Semtech Corp. reported fiscal second-quarter net sales of $342 million, exceeding analyst estimates and marking the tenth straight quarter of revenue growth. Adjusted diluted earnings per share reached $0.71, beating expectations by 16.4% and rising 73% year-over-year.
The company’s data center segment generated record revenue of $100 million, up 91% from a year earlier, driven by demand for 800G and early 1.6T products. Infrastructure net sales totaled $124 million, while industrial revenue climbed 25% sequentially to $179 million, including a 58% year-over-year increase in LoRa-enabled sales. Gross margins expanded to 54.5%, with semiconductor products at 62.8%, reflecting improved product mix and operational efficiency.
Cash flow strengthened significantly, with operating cash flow rising 55% year-over-year to $69 million and free cash flow up 48% to $61 million. Semtech ended the quarter with $204 million in cash and equivalents and $503 million in principal debt.
Shares jumped 5.47% to $127.52 during regular trading and added another 3.65% in after-hours activity, bringing the total gain to 9.3% from the prior close. The stock has traded between $53.62 and $177.35 over the past year.
Management guided fiscal third-quarter revenue to $410 million, with adjusted EPS projected at $1.05. Data center revenue is expected to rise 45% sequentially, while LoRa revenue is forecast to increase about 15% sequentially and 65% year-over-year. Adjusted gross margins are projected to reach 58.3%, with operating expenses guided to $112 million.
Semtech also outlined plans to close the divestiture of its cellular module business in the fourth quarter of fiscal 2027, which is expected to be EPS neutral on a non-GAAP basis and lift gross margins by more than 500 basis points over time, targeting a starting point near 64%.
