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]

Q1'26 Financial Performance - Net sales were $251.1 million[14], a slight increase from $251.0 million in Q4'25[29] - Gross margin was 52.3%[29], and adjusted gross margin was 53.5%[29] - Operating income was $36.0 million[29], resulting in an operating margin of 14.3%[29] - Adjusted operating income was $47.6 million[29], with an adjusted operating margin of 19.0%[29] - Adjusted EBITDA was $55.4 million, representing an adjusted EBITDA margin of 22.1%[29] - Net income was $19.3 million, or $0.22 per diluted share[29], while adjusted net income was $33.9 million, or $0.38 per diluted share[29] End Market Performance in Q1'26 - Infrastructure end market net sales reached $72.8 million, up 5% Q/Q and 30% Y/Y[18], with data center sales at a record $51.6 million, up 3% Q/Q and 143% Y/Y[19] - High-End Consumer end market net sales were $35.4 million, flat Q/Q and up 3% Y/Y[21], with Consumer TVS net sales of $24.5 million, up 2% Q/Q[21] - Industrial end market net sales were $142.8 million, down 3% Q/Q but up 24% Y/Y[24], with LoRa-enabled solutions net sales of $38.9 million, up 5% Q/Q and 81% Y/Y[25], and IoT Systems net sales of $63.5 million, down 8% Q/Q but up 31% Y/Y[25] Q2'26 Outlook - Net sales are expected to be $256.0 million, with a potential variance of +/- $5.0 million[32] - Adjusted gross margin is projected at 53.0%, with a potential variance of +/- 50 bps[32] - Adjusted operating income is expected to be $48.2 million, with a potential variance of +/- $3.0 million[32], resulting in an adjusted operating margin of 18.8%, with a potential variance of +/- 80 bps[32] - Adjusted diluted earnings per share are projected at $0.40, with a potential variance of +/- $0.03[32] - Adjusted EBITDA is expected to be $56.0 million, with a potential variance of +/- $3.0 million[32], resulting in an adjusted EBITDA margin of 21.9%, with a potential variance of +/- 80 bps[32]

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]

Group 1 - Semtech Corporation is set to release its first-quarter earnings results on May 27, with analysts expecting earnings of 37 cents per share, a significant increase from 6 cents per share in the same period last year [1] - The company is projected to report quarterly revenue of $250.09 million, up from $206.1 million a year earlier [1] - On May 12, Semtech announced the appointment of Mitch Haws as the senior vice president of investor relations [2] Group 2 - Semtech shares experienced a decline of 1.4%, closing at $37.28 [2] - Stifel analyst Tore Svanberg maintained a Buy rating and raised the price target from $35 to $42 [7] - UBS analyst Timothy Arcuri maintained a Buy rating but reduced the price target from $60 to $55 [7] - Morgan Stanley analyst Joseph Moore initiated coverage with an Equal-Weight rating and a price target of $30 [7] - Benchmark analyst Cody Acree maintained a Buy rating and lowered the price target from $82 to $68 [7] - Needham analyst Quinn Bolton reiterated a Buy rating with a price target of $54 [7]

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].

Core Viewpoint - Semtech Corporation (SMTC) is expected to report strong financial results for the first quarter of fiscal 2026, with significant year-over-year growth in both net sales and earnings per share. Financial Performance - Semtech anticipates net sales of $250 million (+/- $5 million), reflecting a 21% year-over-year growth, with the Zacks Consensus Estimate for revenues at $249.79 million, indicating a rise of 21.20% from the previous year [1][2] - The company expects non-GAAP earnings per share to be 37 cents (+/- 3 cents), while the consensus mark is at 38 cents, showing a robust year-over-year improvement of 533% [2] Market Drivers - The fiscal first-quarter performance is likely to benefit from strength in infrastructure and high-end consumer markets, with strong growth in the wireless end-market attributed to increasing 5G offerings [3] - Continued growth in FiberEdge and Tri-Edge products, especially for 400G/800G modules, is expected to boost revenue [3] - Strong momentum in Signal Integrity and Analog Mixed Signal & Wireless product lines is anticipated to contribute positively, alongside the growing adoption of artificial intelligence [4] - Increased demand for LoRa devices and LoRaWAN standards is expected to positively impact top-line growth, particularly with new product offerings targeting smaller-scale network deployments [5] Challenges - Macroeconomic challenges, including prolonged inflation and high interest rates, may pose difficulties for the company [6] - Delayed adoption of CopperEdge products due to architectural changes in server racks could negatively affect results [6] - Escalating tensions between the United States and China, along with softness in the industrial end-market and Connectivity segment, are expected to be significant negatives [7]

Wall Street analysts expect Semtech (SMTC) to post quarterly earnings of $0.38 per share in its upcoming report, which indicates a year-over-year increase of 533.3%. Revenues are expected to be $249.79 million, up 21.2% from the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Ahead of a company's earnings disclosure, it is cru ...

Group 1: Market Overview - The S&P 500 Index is down approximately 14% from its 52-week high, while the Invesco PHLX Semiconductor ETF is down around 35% from its highs [1] - Lesser-known chip stocks Semtech and Onsemi have experienced declines of more than 50% from their 52-week highs, presenting potential long-term growth opportunities [2] Group 2: Semtech Analysis - Semtech's stock has dropped 69% from its 52-week high, despite a significant improvement in its financial position [2] - In the most recent quarter, Semtech's revenue rose 30% year-over-year, with adjusted operating margin nearly doubling to nearly 20% [3] - The infrastructure segment, which includes data center customers, saw a 75% year-over-year growth [3] - Semtech's LoRa devices in the Industrial market experienced a revenue increase of 205% from the prior year quarter, indicating strong customer resonance [4] - The current price target for Semtech is $57.33, suggesting a potential upside of 112.42% [6] - Morgan Stanley analysts have set a price target of $30 for Semtech, indicating a 22% upside over the next 12 months [7] Group 3: Onsemi Analysis - Onsemi's stock is down nearly 56% from its 52-week high, primarily due to negative revenue growth for six consecutive quarters [8] - Despite the downturn, Onsemi maintains strong profitability with an adjusted gross profit margin of around 45% and an adjusted operating margin of more than 25% [9] - The company targets revenue growth of 10% to 12% through 2027 and aims for a 40% operating margin [10] - Onsemi is well-positioned to benefit from megatrends such as increasing electric vehicle ownership and has a strong focus on silicon carbide (SiC)-based chips [10][11] - The 12-month stock price forecast for Onsemi is $63.52, indicating a potential upside of 73.08% [12] - Analysts remain cautiously optimistic about Onsemi, with a mix of Buy and Hold ratings [13]