Semtech 2026 Q3 Earnings Strong Revenue Growth, Narrowed Net Loss

Semtech (SMTC) reported fiscal 2026 Q3 earnings on Nov 25, 2025, with revenue rising 12.7% year-over-year to $266.97 million and a 70% reduction in per-share losses. The company raised Q4 revenue guidance to $273 million (±$5 million), reflecting confidence in sustained demand.

Revenue

Semtech’s revenue growth was driven by robust performance across key segments. Signal Integrity contributed $81.61 million, while Analog Mixed Signal and Wireless led with $97.04 million. IoT Systems and Connectivity added $88.32 million, though margins faced pressure from lower-margin cellular modules. The unallocated segment remained flat at $0, and total revenue reached $266.97 million.

Earnings/Net Income

The company narrowed its net loss to $-2.86 million in Q3 2026, a 62.3% improvement from $-7.59 million in the prior-year period. Per-share losses fell to $0.03 from $0.10, reflecting disciplined cost management and operational efficiency. The narrowing loss underscores progress in aligning expenses with revenue growth.

Post-Earnings Price Action Review

The strategy of buying Semtech shares on the date of its earnings announcement and holding for 30 days yielded strong returns over the past three years, with a cumulative profit of $2.31 and a 42.74% quarterly CAGR. This outperformed the SPY ETF’s 10.33% CAGR, highlighting the stock’s momentum. Recent price action showed a 4.55% daily gain, a 14.46% weekly surge, and a 5.89% monthly increase, signaling investor optimism.

CEO Commentary

CEO Hong Hou highlighted Q3’s 4% sequential revenue growth, driven by data center and LoRa expansion. Strategic priorities include advancing 1.6T optical transceivers, optimizing capital structure, and divesting non-core assets. Hou emphasized Semtech’s “ultra-power-efficient solutions” positioning the company to lead in AI-driven infrastructure.

Guidance

Semtech guided Q4 FY2026 revenue of $273 million (±$5 million), with adjusted gross margin of 51.2% and diluted EPS of $0.43 (±$0.03). Data center sales are expected to grow ~10%, while Industrial sales remain flat. R&D expenses will rise due to the force-sensing business integration, but interest costs remain low.

Additional News

Semtech’s stock dropped 10% post-earnings due to margin concerns in the IoT Systems and Connectivity segment, where gross margins fell to 36.6% from 39.5% in Q2. The company cited a shift toward lower-margin cellular modules as a key factor. To strengthen its capital structure, Semtech issued $402.5 million in convertible notes, reducing annualized interest expenses. Additionally, the acquisition of a force-sensing business is expected to enhance its sensor portfolio, creating cross-selling opportunities in industrial and consumer applications.