Q2 2025 Semtech Corp Earnings Call Transcript
Key Points
- Sequential revenue growth across all business units, with a favorable outlook for the third quarter.
- Strong performance in the data center segment, with net sales up 28% sequentially and 37% year over year.
- Significant growth in LoRa enabled solutions, with net sales up 34% sequentially and 72% year over year.
- Gross margin improvement to 50.4%, up 60 basis points sequentially and 80 basis points year over year.
- Operating expenses reduced by 9% year over year, resulting in an operating margin increase of 200 basis points sequentially and 60 basis points year over year.
- Wireless net sales declined, although they remained within expectations.
- Free cash flow for the second quarter was a negative $8.4 million, primarily due to working capital changes.
- Principal outstanding on debt remains high at $1.2 billion.
- Inventory levels increased by 5% sequentially, which could indicate potential future challenges in inventory management.
- Limited public comments on asset sales and the status of the process, creating uncertainty around balance sheet improvements.
Greetings and welcome to Semtech Corporation's second quarter fiscal year 2025 earnings call. (Operator Instructions) As a reminder, this call is being recorded. I would now like to turn the call over to Mark Lin, Executive Vice President and CFO.
Thank you, Mark, you may begin.
Thank you, operator. Good day, everyone and welcome. I'm pleased to be joined today by Hong Hou, President and Chief Executive Officer. Today after market close, we released our unaudited results for the second quarter of fiscal year 2025, which are posted along with an earnings call presentation to our investor website at investors.semtech.com.
Today's call will include various remarks about future expectations, plans, and prospects which comprise forward-looking statements. Please refer to today's press release and see slide 2 of the earnings presentation for information on risk factors that could cause our actual results to differ materially from those made on this call. Unless otherwise
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