequentially.
All end-markets were strong and supply-constraint. Business conditions continue to be exceptionally strong through the quarter, with record bookings and backlogs for products to be shipped over multiple quarters. Our Preferred Supply Program, or PSP, continues to grow and be over 50% of our aggregate backlog, and 100% of our backlog in the most constrained capacity product areas.
Demand far outpaced the capacity improvements and increased shipments we achieved in the quarter. As a result, our unsupported backlog, which customers wanted shipped in the September quarter, but of which we could not deliver in the September quarter, continued to climb significantly as compared to the prior quarter's level.
This is the fifth consecutive quarter that our unsupported backlog for product requested in a given quarter has grown, despite our quarterly revenue having grown 26% in the September '21 quarter, as compared to the year-ago quarter. We continue to experience constraints in all of our internal and external factories and their related manufacturing supply chains.
During the September quarter, we experienced and were adversely impacted by COVID-related disruptions in our packaging and testing operations in Asia. As the Delta variant adversely impacted many of these countries. We took additional steps to protect our employees in these countries and worked with our partners as they took mitigation steps.
We also worked closely with our supply chain partners who provide wafer foundry, assembly, test and materials to secure additional capacity wherever possible. It is a challenging environment for our factories and our partner's factories to hire, train, and retain employees to support the planned manufacturing ramps.
Despite all this, through all the actions we have taken to increase capacity, we expect we will be in a position to support revenue growth for at least each of the next four quarters. This extends by one more quarter, what we stated in our August conference call, as the September quarter results are now behind us. We now expect that manufacturing constraints will persist through much of 2022 and possibly beyond that.
We believe our backlog position, especially the proportion of PSP backlog, is giving us a solid foundation to prudently acquire constrained raw materials, invest in expanding our factory capacity, and hire employees to support our factory ramps. Our capital spending plans are rising in response to growth opportunities in our business, as well as to fill gaps in the level of capacity investments being made by our outsourced manufacturing partners. In Technologies, they may consider it to being trailing edge, but which we believe will be workhorse technologies for us for many years to come. In the September quarter, we were able to secure a license from one of our wafer manufacturing partners for a key trailing edge technology that runs on 8-inch wafers, which we expect to have qualified and in production by 2023. This licensed technology is still growing for us and we expect it will be a workhorse technology for at least 10 to 15 more years.
We believe our increase in capital spending will enable us to capitalize on growth opportunities, improve our gross margins, increase our market share, and give us more control over our destiny for trailing edge technologies. We will of course, continue to utilize the capacity available from our outsourced partners. But our goal is to be less constrained by their investment priorities in areas where they don't align with our business needs.
Now, let's get into the guidance for the December quarter. Our backlog for the December quarter is very strong and we have more capacity improvements coming into effect. Taking all the factors we have discussed on the call today into consideration, we expect our net sales for the December quarter to be up between 4% and 8% sequentially, much stronger than normal seasonality, which is usually down 2% for the December quarter.
Our guidance range assumes capacity additions, as well as continued capacity constraints, some of which we expect to work through during the quarter, and others that will carry over to be worked in future quarters. At the midpoint of our revenue guidance, our year-over-year growth for the December quarter will be a strong 29.3%, accelerating from the 26% year-over-year growth in the September quarter; 19.8% year-over-year growth in the June quarter, and 10.6% year-over-year growth in the March quarter.
For the December quarter, we expect our non-GAAP gross margin to be between 65.8% and 66.2% of sales. We expect non-GAAP operating expenses to be between 22.3% and 22.7% of sales. We expect non-GAAP operating profit to be between 43.1% and 43.9% of sales, and we expect our split adjusted non-GAAP diluted earnings-per-share to be between a $1.14 per share and a $1.20 per share.
Given all the complications of accounting for our acquisitions, including amortization of intangibles, restructuring charges, and inventory write-up on acquisitions, Microchip will continue to provide guidance and track its results on a non-GAAP basis, except for net sales, which will be on a GAAP basis.
We believe that non-GAAP results provide more meaningful comparison to prior quarters. And we requested analysts continue to report their non-GAAP estimates to first call.
Finally, as previously announced, we will be holding our Investor and Analyst Day on November 8th in New York, which will also be simultaneously webcast for those who cannot attend in person.
At the event, we will be providing details about our long-term expected growth rate, updated gross and operating margin targets, as well as more specifics about our strategy for capital return, revenue growth, and manufacturing. We hope you will be able to join us for this important and informative event.
Let me now pass the baton to Steve, to talk about our cash to shareholders. Steve?