Semtech shares tick up as Q2 results top estimates, guidance solid

Published 25/08/2025, 21:30
Semtech shares tick up as Q2 results top estimates, guidance solid

Investing.com -- Semtech Corporation (NASDAQ:SMTC) reported better-than-expected second quarter fiscal 2026 results on Monday, with both earnings and revenue exceeding analyst estimates, sending shares up 0.6% after-hours.

The semiconductor and IoT solutions provider posted adjusted earnings per share of $0.41, beating the analyst consensus of $0.40. Revenue reached $257.6 million, surpassing expectations of $256.06 million and increasing 19.6% YoY from $215.4 million in the same quarter last year. The company’s adjusted operating margin improved to 18.8% compared to 14.2% in the year-ago period.

"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.

For the third quarter of fiscal 2026, Semtech provided guidance for revenue between $261 million and $271 million, with the midpoint of $266 million aligning with analyst expectations of $265 million. The company forecasts adjusted EPS between $0.41 and $0.47, with the midpoint of $0.44 matching the consensus estimate.

The company reported significant improvements in cash flow, which enabled accelerated debt reduction. "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.

On a GAAP basis, Semtech reported a net loss of $27.1 million, or -$0.31 per share, which included a $42 million goodwill impairment charge. Adjusted EBITDA for the quarter was $56.5 million, representing 21.9% of revenue.

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