Semtech surges on strong Q2 beat and upbeat Q3 guidance

Investing.com -- Semtech Corporation is firing on all cylinders. The semiconductor giant just delivered a massive second-quarter beat and followed it up with forward guidance that completely shattered Wall Street consensus, sending shares climbing nearly 3%.

The semiconductor company posted adjusted earnings per share of $0.71, beating the analyst estimate of $0.61 by $0.10. Revenue reached a record $341.9 million, surpassing the consensus estimate of $328.64 million and marking a 33% increase from $257.6 million in the same quarter last year. The company attributed the strong performance to record revenue across its key focus areas and accelerating bookings.

For the third quarter of fiscal 2027, Semtech issued guidance of $1.02 to $1.08 per share, with a midpoint of $1.05 that significantly exceeds the analyst consensus of $0.73. The company expects revenue of $405 million to $415 million, with a midpoint of $410 million well above the consensus estimate of $379 million.

"The Semtech team executed exceptionally well, delivering record revenue across our key focus areas, earnings leverage that continued to outpace revenue growth and significant progress on portfolio optimization," said Hong Hou, president and CEO. "Accelerating bookings and record backlog point to a strong inflection in growth with new revenue drivers and visibility expected to extend well into next fiscal year."

The company reported GAAP gross margin of 53.8% and adjusted gross margin of 54.5% for the quarter. Adjusted operating margin came in at 24.4%, up from 20.4% in the prior quarter. For the third quarter, Semtech expects adjusted operating margin of 31.0%, plus or minus 60 basis points.

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