Semtech Announces Third Quarter of Fiscal Year 2025 Results

Amounts reported in this press release are preliminary and subject to the finalization of the filing of our unaudited financial results on Form 10-Q for the three and nine months ended October 27, 2024. Reported amounts may not foot precisely due to rounding.

About Semtech

Semtech Corporation (Nasdaq: SMTC) is a high-performance semiconductor, IoT systems and cloud connectivity service provider dedicated to delivering high-quality technology solutions that enable a smarter, more connected and sustainable planet. Our global teams are committed to empowering solution architects and application developers to develop breakthrough products for the infrastructure, industrial and consumer markets.

Semtech and the Semtech logo are registered trademarks or service marks of Semtech Corporation or its subsidiaries.

SMTC-F

 

SEMTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Net sales

$

236.8

 

 

$

215.4

 

 

$

200.9

 

Cost of sales

 

113.6

 

 

 

107.6

 

 

 

97.9

 

Amortization of acquired technology

 

2.3

 

 

 

2.3

 

 

 

10.0

 

Total cost of sales

 

115.9

 

 

 

109.9

 

 

 

107.9

 

Gross profit

 

121.0

 

 

 

105.5

 

 

 

93.0

 

Operating expenses, net:

 

 

 

 

 

Product development and engineering

 

42.6

 

 

 

40.1

 

 

 

46.9

 

Selling, general and administrative

 

59.8

 

 

 

55.8

 

 

 

47.7

 

Intangible amortization

 

0.1

 

 

 

0.3

 

 

 

4.9

 

Restructuring

 

0.7

 

 

 

1.5

 

 

 

3.6

 

Goodwill impairment

 

 

 

 

 

 

 

2.3

 

Total operating expenses, net

 

103.2

 

 

 

97.7

 

 

 

105.3

 

Operating income (loss)

 

17.8

 

 

 

7.8

 

 

 

(12.4

)

Interest expense

 

(20.8

)

 

 

(28.6

)

 

 

(28.3

)

Interest income

 

0.5

 

 

 

0.4

 

 

 

0.6

 

Loss on extinguishment of debt

 

 

 

 

(144.7

)

 

 

 

Non-operating (expense) income, net

 

(1.1

)

 

 

(1.0

)

 

 

3.5

 

Investment impairments and credit loss reserves, net

 

 

 

 

 

 

 

(2.0

)

Loss before taxes

 

(3.6

)

 

 

(166.1

)

 

 

(38.6

)

Provision (benefit) for income taxes

 

4.0

 

 

 

4.2

 

 

 

(0.3

)

Net loss attributable to common stockholders

$

(7.6

)

 

$

(170.3

)

 

$

(38.3

)

 

 

 

 

 

 

Loss per share:

 

 

 

 

 

Basic

$

(0.10

)

 

$

(2.61

)

 

$

(0.60

)

Diluted

$

(0.10

)

 

$

(2.61

)

 

$

(0.60

)

 

 

 

 

 

 

Weighted average number of shares used in computing loss per share:

 

 

 

 

 

Basic

 

75,319

 

 

 

65,281

 

 

 

64,216

 

Diluted

 

75,319

 

 

 

65,281

 

 

 

64,216

 

SEMTECH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

(unaudited)

 

 

October 27,
2024

 

January 28,
2024

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

136.5

 

 

$

128.6

 

Accounts receivable, net

 

142.5

 

 

 

134.3

 

Inventories

 

163.5

 

 

 

145.0

 

Prepaid taxes

 

7.8

 

 

 

12.0

 

Other current assets

 

107.6

 

 

 

114.3

 

Total current assets

 

557.8

 

 

 

534.2

 

Non-current assets:

 

 

 

Property, plant and equipment, net

 

133.2

 

 

 

153.6

 

Deferred tax assets

 

18.7

 

 

 

18.0

 

Goodwill

 

541.3

 

 

 

541.2

 

Other intangible assets, net

 

36.8

 

 

 

35.6

 

Other assets

 

91.2

 

 

 

91.1

 

Total assets

$

1,379.0

 

 

$

1,373.7

 

 

 

 

 

LIABILITIES AND EQUITY (DEFICIT)

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

63.9

 

 

$

45.1

 

Accrued liabilities

 

171.6

 

 

 

172.1

 

Total current liabilities

 

235.5

 

 

 

217.2

 

Non-current liabilities:

 

 

 

Deferred tax liabilities

 

 

 

 

0.8

 

Long-term debt

 

1,190.3

 

 

 

1,371.0

 

Other long-term liabilities

 

92.9

 

 

 

92.0

 

Stockholders’ deficit

 

(139.7

)

 

 

(307.4

)

Noncontrolling interest

 

 

 

 

0.2

 

Total liabilities & equity (deficit)

$

1,379.0

 

 

$

1,373.7

 

SEMTECH CORPORATION

SUPPLEMENTAL CASH FLOW INFORMATION

(in millions)

(unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Free cash flow:

 

 

 

 

 

Net cash provided by (used in) operating activities

$

29.6

 

 

$

(5.0

)

 

$

(5.8

)

Net capital expenditures

 

(0.5

)

 

 

(3.4

)

 

 

(6.6

)

Free cash flow

$

29.1

 

 

$

(8.4

)

 

$

(12.4

)

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Gross margin (GAAP)

 

51.1

%

 

 

49.0

%

 

 

46.3

%

Share-based compensation

 

0.3

%

 

 

0.3

%

 

 

0.3

%

Amortization of acquired technology

 

1.0

%

 

 

1.1

%

 

 

5.0

%

Transaction and integration related costs, net

 

%

 

 

%

 

 

(0.3

)%

Adjusted gross margin (Non-GAAP)

 

52.4

%

 

 

50.4

%

 

 

51.3

%

 

 

 

 

 

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Product development and engineering (GAAP)

$

42.6

 

 

$

40.1

 

 

$

46.9

 

Share-based compensation

 

(3.8

)

 

 

(3.4

)

 

 

(3.0

)

Transaction and integration related costs, net

 

 

 

 

 

 

 

(0.1

)

Adjusted product development and engineering (Non-GAAP)

$

38.7

 

 

$

36.6

 

 

$

43.9

 

 

 

 

 

 

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Selling, general and administrative (GAAP)

$

59.8

 

 

$

55.8

 

 

$

47.7

 

Share-based compensation

 

(13.8

)

 

 

(13.0

)

 

 

(3.1

)

Transaction and integration related costs, net

 

(3.2

)

 

 

(1.5

)

 

 

(5.9

)

Litigation costs, net

 

(0.9

)

 

 

(0.1

)

 

 

 

Adjusted selling, general and administrative (Non-GAAP)

$

41.9

 

 

$

41.3

 

 

$

38.6

 

 

 

 

 

 

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Operating expenses, net (GAAP)

$

103.2

 

 

$

97.7

 

 

$

105.3

 

Share-based compensation

 

(17.6

)

 

 

(16.4

)

 

 

(6.0

)

Intangible amortization

 

(0.1

)

 

 

(0.3

)

 

 

(4.9

)

Transaction and integration related costs, net

 

(3.2

)

 

 

(1.5

)

 

 

(6.0

)

Restructuring and other reserves, net

 

(0.7

)

 

 

(1.5

)

 

 

(3.6

)

Litigation costs, net

 

(0.9

)

 

 

(0.1

)

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

(2.3

)

Adjusted operating expenses, net (Non-GAAP)

$

80.6

 

 

$

77.9

 

 

$

82.5

 

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Operating income (loss) (GAAP)

$

17.8

 

$

7.8

 

$

(12.4

)

Share-based compensation

 

18.4

 

 

17.1

 

 

6.5

 

Intangible amortization

 

2.4

 

 

2.6

 

 

14.9

 

Transaction and integration related costs, net

 

3.2

 

 

1.5

 

 

5.5

 

Restructuring and other reserves, net

 

0.7

 

 

1.5

 

 

3.6

 

Litigation costs, net

 

0.9

 

 

0.1

 

 

 

Goodwill impairment

 

 

 

 

 

2.3

 

Adjusted operating income (Non-GAAP)

$

43.4

 

$

30.5

 

$

20.5

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Operating margin (GAAP)

7.5

%

 

3.6

%

 

(6.2

)%

Share-based compensation

7.8

%

 

8.0

%

 

3.3

%

Intangible amortization

1.0

%

 

1.2

%

 

7.4

%

Transaction and integration related costs, net

1.4

%

 

0.7

%

 

2.8

%

Restructuring and other reserves, net

0.3

%

 

0.7

%

 

1.8

%

Litigation costs, net

0.3

%

 

%

 

%

Goodwill impairment

%

 

%

 

1.1

%

Adjusted operating margin (Non-GAAP)

18.3

%

 

14.2

%

 

10.2

%

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Interest expense, net (GAAP)

$

20.3

 

 

$

28.1

 

 

$

27.7

 

Amortization of deferred financing costs

 

(2.1

)

 

 

(2.4

)

 

 

(1.8

)

Write-off of deferred financing costs

 

 

 

 

(5.5

)

 

 

(3.7

)

Investment income

 

0.2

 

 

 

0.2

 

 

 

0.1

 

Adjusted interest expense, net (Non-GAAP)

$

18.4

 

 

$

20.5

 

 

$

22.3

 

 

 

 

 

 

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

Loss on extinguishment of debt (GAAP)

$

 

$

144.7

 

 

$

Loss on extinguishment of debt

 

 

 

(144.7

)

 

 

Adjusted loss on extinguishment of debt (Non-GAAP)

$

 

$

 

 

$

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

GAAP net loss attributable to common stockholders

$

(7.6

)

 

$

(170.3

)

 

$

(38.3

)

Adjustments to GAAP net loss attributable to common stockholders:

 

 

 

 

 

Share-based compensation

 

18.4

 

 

 

17.1

 

 

 

6.5

 

Intangible amortization

 

2.4

 

 

 

2.6

 

 

 

14.9

 

Transaction and integration related costs, net

 

3.2

 

 

 

2.0

 

 

 

5.5

 

Restructuring and other reserves, net

 

0.7

 

 

 

1.5

 

 

 

3.6

 

Litigation costs, net

 

0.9

 

 

 

0.1

 

 

 

 

Investment (gains) losses, reserves and impairments, net

 

(0.2

)

 

 

(0.2

)

 

 

1.9

 

Amortization of deferred financing costs

 

2.1

 

 

 

2.4

 

 

 

1.8

 

Write-off of deferred financing costs

 

 

 

 

5.5

 

 

 

3.7

 

Loss on extinguishment of debt

 

 

 

 

144.7

 

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

2.3

 

Total Non-GAAP adjustments before taxes

 

27.5

 

 

 

175.6

 

 

 

40.2

 

Associated tax effect

 

0.4

 

 

 

2.8

 

 

 

(0.5

)

Total of supplemental information, net of taxes

 

27.9

 

 

 

178.4

 

 

 

39.7

 

Non-GAAP net income attributable to common stockholders

$

20.3

 

 

$

8.1

 

 

$

1.5

 

 

 

 

 

 

 

GAAP diluted loss per share

$

(0.10

)

 

$

(2.61

)

 

$

(0.60

)

Adjustments per above

 

0.36

 

 

 

2.72

 

 

 

0.62

 

Non-GAAP diluted earnings per share

$

0.26

 

 

$

0.11

 

 

$

0.02

 

 

 

 

 

 

 

Weighted-average number of shares used in computing diluted (loss) earnings per share:

 

 

 

 

 

GAAP

 

75,319

 

 

 

65,281

 

 

 

64,216

 

Non-GAAP

 

78,581

 

 

 

71,787

 

 

 

64,304

 

SEMTECH CORPORATION

SUPPLEMENTAL INFORMATION: RECONCILIATION OF GAAP TO NON-GAAP RESULTS (CONTINUED)

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

October 27,
2024

 

July 28,
2024

 

October 29,
2023

 

Q325

 

Q225

 

Q324

GAAP net loss attributable to common stockholders

$

(7.6

)

 

$

(170.3

)

 

$

(38.3

)

Interest expense

 

20.8

 

 

 

28.6

 

 

 

28.3

 

Interest income

 

(0.5

)

 

 

(0.4

)

 

 

(0.6

)

Loss on extinguishment of debt

 

 

 

 

144.7

 

 

 

 

Non-operating expense (income), net

 

1.1

 

 

 

1.0

 

 

 

(3.5

)

Investment impairments and credit loss reserves, net

 

 

 

 

 

 

 

2.0

 

Provision (benefit) for income taxes

 

4.0

 

 

 

4.2

 

 

 

(0.3

)

Share-based compensation

 

18.4

 

 

 

17.1

 

 

 

6.5

 

Depreciation and amortization

 

10.1

 

 

 

12.6

 

 

 

22.5

 

Transaction and integration related costs, net

 

3.2

 

 

 

1.5

 

 

 

5.5

 

Restructuring and other reserves, net

 

0.7

 

 

 

1.5

 

 

 

3.6

 

Litigation costs, net

 

0.9

 

 

 

0.1

 

 

 

 

Goodwill impairment

 

 

 

 

 

 

 

2.3

 

Adjusted EBITDA

$

51.1

 

 

$

40.5

 

 

$

28.1

 

 

 

 

 

 

 

Adjusted EBITDA margin

 

21.6

%

 

 

18.8

%

 

 

14.0

%


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