Semtech Corp (NASDAQ:SMTC) stock plunges 9.17% (As on November 25, 11:35:44 AM UTC-4, Source: Google Finance) after the company reported third-quarter results that topped Wall Street estimates, but earnings guidance for the current fell just short of estimates as the company continues to ramp investment. In the High-End Consumer end market, which represents 16% of total revenue, Semtech continued to gain traction with its PerSe® sensing technology across applications including smart glasses and smartphone platforms. The company completed an acquisition of a leading force-sensing portfolio at the beginning of Q4’26, which is expected to unlock cross-selling opportunities. The Industrial end market, Semtech’s largest at 55% of total revenue, saw continued strong growth in LoRa®-enabled solutions, which increased 10% sequentially and 40% year-over-year to $40.0 million. The company reported strong design win momentum as IoT transitions from 4G to 5G, leveraging its market leadership position. The non-GAAP adjusted operating income increased to $54.9 million from $43.4 million in the prior year. Non-GAAP adjusted gross margin was of 53.0%, up from 52.4% a year ago. Non-GAAP adjusted operating margin was of 20.6% compared to 18.3% a year ago

Moreover, the company is accelerating its R&D roadmap for next-generation data center technologies, targeting initial sampling of 1.6T LPO drivers and TIAs before year-end. It also secured design wins with several leading U.S. hyperscalers for its 800G transceivers and expects 1.6T volume ramps to begin in early 2026.

SMTC in the third quarter of FY26 has reported the adjusted earnings per share of 48 cents, beating the analysts’ estimates for the adjusted earnings per share of 45 cents. The company had reported the adjusted revenue growth of 13 percent to $267 million in the third quarter of FY26, beating the analysts’ estimates for revenue of $266.4 million. The company generated $47.5 million in operating cash flow, a 60% increase from the prior year, while free cash flow improved to $44.6 million from $29.1 million in Q3’25.

Additionally, the company issued $402.5 million of convertible notes with a 0% coupon, using the proceeds to retire higher-interest debt and reduce its total debt load to $503.0 million from $1,214.1 million in Q3’25.

For Q4, Semtech guided adjusted EPS of $0.43 at the midpoint on revenue of $273M, compared with expectations for adjusted EPS of $0.44 on revenue of $265.9M. The company expects adjusted EBITDA to be of $56.0 million (±$3.0 million).