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Jan 26
Semtech Q4 2025 Earnings Report
Semtech reported sequential revenue growth and improved margins in Q4 FY25.
Key Takeaways
Semtech posted revenue of $251.0 million in Q4 FY25, reflecting a 30.1% YoY increase. GAAP operating margin improved to 8.5%, while non-GAAP operating margin reached 19.9%. Net income was $39.1 million, and free cash flow came in at $30.9 million. The company highlighted margin expansion as a key focus for FY26.
Total revenue increased 30.1% YoY to $251.0 million.
GAAP gross margin reached 52.0%, while non-GAAP gross margin was 53.2%.
Operating income improved to $21.2 million, with an 8.5% GAAP operating margin.
Free cash flow of $30.9 million demonstrated improved cash generation.
Semtech
Semtech
Forward Guidance
Semtech expects stable revenue and further margin expansion in FY26, with a focus on cost efficiency and strategic investments.
Positive Outlook
- Revenue guidance of approximately $250 million for Q1 FY26.
- Non-GAAP gross margin expected to be around 53.0%.
- Non-GAAP operating margin projected at 18.2%.
- Non-GAAP EPS forecasted between $0.34 and $0.40.
- Continued reduction in net debt improving financial stability.
Challenges Ahead
- Macroeconomic headwinds may impact customer demand.
- Inventory levels remain elevated, requiring supply chain adjustments.
- Ongoing restructuring costs could pressure short-term profitability.
- Higher interest expenses continue to weigh on net earnings.
- Limited visibility into the recovery of key end markets.