CAMARILLO, California, August 26, 2026, 06:32 EDT
- Semtech was priced at $133.00 ahead of Wednesday’s opening, an increase of 4.3% compared with the previous session’s close.
- Revenue guidance for the third quarter was set at $410 million, roughly 14% higher than consensus estimates.
- Data-center revenue for the quarter hit $100 million, an increase of 91% compared with the same period last year.
Semtech Corporation (NASDAQ:SMTC) gained 4.3% ahead of the market open after projecting a stronger uptick in growth. Shares were priced at $133.00 at 06:30 EDT, compared to Tuesday’s closing figure of $127.52 premarket quote.
The initial jump boosted Semtech’s implied equity value by roughly $510 million. This came after a 5.5% gain during the regular session. Shares are up 10.0% from Monday’s close of $120.91.
Semtech forecasts third-quarter revenue at $410 million, give or take $5 million. Analysts on Wall Street projected $359.9 million. The midpoint of the guidance is 13.9% higher than consensus, and 19.9% above revenue from the second quarter.
The company projected adjusted earnings of $1.05 per share, with a margin of error of three cents either way. Analysts had predicted 73 cents. The midpoint topped the consensus estimate by 43.8% FactSet comparison.
| Investor measure | Reported or guided | Consensus or prior year | Difference |
|---|---|---|---|
| Q2 revenue | $341.9 million | $328.7 million | 4.0% above |
| Q2 adjusted EPS | $0.71 | $0.61 | 16.4% higher |
| Q3 revenue midpoint | $410.0 million | $359.9 million | 13.9% higher |
| Q3 adjusted EPS midpoint | $1.05 | $0.73 | 43.8% higher |
Revenue for the second quarter hit an all-time high of $341.9 million, marking a 33% increase year-on-year and a 17% rise from the previous quarter. Adjusted earnings surged 73% to 71 cents per share.
Data-center revenue reached an all-time high of $100 million, rising 91% compared to a year earlier and accounting for 29.2% of overall sales. Infrastructure revenue climbed 69% to $124 million earnings-call metrics.
Revenue from LoRa-enabled products climbed 58% to $58 million. Sales in IoT Systems and Connectivity moved up 11% to $98.3 million. Sales of semiconductor products rose 44% to $243.5 million.
Adjusted gross margin rose to 54.5%, compared to 53.2% in the prior year. Adjusted operating margin increased by 560 basis points, reaching 24.4%. The company’s outlook for third-quarter gross margin at 58.3% points to additional leverage.
The $62 million sale of the cellular-module unit highlights the margin narrative. The segment, now listed as held-for-sale, generated $48.1 million in sales and $10.9 million in adjusted gross profit for the quarter. That amounts to a margin of 22.7%, which is notably lower than the rest of Semtech’s operations.
Free cash flow climbed 48% to reach $61.4 million, more than doubling from the previous quarter. CEO Hong Hou stated that growing bookings and an all-time high backlog signal “a strong inflection in growth” filed results.
Analysts approached the release holding a Strong Buy consensus. Out of fifteen analysts, twelve rated it Strong Buy, one assigned a Buy rating, and two issued Hold ratings. The average price target stood at $202.92, spanning from $155 to $230 analyst forecasts.
Risks: Premarket prices may move in the opposite direction during less liquid trading. The outlook depends on timely data-center demand and bookings conversion. Margin growth could face challenges from supply limitations, reliance on key customers, and successful completion of divestitures.
The main test is underway. Semtech faces the task of converting its 14% guidance lead into actual shipments and revenue. Its record backlog offers proof for investors, while also heightening expectations.
