Semtech Q1 Earnings Call Highlights

Key Points

• Semtech posted record first-quarter fiscal 2027 revenue of $291 million, up 6% sequentially and 16% year over year, with adjusted EPS of $0.51. Management said it was the company’s ninth straight quarter of net sales growth.
• Data center demand was the main growth driver, with revenue hitting a record $71.6 million, up 39% year over year. Semtech highlighted strong traction in 800G FiberEdge, 1.6T products, and copper offerings, and expects data center revenue to grow another 35% sequentially in Q2.
• LoRa is entering a new growth phase, with LoRa-enabled net sales rising 14% year over year to $44.9 million. The company expects second-quarter LoRa revenue to reach an all-time high, supported by smart utility, building, city, and asset-management deployments.

Semtech NASDAQ: SMTC reported record quarterly revenue for its first quarter of fiscal 2027, driven by strength in its data center and LoRa businesses, and issued a second-quarter outlook that calls for continued acceleration across its major segments.

President and Chief Executive Officer Hong Hou said the company delivered “an exceptional start” to fiscal 2027, with revenue of $291 million for the quarter ended April 26, 2026. That was up 6% sequentially and 16% year over year. Adjusted diluted earnings per share were $0.51, up 34% from the prior year.

“We drove strong sequential and year-over-year revenue and earnings growth, expanded our data center and the LoRa design win pipeline, all while advancing our R&D and strategic initiatives,” Hou said.

Chief Financial Officer Mark Lin said the quarter marked Semtech’s ninth consecutive quarter of net sales growth. Adjusted gross margin was 53%, while total semiconductor products gross margin was 60.7%, reflecting a favorable mix from the company’s data center and LoRa portfolios. Adjusted operating income was $59.3 million, adjusted operating margin was 20.4%, and adjusted EBITDA was $66.4 million.

Data Center Demand Drives Infrastructure Growth

Semtech’s infrastructure net sales were $98.8 million, up 14% sequentially and 36% year over year. Data center net sales reached a record $71.6 million, up 14% sequentially and 39% from the year-ago period.

Hou attributed the data center performance to strong demand across the company’s portfolio, particularly its 800G FiberEdge products. He said demand for Semtech’s transimpedance amplifier, or TIA, solutions was “exceptionally strong” across a broad range of transceiver programs. He also said established and emerging module suppliers had qualified Semtech for new sockets, including some sole-source positions.

The company also cited momentum in 800G linear pluggable optics, or LPO, and said its FiberEdge linear TIA and driver solutions are deployed by several leading hyperscalers in the U.S. and China. Hou said Semtech expects its 800G foundation to support revenue growth this year, with 1.6T shipments launching in the second quarter and gaining momentum in the second half.

On the copper side, Hou said Semtech began shipping CopperEdge 1.6T integrated circuits in the first quarter to cable partners for deployment at a U.S. hyperscaler. He said active copper cable, or ACC, products continue to gain traction as customers evaluate them against incumbent solutions.

During the question-and-answer portion of the call, Hou said capacity remains critical in the current environment. “This is a time capacity is king,” he said, adding that Semtech began working on availability about 18 months ago. He said the company can support drop-in orders and is working with foundry and outsourced semiconductor assembly and test partners to further expand capacity.

LoRa Business Enters New Growth Phase

Industrial net sales were $153.9 million, up 2% sequentially and 8% year over year. LoRa-enabled net sales were $44.9 million, up 12% from the prior quarter and 14% from the year-ago period.

Hou said LoRa growth was supported by applications including smart utilities, smart buildings, smart cities and asset management. He said Semtech’s fourth-generation LoRa platform expands throughput to 2.6 Mbps while retaining low power consumption, sensitivity and protocol flexibility.

He described three pillars for the low-power connectivity business: LoRaWAN for industrial and commercial deployments, LoRa Plus for smart home and security markets, and Amazon Sidewalk for mass-market consumer applications. For the second quarter, Semtech is targeting LoRa revenue at an all-time high, with more than 15% sequential quarterly growth.

In the Q&A session, Hou said growth has increasingly included gateway expansion, which he said indicates customers are adding capacity and coverage to support more end-node applications. He also identified edge AI as a potential “wild card” opportunity for LoRa.

Consumer and IoT Businesses Show Mixed Trends

High-end consumer net sales were $38.4 million, up 5% sequentially and 8% year over year. Hou said Semtech’s transient voltage suppressor, or TVS, business continued to outpace underlying handset volumes, helped by share gains and content expansion at premium handset manufacturers.

He also highlighted the company’s SurgeSwitch solution for high-voltage power delivery applications and said Semtech continues to expand PerSe capacitive sensor design wins.

IoT systems and connectivity net sales were $88.3 million, down 2% sequentially but up 2% year over year. Hou said the newly released AirLink RX400 and AirLink EX400 routers were receiving strong customer feedback, particularly for mission-critical low-power 5G cellular applications.

Portfolio Optimization and Hyfo Acquisition

Hou said the divestiture process for Semtech’s cellular module business is in its final stages, with discussions focused on transition and integration matters. He said the company remains confident the business represents a compelling opportunity for the right acquirer.

Semtech also discussed the Hyfo acquisition, completed in March. Hou said Hyfo’s indium phosphide photonic products are reported in the data center end market and are strategic building blocks for 1.6T and 3.2T optical modules. He said demand for gain chips currently exceeds supply, though capacity expansion plans remain on schedule.

In response to an analyst question, Hou said aggregate demand for gain chips could outpace current capacity by about three times. He said Semtech expects to increase capacity by about three to four times by the end of the year, and by another three to four times by the end of next year.

Second-Quarter Outlook Calls for Further Growth

For the second quarter of fiscal 2027, Semtech expects net sales of $328 million, plus or minus $5 million. At the midpoint, that would represent 13% sequential growth and 27% year-over-year growth.

The company expects data center revenue to grow 35% sequentially in the second quarter, supported by accelerating shipments of 800G and 1.6T components. Hou said that would represent 85% growth over the same period last year.

Lin said Semtech expects adjusted gross margin of 54%, plus or minus 50 basis points, and total semiconductor products gross margin of 62.1%, plus or minus 50 basis points. Adjusted operating margin is expected to reach 21.9% at the midpoint, while adjusted EBITDA is expected to be $79.2 million, plus or minus $2.3 million.

Semtech projected adjusted diluted earnings per share of $0.61, plus or minus $0.02, based on a weighted average share count of 97.7 million. At the midpoint, that would be up 20% sequentially and 49% year over year.

Hou said the company expects accelerating demand through fiscal 2027 and beyond, supported by backlog, bookings and new product ramps. “Our data center business is firing on all cylinders,” he said. “LoRa is entering a new chapter of growth.”

About Semtech NASDAQ: SMTC

Semtech Corporation is a leading supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms. The company's products address a broad range of applications in the Internet of Things (IoT), data center and telecom, industrial, home automation, automotive, and aerospace markets. Semtech's portfolio includes power management, signal integrity, protection devices, wireless and sensing technologies that enable smarter, more connected systems worldwide.

A core offering from Semtech is its LoRa® technology, a low-power, long-range wireless communication platform that has become a de facto standard for global IoT deployments.

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