The following is a summary of the Semtech Corp. (SMTC) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Semtech reported Q4 net sales of $192.9 million, exceeding the midpoint of their guidance.

• Gross margin was at 48.9%, driven by lower overhead and larger portions of lower margin sales.

• Operating expenses dropped 7% to $76.5 million, with reduced R&D costs and stable administrative costs.

• Net loss per share was reported at $0.06.

• The annual financial data for FY2024 shows net sales of $868.8 million, gross margin of 49.5%, and diluted earnings per share of $0.14.

• Q4 ended with a cash balance of $128.6 million, and a positive operating cash flow of $13.9 million with a free cash flow of $4.2 million.

Business Progress:

• All end markets witnessed growth in Q4 with increased interest in their FiberEdge transimpedance amplifiers and laser drivers in the data center segment.

• Q4 infrastructure net sales were at $39.4 million despite a decline of 9%, while high-end consumer sales fell 15% to $32.1 million, but with a nominal increase in Q4 POS compared to Q3.

• Industrial net sales rose 1% to $121.5 million in Q4 with IoT systems net sales rising 11% to $65.5 million.

• The company is investing in 5G and CAT 1 bis offerings and expects net sales for Q1 2025 to be around $200 million.

• Semtech recognizes the gradual shift from copper to optical in data centers and expects to adapt with their competency in both areas.

• Despite a weak foreseeable hardware sector, improvements in the industrial and modules business are noted.

• Semtech has repositioned its LoRa and NIC businesses under a new segment to increase visibility into their legacy businesses.

• The company witnessed a quicker business recovery than expected due to successful roadmap execution and anticipates a healthy run rate once the business conditions improve.

More details: Semtech IR

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