We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Semtech's Q2 revenues rose 32.7% year over year to $341.9 million, topping estimates by 4.1%.
Infrastructure sales rose 69% as 800G strength and early 1.6T FiberEdge and CopperEdge ramps supported growth.
Semtech expects Q3 sales of $410 million and non-GAAP EPS of $1.05, both above consensus estimates.
Semtech Corporation (SMTC - Free Report) shares gained 4% during Tuesday’s extended trading session after the company reported better-than-expected second-quarter fiscal 2027 results.
Semtech posted non-GAAP earnings of 71 cents per share, which beat the Zacks Consensus Estimate by 14.5%. The bottom line exceeded management’s guidance of 61 cents (+/-2 cents) and reflected a robust year-over-year improvement of approximately 73.2%.
Semtech beat on earnings in each of the trailing four quarters, the average surprise being 9.8%.
SMTC’s second-quarter fiscal 2027 revenues of $341.9 million topped the Zacks Consensus Estimate by 4.1% and came above management’s guidance of $328 million (+/- $5 million). The top line jumped 32.7% year over year.
Semtech Corporation Price, Consensus and EPS Surprise
Sales from the infrastructure market totaled $123.7 million (36.2% of net sales), exhibiting year-over-year growth of 69%, supported by the expanding data center business. The increase reflected continued strength in 800G products and the early ramp of 1.6T FiberEdge and CopperEdge solutions.
Sales from the industrial market amounted to $178.9 million (52.3% of net sales), up 25.1% year over year.
Sales from the high-end consumer market totaled $39.2 million (11.5% of net sales), down 4.6% year over year.
SMTC’s Q2 Revenues in Terms of Product Lines
Signal Integrity (36.9% of net sales) sales totaled $126.2 million, up 64.3% year over year.
Analog Mixed Signal & Wireless (34.3% of net sales) sales amounted to $117.4 million, which rose 27.6% year over year.
IoT System and Connectivity (28.8% of net sales) sales totaled $98.3 million, up 10.7% on a year-over-year basis.
Semtech Builds Data Center and LoRa Momentum
FiberEdge demand remained strong across leading hyperscalers, and Semtech said it is designed into every major module provider in its target markets. The company expects 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027 and is engaged in CopperEdge design-ins at bandwidths up to 3.2T.
LoRa-enabled sales set another record at $58 million, up 58% year over year. The company cited expansion across smart utilities, buildings, cities and asset management, while Amazon Sidewalk is expanding internationally after Ring's U.S. launch of LoRa-based sensors. Semtech is also expanding photonics capacity, with high-power CW laser revenues expected to begin in the first half of fiscal 2028.
Semtech’s Margins in Details
The non-GAAP gross margin of 54.5% expanded 130 basis points (bps) on a year-over-year basis and 150 bps sequentially.
Non-GAAP operating income increased 72% year over year to $83.6 million. The non-GAAP operating margin expanded to 24.4% from 18.8% reported in the year-ago quarter. On a quarter-over-quarter basis, non-GAAP operating income increased 41%, while margin expanded 400 basis points.
Semtech’s Balance Sheet & Cash Flow
As of July 26, 2026, cash and cash equivalents totaled $204.1 million, up from $163.3 million as of April 26, 2026.
The long-term debt amounted to $394.4 million, down from the previous quarter’s reported figure of $492 million.
During the second quarter, Semtech generated operating cash flow and free cash flow of $68.9 million and $61.4 million, respectively.
Semtech Initiates Q3 FY27 Guidance
For the third quarter of fiscal 2027, Semtech expects net sales to be $410 million (+/- $5 million). The Zacks Consensus Estimate is pegged at $357.1 million, indicating a year-over-year rise of 33.7%.
The non-GAAP gross margin is expected to be 58.3% (+/- 100 bps). The non-GAAP operating margin is anticipated to be 31% (+/- 60 bps).
Non-GAAP earnings are expected to be $1.05 (+/- 3 cents) per share. The consensus mark for earnings is pegged at 73 cents per share, indicating a year-over-year rise of 52.1%.
The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.73 per share, up 8 cents over the past seven days, indicating a year-over-year surge of 35.1%. Applied Materials shares have surged 86.7% year to date (YTD).
The Zacks Consensus Estimate for Lam Research’s fiscal 2027 earnings has moved northward by 17.8% to $9.32 per share over the past 30 days and calls for a year-over-year jump of 60.4%. Lam Research shares have soared 83.8% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 2 cents to $8.92 per share in the past seven days, implying a year-over-year increase of 87%. NVIDIA shares have risen 14.6% YTD.
View the Zacks #1 Rank List
Image: Bigstock
Semtech's Q2 Earnings Surpass Estimates, Revenues Increase Y/Y
Key Takeaways
Semtech Corporation (SMTC - Free Report) shares gained 4% during Tuesday’s extended trading session after the company reported better-than-expected second-quarter fiscal 2027 results.
Semtech posted non-GAAP earnings of 71 cents per share, which beat the Zacks Consensus Estimate by 14.5%. The bottom line exceeded management’s guidance of 61 cents (+/-2 cents) and reflected a robust year-over-year improvement of approximately 73.2%.
Semtech beat on earnings in each of the trailing four quarters, the average surprise being 9.8%.
SMTC’s second-quarter fiscal 2027 revenues of $341.9 million topped the Zacks Consensus Estimate by 4.1% and came above management’s guidance of $328 million (+/- $5 million). The top line jumped 32.7% year over year.
Semtech Corporation Price, Consensus and EPS Surprise
Semtech Corporation price-consensus-eps-surprise-chart | Semtech Corporation Quote
Semtech’s Q2 Revenues in Terms of End Markets
Sales from the infrastructure market totaled $123.7 million (36.2% of net sales), exhibiting year-over-year growth of 69%, supported by the expanding data center business. The increase reflected continued strength in 800G products and the early ramp of 1.6T FiberEdge and CopperEdge solutions.
Sales from the industrial market amounted to $178.9 million (52.3% of net sales), up 25.1% year over year.
Sales from the high-end consumer market totaled $39.2 million (11.5% of net sales), down 4.6% year over year.
SMTC’s Q2 Revenues in Terms of Product Lines
Signal Integrity (36.9% of net sales) sales totaled $126.2 million, up 64.3% year over year.
Analog Mixed Signal & Wireless (34.3% of net sales) sales amounted to $117.4 million, which rose 27.6% year over year.
IoT System and Connectivity (28.8% of net sales) sales totaled $98.3 million, up 10.7% on a year-over-year basis.
Semtech Builds Data Center and LoRa Momentum
FiberEdge demand remained strong across leading hyperscalers, and Semtech said it is designed into every major module provider in its target markets. The company expects 1.6T FiberEdge market share to exceed 50% by the end of fiscal 2027 and is engaged in CopperEdge design-ins at bandwidths up to 3.2T.
LoRa-enabled sales set another record at $58 million, up 58% year over year. The company cited expansion across smart utilities, buildings, cities and asset management, while Amazon Sidewalk is expanding internationally after Ring's U.S. launch of LoRa-based sensors. Semtech is also expanding photonics capacity, with high-power CW laser revenues expected to begin in the first half of fiscal 2028.
Semtech’s Margins in Details
The non-GAAP gross margin of 54.5% expanded 130 basis points (bps) on a year-over-year basis and 150 bps sequentially.
Non-GAAP operating income increased 72% year over year to $83.6 million. The non-GAAP operating margin expanded to 24.4% from 18.8% reported in the year-ago quarter. On a quarter-over-quarter basis, non-GAAP operating income increased 41%, while margin expanded 400 basis points.
Semtech’s Balance Sheet & Cash Flow
As of July 26, 2026, cash and cash equivalents totaled $204.1 million, up from $163.3 million as of April 26, 2026.
The long-term debt amounted to $394.4 million, down from the previous quarter’s reported figure of $492 million.
During the second quarter, Semtech generated operating cash flow and free cash flow of $68.9 million and $61.4 million, respectively.
Semtech Initiates Q3 FY27 Guidance
For the third quarter of fiscal 2027, Semtech expects net sales to be $410 million (+/- $5 million). The Zacks Consensus Estimate is pegged at $357.1 million, indicating a year-over-year rise of 33.7%.
The non-GAAP gross margin is expected to be 58.3% (+/- 100 bps). The non-GAAP operating margin is anticipated to be 31% (+/- 60 bps).
Non-GAAP earnings are expected to be $1.05 (+/- 3 cents) per share. The consensus mark for earnings is pegged at 73 cents per share, indicating a year-over-year rise of 52.1%.
SMTC’s Zacks Rank and Other Stocks to Consider
Currently, Semtech carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Applied Materials (AMAT - Free Report) , Lam Research (LRCX - Free Report) and NVIDIA (NVDA - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.73 per share, up 8 cents over the past seven days, indicating a year-over-year surge of 35.1%. Applied Materials shares have surged 86.7% year to date (YTD).
The Zacks Consensus Estimate for Lam Research’s fiscal 2027 earnings has moved northward by 17.8% to $9.32 per share over the past 30 days and calls for a year-over-year jump of 60.4%. Lam Research shares have soared 83.8% YTD.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 2 cents to $8.92 per share in the past seven days, implying a year-over-year increase of 87%. NVIDIA shares have risen 14.6% YTD.