November 22, 2023
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Semtech shares still soaring after Q2 earnings report


Shares of Camarillo-based Semtech climbed nearly 10% after a strong earnings report on Sept. 1, and in the following week continued to trade at their highest levels since February.

Semtech, a semiconductor company specializing in Internet of Things applications, closed at $77.50 on Sept. 7. That was 9% above its closing price of $71.13 on Sept. 1, before the release of its earnings report for the second quarter of the 2021-22 fiscal year.

The stock jumped after Semtech beat analysts’ expectations during to a record-breaking second quarter, with all-time highs in earnings and net sales across various company group products.

Semtech delivered earnings of $32.2 million, or 50 cents per share, for the second quarter, a 64.2% increase from the same quarter a year earlier.

Non-GAAP earnings for Semtech in the second quarter were 65 cents per share, a 51.2% increase from the same period a year ago. That mark was also 4.8% higher than what analysts at Zacks’ Consensus Estimate projected.

The rise in net income comes with record net sales in Semtech’s wireless and sensing group products and its signal integrity products group.

In total, Semtech generated $185 million in net sales during the second quarter, a 9% increase from the same quarter a year ago, and 2.21% higher than what Zacks’ Consensus Estimate projected.

“We remain confident in our strategy and as we execute on delivering our Tri Edge and FiberEdge platform that deliver lower power, lower cost and low latency, we should see continued growth in our data center business this year and beyond,” Semtech CEO Mohan Maheswaran said during the company’s earnings call on Sept. 1.

Semtech’s LoRa platform, which connects sensors to the cloud and enables real-time communication of data and analytics, is on track to see at least 40% growth year-over-year, Maheswaran said.

LoRa is part of Semtech’s wireless and sensing product group, which contributed 34% of the total revenue in the second quarter, a 61% increase from the prior year, driven extensively by the growth of the LoRa platform.

“The momentum from our LoRa platforms has really started to accelerate globally,” Maheswaran said. “The number of LoRa gateways deployed increased to over 2.2 million and has already exceeded the goal we set for the full year. … The LoRa opportunity pipeline increased nicely in the quarter and now stands at over $850 million, which also exceeded the target we had set for the whole year.”

Semtech’s signal integrity products group 39% of the total revenue generated in the second quarter, the largest of any oc the company’s product groups.

Six months into Semtech’s fiscal year, the company had $355.3 million in net sales for 2021-22, up from $276.3 million in the same period a year earlier, while net income was at $56.4 million, more than double the income from the first half of last year.

Semtech also had record operating cash flow of $53 million in the second quarter, or 29% of its net sales.

Semtech repurchased 639,519 of its own shares for $42 million during the second quarter, and the company ended the quarter with $262.6 million in cash and cash equivalents.