Semtech Corporation has reported its unaudited financial results for the second quarter of fiscal year 2026, ending on July 27, 2025. The company achieved record net sales of $257.6 million, representing a significant 20% year-over-year growth from the previous year's second quarter net sales of $215.4 million.
The GAAP gross margin for the reported quarter was 52.1%, showing a noticeable improvement from the 49.0% gross margin recorded in the same period a year ago. Additionally, the non-GAAP adjusted gross margin also saw a positive increase, reaching 53.2%, up from 50.4% in the previous year's second quarter.
In terms of operating margin, the GAAP operating margin for the reported quarter was (6.3)%, a decrease from the 3.6% operating margin recorded a year ago. However, the non-GAAP adjusted operating margin demonstrated notable growth, reaching 18.8%, up from 14.2% in the same period last year.
The company reported a GAAP diluted loss per share of $0.31, an improvement from the diluted loss per share of $2.61 in the second quarter of the previous fiscal year. On a non-GAAP basis, adjusted diluted earnings per share were reported at $0.41, a substantial increase from the $0.11 reported in the same period a year ago.
The company also revealed its third-quarter outlook, with expected net sales of approximately $266.0 million, along with various non-GAAP financial measures, including an adjusted diluted earnings per share estimate of $0.44.
Semtech's executive leadership expressed confidence in the company's financial performance, attributing the strong results to deep customer engagement, operational discipline, and strategic investments in core businesses. The company also highlighted its accelerated debt reduction and a reduction in its net leverage ratio, indicating a positive financial trajectory.
The market has reacted to these announcements by moving the company's shares -0.18% to a price of $51.00. For more information, read the company's full 8-K submission here.
