September 27, 2022
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Semtech tops expectations with record quarter

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Camarillo-based Semtech topped analysts’ expectations on Dec. 1 with an announcement of record net sales and net income in the third quarter of its 2021-22 fiscal year.

Semtech, a semiconductor company specializing in Internet of Things applications, generated sales totaling $194.9 million in the third quarter of 2021, up 27% from the same quarter a year ago.

Net income also rose, to $34.4 million, or 53 cents per diluted share, up from $18.4 million, or 28 cents per share, in the same quarter last year. Non-GAAP earnings were also up, hitting 74 cents per share in the third quarter of 2021, up from 47 cents per share in the same quarter a year ago.

Semtech said in a news release that both its earnings and non-GAAP earnings were record highs. Both revenue and non-GAAP earnings topped Zacks’ Consensus Estimate’s projection, which had predicted revenue of $192.9 million and earnings of 72 cents per share.

Semtech shares were up about 1.2% during the trading day Dec. 1, before the earnings release, with the stock price closing at $86.69. Shares did not move in the two hours after the markets closed.

The stock is trading 16.7% higher than it did at the beginning of the year, after three consecutive quarters of growing revenue and net income.

This rise in both revenue and earnings could be attributed to record net sales in Semtech’s wireless and sending group products and its signal integrity products group, the company said in its news release.

Semtech saw record net sales for its LoRa platform, which is a part of its wireless and sending group products. LoRa connects sensors to the cloud and enables real-time communication of data and analytics.

Driven largely by LoRa, Semtech has generated $550.3 million in net sales for the first nine months of the 2021-22 fiscal year, up 27.8% from the same period a year earlier. Net income was $90.8 million through three quarters of the fiscal year, more than double the same period last year.

Semtech’s revenue for wireless and sending segment was at $63.1 million in the third quarter of 2021, accounting for 32% of the company’s total revenue in the quarter.

The company’s most successful segment was its signal integrity products group, which saw sales of $75.4 million in the third quarter.

Finally, Semtech’s protection segment generated $56.4 million in sales in the third quarter of 2021, led by record broad-based industrial net sales, the company said.

Semtech also had record GAAP and non-GAAP gross margins of 63.5% and 63.8%, respectively. Sales to Asia represented the bulk of Semtech’s revenue, as 78% of all sales were in that region. North America represented 12% of net sales.

Semtech ended the quarter with cash and cash equivalents worth $276.5 million.