Thu, May 29, 8:22 PM (25 days ago)
**Semtech Corporation (SMTC) Q1 2026 Financial Summary** **Financial Health and Performance:** - **Revenue:** $251.1 million, up 21.8% YoY, driven by industrial and infrastructure end markets. - **Profit Margins:** Gross margin at 52.3%, up from 48.3% YoY, due to higher volume and favorable product mix. - **Net Income:** $19.3 million, a significant improvement from a loss of $23.2 million YoY. - **EPS:** $0.22, compared to a loss of $0.36 YoY. - **Cash Flow:** Positive operating cash flow of $27.8 million, a reversal from a negative $89,000 YoY. **Key Metrics and Trends:** - **Operating Income:** $35.9 million, up from $3.1 million YoY. - **Interest Expense:** $6.6 million, down from $23.2 million YoY, due to debt repayment and extinguishment of 2028 Notes. - **Tax Provision:** $8.7 million, up from $3.0 million YoY, due to regional income mix and valuation allowance changes. - **Liquidity:** $156.5 million in cash and $452.1 million in available borrowing capacity. **Uncertainties and Future Operations:** - **Macroeconomic Factors:** Tariffs, geopolitical tensions, and inflation may impact demand and supply chains. - **Debt Management:** Compliance with credit agreement covenants and potential conversion of 2028 Notes. - **Legal and Environmental:** Ongoing litigation and environmental remediation may pose risks. - **Strategic Initiatives:** Portfolio rationalization and potential acquisitions or divestitures. **Segment Performance:** - **Signal Integrity:** 29% of net sales, up 26% YoY, driven by data center sales. - **Analog Mixed Signal and Wireless:** 36% of net sales, up 20% YoY, led by LoRa-enabled products. - **IoT Systems and Connectivity:** 35% of net sales, up 20% YoY, driven by IoT Hardware sales. **Conclusion:** Semtech's Q1 2026 shows strong revenue growth and improved profitability, driven by industrial and infrastructure markets. However, macroeconomic uncertainties and strategic initiatives will shape future performance. The company remains focused on debt management, legal matters, and portfolio optimization.