Semtech's Q2 2026: Discrepancies in LPO Adoption, LoRa Revenue, and Data Center Growth

LPO adoption and timing, LoRa revenue expectations, data center revenue and CopperEdge recovery, CopperEdge adoption and market shift, ACC revenue timeline are the key contradictions discussed in Semtech's latest 2026Q2 earnings call.



Record Financial Performance:
- Semtech reported record net sales of $257.6 million for Q2 2026, up 20% year-over-year and marking the sixth consecutive quarter of growth.
- This growth was driven by improvements in adjusted gross profit, operating income, and earnings per share.

Data Center Revenue Surge:
- Infrastructure net sales increased to $73.4 million, with data center sales reaching $52.2 million, both up 1% sequentially and 39% year-over-year.
- The growth was attributed to strong demand for FiberEdge products and increasing data center CapEx forecasts from hyperscalers.

LoRa and High-End Consumer Growth:
- Industrial net sales were $143 million, up slightly sequentially, with LoRa-enabled solutions at $36.9 million, up 29% year-over-year.
- This was supported by strong demand in applications like home security, smart appliances, and environmental sensors, as well as dual-band capability enhancements.

Operational and Financial Improvement:
- The company reduced debt by $879 million since the start of Hong Q. Hou's tenure, improving the net leverage ratio to 1.6x from 8.8x a year ago.
- This reduction led to a 80% year-over-year decrease in interest expenses, allowing for strategic investments in high-growth areas.