Semtech (SMTC) Q4 2025 Earnings Call March 14, 2025 03:53 AM ET Company Participants Mark Lin - Executive VP & CFOHong Hou - President & CEOTimothy Arcuri - Managing DirectorTyler Bomba - Equity Research AssociateStacy Che - Senior AssociateKyle Smith - Research Associate Conference Call Participants Harsh Kumar - Managing Director & Senior Research AnalystQuinn Bolton - Senior AnalystChristopher Rolland - Senior Equity AnalystCody Acree - Equity Research Analyst Operator Good day, and thank you for standin ...

Financial Data and Key Metrics Changes - For Q4, the company recorded net sales of $251 million, up 6% sequentially and up 33% year over year [39][41] - Adjusted gross margin was 53.2%, up 80 basis points sequentially and up 430 basis points year over year [40] - Adjusted operating income was $49.8 million, resulting in an adjusted operating margin of 19.9%, up 160 basis points sequentially and up 1070 basis points year over year [40] - Adjusted diluted earnings per share increased to 40 cents, up from 26 cents in Q3 and up from a loss of 6 cents in Q4 of the previous year [41][42] - Net debt was reduced to $411 million, a decrease of 68% from $1.3 billion at the end of FY 2024 [42][43] Business Line Data and Key Metrics Changes - Infrastructure net sales for Q4 were $69.1 million, up 5% sequentially and up 75% year over year [16] - Data center net sales reached a record $50 million, up 16% sequentially and up 183% year over year [16] - High-end consumer net sales for Q4 were $35.4 million, up 10% year over year, with FY 2025 net sales at $147 million, up 17% year over year [22][25] - Industrial net sales for Q4 were $146.6 million, up 12% sequentially and up 21% year over year, with LoRa-enabled solutions recording Q4 net sales of $37.1 million, up 28% sequentially and up 205% year over year [27][28] Market Data and Key Metrics Changes - The company expects net sales from the infrastructure end market to increase sequentially, with data center applications leading growth [44] - The high-end consumer end market is expected to see slight increases reflective of seasonality, while the industrial end market is anticipated to decline due to seasonality in the IoT portfolio [45] Company Strategy and Development Direction - The company is focused on three core priorities: portfolio optimization and simplification, strategic investment in R&D, and driving margin expansion through operational leverage and AI [11][15] - The company aims to enhance profitability through portfolio optimization and leveraging AI for efficiency [15] - The company is prioritizing divestitures of non-core assets to improve balance sheet strength and operational focus [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, citing strong fundamentals and a favorable market environment [65] - The company anticipates continued growth in the data center segment despite temporary headwinds from the Copper Edge portfolio [70] - Management highlighted the importance of customer engagement and innovation in driving future growth [102] Other Important Information - The company achieved a significant milestone with the 5G Redcap certification in collaboration with AT&T and Qualcomm, positioning it for scalable solutions across industries [36] - The company is actively engaged with over 20 potential customers for its CopperEdge portfolio, indicating a strong interest in new applications [58] Q&A Session Summary Question: Can you expand on the Copper Edge portfolio and its future? - Management indicated that revenue for Copper Edge is expected to be below $50 million in FY 2026, with ongoing engagement with over 20 customers for various applications [56][58] Question: What is the outlook for the core business and growth visibility? - Management expressed confidence in the core business's growth trajectory, with expectations for continued sequential growth across various segments [62][65] Question: Can you provide timing on the upcoming revenue step change in the data center? - Management noted that while there may be temporary bumps in the Copper Edge segment, overall data center growth is expected to continue [70] Question: How is the company approaching portfolio rationalization? - Management stated that they are patient in their approach to rationalization, focusing on strategic synergies rather than distressed sales [76] Question: What is the outlook for LoRa and its recent growth? - Management attributed the strong growth in LoRa to customer focus and new product development, with expectations for continued year-over-year growth [102][156]

Semtech (SMTC) came out with quarterly earnings of $0.40 per share, beating the Zacks Consensus Estimate of $0.32 per share. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this chipmaker would post earnings of $0.24 per share when it actually produced earnings of $0.26, delivering a surprise of 8.33%.Over the last four quarters, the company has surpassed ...

Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Sara Kesten Semtech Corporation (805) 480-2004 webir@semtech.com Semtech Announces Fourth Quarter and Fiscal Year 2025 Results Fourth Quarter of Fiscal Year 2025 Fiscal Year 2025 | (in millions, except per share data) | | Q4'25 | | Q3'25 | | Q4'24 | | FY'25 | | FY'24 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Net sales | $ | 251.0 | $ | 236.8 | $ | 192.9 | $ | 909.3 | $ | 868.8 | | Non-GAAP Financial Results | | | | | | | | | | | | Adj ...

Core Viewpoint - A securities class action lawsuit has been filed against Semtech Corporation for alleged issues related to its CopperEdge product sales during the specified Class Period [1][3]. Company Overview - Semtech Corporation is headquartered in Camarillo, California, and operates in the semiconductor, digital systems, and cloud connectivity sectors. The company offers a range of products, including CopperEdge, which is utilized in active copper cables [2]. Class Action Details - The lawsuit pertains to investors who purchased Semtech securities between August 27, 2024, and February 7, 2025. Investors have until April 22, 2025, to seek appointment as lead plaintiff [1][2]. - The lead plaintiff represents the interests of all class members and typically has the largest financial stake in the case [4]. Sales Performance and Stock Impact - On February 7, 2025, Semtech announced that CopperEdge sales would not meet previously expected levels, forecasting sales to be lower than the estimated $50 million due to necessary architectural changes [3]. - Following this announcement, Semtech's stock price dropped by $16.91, or 31%, closing at $37.60 per share on February 10, 2025 [3].

Core Viewpoint - The Gross Law Firm is notifying shareholders of Semtech Corporation regarding a class action lawsuit due to alleged misleading statements and omissions related to the company's CopperEdge products [1][2]. Group 1: Allegations - The complaint alleges that during the class period from August 27, 2024, to February 7, 2025, Semtech's CopperEdge products did not meet the needs of its server rack customers or end users [1]. - It is claimed that the CopperEdge products required specific rack architecture changes, which were not disclosed [1]. - As a result of these issues, the sales of CopperEdge products are expected to be lower than anticipated, impacting the company's performance in fiscal 2026 [1]. Group 2: Class Action Details - Shareholders who purchased shares of Semtech during the specified class period are encouraged to register for the class action, with a deadline of April 22, 2025, to seek lead plaintiff status [2]. - Participants will be enrolled in a portfolio monitoring software to receive updates throughout the case lifecycle, with no cost or obligation to participate [2]. Group 3: Law Firm Background - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting investors' rights against deceit and fraud [3]. - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions [3].

Core Viewpoint - Securities class action lawsuits have been filed against Semtech Corporation for allegedly making materially false and misleading statements regarding its business operations and product performance during the specified Class Period [1][3]. Group 1: Allegations Against Semtech - The complaint claims that Semtech's CopperEdge products did not meet customer needs, requiring changes in rack architecture [3]. - It is alleged that sales of CopperEdge products would not increase as expected during fiscal 2026, leading to lower-than-anticipated sales [3]. - The positive statements made by Semtech regarding its business and prospects are claimed to be materially misleading and lacking a reasonable basis [3]. Group 2: Legal Process and Participation - Investors in Semtech have until April 22, 2025, to seek appointment as lead plaintiff representatives in the class action [4]. - A lead plaintiff is defined as a representative party acting on behalf of all class members, typically the investor or group with the largest financial interest [4]. - Participation as a lead plaintiff does not affect the ability of other investors to share in any recovery from the lawsuit [4].

Core Viewpoint - A class action securities lawsuit has been filed against Semtech Corporation, alleging securities fraud that negatively impacted investors between August 27, 2024, and February 7, 2025 [1][2]. Group 1: Allegations of Fraud - The lawsuit claims that Semtech's CopperEdge products failed to meet the needs of its server rack customers, necessitating changes in rack architecture [2]. - It is alleged that due to these issues, sales of CopperEdge products would not increase as expected during fiscal 2026, leading to lower-than-anticipated sales [2]. - The defendants are accused of making misleading positive statements regarding the Company's business and prospects, which lacked a reasonable basis [2]. Group 2: Legal Process and Participation - Investors who suffered losses during the specified timeframe have until April 22, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require this role [3]. - Class members may be entitled to compensation without incurring any out-of-pocket costs or fees, with no obligation to participate [3]. Group 3: Firm Background - Levi & Korsinsky, LLP has a history of securing significant settlements for shareholders and is recognized as one of the top securities litigation firms in the United States [4].

Core Viewpoint - Securities class action lawsuits have been filed against Semtech Corporation for allegedly making materially false and misleading statements regarding its business operations and product performance during the specified Class Period [1][2]. Group 1: Allegations Against Semtech - The complaint claims that Semtech's CopperEdge products did not meet the needs of its server rack customers or end users [2]. - It is alleged that the CopperEdge products required certain changes in rack architecture, which were not disclosed to investors [2]. - As a result of these issues, Semtech's sales of CopperEdge products are expected to be lower than anticipated, contradicting previous positive statements made by the company [2]. Group 2: Legal Process for Investors - Semtech investors have until April 22, 2025, to seek appointment as a lead plaintiff representative in the class action [3]. - A lead plaintiff is typically the investor or small group of investors with the largest financial interest in the case [3]. - Investors can choose to remain absent from the class action without affecting their ability to share in any potential recovery [3]. Group 3: Firm Background - Kessler Topaz Meltzer & Check, LLP is known for prosecuting class actions and has a reputation for recovering billions for victims of corporate misconduct [4]. - The firm encourages affected Semtech investors to contact them for more information regarding the case [4].

Core Viewpoint - Semtech Corporation is facing a class action securities lawsuit due to alleged securities fraud that affected investors between August 27, 2024, and February 7, 2025 [1] Group 1: Allegations of Fraud - The lawsuit claims that Semtech's CopperEdge products did not meet the requirements of its server rack customers or end users [2] - It is alleged that the CopperEdge products necessitated specific changes in rack architecture [2] - Consequently, the sales of CopperEdge products are expected to be lower than anticipated, impacting the company's sales ramp-up during fiscal 2026 [2] - The defendants' positive statements regarding the company's business and prospects are claimed to be materially misleading and lacking a reasonable basis [2] Group 2: Legal Process and Participation - Investors who suffered losses during the specified timeframe have until April 22, 2025, to request appointment as lead plaintiff [3] - Participation in the lawsuit does not require serving as a lead plaintiff, and class members may be entitled to compensation without any out-of-pocket costs [3] Group 3: Firm Background - Levi & Korsinsky has a history of securing hundreds of millions of dollars for shareholders and has extensive expertise in complex securities litigation [4] - The firm has been recognized in ISS Securities Class Action Services' Top 50 Report for seven consecutive years as one of the leading securities litigation firms in the U.S. [4]