Street Calls of the Week
CAMARILLO, Calif. - On Monday, Semtech Corporation (NASDAQ:SMTC) reported better-than-expected second quarter fiscal 2026 results, with revenue climbing 20% YoY and adjusted earnings nearly quadrupling from the same period last year.
The semiconductor and IoT systems provider posted adjusted earnings per share of $0.41, slightly above the analyst consensus of $0.40. Revenue reached $257.6 million, exceeding analysts’ expectations of $256.06 million and representing a 20% increase from $215.4 million in the same quarter last year.
"Our second quarter results reflect strong year-over-year financial performance, driven by deep customer engagement, operational discipline, and a culture of excellence," said Hong Hou, president and chief executive officer. "We believe we are well positioned to capture the high-growth opportunities ahead, supported by targeted investments in our core businesses."
Semtech’s adjusted gross margin improved to 53.2% from 50.4% a year ago, while adjusted operating margin rose to 18.8% from 14.2% in the prior-year period. The company also reported stronger cash flow, with $44.4 million provided by operating activities compared to a $5 million outflow in the second quarter of fiscal 2025.
For the third quarter of fiscal 2026, Semtech forecasts revenue between $261 million and $271 million, with the midpoint of $266 million aligning with the analyst consensus of $265 million. The company expects adjusted earnings per share of $0.41 to $0.47, with the midpoint of $0.44 matching analyst expectations.
"Strong net sales growth and improving profitability translated to meaningful sequential and year-over-year increases in our operating and free cash flows," said Mark Lin, executive vice president and chief financial officer.
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