Semtech Announces Fourth Quarter and Fiscal Year 2024 Results
Semtech Corporation (Nasdaq: SMTC), a high-performance semiconductor, IoT systems and cloud connectivity service provider, today reported unaudited financial results for its fourth quarter and fiscal ...
Fourth Quarter of Fiscal Year 2024
- Net sales of $192.9 million, above the midpoint of guidance
- GAAP gross margin of (0.2)% and Non-GAAP gross margin of 48.9%, above the midpoint of guidance
- GAAP diluted loss per share of $9.98 and Non-GAAP diluted loss per share of $0.06
- Positive operating cash flow of $13.9 million and free cash flow of $12.2 million
- Completed optional credit facility prepayment of $5.0 million
Fiscal Year 2024
- Net sales of $868.8 million
- GAAP gross margin of 34.1% and Non-GAAP gross margin of 49.5%
- GAAP diluted loss per share of $17.03 and Non-GAAP diluted earnings per share of $0.14
GAAP gross margin and diluted loss per share are reflective of goodwill and intangible asset impairment charges.
CAMARILLO, Calif.: Semtech Corporation (Nasdaq: SMTC), a high-performance semiconductor, IoT systems and cloud connectivity service provider, today reported unaudited financial results for its fourth quarter and fiscal year 2024, which ended January 28, 2024.
"End market demand for our semiconductor business has progressed from stable to growing," said Paul H. Pickle, Semtech's president and chief executive officer. "While our hardware business remains constrained, we believe Semtech is well-positioned to benefit from near-term growth trends, particularly in our infrastructure end market."
"Working capital improvements contributed to positive operating and free cash flows for the fourth quarter, and we completed an optional principal prepayment on our credit facility," said Mark Lin, Semtech's executive vice president and chief financial officer. "We went live on a single ERP at the beginning of the first quarter of fiscal year 2025, which we expect will increase efficiencies and enhance internal controls."
Fourth Quarter and Fiscal Year 2024 Results
| GAAP Financial Results | ||||||||||||||||||
| Three Months Ended |
| Twelve Months Ended | ||||||||||||||||
(in millions, except per share data) | Q424 |
| Q324 |
| Q423 |
| Q424 |
| Q423 | ||||||||||
Net sales | $ | 192.9 |
|
| $ | 200.9 |
|
| $ | 167.5 |
|
| $ | 868.8 |
|
| $ | 756.5 |
|
Gross margin |
| (0.2 | )% |
|
| 46.3 | % |
|
| 59.7 | % |
|
| 34.1 | % |
|
| 63.3 | % |
Operating costs and expenses, net | $ | 619.6 |
|
| $ | 105.3 |
|
| $ | 155.7 |
|
| $ | 1,240.6 |
|
| $ | 385.8 |
|
Operating (loss) income | $ | (620.0 | ) |
| $ | (12.4 | ) |
| $ | (55.7 | ) |
| $ | (944.3 | ) |
| $ | 92.8 |
|
Operating margin |
| (321.3 | )% |
|
| (6.2 | )% |
|
| (33.2 | )% |
|
| (108.7 | )% |
|
| 12.3 | % |
Interest expense, net | $ | 22.1 |
|
| $ | 27.7 |
|
| $ | 2.1 |
|
| $ | 92.8 |
|
| $ | 11.8 |
|
Goodwill impairment | $ | 473.8 |
|
| $ | 2.3 |
|
| $ | — |
|
| $ | 755.6 |
|
| $ | — |
|
Intangible impairments | $ | 131.4 |
|
| $ | — |
|
| $ | — |
|
| $ | 131.4 |
|
| $ | — |
|
Diluted (loss) earnings per share | $ | (9.98 | ) |
| $ | (0.60 | ) |
| $ | (0.80 | ) |
| $ | (17.03 | ) |
| $ | 0.96 |
|
| Non-GAAP Financial Results | ||||||||||||||||||
| Three Months Ended |
| Twelve Months Ended | ||||||||||||||||
(in millions, except per share data) | Q424 |
| Q324 |
| Q423 |
| Q424 |
| Q423 | ||||||||||
Net sales | $ | 192.9 |
|
| $ | 200.9 |
|
| $ | 167.5 |
|
| $ | 868.8 |
|
| $ | 756.5 |
|
Gross margin |
| 48.9 | % |
|
| 51.3 | % |
|
| 62.3 | % |
|
| 49.5 | % |
|
| 64.5 | % |
Operating costs and expenses, net | $ | 76.5 |
|
| $ | 82.5 |
|
| $ | 66.7 |
|
| $ | 337.5 |
|
| $ | 277.5 |
|
Operating income | $ | 17.8 |
|
| $ | 20.5 |
|
| $ | 37.7 |
|
| $ | 92.7 |
|
| $ | 210.7 |
|
Operating margin |
| 9.2 | % |
|
| 10.2 | % |
|
| 22.5 | % |
|
| 10.7 | % |
|
| 27.8 | % |
Interest expense, net | $ | 19.9 |
|
| $ | 22.3 |
|
| $ | 1.6 |
|
| $ | 81.8 |
|
| $ | 4.6 |
|
Diluted (loss) earnings per share | $ | (0.06 | ) |
| $ | 0.02 |
|
| $ | 0.49 |
|
| $ | 0.14 |
|
| $ | 2.81 |
|
Adjusted EBITDA | $ | 24.0 |
|
| $ | 28.1 |
|
| $ | 44.1 |
|
| $ | 122.0 |
|
| $ | 236.3 |
|
Goodwill impairment was $755.6 million and intangible impairments were $131.4 million for fiscal year 2024 primarily due to reduced earnings forecasts associated with the business acquired from Sierra Wireless and current macroeconomic conditions, including an elevated interest rate environment.
See "Non-GAAP Financial Measures" below for additional information about our non-GAAP financial results.
First Quarter of Fiscal Year 2025 Outlook
(in millions, except per share data) |
| |||||||
Net sales | $ | 200.0 |
|
| +/- |
| $ | 5.0 |
Non-GAAP Financial Measures |
|
|
|
|
| |||
Gross margin |
| 49.5 | % |
| +/- |
|
| 100 bps |
Operating costs and expenses, net | $ | 78.5 |
|
| +/- |
| $ | 1.5 |
Operating income | $ | 20.5 |
|
| +/- |
| $ | 3.0 |
Operating margin |
| 10.3 | % |
| +/- |
|
| 120 bps |
Interest expense, net | $ | 20.5 |
|
|
|
|
| |
Normalized income tax rate |
| 12 | % |
|
|
|
| |
Diluted earnings (loss) per share | $ | 0.00 |
|
| +/- |
| $ | 0.04 |
Adjusted EBITDA | $ | 27.8 |
|
| +/- |
| $ | 3.0 |
|
|
|
|
|
| |||
Diluted share count of 64.5 for diluted (loss) per share and 66.0 for diluted earnings per share | ||||||||
The Company is unable to include a reconciliation of forward-looking non-GAAP results to the corresponding GAAP measures as this is not available without unreasonable efforts due to the high variability and low visibility with respect to the impact of transaction, integration and restructuring expenses, share-based awards, amortization of acquisition-related intangible assets and other items that are excluded from these non-GAAP measures. The Company expects the variability of the above charges to have a potentially significant impact on its GAAP financial results.
Webcast and Conference Call
Semtech will be hosting a conference call today to discuss its fourth quarter and fiscal year 2024 results at 2:00 p.m. Pacific time. The dial-in number for the call is (877) 407-0312. Please use conference ID 13736084. An audio webcast and supplemental earnings materials for the quarter will be available on the Investor Relations section of Semtech's website at investors.semtech.com under "News & Events." A replay of the call will be available throu
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