Semtech Shares Jump on Strong Q4 Earnings Beat, Revenues Up Y/Y

Semtech Corporation SMTC shares jumped 21.06% to close at $39.60 on Friday following impressive fourth-quarter fiscal 2025 earnings results.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.SMTC reported fourth-quarter fiscal 2025 non-GAAP earnings of 40 cents per share, which surpassed the Zacks Consensus Estimate by 25%. The bottom line also exceeded management’s guidance of 32 cents per share and showed a robust improvement from the year-ago quarter’s earnings of 6 cents per share.The company's impressive bottom-line performance demonstrated its operational efficiency and effective expense management.Semtech’s fourth-quarter fiscal 2025 revenues of $251 million beat the Zacks Consensus Estimate by 1.25%. It was roughly in line with the management’s guidance of $250 million (+/- $5 million).The top line jumped 30.1% year over year, with solid growth across all of its end markets, particularly in data centers.However, SMTC’s first-quarter fiscal 2026 guidance reflects lower CopperEdge demand. On a year-to-date basis, shares of SMTC have plunged 36%, underperforming the Zacks Semiconductor - Analog and Mixed industry’s decline of 6%.Semtech Corporation Price, Consensus and EPS Surprise Semtech Corporation price-consensus-eps-surprise-chart | Semtech Corporation QuoteSemtech’s Q4 Revenues in Terms of End MarketsSMTC’s top-line performance can be attributed to the impressive year-over-year rise in its end markets.Sales from the infrastructure market were $69.1 million (27.5% of net sales), exhibiting year-over-year growth of 75%. This was driven by solid demand for data centres, expansion in the FiberEdge portfolio and continued investment in CopperEdge.Sales from the industrial market were $146.6 million (58.4% of net sales), up 21% year over year growth.Sales from the high-end consumer market were $35.4 million (14.1% of net sales), up 10% year over year. Strong market demand, reflective of steady contributions from design wins and market share expansion of Consumer TVS, along with a continued performance of PerSe proximity sensing products, lead to top-line growth.SMTC’s Q4 Revenues in Terms of Product LinesSignal Integrity (28.9% of net sales) sales were $72.5 million in the reported quarter, up 69.4% year over year. Analog Mixed Signal & Wireless (35% of net sales) sales were $85.4 million, up 34% year over year.IoT System and Connectivity (37.09% of net sales) sales were $93.1 million, up 3.8% on a year-over-year basis.Semtech’s Margins Expand Year Over YearThe non-GAAP gross margin of 53.2% expanded 430 basis points (bps) on a year-over-year basis and 80 bps sequentially.Adjusted operating expenses of $83.7 million were within SMTC’s guidance range despite a sequential increase in research & development expenses.The non-GAAP operating margin was 19.9% compared with 9.2% reported in the year-ago quarter.Semtech’s Balance Sheet & Cash FlowAs of Jan. 26, 2025, cash and cash equivalents were $151.7 million, up from $136.5 million as of Oct. 27, 2024.The long-term debt was $505.9 million, down from the previous quarter’s reported figure of $1.19 billion.Operating and free cash flow for the reported quarter was $33.5 million and $30.9 million, respectively.Semtech Offers Q1 GuidanceFor first-quarter fiscal 2026, Semtech expects net sales of $250 million (+/- $5 million), indicating 21% year-over-year growth. The Zacks Consensus Estimate for the same is pegged at $248.80 million, indicating a year-over-year rise of 20.71%.SMTC expects infrastructure end-market net sales to increase sequentially at mid-point of revenue guidance, including the negative impact of CopperEdge related sales. High-end consumer end-market sales are expected to increase while industrial is anticipated to decline.The non-GAAP gross margin is expected to be 53% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 18.2%, suggesting a 600 bps year-over-year improvement.Non-GAAP earnings are expected to be 37 cents (+/- 3 cents) per share. The consensus mark for earnings is pegged at 32 cents per share, suggesting an improvement from the year-ago quarter’s earnings of 6 cents. The figure remained unchanged over the past 30 days.Zacks Rank & Stocks to ConsiderCurrently, SMTC carries a Zacks Rank #3 (Hold).ACI Worldwide ACIW, Dropbox DBX and InterDigital IDCC are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.ACIW, DBX and IDCC sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.ACIW shares have risen 2% year to date. The Zacks Consensus Estimate for ACIW’s full-year 2025 earnings is pegged at $2.73 cents, up by 4.6% over the past 30 days, indicating an increase of 3.41% from the year-ago quarter’s reported figure.DBX shares have lost 14.7% year to date. The Zacks Consensus Estimate for DBX’s full-year 2025 earnings is pegged at $2.54 per share, down by 3.05% over the past 30 days, indicating a gain of 2.01% from the year-ago quarter’s reported figure.IDCC shares have gained 12% year to date. The Zacks Consensus Estimate for IDCC’s full-year 2025 earnings is pegged at $10.45 per share, up by 10.1% over the past 30 days, indicating a loss of 30.19% from the year-ago quarter’s reported figure.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Semtech Corporation (SMTC): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report ACI Worldwide, Inc. (ACIW): Free Stock Analysis Report Dropbox, Inc. (DBX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks