Semtech Corp (NASDAQ:SMTC) Surpasses Expectations

Semtech Corp (NASDAQ:SMTC), a high-performance semiconductor, IoT systems and cloud connectivity service provider, stock fell 1.33% (As on March 29, 8:00:00 PM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 23. Goodwill impairment was $755.6 million and intangible impairments were $131.4 million for fiscal year 2024 primarily due to reduced earnings forecasts associated with the business acquired from Sierra Wireless and current macroeconomic conditions, including an elevated interest rate environment. This quarter, Semtech’s DIO came in at 133, which is 10 days below its five-year average. For the quarter, the company has delivered GAAP gross margin of (0.2)% and Non-GAAP gross margin of 48.9%, above the midpoint of guidance, generated positive operating cash flow of $13.9 million and free cash flow of $12.2 million and has completed optional credit facility prepayment of $5.0 million. Working capital improvements has contributed to positive operating and free cash flows for the fourth quarter.

SMTC in the fourth quarter of FY 23 has reported the adjusted loss per share of 6 cents, missing the analysts’ estimates for the adjusted loss per share of 5 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 15.2 percent to $192.9 million in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $191.2 million.

For the current quarter ending in April, Semtech expects revenue to be in the range of $195 million to $205 million, 2.4% above analysts’ estimates.

On the other hand, SMTC has announced its agenda for OFC 2024, featuring live demonstrations of groundbreaking technologies for Passive Optical Networks (PON). Semtech is set to unveil the industry’s first end-to-end, compliant asymmetric PMD analog chipset for 50G HS-PON Optical Line Terminal (OLT) and Optical Networking Unit (ONU), alongside an innovative 50Gbps NRZ upstream burst mode Transimpedance Amplifier (TIA) for symmetric HS-PON. This will enable whole new levels of service and revenue capabilities for carriers. It helps carriers to increase their capacity to guarantee bandwidth for high-use, high-requirement customers (at a premium), North American carrier interest is strong.

In addition, the company has announced the integration of Non-Terrestrial Network (NTN) support into its HL series LPWA modules, specifically the HL7810 and HL7812. This significant advancement showcases a major leap forward in enabling uninterrupted global connectivity even amidst the most challenging conditions.

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