Cash and Liquidity - As of April 27, 2025, the company's foreign subsidiaries held $136.1 million in cash and cash equivalents, a decrease from $139.1 million at January 26, 2025[181]. - The company expects future non-operating cash uses to be for capital expenditures and debt repayment, funded through cash flows from operating activities[183]. - On April 24, 2025, the company increased its total available borrowing capacity under the revolving credit facility by $117.5 million, raising the total facility size to $455.0 million[185]. - As of April 27, 2025, the company had $171.2 million outstanding under the Term Loans and no revolving loans outstanding, with available undrawn borrowing capacity of $452.1 million[187]. - The company issued $250.0 million in aggregate principal amount of 2028 Notes on October 26, 2023, bearing interest at 4.00% per year, maturing on November 1, 2028[194]. - As of April 27, 2025, approximately $62.0 million of the 2028 Notes remained outstanding, with one condition for conversion met[195]. - The company is in compliance with the financial covenants in its Credit Agreement as of April 27, 2025[190]. - There have been no material changes to cash requirements from those disclosed in the Annual Report for the fiscal year ended January 26, 2025[203]. Operating Performance - In the first three months of fiscal year 2026, net cash provided by operating activities was $27,824 thousand, a significant increase compared to a net cash used of $89 thousand in the same period of fiscal year 2025[204]. - Operating cash flows were positively impacted by a 21.8% increase in net sales, lower interest payments, and reduced restructuring payments, while negatively impacted by increased annual bonus payments and higher inventory spending[206]. - Capital expenditures for the first three months of fiscal year 2026 were $1.7 million, up from $1.3 million in the same period of fiscal year 2025, reflecting investments in production capabilities[208]. - The company sold investments for proceeds of $0.5 million in the first three months of fiscal year 2026, compared to $2.7 million in the same period of fiscal year 2025[208]. - In the first three months of fiscal year 2026, the company made a prepayment of $10.0 million on its Term Loans, with no such prepayments made in the same period of fiscal year 2025[211]. - Employee share-based compensation payroll taxes paid in the first three months of fiscal year 2026 amounted to $8.9 million, compared to $2.4 million in the same period of fiscal year 2025[212]. Strategic Initiatives - The company is conducting a portfolio rationalization review to identify non-core assets and align its portfolio with its strategic vision[199]. - The stock repurchase program was expanded by an additional $350.0 million on March 11, 2021, allowing the company to repurchase its common stock at any time[200]. - The remaining authorization for share repurchase under the program as of April 27, 2025, was $209.4 million[201]. - Working capital fluctuates based on end-market demand and management of receivables, inventory, and payables, with potential acquisitions also impacting requirements[202]. - The company plans to finance significant expenditures for new product development through cash generated by operating activities and existing cash balances[198].

Shares of Semtech Corp SMTC were down 5.8% at last check on Wednesday, despite the company’s upbeat first-quarter results.Here are some key analyst takeaways.Stifel analyst Tore Svanberg reiterated a Buy rating, while raising the price target from $42 to $45.Piper Sandler analyst Harsh Kumar maintained an Overweight rating and price target of $55.Roth Capital Partners analyst Scott Searle reaffirmed a Buy rating and price target of $65.Cantor Fitzgerald analyst Quinn Bolton maintained a Buy rating and price ...

Core Viewpoint - Semtech Corporation (SMTC) reported strong first-quarter fiscal 2026 earnings, with non-GAAP earnings of 38 cents per share matching the Zacks Consensus Estimate and revenues of $251.1 million exceeding expectations, indicating robust growth across all end markets, particularly in data centers [1][3][10]. Financial Performance - Non-GAAP earnings of 38 cents per share showed a significant improvement from 6 cents in the year-ago quarter, exceeding management's guidance of 37 cents [1][2]. - Revenues of $251.1 million surpassed the Zacks Consensus Estimate by 0.44% and increased by 22% year over year [3][10]. - Non-GAAP gross margin expanded to 53.5%, up 370 basis points year over year, while non-GAAP operating income surged 88.9% to $47.6 million [7]. Revenue Breakdown - Infrastructure market sales reached $72.8 million, accounting for 29% of net sales, with a year-over-year growth of 30% driven by data center demand [4]. - Industrial market sales were $142.8 million, representing 56.9% of net sales, up 24% year over year [4]. - High-end consumer market sales totaled $35.4 million, a 3% increase year over year, supported by strong design-in momentum for SurgeSwitch [5]. Product Line Performance - Signal Integrity sales were $73.5 million, up 26.1% year over year, making up 29.3% of net sales [6]. - Analog Mixed Signal & Wireless sales reached $90.6 million, a 20.3% increase year over year, accounting for 36.1% of net sales [6]. - IoT System and Connectivity sales were $86.9 million, reflecting a 19.9% year-over-year growth, comprising 34.6% of net sales [6]. Future Guidance - For Q2, Semtech expects net sales of $256 million (+/- $5 million), indicating a year-over-year rise of 18.5% [10]. - The company anticipates non-GAAP earnings of 40 cents (+/- 3 cents) per share, representing a year-over-year increase of 254.6% [12]. - Non-GAAP gross margin is expected to be around 53% (+/- 50 bps) for the upcoming quarter [11].

Group 1: Earnings Performance - Semtech reported quarterly earnings of $0.38 per share, matching the Zacks Consensus Estimate, and showing a significant increase from $0.06 per share a year ago [1] - The company had previously exceeded earnings expectations, posting $0.40 per share against an expected $0.32, resulting in a 25% surprise [1] - Over the last four quarters, Semtech has surpassed consensus EPS estimates three times [1] Group 2: Revenue Performance - Semtech's revenues for the quarter ended April 2025 were $251.1 million, exceeding the Zacks Consensus Estimate by 0.52% and up from $206.1 million year-over-year [2] - The company has also topped consensus revenue estimates in all four of the last quarters [2] Group 3: Stock Performance and Outlook - Semtech shares have declined approximately 39.7% since the beginning of the year, contrasting with the S&P 500's decline of only 1.3% [3] - The future performance of Semtech's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - Current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $255.28 million, and for the current fiscal year, it is $1.70 on revenues of $1.05 billion [7] Group 4: Industry Context - The Semiconductor - Analog and Mixed industry, to which Semtech belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Data and Key Metrics Changes - For Q1, net sales reached a record $251.1 million, up 22% year over year and above the midpoint of the outlook [21] - Adjusted gross margin was 53.5%, up 30 basis points sequentially and up 370 basis points year over year [21] - Adjusted operating income was $47.6 million, resulting in an adjusted operating margin of 19%, up 680 basis points year over year [22] - Adjusted EBITDA was $55.4 million, up 68% year over year, with an adjusted EBITDA margin of 22.1%, up 600 basis points year over year [22] - Adjusted diluted earnings per share were $0.38, up from $0.06 a year ago [23] Business Line Data and Key Metrics Changes - Infrastructure net sales were $72.8 million, up 5% sequentially and up 30% year over year [8] - Data center net sales were a record $51.6 million, up 3% sequentially and up 143% year over year [8] - High-end consumer net sales were $35.4 million, flat sequentially and up 3% year over year [12] - Industrial net sales were $142.8 million, down 3% sequentially but up 24% year over year [16] - LoRa enabled solutions within the industrial market had net sales of $38.9 million, up 5% sequentially and up 81% year over year [16] Market Data and Key Metrics Changes - The company expects short-term demand gaps in the CopperEdge segment but anticipates sustainable growth in the data center business due to capital expenditure growth by hyperscalers [9] - The IoT cellular portfolio is expected to benefit from growing 5G adoption rates, particularly in North America [18] - Connected services net sales remained stable, showcasing the deployment of AI tools for anomaly detection [19] Company Strategy and Development Direction - The company focuses on portfolio optimization, strategic investment in R&D, and driving margin expansion [7] - Management emphasizes the importance of solidifying a winning culture, accelerating innovation, and leveraging technology leadership to enhance shareholder value [20] - The company is optimistic about the second half of the fiscal year, expecting growth driven by fiber edge products and incremental opportunities from LPO and CopperEdge [90][94] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties that may impact the timing of portfolio optimization initiatives but remains committed to strategic priorities [68] - The company is confident in its ability to navigate through dynamic tariff policies and maintain stable product flow across the semiconductor supply chain [7] - Management expects net sales for Q2 to be around $256 million, reflecting a 19% year-over-year increase at the midpoint [25] Other Important Information - The company recorded a net debt decrease of $14.8 million to $396.2 million, with a focus on debt reduction [24] - The company successfully amended its revolving credit facility to increase total borrowing capacity by $117.5 million [24] Q&A Session Summary Question: Insights on the cellular module business - Management noted that the cellular module business experienced a seasonal decline but expects revenue to accelerate in future quarters due to competitive dynamics [32][34] Question: Update on AI connectivity and CopperEdge - Management highlighted strong engagement with over 20 customers for CopperEdge, with expectations for revenue ramp-up by Q4 [41][44] Question: Trends in the core data center business - Management expressed optimism for growth in the core data center business, driven by fiber edge products and expected incremental revenue from LPO [55] Question: LoRa market outlook - Management indicated that while LoRa sales may moderate slightly, the business remains strong with a projected quarterly run rate of $30 million to $35 million [60] Question: Expectations for seasonality in the second half - Management noted that seasonality is expected in the high-end consumer segment, while other markets may not show obvious seasonal trends [80] Question: Insights on surge switch product - Management explained that surge switch provides additional protection and is being designed into various applications, enhancing dollar content compared to typical protection products [97][100]

Financial Data and Key Metrics Changes - For Q1, net sales reached a record $251.1 million, up 22% year over year and above the midpoint of the outlook [20][21] - Adjusted gross margin was 53.5%, up 30 basis points sequentially and up 370 basis points year over year [20] - Adjusted operating income was $47.6 million, resulting in an adjusted operating margin of 19%, up 680 basis points year over year [21] - Adjusted diluted earnings per share increased to $0.38, up from $0.06 a year ago [22] - Net debt decreased by $14.8 million to $396.2 million, with a net leverage ratio below two [23] Business Line Data and Key Metrics Changes - Infrastructure net sales were $72.8 million, up 5% sequentially and up 30% year over year [7] - Data center net sales were a record $51.6 million, up 3% sequentially and up 143% year over year [7] - High-end consumer net sales were $35.4 million, flat sequentially and up 3% year over year [11] - Industrial net sales were $142.8 million, down 3% sequentially but up 24% year over year [15] - LoRa enabled solutions net sales were $38.9 million, up 5% sequentially and up 81% year over year [15] Market Data and Key Metrics Changes - The data center business is expected to be a sustainable growth driver, particularly due to capital expenditure growth by hyperscalers [8] - The industrial end market is experiencing a broader market recovery, with strong demand for IoT cellular products [17] - The high-end consumer market is expected to see a typical seasonal increase in smartphone unit ramps [12] Company Strategy and Development Direction - The company is focused on portfolio optimization, strategic investment in R&D, and driving margin expansion [6] - Management emphasized the importance of operational excellence and disciplined execution to create shareholder value [19] - The company is actively engaging with customers to leverage technology leadership and improve profitability [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties impacting the timing of some portfolio optimization initiatives, but remains committed to strategic priorities [67] - The company expects continued growth in the data center business, driven by fiber edge products and incremental opportunities from LPO and CopperEdge [90][92] - Management expressed optimism about the second half of the fiscal year, anticipating strong demand and revenue growth [105] Other Important Information - The company successfully amended its revolving credit facility to increase total borrowing capacity by $117.5 million [23] - The connected services business is stable, showcasing the deployment of AI tools for improved network security [18] Q&A Session Summary Question: Insights on the cellular module business and margin changes - Management noted that the cellular module business experienced seasonality and a mix shift affecting gross margins, but expects revenue to accelerate in future quarters [30][32] Question: Update on AI connectivity and CopperEdge - Management reported strong engagement with over 20 customers for CopperEdge, with expectations for revenue ramping in Q4 [40][62] Question: Trends in the data center business excluding LPO and ACC - Management indicated that the core data center business is expected to grow, driven by fiber edge products, despite some air pockets in demand [52][54] Question: Expectations for LoRa and new market penetration - Management expects LoRa revenue to stabilize around $30 million to $35 million per quarter, with potential for growth in new medical applications [56][58] Question: Seasonality expectations for the second half of the year - Management anticipates typical seasonality for high-end consumer products, while other markets may not show obvious seasonal trends [78][80]

QUARTERLY EARNINGS PRESENTATION Q1'26 NASDAQ: SMTC 1 | QUARTERLY EARNINGS PRESENTATION | Q1'26 Safe Harbor Statement This presentation contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended, based on the Company's current expectations, estimates and projections about its operations, industry, financial condition, performance, results of operations, and liquidity. Forward-looking statements are statements ot ...

Financial Performance - Net sales for Q1 2026 were $251.1 million, representing a 22% year-over-year growth[4] - GAAP gross margin increased to 52.3%, up from 48.3% a year ago, while Non-GAAP adjusted gross margin rose to 53.5% from 49.8%[4] - GAAP diluted earnings per share improved to $0.22 compared to a loss of $0.36 a year ago, and Non-GAAP adjusted diluted earnings per share increased to $0.38 from $0.06[4] - Adjusted EBITDA margin for Q1 2026 was 22.1%, up from 16.1% a year ago[4] - Operating income for Q1'26 was $36.0 million, up from $21.2 million in Q4'25 and $3.1 million in Q1'25, indicating a strong operational performance[25] - Net income for Q1'26 was $19.3 million, compared to $39.1 million in Q4'25 and a loss of $23.2 million in Q1'25, reflecting improved profitability[25] - Free cash flow for Q1'26 was $26.2 million, down from $30.9 million in Q4'25 but a significant improvement from a negative $1.4 million in Q1'25[29] - The adjusted net income (Non-GAAP) for Q1'26 was $33.9 million, slightly down from $34.5 million in Q4'25[37] Debt and Liquidity - The company made a $10 million term loan principal prepayment in Q1 and an additional $15 million in Q2 2026 to prioritize debt reduction[3] - Interest expense decreased to $6.2 million in Q1 2026 from $22.7 million a year ago[5] - Current liabilities decreased to $236.0 million from $283.0 million in the previous quarter, indicating improved liquidity[27] Outlook and Projections - The outlook for Q2 2026 includes projected net sales of $256.0 million, with an adjusted diluted earnings per share estimate of $0.40[6] - The company expects a normalized tax rate of 15% for fiscal year 2026, applied to each quarter[15] Operational Efficiency - Adjusted operating margin for Q1 2026 was 19.0%, compared to 12.2% a year ago[5] - The company reported a basic earnings per share of $0.22 for Q1'26, down from $0.48 in Q4'25 but an improvement from a loss of $0.36 in Q1'25[25] - The segment gross margin for Signal Integrity was 65.5% in Q1'26, while Analog Mixed Signal and Wireless had a gross margin of 62.3%[31] - The operating margin (GAAP) improved to 14.3% in Q1'26, up from 8.5% in Q4'25 and 1.5% in Q1'25[34] - Selling, general and administrative expenses (GAAP) decreased to $46.4 million in Q1'26 from $54.5 million in Q4'25[34] - The adjusted operating expenses (Non-GAAP) were $86.6 million in Q1'26, compared to $83.7 million in Q4'25[34] Strategic Focus - The company continues to invest strategically in innovation and operational scale to support long-term growth[3] - The company continues to focus on high-performance semiconductor and IoT systems, aiming to enhance its market position and expand its product offerings[22]

Semtech Corporation SMTC will release its first-quarter earnings results after the closing bell on Tuesday, May 27.Analysts expect the Camarillo, California-based company to report quarterly earnings at 37 cents per share, up from 6 cents per share in the year-ago period. Semtech projects to report quarterly revenue at $250.09 million, compared to $206.1 million a year earlier, according to data from Benzinga Pro.On May 12, Semtech announced that Mitch Haws has joined the company as its senior vice presiden ...

Core Viewpoint - Semtech Corp (NASDAQ:SMTC) is anticipated to report first-quarter earnings soon, with bearish sentiment surrounding the stock, which has a history of significant post-earnings price movements [1]. Group 1: Earnings Expectations - Semtech is set to report earnings after the market closes on May 27, with the options market indicating a larger-than-usual post-earnings swing of 14.3% [2]. - The stock has previously experienced notable post-earnings moves, including a 21.5% increase after the March report and an 18.1% rise following the November earnings report [2]. Group 2: Stock Performance - The current trading price of Semtech is $38.05, having rebounded from a 12-month low of $24.05 recorded on April 21 [3]. - Year-to-date, the shares have declined by 38.4%, and the 80-day moving average is identified as a critical pivot point for future performance [3]. Group 3: Short Interest and Volatility - Short interest in Semtech has decreased by 10% in the last two reporting periods, yet 6.63 million shares sold short still represent 7.7% of the total available float [5]. - The Schaeffer's Volatility Scorecard (SVS) for Semtech is at 89 out of 100, indicating that the stock has surpassed option traders' volatility expectations over the past year [5].