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Semtech Corporation’s (SMTC - Free Report) first-quarter fiscal 2025 non-GAAP earnings of 6 cents per share beat the Zacks Consensus Estimate of the break-even point. The bottom line increased 50% year over year.
Net sales of $206.1 million surpassed the Zacks Consensus Estimate of $200.2 million. The figure decreased 12.9% from the prior-year quarter.
Softness in the IoT Systems and Connectivity segments was a major concern. Sluggishness in the industrial end-market was a negative.
Nevertheless, growing momentum in the Signal Integrity, and Analog Mixed Signal & Wireless product lines remained a plus. Improving performances in the infrastructure and consumer markets were tailwinds.
Shares of Semtech have gained 76.5% on a year-to-date basis, outperforming the industry’s growth of 13.1%.
Semtech Corporation Price, Consensus and EPS Surprise
Sales from the infrastructure market were $55.98 million (27.1% of net sales), exhibiting year-over-year growth of 43.5%. The figure surpassed the consensus mark of $48.8 million.
Sales from the industrial market were $115.6 million (56.1% of net sales), down 34.3% from the prior-year period. The figure lagged the consensus mark of $119 million.
Sales from the high-end consumer market were $34.54 million (16.8% of net sales), increasing 59.9% year over year. The figure topped the consensus mark of $32.06 million.
Revenues by Product Lines
Signal Integrity (28.3% of net sales) sales were $58.3 million in the reported quarter, up 42.6% year over year.
Analog Mixed Signal & Wireless (36.6% of net sales) sales were $75.3 million, up 26.4% from the prior-year quarter.
IoT Systems and Connectivity (35.1% of net sales) sales were $72.5 million, decreasing 46.7% from the year-ago quarter.
Operating Results
The non-GAAP gross margin of 49.8% expanded 130 basis points (bps) from the year-ago quarter.
Adjusted selling, general and administrative expenses for the fiscal first quarter decreased 15.7% to $38.9 million from the prior-year quarter.
Adjusted product development and engineering expenses fell 17.4% from the year-ago quarter to $38.4 million.
The non-GAAP operating margin of 12.2% expanded 290 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Apr 28, 2024, cash and cash equivalents were $126.8 million, down from $128.6 million as of Jan 28, 2024.
Account receivables for first-quarter fiscal 2024 were $153.9 million, up from $134.3 million in fourth-quarter fiscal 2024.
The long-term debt was $1.373 billion compared with $1.371 billion in the previous quarter.
In the reported quarter, the company used $89,000 of cash in operations against $13.9 million of cash generated from operations in the previous quarter. The free cash flow in the fiscal first quarter was an outflow of $1.42 million.
Guidance
For second-quarter fiscal 2025, management expects net sales of $212 million (+/- $5 million). The Zacks Consensus Estimate for the same is pegged at $210.68 million.
The non-GAAP gross margin is expected to be 50% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 13.4% (+/- 90 bps).
The non-GAAP-based earnings per share is expected to be 9 cents (+/- 3 cents). The consensus mark for earnings is pinned at 10 cents per share.
Zacks Rank & Stocks to Consider
Currently, Semtech carries a Zacks Rank #3 (Hold).
Image: Bigstock
Semtech (SMTC) Q1 Earnings Beat Estimates, Sales Dip Y/Y
Semtech Corporation’s (SMTC - Free Report) first-quarter fiscal 2025 non-GAAP earnings of 6 cents per share beat the Zacks Consensus Estimate of the break-even point. The bottom line increased 50% year over year.
Net sales of $206.1 million surpassed the Zacks Consensus Estimate of $200.2 million. The figure decreased 12.9% from the prior-year quarter.
Softness in the IoT Systems and Connectivity segments was a major concern. Sluggishness in the industrial end-market was a negative.
Nevertheless, growing momentum in the Signal Integrity, and Analog Mixed Signal & Wireless product lines remained a plus. Improving performances in the infrastructure and consumer markets were tailwinds.
Shares of Semtech have gained 76.5% on a year-to-date basis, outperforming the industry’s growth of 13.1%.
Semtech Corporation Price, Consensus and EPS Surprise
Semtech Corporation price-consensus-eps-surprise-chart | Semtech Corporation Quote
Revenues by End Market
Sales from the infrastructure market were $55.98 million (27.1% of net sales), exhibiting year-over-year growth of 43.5%. The figure surpassed the consensus mark of $48.8 million.
Sales from the industrial market were $115.6 million (56.1% of net sales), down 34.3% from the prior-year period. The figure lagged the consensus mark of $119 million.
Sales from the high-end consumer market were $34.54 million (16.8% of net sales), increasing 59.9% year over year. The figure topped the consensus mark of $32.06 million.
Revenues by Product Lines
Signal Integrity (28.3% of net sales) sales were $58.3 million in the reported quarter, up 42.6% year over year.
Analog Mixed Signal & Wireless (36.6% of net sales) sales were $75.3 million, up 26.4% from the prior-year quarter.
IoT Systems and Connectivity (35.1% of net sales) sales were $72.5 million, decreasing 46.7% from the year-ago quarter.
Operating Results
The non-GAAP gross margin of 49.8% expanded 130 basis points (bps) from the year-ago quarter.
Adjusted selling, general and administrative expenses for the fiscal first quarter decreased 15.7% to $38.9 million from the prior-year quarter.
Adjusted product development and engineering expenses fell 17.4% from the year-ago quarter to $38.4 million.
The non-GAAP operating margin of 12.2% expanded 290 bps from the prior-year quarter.
Balance Sheet & Cash Flow
As of Apr 28, 2024, cash and cash equivalents were $126.8 million, down from $128.6 million as of Jan 28, 2024.
Account receivables for first-quarter fiscal 2024 were $153.9 million, up from $134.3 million in fourth-quarter fiscal 2024.
The long-term debt was $1.373 billion compared with $1.371 billion in the previous quarter.
In the reported quarter, the company used $89,000 of cash in operations against $13.9 million of cash generated from operations in the previous quarter. The free cash flow in the fiscal first quarter was an outflow of $1.42 million.
Guidance
For second-quarter fiscal 2025, management expects net sales of $212 million (+/- $5 million). The Zacks Consensus Estimate for the same is pegged at $210.68 million.
The non-GAAP gross margin is expected to be 50% (+/- 50 bps). The non-GAAP operating margin is anticipated to be 13.4% (+/- 90 bps).
The non-GAAP-based earnings per share is expected to be 9 cents (+/- 3 cents). The consensus mark for earnings is pinned at 10 cents per share.
Zacks Rank & Stocks to Consider
Currently, Semtech carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Badger Meter (BMI - Free Report) and Dropbox (DBX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 30.6% in the year-to-date period. The long-term earnings growth rate for ANET is anticipated to be 15.68%.
Badger Meter’s shares have gained 27% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 15.57%.
Shares of Dropbox have declined 22.6% in the year-to-date period. The long-term earnings growth rate for DBX is expected to be 11.44%