Semtech lifts third-quarter sales outlook and sets fiscal 2030 financial targets
The company raised its third-quarter net sales outlook to $417.5 million and set a fiscal 2030 framework with $3.2 billion in net sales, both disclosed at a Data Center Analyst Day.
Key takeaways
- Semtech Corporation (SMTC) raised its third-quarter fiscal 2027 net sales outlook to $417.5 million, plus or minus $2.5 million, from $410.0 million, according to a Form 8-K filed Oct. 15 after its Data Center Analyst Day. It also set fiscal 2030 targets, including $3.2 billion in net sales.
Semtech Corporation (SMTC) raised its third-quarter fiscal 2027 net sales outlook to $417.5 million, plus or minus $2.5 million, and set financial targets for fiscal 2030, the company said Thursday in a Form 8-K furnished under Regulation FD.
The update was made during the company's Data Center Analyst Day, which was held with a live webcast.
The table compares the new third-quarter outlook with the previous one.
| Metric | Previous outlook | Updated outlook |
|---|---|---|
| Net sales | $410.0 million ±$5.0 million | $417.5 million ±$2.5 million |
| Adjusted gross margin | 58.3% ±100 bps | 59.0% ±40 bps |
| Adjusted gross margin, excluding business held for sale | 63.9% ±100 bps | 64.0% ±40 bps |
| Adjusted operating margin | 31.0% ±60 bps | 33.0% ±10 bps |
| Adjusted diluted earnings per share | $1.05 ±$0.03 | $1.14 ±$0.02 |
Adjusted gross margin is now expected at 59.0%, plus or minus 40 basis points, up from 58.3%, plus or minus 100 basis points.
Excluding the business held for sale, adjusted gross margin is now expected at 64.0%, up from 63.9%.
Adjusted operating margin is now expected at 33.0%, up from 31.0%. Adjusted diluted earnings per share are now expected at $1.14, up from $1.05.
For fiscal 2030, the company set a financial framework with net sales of $3.2 billion. That figure implies consolidated net sales growth of 38% a year, on a compound annual growth rate basis, from fiscal 2026 through fiscal 2030.
The company set a fiscal 2030 target of $2.1 billion in data center net sales, a compound annual growth rate of 75% over the same period. It also set a 30% compound annual growth rate target for LoRa net sales.
Other fiscal 2030 targets include adjusted gross margin of 70%, adjusted operating margin of 48% to 50%, free cash flow of 35% of net sales, and adjusted diluted earnings per share of $12.40 to $13.00.
The framework targets adjusted diluted earnings per share growth of 64% to 66% a year, on a compound annual growth rate basis. It assumes 104 million non-GAAP diluted shares and a 20% adjusted normalized tax rate.
The fiscal 2026 base in the framework excludes $166 million in Cellular Module revenue.
The company said the framework consists of targets and goals, not guidance or forecasts, and is not a guarantee of future performance. It depends on management's assumptions as of Oct. 15, 2026, particularly on growth in the data center market and the company's ability to capture it.
The company said it cannot reconcile the forward-looking non-GAAP figures to GAAP measures without unreasonable efforts. It cited high variability in transaction, integration and restructuring expenses, share-based awards and amortization of acquisition-related intangible assets, and said those items could affect its GAAP results.
A replay of the Data Center Analyst Day presentations and accompanying materials will be available on the company's investor relations website for 90 days.