Semtech Reports Fiscal 2027 Second-Quarter Results
Semtech Corporation (Nasdaq: SMTC), a provider of high-performance semiconductor and connectivity technologies for artificial intelligence data centers and intelligent Internet of Things (IoT) applications, has announced its unaudited financial results for the second quarter of fiscal year 2027.
The quarter ended with the company highlighting record revenue, continued earnings growth, margin expansion, strong bookings, and progress in optimizing its business portfolio.
Semtech management said the latest results demonstrate continued momentum across the company’s major business areas and provide greater visibility into future growth.
Record Revenue and Strong Business Momentum
Semtech President and CEO Hong Hou said the company delivered strong execution during the quarter, generating record revenue across its key focus areas.
According to Hou, the company also achieved earnings growth that outpaced revenue expansion while making significant progress in optimizing its portfolio. The combination of these developments is expected to support a business model with stronger margins and improved returns.
The company reported that accelerating bookings and a record backlog point to an important growth inflection. Semtech expects new revenue drivers to contribute to performance and provide visibility extending into the next fiscal year.
Hou said the company’s strategy remains focused on expanding its most promising business areas while improving margins and creating a more predictable financial profile.
Focus on Higher-Return Business Areas
Semtech is continuing to refine its portfolio as it focuses resources on markets and technologies with strong growth potential.
The company’s primary areas of focus include high-performance semiconductor technologies supporting AI data center networking, signal integrity, analog and mixed-signal applications, wireless connectivity, and intelligent IoT devices.
Management believes that strengthening these areas while improving operational efficiency can help create a business characterized by higher margins, more predictable growth, and stronger returns on investment.
The company’s latest quarter reflects progress toward these objectives, with revenue growth accompanied by improvements in earnings and cash generation.
Strong Bookings and Record Backlog
Another key highlight from the quarter was the strength of Semtech’s bookings and backlog.
The company said accelerating bookings are providing increased confidence in future demand. Record backlog levels also offer greater visibility into expected revenue, with management anticipating that the momentum will extend into the next fiscal year.
The company expects broad-based bookings strength to support continued revenue growth across its business.
Semtech believes this combination of new bookings, backlog, and emerging revenue drivers could mark an important transition toward sustained growth.
Earnings and Margin Expansion
Semtech also reported continued leverage in its earnings performance.
Management noted that earnings growth continued to outpace revenue growth during the quarter, reflecting the benefits of operating discipline and portfolio optimization.
The company is focused on expanding margins while maintaining investments in technologies and markets that support long-term growth. This approach is intended to balance revenue expansion with improved profitability.
CFO Mark Lin said the company converted record revenue, margin expansion, and diluted earnings per share growth into strong operating cash flow and free cash flow during the quarter.
Strong Cash Flow Generation
Cash generation was another important component of Semtech’s second-quarter performance.
Mark Lin, Executive Vice President and Chief Financial Officer, said the company’s disciplined execution allowed it to translate improved financial performance into strong operating and free cash flow.
Strong cash generation can provide Semtech with additional flexibility to invest in research and development, pursue strategic opportunities, manage its capital structure, and support other corporate priorities.
The company expects continued improvements in revenue, margins, and earnings as it moves into the third quarter.
Outlook for the Third Quarter
Semtech enters its third fiscal quarter with confidence in the strength of its bookings pipeline.
Management expects broad-based demand to translate into sustained growth in revenue, margins, and earnings. The company also expects its record backlog and developing revenue opportunities to provide continued visibility into future performance.
However, Semtech noted that it is unable to provide a reconciliation of certain forward-looking non-GAAP financial measures to comparable GAAP measures.
The company said this is due to the variability and limited visibility surrounding several items, including transaction and integration expenses, restructuring costs, share-based compensation, and amortization of acquisition-related intangible assets.
These factors could have a significant effect on the company’s future GAAP financial results.
Conference Call and Webcast
Semtech is hosting a conference call to discuss its fiscal 2027 second-quarter financial results.
The company’s management team will review the results and provide additional information regarding its financial performance and business outlook.
An audio webcast and supplemental earnings materials are available through Semtech’s Investor Relations website under the “News & Events” section.
A replay of the conference call will also be available through September 22, 2026, providing investors and other interested parties with an opportunity to review the company’s quarterly discussion.
Understanding Non-GAAP Financial Measures
Alongside its GAAP financial results, Semtech provides several non-GAAP financial measures to help investors better evaluate the company’s underlying operating performance.
These measures include adjusted gross margin, adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and free cash flow.
Management believes these metrics provide useful information when comparing the company’s performance across different reporting periods.
Items Excluded From Non-GAAP Results
Semtech adjusts certain financial measures to exclude expenses and gains that management believes may not reflect the company’s core operating performance over time.
These adjustments can include share-based compensation, intangible asset amortization, transaction and integration costs, restructuring expenses, litigation costs, investment gains or losses, debt-related expenses, goodwill and intangible asset impairments, and amortization of inventory step-up.
The company also excludes certain other items depending on their nature and impact during a reporting period.
Semtech emphasized that excluding these items does not necessarily mean they are unusual or non-recurring. Some costs, including restructuring, acquisition-related, or litigation expenses, may occur periodically as part of the company’s ongoing business activities.
The company believes excluding these items can nevertheless provide a more consistent view of its core operating performance because their timing and magnitude can vary significantly between periods.
Adjusted EBITDA and Free Cash Flow
Semtech also reports adjusted EBITDA and adjusted EBITDA margin as measures of operating performance.
Adjusted EBITDA is calculated using net income or loss and adds back interest expense, interest income, income taxes, depreciation and amortization, and share-based compensation, along with selected additional expenses and gains or losses that management believes do not represent the company’s core results.
Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales.
Free cash flow is another important non-GAAP measure. Semtech defines free cash flow as cash provided by operating activities less net capital expenditures. The measure can be either positive or negative depending on the company’s operating and investment activities.
Segment and Portfolio Reporting
Semtech is also providing a total semiconductor products gross margin metric, which combines the segment gross margins of its Signal Integrity and Analog Mixed Signal and Wireless reportable segments.
The company has also introduced an adjusted gross margin metric that excludes the results of its cellular module business, which was classified as held for sale at the end of the reporting period.
These additional measures are intended to provide investors with greater insight into the performance of Semtech’s continuing core businesses.
Building a Stronger Business for the Future
Semtech’s second-quarter results highlight the company’s focus on combining growth with improved profitability and cash generation.
Record revenue, accelerating bookings, a strong backlog, margin expansion, and continued portfolio optimization are supporting management’s confidence in the company’s future prospects.
As Semtech moves into the second half of fiscal 2027, the company remains focused on expanding its key semiconductor and connectivity businesses, improving operating efficiency, and developing new revenue opportunities.
Management believes these efforts can help establish a more predictable, higher-margin, and higher-return business while positioning Semtech to benefit from continued demand for AI data center networking, advanced semiconductors, and intelligent IoT connectivity.
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