Semtech’s first quarter saw strong market approval, with results surpassing Wall Street expectations. Management attributed the company’s performance to robust demand in its data center and LoRa businesses, which benefited from design win momentum and deeper customer engagement. CEO Hong Q. Hou emphasized the company’s progress in expanding its FiberEdge and CopperEdge portfolios, noting their adoption across leading data center deployments. Hou highlighted, “We drove strong sequential and year-over-year revenue and earnings growth, extended our data center and LoRa design win pipeline, all while advancing our R&D and strategic initiatives.”
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Semtech (SMTC) Q1 CY2026 Highlights:
- Revenue: $291 million vs analyst estimates of $283.7 million (15.9% year-on-year growth, 2.6% beat)
- Adjusted EPS: $0.51 vs analyst estimates of $0.45 (12.7% beat)
- Adjusted EBITDA: $66.4 million vs analyst estimates of $55.76 million (22.8% margin, 19.1% beat)
- Revenue Guidance for Q2 CY2026 is $328 million at the midpoint, above analyst estimates of $300.4 million
- Adjusted EPS guidance for Q2 CY2026 is $0.61 at the midpoint, above analyst estimates of $0.51
- EBITDA guidance for Q2 CY2026 is $79.2 million at the midpoint, above analyst estimates of $58.98 million
- Operating Margin: 8.9%, down from 14.3% in the same quarter last year
- Inventory Days Outstanding: 135, down from 154 in the previous quarter
- Market Capitalization: $13.93 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Semtech’s Q1 Earnings Call
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Rick Schafer (Oppenheimer): Asked about timing for ACC MSA specification finalization and its impact on adoption. CEO Hong Q. Hou responded that ratification would likely accelerate industry-wide ACC adoption, as interoperability is a key catalyst.
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Sean O'Laughlin (Stifel): Questioned the allocation of increased operating expenses. CFO Mark Lin clarified that higher spending is focused on high-conviction R&D programs in data center and LoRa, with SG&A as a percentage of sales continuing to decline.
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Christopher Rolland (Susquehanna): Sought clarity on the drivers of optical segment growth and customer concentration. CEO Hou explained that 800G FiberEdge and LPO are principal contributors, and that design wins are broadly distributed across module makers—not concentrated with a single customer.
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Quinn Bolton (Needham): Asked about Semtech’s ability to support both unidirectional and bidirectional SerDes with its CopperEdge portfolio. Hou confirmed current support for unidirectional, with work underway to enable bidirectional solutions using existing IP blocks.
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Tristan Gerra (Baird): Inquired about the sustainability of ACC growth given industry shifts to higher data rates. CEO Hou stated that copper-based solutions remain relevant and complementary, especially as larger rack topologies require longer links beyond what optical-only solutions address.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of capacity expansion for key products like GaN chips and CopperEdge, (2) execution on new product ramps in both 1.6T optical and LoRa+ platforms, and (3) progress on portfolio optimization, including the completion of the cellular module divestiture. Developments in customer adoption and design wins will also be key indicators of sustained momentum.
Semtech currently trades at $149.87, down from $164.46 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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