Semtech Corporation reported fiscal second-quarter 2027 revenue of $342 million, a 33% increase from the same period last year, marking the company’s 10th consecutive quarter of growth. Adjusted diluted earnings per share climbed 73% to $0.71, while adjusted operating income rose to $83.6 million, lifting the operating margin to 24.4% from 20.4% in the prior quarter.
Data center net sales reached a record $100 million, up 39% sequentially and 91% year-over-year, while LoRa-enabled revenue totaled $58 million, growing 31% quarter-over-quarter and 58% year-over-year. The infrastructure segment, which includes data center products, generated $124 million in net sales, up 25% sequentially and 69% year-over-year. Industrial segment revenue rose 16% sequentially and 25% year-over-year to $179 million. Adjusted gross margin expanded to 54.5%, a 150-basis-point sequential increase and 130 basis points higher than the prior year.
Operating cash flow surged 90% sequentially to $68.9 million, while free cash flow increased 119% to $61.4 million. The company reported total debt of $503 million, cash of $204.1 million, and a net leverage ratio of 1.1x, down from 1.4x in the prior quarter.
Semtech’s guidance for fiscal third-quarter 2027 projects net sales of $410 million, representing 54% year-over-year growth and 20% sequential growth. Adjusted gross margin is expected to reach 58.3%, with a projected 63.9% excluding the business held for sale. Adjusted diluted EPS is forecast at $1.05, up 119% year-over-year and 48% sequentially. The infrastructure segment’s revenue is projected to rise 45% sequentially and 160% year-over-year, while LoRa net sales are expected to increase approximately 15% sequentially and 65% year-over-year.
The company highlighted progress on its FiberEdge platform, targeting over 50% market share at 1.6T by the end of fiscal 2027. Semtech also noted the pending divestiture of its cellular module business, expected to close in fiscal fourth-quarter 2027 and projected to be EPS neutral on a non-GAAP basis while adding more than 500 basis points to gross margin. Shares rose 5.47% to $127.52 during regular trading and added another 3.65% to $132.17 in after-hours activity.
