Semtech 2026 Q3 Earnings 62.3% Net Loss Reduction Beats Expectations

Semtech (SMTC) delivered better-than-expected results, with revenue rising 12.7% to $266.97 million and a 62.3% reduction in net losses. The company raised Q4 guidance, signaling confidence in sustained growth driven by data center and IoT expansion.

Revenue

Semtech’s total revenue surged 12.7% year-over-year to $266.97 million in Q3 2026, with strong contributions across segments. The Analog Mixed Signal and Wireless segment led with $97.04 million, driven by demand for data center and LoRa solutions. Signal Integrity followed with $81.61 million, reflecting robust transceiver sales, while IoT Systems and Connectivity rounded out at $88.32 million.

Earnings/Net Income

The company narrowed its net loss to $2.86 million, a 62.3% improvement from $7.59 million in Q3 2025. Earnings per share (EPS) improved to a loss of $0.03 from $0.10, marking a 70.0% reduction in losses. This performance underscores Semtech’s progress in cost optimization and operational efficiency.

Post-Earnings Price Action Review

Following the earnings release, Semtech’s stock surged 4.55% in a single trading day, 14.46% over the subsequent week, and 5.89% month-to-date. The upward momentum aligns with the company’s positive guidance and strategic advancements in data center and IoT markets.

CEO Commentary

Hong Hou, CEO, highlighted record $56.2 million in data center sales and 1.6T transceiver design wins, alongside 40% YoY growth in LoRa. Strategic priorities include accelerating R&D for 1.6T solutions, expanding sensor capabilities via the Qorvo acquisition, and divesting non-core assets to enhance margins.

Guidance

Mark Lin, CFO, guided Q4 FY26 revenue of $273M ± $5M, with adjusted gross margin of 51.2% ± 50 bps and adjusted diluted EPS of $0.43 ± $0.03. The outlook reflects confidence in sustained demand for power-efficient data center and IoT solutions.

Additional News

1. Strategic Acquisition: Semtech acquired a force-sensing business to bolster its sensor portfolio, enabling cross-selling opportunities in industrial and consumer applications.

2. Capital Structure Optimization: The company issued $350 million in convertible senior notes due 2030, reducing annualized interest expenses and strengthening liquidity.

3. Divestiture Progress: Ongoing efforts to divest non-core assets aim to focus on high-margin core businesses, though no specific timeline has been disclosed.

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