Semtech (SMTC) Q4 2026 earnings summary

Executive summary

• Achieved record annual net sales of $1.05 billion for FY'26, up 15% year-over-year, with Q4'26 net sales of $274.4 million, up 9% year-over-year and 3% sequentially.

• Adjusted diluted EPS for Q4'26 was $0.44, up 10% year-over-year; full-year adjusted diluted EPS was $1.71, up 94% from prior year.

• Strategic acquisition of HieFo Corporation enhances high-efficiency laser and optoelectronic capabilities for data center optical interconnects, expected to be accretive to non-GAAP EPS within the first year.

• Strong momentum in data center and LoRa portfolios drove growth; significant progress in portfolio optimization and R&D investment.

• Progressing on divestiture of cellular module business, with high interest and due diligence underway from potential acquirers.

Financial highlights

• Q4'26 adjusted gross margin was 51.6%; total semiconductor products gross margin was 61.7%, up 350 bps year-over-year.

• Q4'26 adjusted operating income was $50.0 million; adjusted operating margin was 18.2%.

• Q4'26 adjusted EBITDA was $57.4 million (margin: 20.9%); FY'26 adjusted EBITDA was $232.0 million (margin: 22.1%).

• Q4'26 operating cash flow was $61.5 million, up 84% year-over-year; free cash flow was $59.1 million, up 91% year-over-year; FY'26 free cash flow was $171.4 million.

• Ended FY'26 with $195.2 million in cash and $503 million in debt; adjusted net leverage ratio improved to 1.3x.

Outlook and guidance

• Q1'27 net sales expected at $283 million ±$5 million, up 13% year-over-year.

• Adjusted gross margin projected at 52.8% ±50 bps; adjusted operating margin at 18.6% ±70 bps.

• Adjusted EBITDA expected at $59.5 million ±$3 million; adjusted diluted EPS at $0.45 ±$0.03; Q1'27 adjusted EBITDA margin expected at 21.0%.

• Data center revenue projected to grow over 50% year-over-year in FY2025, driven by ACC, 1.6T FiberEdge, and linear equalizer products.

• LoRa long-term growth rate expected at ~20%, with quarterly sales in the $35–$45 million range.