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A month has gone by since the last earnings report for Semtech (SMTC). Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Semtech due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Semtech's Q3 Earnings Beat, Sales Rise Y/Y
Semtech Corporation’s third-quarter fiscal 2025 non-GAAP earnings of 26 cents per share beat the Zacks Consensus Estimate by 8.33%. The bottom line also exceeded management’s guidance of 23 cents and showed a robust improvement from the year-ago quarter’s earnings of 2 cents.
Semtech’s third-quarter fiscal 2025 revenues of $236.8 million beat the Zacks Consensus Estimate by 1.81% and exceeded management’s guidance of $233 million. The figure rose 18% year-over-year.
SMTC provided strong guidance for the fourth-quarter fiscal 2025. At the mid-point, it now expects growth in net sales, gross, operating and adjusted EBITDA margins. This calls for earnings growth in the current quarter.
SMTC’s Q3 Top-Line Details
SMTC’s better-than-expected top-line performance can be attributed to the impressive year-over-year rise in its end markets
The growing momentum across the infrastructure and high-end consumer end markets benefited the company. Strength in Signal Integrity and Analog Mixed Signal & Wireless segments was a positive.
SMTC’s Q3 Revenues by End Market
Sales from the infrastructure market were $65.8 million (27.8% of net sales), exhibiting year-over-year growth of 52.3%. This was driven by solid demand for Semtech’s FiberEdge TIAs, laser drivers and Tri-Edge 50G PAM4 products that led to strong growth in hyperscale data center sales in the reported quarter.
Sales from the industrial market were $131 million (55.3% of net sales), up 9% from the prior-year period’s tally.
Sales from the high-end consumer market were $40 million (16.9% of net sales), up 6.4% year over year. Strong market demand, along with solid momentum in consumer circuit protection and smart sensing products, drove top-line growth.
SMTC’s Q3 Revenues by Product Lines
Signal Integrity (30.2% of net sales) sales were $71.5 million in the reported quarter, up 51.5% year over year.
Analog Mixed Signal & Wireless (35% of net sales) sales were $82.8 million, up 17.9% from the prior-year quarter’s figures.
IoT System and Connectivity (34.8% of net sales) sales were $82.5 million, down 1.2% year over year.