Semtech (SMTC) Q4 2026 earnings summary

Executive summary

• Achieved record net sales of $1.05 billion for FY'26, up 15% year-over-year, with Q4'26 net sales of $274.4 million, up 9% year-over-year and 3% sequentially.

• Adjusted diluted EPS for Q4'26 was $0.44, up 10% year-over-year; full-year adjusted diluted EPS was $1.71, up 94% from prior year.

• Strong growth driven by data center and LoRa portfolios, with significant design wins and product innovation.

• Completed acquisition of HieFo Corporation, enhancing high-efficiency laser and optoelectronic technology, expected to be accretive to non-GAAP EPS within the first year.

• Progressing on divestiture of cellular module business, with high interest from potential acquirers.

Financial highlights

• Q4'26 adjusted gross margin was 51.6%; total semiconductor products gross margin was 61.7%.

• Q4'26 adjusted operating income was $50.0 million; adjusted operating margin was 18.2%.

• Q4'26 adjusted EBITDA was $57.4 million (20.9% margin); FY'26 adjusted EBITDA was $232.0 million (22.1% margin).

• Free cash flow for FY'26 was $171.4 million; Q4'26 free cash flow was $59.1 million.

• Ended FY'26 with $195.2 million in cash and $503 million in debt; adjusted net leverage ratio at 1.3x, down from 2.3x a year ago.

Outlook and guidance

• Q1'27 net sales expected at $283 million ±$5 million, up 13% year-over-year.

• Adjusted gross margin projected at 52.8% ±50 bps; adjusted operating margin at 18.6% ±70 bps.

• Adjusted diluted EPS for Q1'27 expected at $0.45 ±$0.03.

• Infrastructure net sales projected to increase sequentially, with data center growth of 12% and initial CopperEdge shipments.

• High-End Consumer net sales expected to rise 9% sequentially, 13% year-over-year, driven by TVS and force-sensing products.