Semtech Corporation Q4 FY2026 earnings call

Hong noted SEMTEX closed FY2026 with record sales, strong growth, data center roadmap progress, product portfolio optimization, and HIFO acquisition. Mark discussed Q4 net sales growth, gross margin, adjusted metrics, cash flow, and Q1 FY2027 outlook. Operational highlights include 5G REDCap router launch, divestiture progress, MSA participation, and industry event presence

For Q4, net sales were $274.4 million, up 3% sequentially and 9% year over year. For the year, revenues were $1.05 billion, up 15% driven by data center and Elora portfolios. Adjusted diluted earnings per share were 44 cents in Q4, up 10% year-over-year, and $1.71 for fiscal year 2026, up 94% over prior year. Infrastructure Q4 net sales $86.3M, up 11% seq and 25% y/y; fiscal 2026 $310M, up 27% y/y. Data center Q4 net sales record $63M, up 12% seq and 26% y/y; 2026 $223M, up 58% annually. High-end consumer Q4 $36.6M, down 13% seq and up 3% y/y; fiscal 2026 $155.1M, up 5% y/y. Industrial Q4 $151M, up 3% seq and y/y; fiscal 2026 $584M, up 13% y/y. LoRa-enabled Q4 $39.6M, in line with Q3 and up 7% y/y; fiscal 2026 $156M, up 34% full year. IoT systems and connectivity Q4 $89.9M, up 2% seq and down 3% y/y; fiscal 2026 $354M, up 9% y/y

Q1 FY2027 net sales expected $283M +/- $5M, 13% y/y at midpoint. Infrastructure net sales to increase seq, data center growth incl Copper Ridge shipments. High consumer net sales to increase ~9% seq. Industrial net sales flat. Adjusted gross margin expected 52.8% +/- 50 bps. Adjusted net operating expenses expected $96.9M +/- $1M. Adjusted EBITDA expected $59.5M +/- $3M. Adjusted diluted EPS expected 45 cents +/- 3 cents

Q: Question on hypo acquisition initial apps, qualification cycles; A: Hypo GaN chip in production, demonstrating CW lasers at OFC, multiple customers seeking samples Q: Question on CopperEdge ramp, mix; A: Start shipping to cable manufacturers in April, mix between DAC and ACC tested, linear equalizer with multiple customers Q: Question on LoRa 20% longer term, 35 - 45M quarterly run rate; A: LoRa trend lower revenue increasing, quarter to quarter bumpy, multiple growth drivers incl LoRa Plus, Amazon Sidewalk Q: Question on Indian Fossilized Laser Acquisition, go-to-market strategy; A: FAB integrated, go-to-market via providing chipset with reference design to accelerate time to market Q: Question on CPO, copper role; A: Copper mainstream within rack, CPO for multiple racks, MPO complement to CPO Q: Question on ARISA XPO announcement, LPO ecosystem; A: XPO defined high density, low power MSA, MPO involved in common specification development Q: Question on potential divestitures; A: Making good progress, interested parties spending on due diligence Q: Question on 800 gig growth, transition to higher speeds; A: 800 gig foundation, growth strong through FY27, evolving into 1.60 and low-power 1.60 optics Q: Question on data center revenue growth 50%, growth drivers; A: ACC with hyperscaler, 1.6T fiber edge in second half, linear equalizer onboard Q: Question on semis gross margin, accretive products; A: New products have accretive gross margins, other products also contribute Q: Question on LPO in data center growth, ACC engagement; A: LPO continues to grow, ACC adoption increasing with multiple hyperscalers embracing it Q: Question on China marketplace, Sidewalk contribution; A: Diversifying away from China, Sidewalk to start deploying in March with multiple product demos at CES Q: Question on TVS and protection sensing; A: TVS revenue growing above handset volumes, with good design wins and geopolitical tailwind