Semtech Corp. posted fiscal second-quarter 2027 results that exceeded expectations, with net sales climbing 33% year-over-year to $342 million and adjusted diluted earnings per share rising 73% to $0.71. The company’s shares advanced 5.47% in regular trading to close at $127.52, with after-hours gains pushing the total increase to approximately 9.3%.
Revenue growth was led by the infrastructure segment, which reported net sales of $124 million, up 69% from the prior-year quarter. Data center sales reached a record $100 million, a 39% increase quarter-over-quarter and a 91% jump year-over-year, driven by demand for 800G solutions and early adoption of 1.6T products. The industrial segment also contributed, with net sales of $179 million, including a record $58 million from LoRa-enabled products, up 58% year-over-year.
Adjusted gross margin expanded to 54.5%, while adjusted operating margin improved to 24.4%, reflecting operational leverage. Adjusted EBITDA totaled $91.1 million, a 37% increase from the prior quarter. Cash flow metrics strengthened, with operating cash flow rising 90% sequentially to $68.9 million and free cash flow up 119% to $61.4 million. Net debt declined to $299 million as of the end of the quarter.
CEO Hong Hou highlighted the company’s performance, stating that Semtech achieved "record revenue across our key focus areas, earnings leverage, and accelerating bookings and record backlog." The company also reiterated its position in critical infrastructure build-outs, framing its role as central to major industry trends.
For the fiscal third quarter 2027, Semtech guided for net sales of $410 million at the midpoint, representing 54% year-over-year growth, with adjusted diluted EPS projected at $1.05. Adjusted gross margin is expected to reach 58.3% at the midpoint, while adjusted operating margin is forecast at 31.0%. Data center sales are projected to grow 45% sequentially and 160% year-over-year.
