Semtech Reports Record Q1 2027 Earnings Driven by Data Center Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: seekingalpha
- Significant Revenue Growth: Semtech achieved net sales of $291 million in Q1 of fiscal 2027, exceeding expectations and marking the ninth consecutive quarter of sales growth, highlighting the company's strong performance in the data center market.
- Record Data Center Sales: Data center sales reached $71.6 million in Q1, with a projected 35% sequential growth in Q2, indicating accelerating demand for 800G and 1.6T components that will further drive revenue growth.
- Strong Gross Margins: The adjusted gross margin for Q1 was 53%, with expectations to slightly increase to 54% in Q2, reflecting the company's solid profitability from its data center and LoRa product lines, enhancing future financial stability.
- Strategic Investment and Business Optimization: The company is nearing completion of its cellular module divestiture while increasing R&D spending to accelerate the market launch of key data center projects, demonstrating its commitment to optimizing its product portfolio and enhancing market competitiveness.
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Analyst Views on SMTC
Wall Street analysts forecast SMTC stock price to fall
16 Analyst Rating
15 Buy
1 Hold
0 Sell
Strong Buy
Current: 157.200
Low
67.00
Averages
82.87
High
95.00
Current: 157.200
Low
67.00
Averages
82.87
High
95.00
About SMTC
Semtech Corporation is a provider of high-performance semiconductors, Internet of Things (IoT) systems and cloud connectivity service solutions. Signal Integrity segment designs, develops, manufactures and markets a portfolio of optical and copper data communications and video transport products used in a wide variety of infrastructure and industrial applications. The Analog Mixed Signal and Wireless segment designs, develops, manufactures and markets high-performance protection devices, which are often referred to as transient voltage suppressors and specialized sensing products. The IoT Systems and Connectivity segment designs, develops, operates and markets a comprehensive product portfolio of IoT solutions that enable businesses to connect and manage their devices, collect and analyze data, and improve decision-making. It also manufactures Indium Phosphide optoelectronic devices for optical transceivers used across data center interconnects and intra-data center interconnects.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Semtech Reports Record Q1 2027 Earnings Driven by Data Center Growth
- Significant Revenue Growth: Semtech achieved net sales of $291 million in Q1 of fiscal 2027, exceeding expectations and marking the ninth consecutive quarter of sales growth, highlighting the company's strong performance in the data center market.
- Record Data Center Sales: Data center sales reached $71.6 million in Q1, with a projected 35% sequential growth in Q2, indicating accelerating demand for 800G and 1.6T components that will further drive revenue growth.
- Strong Gross Margins: The adjusted gross margin for Q1 was 53%, with expectations to slightly increase to 54% in Q2, reflecting the company's solid profitability from its data center and LoRa product lines, enhancing future financial stability.
- Strategic Investment and Business Optimization: The company is nearing completion of its cellular module divestiture while increasing R&D spending to accelerate the market launch of key data center projects, demonstrating its commitment to optimizing its product portfolio and enhancing market competitiveness.
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Semtech Reports Strong Q1 Results, Boosts Growth Outlook
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- Optimistic Growth Outlook: The company anticipates a 35% sequential growth in data center revenues for Q2, with analysts projecting accelerated growth in the coming quarters based on existing backlog, further solidifying its position in the optical networking ecosystem.
- Analyst Price Target Increases: UBS raised its price target for Semtech from $165 to $225, while Craig-Hallum nearly doubled its target to $205, reflecting strong market confidence in the company's future growth potential.
- Strong Margin Performance: Semtech's semiconductor product gross margins reached 60.7% in April, significantly above the corporate average, driven by robust performance in data center and LoRa products, showcasing its competitive advantage in high-growth markets.
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Semtech's Q1 Earnings Call Highlights Optimistic Growth Outlook
- Record Data Center Revenue: Semtech reported a record $71.6 million in data center revenue for Q1, driven by strong demand for 800G FiberEdge products, indicating enhanced competitiveness in the hyperscale networking market.
- Sustained LoRa Growth: Industrial revenue rose to $153.9 million, with LoRa-enabled sales reaching $44.5 million, demonstrating the company's deepening market penetration in smart utilities, smart buildings, and asset tracking.
- Improved Margins and Operational Efficiency: The first quarter saw an adjusted gross margin of 53% and an adjusted operating margin of 20.4%, showcasing the company's ability to maintain strong profit control while pursuing growth.
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Semtech Reports Record Quarterly Revenue and Significant EPS Growth
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- Adjusted EPS Increase: The adjusted diluted earnings per share reached $0.51, marking a significant 34% year-over-year growth, which highlights effective management in cost control and profitability.
- Strong Data Center Performance: Data center net sales hit $71.6 million, up 14% sequentially and 39% year-over-year, demonstrating the company's competitiveness and increased market share in a high-demand sector.
- Expansion of LoRa Business: LoRa-enabled net sales reached $44.5 million, with a 12% quarter-over-quarter and 14% year-over-year increase, driven by growth in new applications such as smart utilities and asset management, showcasing the company's strategic positioning in the IoT space.
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Semtech Reports Record Q1 2027 Earnings Driven by Data Center Growth
- Significant Revenue Growth: Semtech achieved net sales of $291 million in Q1 of fiscal 2027, exceeding expectations and marking the ninth consecutive quarter of sales growth, highlighting the company's strong performance in the data center market.
- Record Data Center Sales: Data center sales reached $71.6 million in Q1, with a projected 35% sequential growth in Q2, indicating accelerating demand for 800G and 1.6T components that will further drive revenue growth.
- Strong Gross Margins: The adjusted gross margin for Q1 was 53%, with expectations to slightly increase to 54% in Q2, reflecting the company's solid profitability from its data center and LoRa product lines, enhancing future financial stability.
- Strategic Investment and Business Optimization: The company is nearing completion of its cellular module divestiture while increasing R&D spending to accelerate the market launch of key data center projects, demonstrating its commitment to optimizing its product portfolio and enhancing market competitiveness.
See More
Travel Stocks Surge as Oil Prices Retreat
- Airline Stocks Rise: Shares of airlines surged as oil prices fell nearly 4%, with United Airlines gaining 7% and Delta Air Lines up 4%, indicating potential profitability improvements for airlines amid reduced cost pressures.
- Telecom Infrastructure Surge: Dycom Industries saw a stock increase of about 30% after raising its full-year outlook, projecting contract revenue between $7.38 billion and $7.65 billion, and enhancing its data center capabilities through the acquisition of National Technology Integrators.
- Cloud Security Decline: Zscaler's shares tumbled over 30% after guiding for current-quarter revenue below analyst expectations, despite beating third-quarter adjusted earnings forecasts, reflecting market concerns about its future growth trajectory.
- Retail Stock Gains: Bath & Body Works shares rose 12% after forecasting second-quarter earnings per share between 20 to 25 cents, exceeding analyst expectations, which indicates strong consumer demand and improved profitability for the company.
See More
Semtech Reports Strong Q1 Results, Boosts Growth Outlook
- Strong Performance: Semtech (SMTC) reported Q1 data center revenues of $71.6 million, a 14% sequential increase that exceeded market expectations, leading to an 8% rise in pre-market trading.
- Optimistic Growth Outlook: The company anticipates a 35% sequential growth in data center revenues for Q2, with analysts projecting accelerated growth in the coming quarters based on existing backlog, further solidifying its position in the optical networking ecosystem.
- Analyst Price Target Increases: UBS raised its price target for Semtech from $165 to $225, while Craig-Hallum nearly doubled its target to $205, reflecting strong market confidence in the company's future growth potential.
- Strong Margin Performance: Semtech's semiconductor product gross margins reached 60.7% in April, significantly above the corporate average, driven by robust performance in data center and LoRa products, showcasing its competitive advantage in high-growth markets.
See More
Zscaler's Earnings Misses Expectations, Shares Plunge
- Zscaler Earnings Miss: Zscaler's revenue guidance for the current quarter is between $875 million and $878 million, falling short of the $879 million analysts expected, leading to a more than 23% drop in shares, indicating market concerns about its future growth.
- Peer Impact: Following Zscaler's disappointing results, shares of Palo Alto Networks and CrowdStrike fell by 4% and over 3%, respectively, reflecting a decline in market confidence across the cybersecurity sector.
- Bath & Body Works Strong Performance: The company reported better-than-expected first-quarter earnings and forecasted second-quarter EPS between 20 to 25 cents, exceeding the 21 cents expected by analysts, resulting in a 15% increase in shares, showcasing resilience in market demand.
- Semtech's Impressive Results: Semtech posted first-quarter adjusted earnings and revenue that surpassed estimates, with guidance for current-quarter earnings and EBITDA also exceeding analyst expectations, leading to a 7% rise in shares, highlighting its strong performance in the semiconductor market.
See More
Semtech's Q1 Earnings Call Highlights Optimistic Growth Outlook
- Record Data Center Revenue: Semtech reported a record $71.6 million in data center revenue for Q1, driven by strong demand for 800G FiberEdge products, indicating enhanced competitiveness in the hyperscale networking market.
- Sustained LoRa Growth: Industrial revenue rose to $153.9 million, with LoRa-enabled sales reaching $44.5 million, demonstrating the company's deepening market penetration in smart utilities, smart buildings, and asset tracking.
- Improved Margins and Operational Efficiency: The first quarter saw an adjusted gross margin of 53% and an adjusted operating margin of 20.4%, showcasing the company's ability to maintain strong profit control while pursuing growth.
- Positive Future Outlook: Semtech expects Q2 revenue of $328 million and adjusted EPS of $0.61, reflecting confidence in future growth, particularly with ongoing investments in data center and LoRa sectors.
See More
Semtech Reports Record Quarterly Revenue and Significant EPS Growth
- Quarterly Revenue Growth: Semtech reported record quarterly revenue of $291 million, reflecting a 6% sequential increase and a 16% year-over-year rise, indicating strong market performance and sustained growth potential.
- Adjusted EPS Increase: The adjusted diluted earnings per share reached $0.51, marking a significant 34% year-over-year growth, which highlights effective management in cost control and profitability.
- Strong Data Center Performance: Data center net sales hit $71.6 million, up 14% sequentially and 39% year-over-year, demonstrating the company's competitiveness and increased market share in a high-demand sector.
- Expansion of LoRa Business: LoRa-enabled net sales reached $44.5 million, with a 12% quarter-over-quarter and 14% year-over-year increase, driven by growth in new applications such as smart utilities and asset management, showcasing the company's strategic positioning in the IoT space.
See More
