Semtech Corp (NASDAQ:SMTC) stock rallies 19.54% (As on November 26, 11:27:50 AM UTC-4, Source: Google Finance) after the company beat market’s expectations for the third quarter of FY 24. The company delivered record data center net sales of $43.1 million, up 58% sequentially. The company posted Non-GAAP gross margin of 52.4%, up 200 basis points sequentially and Non-GAAP operating margin of 18.3%, up 410 basis points sequentially. The company reported Adjusted EBITDA margin of 21.6%, up 280 basis points sequentially. The company remains optimistic about its future, driven by AI-driven product demand in data centers. Semtech’s management has expressed satisfaction with the company’s performance and highlights their strategic initiatives aimed at expanding market share and addressing customer needs. The company continues to focus on leveraging its operating model for sustained growth.

SMTC in the third quarter of FY 24 has reported the adjusted earnings per share of 26 cents, beating the analysts’ estimates for the adjusted earnings per share of 24 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $236.8 million in the third quarter of FY 24, beating the analysts’ estimates for revenue of $232.6 million. It is  up 10% sequentially

The company said it expects fiscal Q4 non-GAAP EPS of $0.32 per diluted share, plus or minus $0.03. Analysts surveyed by FactSet expect $0.27. Semtech expects net sales for the quarter of $250 million, plus or minus $5 million. Analysts polled by FactSet expect $242 million. The company expects a non-GAAP gross margin of approximately 52.8% Semtech’s strategic focus is on revenue acceleration and its commitment to capitalize on market opportunities. The company’s dedication to reducing debt has been underscored as a key priority, which is seen as a positive step towards strengthening the company’s financial position. The company project AI-driven product demand to be a long-term and transformational growth engine for Semtech.

In terms of business advancements, Semtech’s Advanced Communications Controller has begun generating revenue, with expectations of continued growth through 2025. The company is also making strides in the Low Power Optical (LPO) market, anticipating revenues in the second half of fiscal year 2026. Semtech’s LoRa technology has shown a 37% sequential increase in revenues, and the company is preparing to start shipments for a market of 30 million units of its industry-leading Linear Pluggable Optics in the latter half of FY 2026.