SMTC

Semtech is executing a genuine operational turnaround. FY2026 revenue grew 15.5% to $1.05B with growth across all three segments, led by an ~$81.4M increase in data center sales (Signal Integrity) and ~$39.7M of LoRa-enabled industrial sales. Gross margin expanded to 51.6% from 50.2%, and Signal Integrity gross margin hit 65.2% on favorable mix and overhead absorption. Most strikingly, operating cash flow surged 212.4% to $181M and cash rose 28.6% to $195M, while the net loss narrowed sharply to -$40.4M from -$162M the prior year. The data-center exposure ties Semtech to one of the strongest secular demand themes in semis.

But the company is not yet profitable. Net margin is -3.8% and ROE -7.3%, and the FY2026 loss includes an $84.8M goodwill impairment (up from $7.5M) plus $196M of R&D. Operating income actually fell 34.8% to $32.6M as operating expenses rose 25%, so the GAAP operating model is thin. Retained earnings remain deeply negative at -$436M, a legacy of the FY2024 -$1.09B loss, and shares outstanding grew 7.5% to 93.0M. The balance sheet is manageable — $491M long-term debt against $550M equity and $195M cash — but there is no profit cushion.