What happened

Shares of MACOM Technology Solutions Holdings (NASDAQ:MTSI) jumped on Wednesday following the semiconductor company's fiscal second-quarter report. The company beat analyst estimates for both revenue and earnings, and management commentary suggested that revenue has finally bottomed out. As of 1:40 p.m. EDT, the stock was up 18%.

So what

MACOM reported second-quarter revenue of $150.4 million, down 19.2% year over year but up 14.9% from the first quarter. Analysts were expecting revenue to be about $4.9 million lower. CEO John Croteau stated in the earnings release that the company's December quarter marked the bottom of the cycle for revenue and demand, and that order intake and customer forecasts had returned to more normalized patterns in the second quarter.

A MACOM chip.

Image source: MACOM.

Non-GAAP earnings per share came in at $0.13, down from $0.63 in the prior-year period but $0.01 better than analysts were expecting. Non-GAAP gross margin fell almost 7 percentage points year over year to 51.6%, and non-GAAP operating margin was more than cut in half to 10.5%.

Going forward, Croteau sees a return to growth:

Moving forward, we expect sales across all our end markets to contribute to top line growth quarter-by-quarter throughout calendar 2018. The exact slope will be paced by our ability to scale operationally, both with our strategic suppliers and in our own factories. We believe the future contribution from these sales can provide significant operating leverage as we monetize what were previously strategic investments for the company.

Now what

MACOM expects third-quarter revenue between $142 million and $150 million, with non-GAAP gross margin recovering to a range of 54% to 57%. The company believes that the next phase of global infrastructure spending -- driven by 5G technology, heavy investments from cloud computing providers, and defense and industrial capital investment -- is now being entered following last year's cyclical downturn in China.

Shares of MACOM have plunged since mid-2017 as revenue and profits fell off a cliff. The company's upbeat outlook was enough on Wednesday for the stock to begin clawing back a small part of those losses.

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