Semtech Q1 Earnings Beat, Guidance Strengthens Outlook
Semtech Q1 earnings showed a record quarter and above-consensus Q2 guidance on 800G and LoRa strength, prompting analyst upgrades and trader repositioning
KEY TAKEAWAYS
- Semtech reported record Q1 net sales of $291 million and non-GAAP EPS of $0.51.
- Guidance set Q2 net sales to $328 million ± $5 million and non-GAAP EPS to $0.61 ± $0.02.
- Data-center sales reached $72 million; LoRa revenue was $45 million, with management targeting more than 15% sequential growth.
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Semtech Corporation reported a record first quarter of fiscal 2027 on May 26, 2026, driven by strength in 800G data-center products and LoRa connectivity. The company’s results and guidance prompted analysts to raise forecasts and price targets.
Record Q1 Results
Semtech announced net sales of $291.0 million and non-GAAP diluted earnings per share of $0.51 for the quarter ended April 26, 2026. Revenue rose 16% year over year and 6% sequentially. Adjusted gross margin was 53.0%, with total semiconductor products gross margin at 60.7%. Adjusted operating income reached $59.3 million, yielding a 20.4% operating margin. Adjusted EBITDA was $66.4 million, and adjusted diluted EPS increased 34% year over year. The company noted this marked nine consecutive quarters of net sales growth.
Data Center and LoRa Momentum
Infrastructure revenue climbed 14% sequentially and 36% year over year to $98.8 million. Data-center sales hit a record $71.6 million, up 14% sequentially and 39% year over year. Management attributed this to broad demand for 800G FiberEdge optical modules and transimpedance amplifier solutions, with strong design-win momentum. Shipments of 1.6T products are set to begin in the second quarter and are expected to accelerate in the second half of fiscal 2027.
LoRa-enabled revenue rose 12% sequentially and 14% year over year to $44.9 million. The company described LoRa as entering a new growth phase, supported by backlog and bookings. Its low-power connectivity strategy focuses on three pillars: LoRaWAN for industrial and commercial use, LoRa Plus for smart-home and security applications, and Amazon Sidewalk for mass-market consumer reach. Other end markets showed steady activity, including industrial sales of $153.9 million, high-end consumer sales of $38.4 million, and IoT systems and connectivity at $88.3 million.
Guidance and Analyst Revisions
For the second quarter, Semtech guided net sales to $328 million plus or minus $5 million, with adjusted gross margin at 54.0% plus or minus 50 basis points and total semiconductor products gross margin at 62.1% plus or minus 50 basis points. Adjusted operating margin is expected to reach about 21.9% at the midpoint, adjusted EBITDA is guided to $79.2 million plus or minus $2.3 million, and adjusted diluted EPS to $0.61 plus or minus $0.02 based on roughly 97.7 million diluted shares. This outlook implies accelerating sequential revenue and earnings growth.
Management expects data-center revenue to rise about 35% sequentially in the current quarter, driven by accelerating 800G volumes and initial shipments of higher-speed components into AI and hyperscale customers. LoRa revenue is targeted to reach an all-time high next quarter, with more than 15% sequential growth. The company described demand as accelerating through fiscal 2027 and beyond, supported by backlog, bookings, and product ramps.
Following the disclosure, multiple analysts raised forecasts and price targets. One firm increased its price target to $188, applying valuation metrics of roughly 10.8 times 2027 enterprise value to sales and 50.2 times 2027 price-to-earnings, reflecting the stronger-than-expected data-center trajectory and LoRa growth.
