- Semtech Corporation (SMTC, Financial) reported a 22% increase in net sales year-over-year, reaching $251.1 million for the first quarter of fiscal year 2026.
- The company showed strong operational performance with a GAAP gross margin improvement to 52.3% from 48.3% in the previous year.
- Semtech reduced its net leverage ratio, aided by a $10 million term loan principal prepayment in Q1 and an additional $15 million to date in the second quarter.
Semtech Corporation (SMTC), a leading provider in the high-performance semiconductor, IoT systems, and cloud connectivity sectors, released its financial results for the first quarter of fiscal year 2026, marking a significant 22% increase in net sales over the previous year. The company's net sales reached $251.1 million, compared to $206.1 million in the first quarter of fiscal year 2025.
The gross margin showed considerable improvement, with GAAP gross margin climbing to 52.3% from last year’s 48.3%, and the non-GAAP adjusted gross margin increasing to 53.5% from 49.8%. Operating income also made a positive leap, with a GAAP operating margin of 14.3% and a non-GAAP adjusted operating margin reaching 19.0%.
Mark Lin, Executive Vice President and CFO of Semtech, highlighted the strategic debt reductions that aided in improving the company's net leverage ratio. The firm made a $10 million reduction in term loan principal in the first quarter and has extended this reduction by an additional $15 million in the second quarter.
Semtech's adjusted EBITDA margin improved to 22.1% from 16.1% last year, underlining the company's robust financial health and operational efficiency. Furthermore, the company's GAAP diluted earnings per share turned positive at $0.22, showing a significant recovery from a loss of $0.36 per share a year ago, while non-GAAP adjusted diluted earnings per share increased to $0.38 from $0.06.
The company remains optimistic about the future, projecting net sales between $251 million and $261 million for the second quarter of fiscal year 2026. Semtech plans to maintain a strategic focus on innovation and operational excellence to sustain growth and enhance shareholder value.
