Financial Data and Key Metrics Changes - For Q2, the company reported record net sales of $257.6 million, up 20% year over year and marking the sixth consecutive quarter of growth [25][27] - Adjusted gross margin was 53.2%, down 30 basis points sequentially but up 280 basis points year over year [25][26] - Adjusted operating income was $48.6 million, resulting in an adjusted operating margin of 18.8%, up 460 basis points year over year [27] - Adjusted diluted earnings per share increased to $0.41, up from $0.11 a year ago [28] Business Line Data and Key Metrics Changes - Infrastructure net sales reached $73.4 million, up 1% sequentially and up 39% year over year, driven by record revenues in the data center business [9][10] - Data center net sales were $52.2 million, up 1% sequentially and up 92% year over year [10] - High-end consumer net sales were $41.2 million, up 16% sequentially and up 11% year over year [17] - Industrial net sales were $143 million, slightly up sequentially and up 14% year over year [19] Market Data and Key Metrics Changes - The company noted strong demand in the data center market, with expectations for continued growth driven by increased CapEx spending from cloud service providers [41][42] - The industrial end market showed growth in applications including home security systems and smart appliances, with LoRa-enabled solutions net sales at $36.9 million, down 5% sequentially but up 29% year over year [19][20] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, having reduced debt significantly, resulting in an adjusted debt leverage ratio of 1.6, down from 8.8 a year ago [7][30] - The strategy includes rationalizing the portfolio and increasing investment in core assets such as data center, LoRa, and Persei, which have contributed to net sales momentum [7][9] - The company aims to transform into a higher growth and more profitable entity, with a focus on portfolio optimization and strategic investments in R&D [8][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the data center market, citing strong forecasts for 2026 and beyond, despite some caution in the Chinese market due to GPU availability [41][42] - The company anticipates continued strong demand for its fiber edge products and is preparing for significant volume ramps in 2026 [11][12] - Management highlighted the importance of low power and low latency solutions in meeting the increasing bandwidth requirements [12][16] Other Important Information - The company recorded a non-cash goodwill impairment charge of $41.9 million from its Connected Services business, reflecting a reassessment of this business's goodwill balance [28][29] - Operating cash flow for Q2 was $44.4 million, up 60% from the previous quarter and up from negative $5 million a year ago [29] Q&A Session Summary Question: What is the outlook for LPO opportunities and timing? - Management indicated that LPO deployment is expected to start in Q4, with various customers at different stages of testing and qualification [36][38] Question: How is the general state of data center spending? - Management noted strong conviction among cloud service providers to increase CapEx spending for data center capacity and AI capabilities, with optimistic forecasts for 2026 [40][41] Question: What is the outlook for CopperEdge and broader adoption? - Management reported strong traction with over 20 customers engaged, with expectations for high volume ramps in Q4 or 2026 [46][48] Question: What is the expected performance of LoRa in the coming quarters? - Management expressed confidence in LoRa's demand, expecting quarterly revenue between $30 million to $40 million, driven by new product capabilities [56][58] Question: What are the expectations for the ACC revenue ramp? - Management clarified that the volume ramp for ACC is expected to start in Q4, with specific applications driving demand [94] Question: How does the company view the general business environment and bookings? - Management reported strong booking activities across various segments, indicating positive momentum for future quarters [101][102]

Financial Data and Key Metrics Changes - For Q2, the company reported record net sales of $257.6 million, up 20% year over year and marking the sixth consecutive quarter of growth [25][24] - Adjusted gross margin was 53.2%, down 30 basis points sequentially but up 280 basis points year over year [25] - Adjusted operating income was $48.6 million, resulting in an adjusted operating margin of 18.8%, up 460 basis points year over year [26] - Adjusted diluted earnings per share increased to $0.41, up from $0.11 a year ago [28] - The adjusted debt leverage ratio improved to 1.6, down from 8.8 a year ago [27] Business Line Data and Key Metrics Changes - Infrastructure net sales reached $73.4 million, up 1% sequentially and up 39% year over year, driven by record revenues in the data center business [9] - Data center net sales were $52.2 million, up 1% sequentially and up 92% year over year [10] - High-end consumer net sales were $41.2 million, up 16% sequentially and up 11% year over year [17] - Industrial net sales were $143 million, up slightly sequentially and up 14% year over year [19] - IoT systems hardware business recorded net sales of $64.8 million, up 2% sequentially and up 24% year over year [21] Market Data and Key Metrics Changes - The company noted strong demand in the data center market, with expectations for continued growth driven by increased CapEx spending from cloud service providers [39] - In China, CSPs showed cautious booking activity due to GPU availability but have recently seen improved bookings [40] - The company is experiencing strong momentum in the 5G market, particularly with IoT transitions from 4G to 5G [22] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, having reduced debt significantly and improved its net leverage ratio [6] - There is an emphasis on portfolio optimization and increased investment in core assets such as data center, LoRa, and Persei [6][8] - The company aims to transform into a higher growth and more profitable entity, with a strong focus on R&D to support long-term growth [5][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the data center market's growth cycle, driven by higher data rates and increased demand for fiber edge products [11] - The company anticipates continued strong opportunities in the data center market, despite some caution from CSPs in China [40] - Management highlighted the importance of low power and low latency solutions in meeting the evolving demands of data centers [12] Other Important Information - The company recorded a non-cash goodwill impairment charge of $41.9 million from its Connected Services business [28] - The company expects net sales for Q3 to be approximately $266 million, reflecting a 12% year-over-year increase [30] Q&A Session Summary Question: What is the timing for LPO opportunities? - Management indicated that LPO deployments are expected to start in Q4, with some customers at different stages of testing and qualification [36][37] Question: What is the outlook for data center spending? - Management expressed strong confidence in continued data center spending, with CSPs forecasting increased CapEx for 2026 and beyond [38][39] Question: What is the outlook for CopperEdge adoption? - Management reported strong traction with CopperEdge, with several key customers engaged in testing and qualification [46] Question: What is the expected performance of LoRa? - Management expects LoRa revenue to be between $30 million to $40 million quarterly, driven by new applications and enhanced capabilities [56] Question: What are the expectations for ACC revenue? - Management expects ACC revenue to ramp up in Q4, with 100 gig per lane cables leading the initial demand [95] Question: What are the expectations for the Tri Edge business? - Management plans to continue developing the Tri Edge product line, focusing on low power consumption and signal integrity [86][88]

Non-GAAP Financial Measures QUARTERLY EARNINGS PRESENTATION Q2'26 NASDAQ: SMTC 1 | QUARTERLY EARNINGS PRESENTATION | Q2'26 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 ...

Executive Summary & Highlights This section outlines Semtech Corporation's Q2 FY26 financial performance and management insights [Company Overview](index=1&type=section&id=Item%201.1.%20Company%20Overview) Semtech Corporation is a leading provider of high-performance semiconductor, Internet of Things (IoT) systems, and cloud connectivity service solutions, focused on delivering technology for a smarter, more connected, and sustainable planet - Semtech is a leading provider of high-performance semiconductor, IoT systems, and cloud connectivity service solutions[2](index=2&type=chunk)[22](index=22&type=chunk) [Q2 FY26 Financial Highlights](index=1&type=section&id=Item%201.2.%20Q2%20FY26%20Financial%20Highlights) Semtech reported record net sales of $257.6 million, representing 20% year-over-year growth, with improved non-GAAP adjusted gross and operating margins, and significantly increased non-GAAP adjusted diluted EPS Q2 FY26 Key Financial Highlights | Metric | Q2'26 | Q2'25 | YoY Change | | :-------------------------------- | :------ | :------ | :--------- | | Net sales (million USD) | $257.6 | $215.4 | +20% | | GAAP gross margin (%) | 52.1% | 49.0% | +3.1 pp | | Non-GAAP adjusted gross margin (%) | 53.2% | 50.4% | +2.8 pp | | GAAP operating margin (%) | (6.3)% | 3.6% | -9.9 pp | | Non-GAAP adjusted operating margin (%) | 18.8% | 14.2% | +4.6 pp | | GAAP diluted loss per share (USD) | $(0.31) | $(2.61) | +$2.30 | | Non-GAAP adjusted diluted EPS (USD) | $0.41 | $0.11 | +$0.30 | [Management Commentary](index=1&type=section&id=Item%201.3.%20Management%20Commentary) CEO Hong Hou highlighted strong year-over-year financial performance driven by deep customer engagement, operational discipline, and targeted investments, while CFO Mark Lin noted improved cash flows enabling accelerated debt reduction - CEO Hong Hou attributed strong YoY financial performance to deep customer engagement, operational discipline, and a culture of excellence, positioning the company for high-growth opportunities[3](index=3&type=chunk) - CFO Mark Lin emphasized that strong net sales growth and improving profitability resulted in meaningful sequential and year-over-year increases in operating and free cash flows, leading to accelerated debt reduction and a reduced net leverage ratio[3](index=3&type=chunk) Financial Results This section details Semtech's Q2 FY26 financial performance, including GAAP and non-GAAP results, and provides the Q3 FY26 outlook [Second Quarter Fiscal Year 2026 Results](index=2&type=section&id=Item%202.1.%20Second%20Quarter%20Fiscal%20Year%202026%20Results) Semtech reported Q2 FY26 net sales of $257.6 million, a GAAP net loss of $(27.1) million due to a goodwill impairment, and a non-GAAP adjusted net income of $36.7 million GAAP Financial Results (Q2'26 vs Q1'26 vs Q2'25) | Metric | Q2'26 | Q1'26 | Q2'25 | | :-------------------------- | :------ | :------ | :------ | | Net sales (million USD) | $257.6 | $251.1 | $215.4 | | Gross margin (%) | 52.1% | 52.3% | 49.0% | | Operating expenses, net (million USD) | $150.3 | $95.3 | $97.7 | | Operating (loss) income (million USD) | $(16.2) | $36.0 | $7.8 | | Operating margin (%) | (6.3)% | 14.3% | 3.6% | | Interest expense, net (million USD) | $4.7 | $6.2 | $28.1 | | Goodwill impairment (million USD) | $42.0 | — | — | | Net (loss) income (million USD) | $(27.1) | $19.3 | $(170.3) | | Diluted (loss) earnings per share (USD) | $(0.31) | $0.22 | $(2.61) | Non-GAAP Financial Results (Q2'26 vs Q1'26 vs Q2'25) | Metric | Q2'26 | Q1'26 | Q2'25 | | :-------------------------- | :------ | :------ | :------ | | Net sales (million USD) | $257.6 | $251.1 | $215.4 | | Adjusted gross margin* (%) | 53.2% | 53.5% | 50.4% | | Adjusted operating expenses, net* (million USD) | $88.4 | $86.6 | $77.9 | | Adjusted operating income* (million USD) | $48.6 | $47.6 | $30.5 | | Adjusted operating margin* (%) | 18.8% | 19.0% | 14.2% | | Adjusted interest expense, net* (million USD) | $4.1 | $5.0 | $20.5 | | Adjusted net income* (million USD) | $36.7 | $33.9 | $8.1 | | Adjusted diluted earnings per share* (USD) | $0.41 | $0.38 | $0.11 | | Adjusted EBITDA* (million USD) | $56.5 | $55.4 | $40.5 | | Adjusted EBITDA margin* (%) | 21.9% | 22.1% | 18.8% | [Third Quarter Fiscal Year 2026 Outlook](index=2&type=section&id=Item%202.2.%20Third%20Quarter%20Fiscal%20Year%202026%20Outlook) For Q3 FY26, Semtech projects net sales of $266.0 million (±$5.0 million), with non-GAAP adjusted diluted EPS of $0.44 (±$0.03) and strong adjusted operating and EBITDA margins Q3 FY26 Non-GAAP Financial Outlook | Metric | Q3'26 Outlook | | :-------------------------- | :-------------- | | Net sales (million USD) | $266.0M (±$5.0M) | | Adjusted gross margin* (%) | 53.0% (±50 bps) | | Adjusted operating expenses, net* (million USD) | $88.8M (±$1.0M) | | Adjusted operating income* (million USD) | $52.2M (±$3.0M) | | Adjusted operating margin* (%) | 19.6% (±80 bps) | | Adjusted interest and other expense, net* (million USD) | $(5.0)M | | Adjusted normalized tax rate* (%) | 15% | | Adjusted diluted earnings per share* (USD) | $0.44 (±$0.03) | | Adjusted EBITDA* (million USD) | $60.0M (±$3.0M) | | Adjusted EBITDA margin* (%) | 22.5% (±80 bps) | | Non-GAAP diluted share count* (million) | 91.6M | Non-GAAP Financial Measures This section defines Semtech's non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents [Definition and Rationale](index=3&type=section&id=Item%203.1.%20Definition%20and%20Rationale) Semtech uses various non-GAAP measures to supplement GAAP results, excluding items like share-based compensation and goodwill impairment, to provide a clearer view of core operational performance and enhance comparability - Non-GAAP measures exclude share-based compensation, intangible amortization, transaction/integration costs, restructuring, litigation costs, and goodwill impairment[10](index=10&type=chunk)[12](index=12&type=chunk) - Management believes these exclusions provide useful information by reflecting core results and enhancing comparability between periods, despite some excluded items potentially being recurring[11](index=11&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - A full-year normalized non-GAAP tax rate of **15%** is projected for fiscal year 2026 to reduce quarterly variability and improve comparability[15](index=15&type=chunk) [Reconciliation of GAAP to Non-GAAP Results](index=11&type=section&id=Item%203.2.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) This section provides detailed reconciliations from GAAP to Non-GAAP figures for gross margin, operating expenses, operating income, net income, diluted EPS, and EBITDA across Q2'26, Q1'26, and Q2'25, illustrating the specific adjustments made for each metric [Gross Margin Reconciliation](index=11&type=section&id=Item%203.2.1.%20Gross%20Margin%20Reconciliation) This subsection reconciles GAAP gross margin to non-GAAP adjusted gross margin, detailing adjustments for compensation and amortization | Metric | Q2'26 | Q1'26 | Q2'25 | | :-------------------------- | :------ | :------ | :------ | | Gross margin (GAAP) (%) | 52.1% | 52.3% | 49.0% | | Share-based compensation (%) | 0.2% | 0.3% | 0.3% | | Amortization of acquired technology (%) | 0.9% | 0.9% | 1.1% | | Adjusted gross margin (Non-GAAP) (%) | 53.2% | 53.5% | 50.4% | [Operating Expenses and Income Reconciliation](index=12&type=section&id=Item%203.2.2.%20Operating%20Expenses%20and%20Income%20Reconciliation) This subsection reconciles GAAP operating expenses and income to their non-GAAP adjusted counterparts, outlining various excluded items Operating Expenses, Net Reconciliation | Metric | Q2'26 | Q1'26 | Q2'25 | | :------------------------------------ | :------ | :------ | :------ | | Operating expenses, net (GAAP) (million USD) | $150.3 | $95.3 | $97.7 | | Share-based compensation (million USD) | $(16.7) | $(6.1) | $(16.4) | | Intangible amortization (million USD) | $(0.1) | $(0.1) | $(0.3) | | Transaction and integration related costs, net (million USD) | $(1.2) | $(1.1) | $(1.5) | | Restructuring and other reserves, net (million USD) | $(1.5) | $(1.2) | $(1.5) | | Litigation costs, net (million USD) | $(0.4) | $(0.2) | $(0.1) | | Goodwill impairment (million USD) | $(42.0) | — | — | | Adjusted operating expenses, net (Non-GAAP) (million USD) | $88.4 | $86.6 | $77.9 | Operating Income Reconciliation | Metric | Q2'26 | Q1'26 | Q2'25 | | :-------------------------- | :------ | :------ | :------ | | Operating (loss) income (GAAP) (million USD) | $(16.2) | $36.0 | $7.8 | | Share-based compensation (million USD) | $17.3 | $6.8 | $17.1 | | Intangible amortization (million USD) | $2.4 | $2.4 | $2.6 | | Transaction and integration related costs, net (million USD) | $1.2 | $1.1 | $1.5 | | Restructuring and other reserves, net (million USD) | $1.5 | $1.2 | $1.5 | | Litigation costs, net (million USD) | $0.4 | $0.2 | $0.1 | | Goodwill impairment (million USD) | $42.0 | — | — | | Adjusted operating income (Non-GAAP) (million USD) | $48.6 | $47.6 | $30.5 | [Net Income and EPS Reconciliation](index=13&type=section&id=Item%203.2.3.%20Net%20Income%20and%20EPS%20Reconciliation) This subsection reconciles GAAP net income and diluted EPS to their non-GAAP adjusted equivalents, including tax effects and other adjustments Net Income Reconciliation | Metric | Q2'26 | Q1'26 | Q2'25 | | :------------------------------------ | :------ | :------ | :------ | | Net (loss) income (GAAP) (million USD) | $(27.1) | $19.3 | $(170.3) | | Total Non-GAAP adjustments before taxes (million USD) | $65.3 | $12.9 | $175.6 | | Associated tax effect (million USD) | $(1.7) | $2.7 | $2.8 | | Equity method loss (income) (million USD) | $0.1 | $(1.0) | — | | Adjusted net income (Non-GAAP) (million USD) | $36.7 | $33.9 | $8.1 | Diluted EPS Reconciliation | Metric | Q2'26 | Q1'26 | Q2'25 | | :------------------------------------ | :------ | :------ | :------ | | Diluted (loss) earnings per share (GAAP) (USD) | $(0.31) | $0.22 | $(2.61) | | Adjustments per above (USD) | $0.72 | $0.16 | $2.72 | | Adjusted diluted earnings per share (Non-GAAP) (USD) | $0.41 | $0.38 | $0.11 | [Adjusted EBITDA Reconciliation](index=14&type=section&id=Item%203.2.4.%20Adjusted%20EBITDA%20Reconciliation) This subsection provides a reconciliation from GAAP net income to non-GAAP adjusted EBITDA, detailing various adjustments | Metric | Q2'26 | Q1'26 | Q2'25 | | :-------------------------- | :------ | :------ | :------ | | Net (loss) income (GAAP) (million USD) | $(27.1) | $19.3 | $(170.3) | | Interest expense (million USD) | $5.2 | $6.6 | $28.6 | | Interest income (million USD) | $(0.5) | $(0.4) | $(0.4) | | Provision for income taxes (million USD) | $4.8 | $8.7 | $4.2 | | Equity method loss (income) (million USD) | $0.1 | $(1.0) | — | | Share-based compensation (million USD) | $17.3 | $6.8 | $17.1 | | Depreciation and amortization (million USD) | $10.3 | $10.2 | $12.6 | | Goodwill impairment (million USD) | $42.0 | — | — | | Adjusted EBITDA (Non-GAAP) (million USD) | $56.5 | $55.4 | $40.5 | Supplemental Information This section provides additional context, including webcast details, forward-looking statements, notes on results, and a company overview [Webcast and Conference Call Details](index=3&type=section&id=Item%204.1.%20Webcast%20and%20Conference%20Call%20Details) Semtech hosted a conference call on August 25, 2025, to discuss Q2 FY26 results, with webcast and replay information available on its Investor Relations website - A conference call was held on August 25, 2025, at 1:30 p.m. Pacific time to discuss Q2 FY26 results[9](index=9&type=chunk) - Webcast and supplemental materials are available on Semtech's Investor Relations website, with a replay accessible until September 22, 2025[9](index=9&type=chunk) [Forward-Looking and Cautionary Statements](index=5&type=section&id=Item%204.2.%20Forward-Looking%20and%20Cautionary%20Statements) This section contains standard forward-looking statements regarding future financial and operational performance, subject to known and unknown risks and uncertainties, cautioning investors against undue reliance - The press release contains forward-looking statements about future financial performance, operational performance, growth trends, and company plans[17](index=17&type=chunk)[18](index=18&type=chunk) - Potential risks include industry volatility, rapid decrease in average selling prices, supply chain disruptions, failure to develop new products, intellectual property issues, R&D investment needs, competition, and difficulties integrating acquisitions like Sierra Wireless[19](index=19&type=chunk) - Investors are cautioned against undue reliance on forward-looking information, which is subject to significant risks and uncertainties detailed in SEC filings[20](index=20&type=chunk) [Notes on Reported Results](index=7&type=section&id=Item%204.3.%20Notes%20on%20Reported%20Results) The reported amounts are preliminary and subject to finalization for the Form 10-Q filing, with specific quarter-end dates defined for Q2'26, Q1'26, and Q2'25 - Reported results are preliminary and subject to finalization for the Form 10-Q filing for the quarter ended July 27, 2025[21](index=21&type=chunk) - Q2'26 refers to the quarter ended July 27, 2025; Q1'26 to April 27, 2025; and Q2'25 to July 28, 2024[21](index=21&type=chunk) [About Semtech](index=7&type=section&id=Item%204.4.%20About%20Semtech) Semtech Corporation (Nasdaq: SMTC) is a leading provider of high-performance semiconductor, IoT systems, and cloud connectivity service solutions, dedicated to delivering technology for a smarter, more connected, and sustainable planet - Semtech Corporation is a leading provider of high-performance semiconductor, IoT systems, and cloud connectivity service solutions[22](index=22&type=chunk) - The company is dedicated to delivering technology solutions for a smarter, more connected, and sustainable planet, serving infrastructure, industrial, and consumer markets[22](index=22&type=chunk) Condensed Consolidated Financial Statements (Unaudited) This section presents Semtech's unaudited consolidated statements of operations, balance sheets, and cash flow information [Statements of Operations](index=8&type=section&id=Item%205.1.%20Statements%20of%20Operations) The unaudited condensed consolidated statements of operations show Q2'26 net sales of $257.6 million and a GAAP net loss of $(27.1) million, significantly impacted by a $42.0 million goodwill impairment charge Condensed Consolidated Statements of Operations (GAAP) | Metric | Q2'26 | Q1'26 | Q2'25 | | :------------------------------------ | :------ | :------ | :------ | | Net sales (million USD) | $257.6 | $251.1 | $215.4 | | Total cost of sales (million USD) | $123.5 | $119.8 | $109.9 | | Gross profit (million USD) | $134.1 | $131.3 | $105.5 | | Total operating expenses, net (million USD) | $150.3 | $95.3 | $97.7 | | Operating (loss) income (million USD) | $(16.2) | $36.0 | $7.8 | | Goodwill impairment (million USD) | $42.0 | — | — | | Net (loss) income (million USD) | $(27.1) | $19.3 | $(170.3) | | Diluted (loss) earnings per share (USD) | $(0.31) | $0.22 | $(2.61) | [Balance Sheets](index=9&type=section&id=Item%205.2.%20Balance%20Sheets) As of July 27, 2025, total assets were $1,405.9 million, with increased current assets and decreased total liabilities, notably a reduction in goodwill due to an impairment charge Condensed Consolidated Balance Sheets | Metric | July 27, 2025 | January 26, 2025 | | :-------------------------- | :-------------- | :--------------- | | Total current assets (million USD) | $614.9 | $585.5 | | Total non-current assets (million USD) | $791.0 | $833.8 | | Total assets (million USD) | $1,405.9 | $1,419.3 | | Total current liabilities (million USD) | $243.1 | $283.0 | | Total non-current liabilities (million USD) | $609.8 | $593.8 | | Stockholders' equity (million USD) | $552.9 | $542.4 | | Total liabilities & equity (million USD) | $1,405.9 | $1,419.3 | - Goodwill decreased from **$533.1 million** to **$492.2 million**, reflecting the impairment charge in Q2'26[27](index=27&type=chunk)[5](index=5&type=chunk) - Current portion of long-term debt reduced from **$45.6 million** to zero, contributing to the decrease in total current liabilities[27](index=27&type=chunk) [Supplemental Cash Flow Information](index=10&type=section&id=Item%205.3.%20Supplemental%20Cash%20Flow%20Information) Net cash provided by operating activities significantly improved to $44.4 million in Q2'26, and free cash flow turned positive, reaching $41.5 million, demonstrating strong sequential and year-over-year growth Supplemental Cash Flow Information | Metric | Q2'26 | Q1'26 | Q2'25 | | :------------------------------------ | :------ | :------ | :------ | | Net cash provided by (used in) operating activities (million USD) | $44.4 | $27.8 | $(5.0) | | Net capital expenditures (million USD) | $(2.9) | $(1.7) | $(3.4) | | Free cash flow (million USD) | $41.5 | $26.2 | $(8.4) |

Core Insights - Semtech Corporation (SMTC) is set to report its second-quarter fiscal 2025 results on August 25, with anticipated revenues of $256 million, reflecting an 18.9% increase year-over-year [1][10] Revenue and Earnings Expectations - For the fiscal second quarter, Semtech expects non-GAAP earnings per share to be 40 cents, showing a significant improvement from 11 cents in the same quarter last year [2][10] Performance Drivers - The anticipated strong performance is attributed to growth in infrastructure and high-end consumer markets, as well as robust demand in the wireless sector driven by 5G offerings [3][10] - The launch of cost-optimized 5G solutions, including EM9492 and EM9295 modules, is expected to enhance adoption among telecom carriers [3] - Increased compliance with various certifications for 5G modules is likely to boost their acceptance among global networking carriers [3] - Strong momentum in Signal Integrity and Analog Mixed Signal & Wireless product lines is expected to contribute positively [4] - Demand for Tri-Edge and FiberEdge products in hyperscale data centers is anticipated to aid performance [5] - The growing popularity of LoRa devices and LoRaWAN standards is expected to positively impact top-line growth [6] Challenges - Macroeconomic factors such as prolonged inflation and high interest rates may pose challenges for Semtech in the fiscal second quarter [7] - Tensions between the United States and China could raise concerns, while softness in the industrial end-market and Connectivity segment is expected to negatively affect results [7]

Core Insights - Semtech (SMTC) is expected to report quarterly earnings of $0.40 per share, reflecting a year-over-year increase of 263.6% [1] - Anticipated revenues for the quarter are projected to be $256.04 million, which represents an 18.9% increase compared to the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1] Revenue Estimates by Market Segment - Net Sales for the High-End Consumer market are forecasted to reach $36.79 million, showing a slight decline of -0.8% from the prior-year quarter [4] - Net Sales for the Industrial market are expected to be $143.82 million, indicating a year-over-year increase of +14.8% [4] - Net Sales for the Infrastructure market are projected at $75.47 million, suggesting a significant year-over-year increase of +42.6% [4] Revenue Estimates by Reportable Segment - Net Sales for the Signal Integrity segment are predicted to reach $77.92 million, reflecting a year-over-year increase of +31.1% [5] - Semtech shares have decreased by -5.7% over the past month, contrasting with the Zacks S&P 500 composite's increase of +2% [5] - Semtech holds a Zacks Rank of 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [5]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Semtech Corporation due to a class action complaint alleging breaches of fiduciary duties by the board of directors [1][2] Group 1: Class Action Complaint Details - The class action complaint was filed on February 20, 2025, covering a Class Period from August 27, 2024, to February 7, 2025 [1] - Allegations include that Semtech's management made materially false and misleading statements and failed to disclose adverse facts about the company's business and operations [2] - Specific failures include the inadequacy of CopperEdge products for server rack customers, necessary architectural changes, and lower-than-expected sales projections for fiscal 2026 [2] Group 2: Company Information and Contact - Bragar Eagel & Squire, P.C. is a nationally recognized law firm representing investors in complex litigation [4] - Long-term stockholders of Semtech are encouraged to contact the firm for more information regarding their rights and the ongoing investigation [3][6]

Core Insights - SkyWater Technology (SKYT) and Semtech Corporation (SMTC) are positioned to benefit from the growing semiconductor market, particularly as the U.S. increases domestic chip production [1][2] - Semiconductor sales are projected to grow 11.2% year over year, reaching $700.9 billion in 2025 and $760.7 billion in 2026, driven by demand for AI hardware, electric vehicles, and industrial automation [2] SkyWater Technology (SKYT) - SkyWater is enhancing its market position through product innovation and expanded manufacturing capabilities, with a focus on its ThermaView platform for thermal imaging [4] - The company reported Q1 2025 revenues of $61.3 million and a gross margin of 24.2%, with advanced computing now accounting for 10% of total revenues [5] - The acquisition of Infineon's Fab 25 is expected to significantly increase SkyWater's capacity, adding approximately 400,000 wafer starts per year and making it the largest U.S.-based pure-play foundry service provider [6] Semtech Corporation (SMTC) - Semtech is experiencing growth in next-gen data center infrastructure, reporting record data center revenue of $51.6 million in Q1 fiscal 2026, a 143% increase year over year [7] - The CopperEdge product line offers over 90% power savings and is designed for high-density AI/ML data centers, with new ICs launched to support advanced connectivity [8] - Semtech's collaboration with major cloud platforms positions its technologies at the core of next-generation compute infrastructure, enhancing its growth potential in AI-centric markets [9][10] Market Performance and Valuation - Both SKYT and SMTC shares have declined year-to-date, with drops of 25.8% and 21.3% respectively, attributed to a challenging macroeconomic environment [11] - SMTC shares are currently overvalued with a Value Score of D, while SKYT holds a Value Score of B; SMTC's Price/Sales ratio is 3.87X compared to SKYT's 1.43X [13] - Earnings estimates indicate a projected loss of one cent per share for SKYT in 2025, while SMTC's earnings for fiscal 2026 are estimated at $1.66 per share, reflecting an 88.64% year-over-year increase [16] Conclusion - Both companies are well-positioned to capitalize on long-term growth trends in the semiconductor market, with SkyWater benefiting from its unique foundry status and Semtech showing stronger near-term visibility due to record data center performance [17][18]

Company Overview - Semtech's shares have increased by approximately 20.2% over the past month, outperforming the S&P 500 index [1] - The consensus estimate for Semtech has shifted upward by 26.11% in the past month, indicating positive revisions [2] Performance Metrics - Semtech currently holds a Growth Score of A, but has a low Momentum Score of D and a Value Score of D, placing it in the bottom 40% for value investment strategy [3] - The overall VGM Score for Semtech is B, which is a composite score that investors should consider if not focused on a single strategy [3] Future Outlook - The upward trend in estimates suggests a promising outlook for Semtech, leading to a Zacks Rank of 2 (Buy), indicating expectations for above-average returns in the coming months [4] Industry Comparison - Semtech is part of the Zacks Semiconductor - Analog and Mixed industry, where Analog Devices (ADI) has gained 8.8% over the past month [5] - Analog Devices reported revenues of $2.64 billion for the last quarter, reflecting a year-over-year increase of 22.3%, with EPS rising from $1.40 to $1.85 [5] - For the current quarter, Analog Devices is expected to post earnings of $1.92 per share, representing a year-over-year change of 21.5% [6]

Group 1 - Semtech (SMTC) shares have increased by 2.2% over the past four weeks, closing at $40.23, with a mean price target of $56.33 indicating a potential upside of 40% [1] - The average of 12 short-term price targets ranges from a low of $43.00 to a high of $68.00, with a standard deviation of $8.32, suggesting a variability in analyst estimates [2] - Analysts show strong agreement on SMTC's ability to report better earnings than previously predicted, which supports the potential for stock upside [4][11] Group 2 - The Zacks Consensus Estimate for SMTC's current year earnings has increased by 20.4% over the past month, with four estimates rising and three falling [12] - SMTC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting the extent of gains, they can provide a directional guide for price movement [14]