Semtech Corporation reported fiscal second-quarter 2027 revenue of $342 million, up 33% year-over-year and marking the tenth consecutive quarter of growth. Adjusted diluted earnings per share increased 73% to $0.71, while adjusted gross margin expanded by 130 basis points to 54.5%. The stock rose 5.47% to $127.52 during regular trading and added another 3.65% in after-hours dealings.
Data center products generated a record $100 million in net sales, up 91% year-over-year and 39% sequentially, driven by strong demand for 800G solutions and early adoption of 1.6T technology. The company expects its FiberEdge 1.6T platform to exceed 50% market share by the end of fiscal 2027, with CopperEdge technology scaling up to 3.2T in design-in phases. LoRa-enabled solutions also set a quarterly record at $58 million, growing 58% year-over-year and 31% quarter-over-quarter, supported by the LoRa Gen 4 platform’s dual-band capability and 2.6 Mbps throughput.
The infrastructure segment, which includes data center, PON/FTTH, wireless and circuit protection, reported $124 million in net sales, up 69% year-over-year and 25% sequentially. Industrial segment revenue reached $179 million, a 25% year-over-year increase, while IoT systems and connectivity contributed $98 million, with 5G RedCap routers entering full-scale production.
Adjusted operating income rose to $83.6 million, translating to an operating margin of 24.4%, compared with 20.4% in the prior quarter and 18.8% a year earlier. Adjusted EBITDA totaled $91.1 million, representing a margin of 26.6%, while operating cash flow increased 55% year-over-year to $68.9 million. Free cash flow climbed 48% to $61.4 million.
Semtech’s balance sheet showed $204.1 million in cash and $503 million in total debt, resulting in a net debt position of $299 million and a net leverage ratio of 1.1 times, down from 1.4 times in the prior quarter.
For the fiscal third quarter, the company guided to net sales of $410 million, plus or minus $5 million, representing 54% year-over-year growth and 20% sequential growth. Adjusted gross margin is projected at 58.3%, with a 63.9% margin excluding the business held for sale. Adjusted diluted EPS is forecast at $1.05, plus or minus $0.03, while adjusted operating margin is expected to reach 31.0%.
Semtech expects data center revenue in the infrastructure segment to rise 45% sequentially and 160% year-over-year, with LoRa net sales in the industrial segment anticipated to grow approximately 15% sequentially and 65% year-over-year. The company also reiterated that the divestiture of its cellular module business, expected to close in fiscal Q4 2027, will be EPS neutral on a non-GAAP basis while adding more than 500 basis points to gross margin.
