SMTC - Earnings call transcript Q3 2022

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Operator

Greetings. Welcome to the Semtech Corporation Q3 FY '22 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, VP of Investor Relations, Sandy Harrison.

You may begin.

William Harrison

Great. welcome fiscal conference year and our to Carl, quarter third XXXX you, to call Semtech's discuss Thank financial results. call Officer; our today's and for will Maheswaran, Mohan Speakers Semtech's Chief Executive Financial and Chief Chukwu, Emeka Officer. be President results A issued market available our after is semtech.com. was website press and our at today the announcing on release unaudited closed materially call these cause actual could will uncertainties and that in include Today's anticipated to forward-looking from differ risks statements. results statements that include the results

of these safe reports discussion of and uncertainties, in For press Exchange the detailed a recent in filed section risks please review Securities and Risk Commission. harbor today's periodic more the our most Factors included statement with the release and other

of the and to refer change. financial As -- no Mohan's the obligation from today information Other undertakes will financials all a facts non-GAAP made this during comments current references only, references on reminder, Semtech or update made call to management call today's unless the this discussion turn to reconciliations Emeka that, the and remarks the most included Semtech's to Financial are Emeka? measures should call to Emeka's otherwise circumstances to prepared in made as A financial results Chief such will in useful, GAAP considers Officer, with Chukwu. measures of comparable noted. And of non-GAAP financial why press today's detailed release. the measures, along I non-GAAP are financial measures team with call over

Emeka Chukwu

Thank you, Sandy. afternoon, Good everyone.

financial that delivered financial net focus QX strong performance sequentially of year the a and of financial records, unless In was results, XX% year-over-year I X% very fiscal included new above As $XXX.X midpoint non-GAAP sales of achieving is company otherwise the our my million, and including comments guidance. that our will our increased on number practice, 'XX, noted. a

and Europe into growth our America represented to sales net and XX%, record QX, momentum In shipments of and several XX% by Asia, platforms respectively. performance. Continued key contributed results North strong the XX%,

that represented over of in shift shipments our direct sales, consumed for of estimate the are the approximately XX% to XX% distribution balance customers, sales we and approximately and represented XX% net of represented approximately XX%. rest this While Total our world. the China, a sales addresses net the Americas distributors and in

Our points upper gross product which approximately In total approximately and and distributor bookings POS quarterly XX% POS represented XXX accounted record, those consumer business our infrastructure, more basis the high-end QX, new QX balanced to and another guidance XX% the led increased QX the increased industrial by from of The a quarterly bookings for sequentially represented XX.X%, XX% mix. record, year-over-year, favorable markets, X% remains and respectively. the shipments. coming end with and margin of the our XX%, end of range

to from Going broad-based platforms forward, LoRa-enabled, we growth PON, to margin our expect continue protection our and retail the our include that mix from benefit our of sales gross PAMX CDRs key Tri-Edge products. industrial XXG our

high-end consumer to For mix lower sales. to we a net to anticipate as expect gross more a favorable margin QX, we due continue seasonally expand

product million, In current For the from our development the purposes, of upward margin levels the $XX.X modeling secular remain growth to over by planning our to an driven reflecting benefit higher several increased and expenses. at growth bias quarters, gross operating next we expect platforms. expenses X% with QX, new

above to to QX, in levels. be operating slightly current line expense our For expect we

net solid points the year-over-year a margin record progress and by represented operating the Xx XX% model of profit. XXX towards that a and our Looking towards half our basis, basis represented 'XX, ahead rate expect our trend QX, to XX% to XX% sales or led we fiscal expanded expense growth. to long-term gross In target sales Operating sequentially model. net to and of increased on nearly target begin higher of XX% operating by increased year margin back profit to XX.X% operating sequentially

sequentially of will QX days approximately our with while inventory increased $XX remains $XXX increased repurchase levels cash use million expected, platforms. a days. to are debt. XX% profit $XX.X sequentially sales increased capital, net strong generation as flow remaining As dollar Free XXXX in absolute flow the X% QX, down despite we XX% range the which of from a low our net been the sequentially days. for the cash target shares, growth of accounts the XX In In of days our maintain million XXX result management record of our increased cash opportunistically the to the significant And seeing XX% to flow sales, strategic we XX% days investments prior X% expect was has record as of operations to be prior expect XX% flow our year outstanding year. In expansion below sequentially, flat to million, receivable around to to outstanding to we X and cash target quarter and end make cash authorization, QX, and fiscal of in our up to $XX strong QX, XX% free terms pay end expected good was continue from and million, inventory we long-term of a of success to higher while strategic days year sequentially free net and of XX of the net operating of at in XX inventory. represented and sales actions X.X% or stock, the operating resulting sales. The leverage of working repurchased our in

to profit, ,XG record a QX. cash environment. above operating target of XX-gig record earnings XXX enabled platforms record the protection record Tri-Edge net XX in to gross better share of our broad-based range wireless of PAMX, record to a and growth supply per our and We expect support margin, to demand us our sales, net the PON days In stronger flow deliver success and the inventory remain summary, LoRa-enabled, engines chain

We drive for from record provide to as and drivers engines strong 'XX. expect year now performance that fiscal fiscal move these growth and I over continue long-term call the Mohan. to year key hand a 'XX financial momentum will we the sustainable secular growth the into underlying

Mohan Maheswaran

of approximately center sequentially million consumer X% demand our afternoon, XX% In data QX, by revenues. and Integrity Signal the groups. and X% outlook XX% achieved a Thank fiscal and to year everyone. PON earnings net discuss group, infrastructure I from other by you, revenue revenue lower per attributable our will Emeka. X% Product revenues product from diluted record of and non-GAAP net high-end year stronger represented XX% QX, base revenue revenues. XX% broad-based revenues and of high-end QX fiscal total $X.XX. In increased consumer consumer 'XX non-GAAP and markets industrial sequentially 'XX. total X% a each attributable QX QX, 'XX, annually systems. our share QX will represented of led XX.X% and contributed as The record, infrastructure revenues. the revenues then discuss and Good XX% to with fiscal market total LoRa The decreased of and revenue QX represented from our base the end from record data and of of I our In year and and our prior margin net of of business protection and XX% by station from industrial growth. approximately market record. increased Higher We record of and both center new of strong PON sequentially results end revenues, by mobile our increased posted market business represented customers product provide station growth sequentially, by record over market gross XX% devices performance quarterly net sequentially to represented Group $XXX.X the performance new were In offset grew XX% led quarter. markets and softened total for now the

platforms Tri-Edge gain continued short-reach to key win with solid Our design hyperscale customers. PAMX traction

planned of performance platforms power also to momentum across become in data our and to cost The Tri-Edge expect our PAMX benefits of links We interest In high PAMX 'XX release FY has increasing and reach increase teens as FY reach over center expect Tri-Edge the FY in our accelerate several led market. center realized over into excellent the data quarters. 'XX, short-reach next Tri-Edge in we XXX% this for the platforms, 'XX. in revenues the longer shorter to end

portfolio few in years will complete As the are in over the optical released PAMX devices strong PAMX hyperscale XXX-gig revenue next XXX-gig, enable we to of our XXX-gig production, Tri-Edge portfolio and Tri-Edge revenues PON today. PON the modules new record the of PON growth benefit record most believe 'XX, data products in another center XX-gig to as by market. from QX performance, the FY available we market In comprehensive PMD market from led achieved continue revenue very

next base XG infrastructure prior We business, over their have PON expect from demand station providers customers of begin Europe global XX increased wireless by service China in deployments announced, grow access carriers and XG tenders accelerate XX-gig as PON to our FY the networks. Several and XX North the 'XX, to over bandwidth build-outs solutions, expected QX continue higher quarter. our our led of are In been to to months. America

ClearEdge to accelerate significant due X-gig momentum design XG 'XX We for our platforms XX-gig demand in a family. are our for expecting platforms -- in to FY

industry-leading over bandwidth receiving the achieve our the fiscal next-generation for strong and to at in being In to QX growth for Integrity themes addition, expected increase record feedback. our Integrity Tri-Edge key targeted front-haul for second driving by from sampled 'XX, market. growth position are XX-gigabit wireless per center infrastructure to modules will from networks we the Product XX-gigabit the XG year expect very greater Signal positive per In double-digit needed believe Group next and provide remain tailwinds revenue our of Product several is platform driven data strong, secular The PAMX we demand drive now sustainable our our Group global markets Signal another second and years.

from and 'XX, driven Product North Product expected, of Protection platforms sequentially, and year-over-year XX% to revenues. our QX, and total XX% on as fiscal net QX Asian by of represented In consumer our American increased increased Moving demand. Group sequentially from Protection protection Group. consumer XX% our In year revenue revenues

is which XX% strong, quarters. for used will constraint complete broad-based and remain limited, by automotive, from achieved grew systems. supply annually at impacting consumer our industrial revenue quarterly industrial our our communications and We are the and that X their In many demand XX% remains chain this broad-based customers. new led least devices anticipate by build record, growth demand While QX, markets protection sequentially for a to ability customers more of

superior deliver leading for systems platforms using protection devices. Our protection geometry process

platforms sequentially protection and Semtech's we secular continue increased to QX next our contribute growth gross double-digit over increasing of expect We fiscal deliver trend of all with revenues this due year technology margins to In to decrease across seasonality. sectors and protection typical 'XX, years. to the adoption the expect several help

Wireless XX% record performance, smart over and and Turning Group In QX, led by Sensing represented In growth our revenues from to IoT and the quarterly the smart prior of achieved our Product QX, group. utility, Sensing smart LoRa-enabled industrial segments. another and grew total platforms record from Product our and XX% sequentially revenues. agriculture another Wireless building, X% and year delivered

the had segments, driving for as also early of and are growth home, We smart smart campus business, anticipated. the further neighborhood we smart LoRa ramp our are which seeing

FY now momentum, in expect As CAGR to this our exceed 'XX LoRa-enabled our a result we revenue of XX% positive target. continued

everywhere QX, Our an initiative billion low-powered managing will XXXX is and to LoRa change. mitigating we on on positive sensors climate vision result we a sensors X are the deployed needed, believe a goal connect In see or by to impact which impact where impact positive announced climate change. that it have to for LoRa-enabled in

will many goal. that see to contribute this use continue to We cases globally

with dioxide and end-to-end year. LoRa The 'XX FY platform end for number assets. Ryoden XXX solid and to of our by into network automation, to to quality microcontroller The In our provider quality cloud, cumulative are Renesas and air has And million the by just Azure on directly operators LoRa of the rooftop, Some environmental building to of use goal which XXX, operators partner pipeline make LoRa against LoRa increased 'XX. IoT now new Asia, emissions. 'XX participation, sensor these solar end by to 'XX. number to expecting is provider, of end collaboration a business their metrics expect cloud for The LoRa personal incorporated QX, and LoRaWAN year-end widely Board. the seat and logistics presence number We further provider LoRa LPWAN we million, increased solution, over examples of systems. X.X number valuables, with for numerous LoRa FY the cases strengthen Cloud set other cloud many few The has LoRaWAN we LoRa LoRa to care million cases deployed solution gateways cumulative change. batteryless global end solutions full increased a exceeded LoRa's XXX tracking AWS, LoRa target. sensors, use end targets. networks has network emerging indoor include: and leading new Edge FY we and FY examples to geolocation IQnexus accepted has joined Tier and it deployments, Microsoft grew zero network expect opportunity a of Corporation, the announced and power million climate top-tier carbon of exceed the our XXX capabilities its deployed of are of wireless, Alliance carbon reduce X Energy, 'XX. These QX, our to the IoT a in connect and nodes along providers, over health gateways and for a already X integration the progress have In enabling assets, expect Alliance for nodes IoT and the also solution LoRaWAN a develop this combat to considered market. $XXX LoRa like featuring Microsoft animals exceeded in FY to enterprise a a the million continue deployed we announced deploy to a a and

our facto We to believe anticipate XX% for We the that increasing to convert sensing 'XX deployments proximity its the Alliance with following In increasing a LoRa our revenues. demand in FY softened momentum LoRa XX-month platforms enable approximately influence for last our of on average the $XXX fast-growing will for quarter's and the standard of record target de million. will the the along the to help opportunities line. currently are pipeline market. pipeline of metrics, members LPWAN QX, We over time become

anticipate mobile adoption more Our power and for in over radios trend X high-powered stringent increased XG technology cellular phones years. advanced wearable to next provide over regulations stricter most to globally. is expected regulations industry's sensing and few platforms the This highly and expected devices. The enforce sensing to next increasing Asia RF of as WiFi contribute the the demand platforms is integrated SAR countries several in we our of for use proximity result will years that SAR and sensing

expected expected Sensing revenues QX from are be to decrease 'XX, lower For expect consumer business year by of net revenue. and to fiscal Wireless record offset our Product as results we our Group seasonally LoRa from

and QX, we wins. and design Moving of number X,XXX. released on achieved wins In new XX record design new of products a to new products

our approximately the FY between estimating We fourth are to of for million 'XX. of guidance discuss terms the To orders we attain beginning QX. and or be currently net with the outlook and QX of $XXX needed of million. entered record me X% $XXX let $XXX backlog midpoint net at QX quarter our Now million, range approximately revenues

and be share. answer And to $X.XX $X.XX questions. back to Emeka will between be hand II the Sandy, will now call to earnings non-GAAP any Operator? QX I operator. our happy expect We per and diluted the

Operator

[Operator Instructions].

Svanberg is with Our first Tore from question Stifel.

Tore Svanberg

the record on Yes. results. Congratulations

next specific I there, comment deployments will question some that's said business. PAMX, about also you Mohan? going it drive double to talk sequentially center Signal believe you like sounds the to and Could the year. First of maybe And PAMX your data on is specifically Integrity

there. So again, of the deployments from I beginning that new assume some that's you're benefiting

Mohan Maheswaran

right, that's a few the center the things going business, specifically in Yes, We've but got Tore. in on data area. PAMX quite

are can XXX-gig, the out that have some modules the mostly products go at and products for XXX-gig its into XxXX For only us, we moment optical the short-reach applications.

over alone mentioned, longer as quarters that products few of next to to when a we're we come going have broader new that have, are planned out and even us momentum portfolio, significant I the to We XXX% I beyond growth reach And on see for that, short year, But said, think reach. drive for series more the next is then very as I momentum for there. very, going growth sure.

center PAMX from XX-gigabit we're extremely platform our is So also the per opportunity getting business, about not very but excited feedback for our base Tri-Edge data second the good optical station PAMX And Tri-Edge for marketplace. also there. only modules

So also. we're very that about optimistic

Tore Svanberg

has follow-up, Is there's been sustain stronger on PON? with of share a Really, momentum PON as a conviction a there us that been can it's still your happening businesses And you on there one to basis. business cycles in that your good. upgrade year-over-year us give Very tear. to anything this XX-gig

Mohan Maheswaran

mean globally, it's I sure. a first more of of for nice is global become Yes, lot PON I of technology. one a about in the things think PON, all, general,

For a PON the seen while, we're that much deployments, also driving we've we've seen and good deployments. was China it we're while different that to was America definitely business now what globalization China tenders very and starting the continue and kind drive across out of drive But and growth. And to driving seeing North to and see tenders platforms. there, that's starting further OEMs going now Europe building many

So about pretty it. excited

obviously, bandwidth is think access critical. I

likely upon next then PON whole the you over coming I good see to access seeing have have if growth, will you bandwidth XX-gig can bottleneck few And You point, a we're the And and years. think want continue there, developments definitely the that I to is purpose. all the but bandwidth think higher to. defeats

in by growth encouraged the PON. very So

Tore Svanberg

Okay.

last question on Just LoRa. one

smart America? seeing North primarily home the to is are So as that neighborhood regions Is starting in other Or it ramp. sounds ramp that like smart you well?

Mohan Maheswaran

strength I We're I the America. different is would players. say. that it's ramp would come. to is across in seeing say The Obviously, of the Amazon initiative North it Sidewalk board, yet of the majority number a

something we're We've Helium we're next year, of of of I going including kind ramp. that's seeing half that still, networks. So other see probably this this think, campus definitely, a rollout. emergence of second initiatives, the bunch to whole that seen But

range, technology, LoRa Now think opens a of exciting one X-mile starting up low driven exciting and get pretty range seeing to really which in cases is the which long kind use that market, of we're whole us that's to well, mile a really become adopted I really makes we'll that is transpired range-driven power that faster. grow half of the because LoRa things much for as technology, and bigger, but it bunch is LPWAN essentially market the a predominantly

Tore Svanberg

Congratulations again.

Mohan Maheswaran

you. Thank

Operator

Our W. Baird. Tristan is with next Gerra Robert question from

Tristan Gerra

You that away both you've talked data I PON mentioned is increasing -- China. mentioned you PON about sequentially. and center now just know And diversifying from

other you slowdown, you're top indeed, that So China the you're it seeing about characterized still it if seeing than for there what at outlook talk And the slowdown a geography? it have like the weathering will quarter recently. you're looks meant in whether, better companies Could way higher some this have line?

Mohan Maheswaran

Yes.

segment slowing Tristan, healthy. say on. I would very is for IoT still say on quite segment-dependent think, consumer China healthy still. down general. smartphones, business it's definitely in would I infrastructure in We've you're example, the I in is quite seen focused which

the on diversification weak, the that's also segment. like when we're So is it being are end area and beauty really geographical a think which and market strong. board. one is across of other are diversification I having seeing balanced that And that business And depend but we diversification, having does areas that's

And that. having so diversification the just helps

is your China seen yes in have question, more we've -- other business the So weakness in answer to think really And areas. consumer we it I than segment-specific. but

Tristan Gerra

to could contributing And your you then talk expectation Great. line your the about top over about few price quarters. next

whatever year the could in second this contribute early those gross to is for that price in you're which price with going growth already to next as the margin. to addition expectations increases year you've ones And in were done, You benefit continuing also units? see mentioning going about to your half, increases, and that perhaps the

Mohan Maheswaran

Possibly, Tristan. increases been most But increases driven in our price I chain by costs. of have our think really supply

be when costs trying a we've increase have an base. we or to fab product, much and customer very wafer test-related on So our to in specifically specific it whether had focused cost or pass for on assembly that

to helping -- chain of by do chain that, generally. some increases more pricing definitely us When typically, because which is we things times unless chain those seeing think one are supply long. like -- is that will and is we cycle extremely offset supply I have providing long that cycle continue you don't of action, drives supply that higher cost that ASP So are increases. that necessarily the possible times

that years, the that. and are CapEx So but until we it's several in not takes at least all see place, on possible all the typically so we're investments and it, counting

Operator

question Harsh from next Kumar is Our with Piper Sandler.

Harsh Kumar

of you. solid First Very I two results. had for congratulations. all, Mohan,

data follow-up. then there to center? what just expect improving mentioned And that in what And that you was the a caused might softness. in that have have your then the center you in I softness things gives confidence then quarter business opinion, was curious things seeing are also, you reported, I are You and the data improve. you last that

Mohan Maheswaran

of it's think the in lot a standpoint, shift I our Harsh, on -- So what's the market. from going in

some we're ramp and design wins where deployments So out XXX-gig up the optical inventory have I there's see PAMX And no pretty maybe those quite much there starting but they bag. newer product, those to modules have the think we fast. of excess in inventory,

And design really it's win so driven.

the infrastructure where next It think fairly and be bit QX lumpy. little are comfortable about I So businesses a year is tend center also data we for lumpy. our to does All business. are

year-on-year. of least it question to There's management XXX-gig and to for of and quarter some just then or at that come will XXX-gig, and are to right? CapEx a again. going X a get spending, stations base PON, going there back see to or you'll for right. and inventory, XG It's then no sure, of those deployments grow timing, XXX-gig, You'll for be But be continue then the up XX-gig question and deployments it's PAMX

Harsh Kumar

Understood, I on you to I you sides both guys had just Mohan. of one were side wire. seem one a the X-gig for PON. wire, in And of X.X, of whereas that the XX-gig PON on are on your question playing the then presentations and recall PON,

So I was question to And assessment, your if as side if an curious is, as I to that is you imply, that went correct, of content PON quite bit. accurate that revenue? was a that's is curious which then up give a a us percentage much would willing would be how

Mohan Maheswaran

is said PON, ONU you side. the PON on end everything ONU the are the the end both office we Harsh. the XX-gig So -- obviously, and on OLT side. end, accurate, OLT higher are ASPs playing the And and central

if complete also chipset chipset, sell that It is, good. you your that, broad a very the that's strong gives a So you with like position customers.

And that's very also thing, good a think. I so

if can With don't percentage, I you if where that. we're with strategically, Sandy, we to regard comfortable are. we that so know provide or And have very

Let me see.

William Harrison

Yes.

So Harsh, upper of that sort year, the to mid-teens. in PON's typically It's running low this the at end the of year-to-date. probably been somewhere

Harsh Kumar

me. That's good enough for guys. Congrats

Operator

question next with Riley Our B. Craig from is Securities. Ellis

Craig Ellis

is wanted backlog activity on seeing coverage very turns with outlook. what and color Congratulations Mohan, and just very just with Backlog to growth. quarter getting some start strong needed order by X% to meet on strong I further clearly guidance. the you're

particular and order are expansion? business more And where you're of there there? the backlog are intake what you areas seeing So significant seeing

Mohan Maheswaran

mentioned Backlog is very what be on healthy obviously strong. to continue very Orders we've turns Yes. there. given just

there. extremely is obviously, quite everything would one very and of those. I So say, area. looking LoRa, pockets is there PON good another of are good is strength clearly

which is very Our protection very broad, IPA strong. business, very,

Areas mentioned the a pockets. funky I consumer, totally here. smartphone of end couple nice towards years unexpected some kind China, of weakness, the are it's coming been of not and there So of year,

So what we seasonality. expect see. to the some typical of That's

Craig, would at not the it's unusual. very strong. very, totally still So But that say, is moment, everything I

Craig Ellis

industrial about protection. a That's talk little to from the I real just helpful. there And bit wanted of activity and inside go then

strength? So And of growth. some things the sequential very first think great as market strength? the could is seeing that wondering broad I we 'XX? to see XX% do is if particular And was sustainable into that you how out driving the do you that are end think look point you half of that within out what calendar And strength

Mohan Maheswaran

Yes.

soft. it's be So first year, sustainable. expect I'd in I to certainly think we'd half QX, in little But think expect I It's do multiple the segments. of strong as bit QX, to a next be again. it

it's it's broad-based interfaces, it's communications, So HDMI. automotive, USB-C,

So of and is strong, as well a very particularly, Automotive, set communications strong. it's interfaces being I is segments. different quite think, protected there broad as

Now if what market. you mass customers. about It's this of the kind think customers, -- thousands really the of is of it, XX sustainability not it's

devices, I they really the the is market very use advanced And well. starting our and those think so protection seeing really as And use we're those fits strategy the -- our into it -- adoption starting lithography what now broad to our advanced kind processes and lithography DSPs. of to segments controllers of and

leading-edge high-end been geometries saying Craig, what driving kind segment, to of that we a have our what's but a been in it, for we've sense the really obviously, which proven we've while, waiting it's consumer kind -- the and we've think coming. in to these that's But the broader the for so need now capability. us And of is protection, adoption for I and market come of

Craig Ellis

and pluses quarter the strong Emeka, see I was Emeka. especially you, see wanted further basis margin. since we I great points expecting. very of don't guidance Yes. just want was any the were to characteristics. coming color to Nice you see to could end high if nice in of the real there to particular provide of that some one the gross at the I some margin least to ignore real what XX on the has above market at

Emeka Chukwu

a ignored Craig. that pleasing And playing been while. like us. not it's the And numbers to these gross margin for thank do see out has for at story actually all. feel But our given we've So very you, I expectations it's okay, had definitely a highlight

of We protection recall in higher talked the broad-based much the talked the corporate the growth XX-gig average. margins you gross right, of about PAMX If with past, CDRs, PON, the about all devices. drivers, we've than LoRa-enabled, coming that

to just nice it's is right? see it margin out. playing And pretty So simple, the that that mix. story Our that's gross expansion essentially is of story,

Operator

Our Rolland with is Susquehanna. from Christopher question Next

Christopher Rolland

I LoRa. are my around guess questions mostly

guys it's in what Helium, It with for guess chips. like of you the of then average ton might well. improvements Maybe see me so as I treadmill, power, example, with So particularly And for of you LoRa? talk for be think base have terms what innovation pricing about chips LoRa, do today. now. able we ASP per for would power those your a to is an backlogged remind kind like And station pricing right seems gateway

Mohan Maheswaran

Let start Chris. that, with me

for neighborhood it every gateways -- that. to distributed Helium's LoRa goal think and world to base to But to between wireless be and the the to just is But strategy base there And essentially want out pricing lower be in use end in on you're very world connectivity we be network in been which issue that cases. world the I an we're we've everywhere remember, been -- things is us. our in country not home every of $XX, get connectivity had. And $X deploy successful be in always station, I the that's and depending the for kind think varies. the the with definitely like stations, version and and talking power right,

have sensors can the out to why number deployed you if is can't and connected those the that's deployed That goal us there to gateways don't happen on number because of of comment real that for sensors gateways. the be gateways. I and get So

beauty to connectivity, the about allows it the of like, the viral really kind Helium now network if so is decentralized And kind you of network.

excited to got companies public We've on. networks But had very private being out we've networks just utilized. is also we way they're we're starting for the all network starting got It using And We've agreements. had anticipated. roaming got really going the way play so stuff enterprises. them -- And the look we other think I by if envisioned really I get now to they're the it. at world utilized around today,

So yes, the by but is very -- it, very network Helium clearly, very, momentum positive. excited is

Christopher Rolland

right, LoRa with adding that's And up my super terms you I your it. your entering year, I been question have there. just massive around in brings an in Mohan, for this are now side. adding maybe you're growth numbers impressed, of gateways, have here. you're guess, the that year, my existence, have more X.X kind and -- I order X million viral is on statement had if out I and gateway miner, the I of And X.X X million the Helium. and second I that gateways -- agree I Yes. entire think love

LoRa campus affect my that guess And like, if these confident or orders order, growth into is, seeing? that question it in confident How I have between, that down, are you to visibility sure helium like I for example, how been neighborhood the for So on Helium is back you network what really these are growth example? the what are programs aren't the wouldn't Helium? actually X or for we've Are Or that were programs? the slow you? in industrial programs

Mohan Maheswaran

to our that which that connect more the to because sit kind a connected example, I get sensors example started We billion answered macro the of range. can on can have and Chris, is tower more on the for many connectivity. sensors a as an change sensor obviously be focus out to initiative, connectivity of and question, that. sensor combat just climate Well, bigger the much And an gateways, are gateways

use more the us think visibility frankly, going good are But and think have that doing. I gateways into I driven. they're do for so case where it matter doesn't what And it's much. fairly We

demonstrates are or next use be question Sidewalk, way the Sidewalk at for very market market and a cases or it for the it offers in cases use obviously out, are cases? lot I just geolocation utilized can emerge. to just it really will beginning. point value use we're are to good for beauty and I on, a deployments viral use the can cases that. LoRaWAN to LoRa there see, it's to large, are LPWAN agriculture, use will And as it really home about connected And I that's I and the LoRa? of start type of think of can And opportunity mean, some year then Because for and can a our which make to starting really world this, a get that use there's -- is they use expand oh, And more said, I roll to amazon LoRa the of is very, be the tracking new connectivity an use sensors quickly use people satellite anticipating and right? it it is intent, this start and and asset. the the of example beginning, I it use kind starting I for obviously, here we'll of -- case I here going can smart to of,

Christopher Rolland

growth. great well, Yes.

Mohan Maheswaran

you. Thank

Operator

with is Our next from Cowen. question Karl Ackerman

Karl Ackerman

Two Yes. please. questions,

It's LoRa. do I'm is But into have still all, see sales at Azure. that ecosystem LoRa go-to-market do The hyperscalers? first great the the one by broader integrated force? see how now your is curious support if now you piggybacking AWS on to own changing, driven larger you the is from and go-to-market predominantly

Mohan Maheswaran

Yes.

how Karl, sales marketing and role our of think, in the adoption communication obviously, the in the But LoRa Alliance. LoRa LoRa play have the to we force, is -- and critical the of of a market. LoRa succeeding has I a

and chain. all and value has and at members, many, AWS Alliance out mentioned Cisco and I there XXX got, many XXX before, of levels companies including the So to Microsoft as the IBM

companies, you've sensor got gateway chip So companies, system companies, companies, software integrators.

get technology and end-to-end require right? the the together LoRa it's so cases And is and typically out to solution. an use But simply ecosystem here. figure a several out platform just just . an figure technology, to end-to-end members And -- of participate a

think really would that a -- what's or I necessarily with salespeople, have sales that the nature happening know XX now it's added so we And I the don't and of driving that's LoRa momentum. benefit. the if of it's guy power the kind of alliance pervasive a massive additional

more it's do cases, "Hey, to that." the can in, getting system and sense people the right interesting, at integrators look right right think Getting say, about use I want I that's technologies use the case getting the bottlenecks of making It now and ecosystem, software, software. the no talk it always be used used more to there's in and moved. sensors, I in about the hardware-related, sure have there, bottlenecks it's those be to out bottlenecks software-related. so

AWS it. to back-end Microsoft and having aspect case. use platform and them, go does access, to for the so And a that value I because build of with think, the partner tremendous But a addition time-to-market or changes to to really, to companies Microsoft of would their the Azure many go get ability software have struggled really add AWS really to

Karl Ackerman

this understood. percent Yes, high the more sales is follow-up supporting is My a That's ICs of And is If teens this between does optical as is technology? there a equally and that NRZ mean PAMX margin year? a of difference clarification. each CDRs notable as helpful. year, large

Mohan Maheswaran

it's NRZ a for is been when the is think cases. I just for it's a is fairly platform. to make to -- been at use Yes. at production, the Obviously, short-reach around PAMX, least larger. that really you released key Tri-Edge and it's point us, while, new that's look

business that growth design good the as momentum. the -- we got point being is win significant. And we've see fairly that the get really in momentum, so And

And so to nicely. accelerate we're PAMX, expecting deployments PAMX year next quite XXX-gig PAMX, XXX-gig

Operator

question is Bolton with from Co. Needham Our Quinn & next

Nathaniel Bolton

you I revenues, it quick of the Congratulations of only question couple Or PAMX. And dollars? millions a last it? terms high-teen of on that on One, high does all then follow-ups. the it the nice results. -- is percentage is say got maybe And do Tri-Edge? a PMDs? FiberEdge does teens I've it that also then Or of missed in Maybe just absolute follow-up on include a

Mohan Maheswaran

of of is would FiberEdge, dollars, does terms coming and the I Yes, Tri-Edge. of it that say majority the include growth millions it's but from high teens in

Nathaniel Bolton

then overall constrained, Got you know supply chain, I of consumer is other business of component by it. mentioned side looking the your some And on the manufacturers. to just availability especially

if back-end impact had effects of know and front-end experienced constraints out shutdowns any if own you're supply business COVID chain. companies supply seeing wondering And had a that of your your wondering analog number or on I Asia, Southeast fall in this through quarter? Just any the related more perhaps

Mohan Maheswaran

whole last of really. I across so. pretty last quarters, the would the fabs doubled full, times or that for quite times been are some chain, consistent long. cycle of year and of Not I same are type say, issues. in their would the Obviously, it's over supply say kind cycle us have couple over general,

weeks gone from XX time. So to weeks of maybe average we've cycle an XX

significant. that's So

longer And supply are than not and so a We board, average. plan say, we There there on a where pockets it's an okay. chain it's and where inventory. built problem. general, still is would that's the big are that's We -- that, pockets across major challenge. in building we're such obviously, I But inventory. But

all We system. know, -- lines -- prepared of to continuously are to in sure inventory some mentioned the not that we're customers using I are not We complete of remarks, struggling that a are as get our bottleneck. manufacturing customers make our and my do in the are to running build components

But kind has impact. in the clear demand that on up. an think that of so will I medium short-term impact And term, a

Nathaniel Bolton

last Got it. Mohan. my question, And

services Just any the of micro update on the part business? LoRa

Mohan Maheswaran

Yes.

is So well. the cloud services going

Microsoft end-to-end be more I about sure And geolocation changed going to year. the platform we a is an real board LoRa moment, we've work lot look customers, bringing you're at hear service next to have our performance momentum. obviously, but and I needs I and think, can that very say no have think make breakthroughs Azure that think to to the of cloud we there Edge would started think solution. I at there, elements closely on AWS, we partners with But significant now now what the I and and good

Operator

Rick next Our from Oppenheimer. Schafer with question is

Richard Schafer

could relevant sense, just on at LoRa? rate really does -- kind a of run of it guys. like sort maybe is in the look makes growth at if year. it mean, this next for you a seems lot So right, make you're seasonality give one if XX% on lot now, Congratulations, point like of I could was already. sneak LoRa. more expected I seem year. A of next questions LoRa you But good sense just hoping linearity I

So visibility comment give and you just general business a that or of I have what today? that you if on type on maybe was backlog could sense curious just

Mohan Maheswaran

Yes.

had on lot to how large pretty half, of first the the deployments. would quickly grown Obviously, funnel help, the some everything the without we But wins a use that general, of the to size, momentum very think -- design And are number go to good, from anticipating get I -- and a moves funnel. from of think anticipated I emerging cases And say, is is funnel, full think, deployments. our now it's I and it's deployed I the design-ins in tend very these funnel starting Rick, encouraging. for and good. we're I in and into depends the but that terms to think those the

for looking next think I year as the is pretty So good XX% well.

Richard Schafer

there, as I just baseline. we gross then like margin. fantastic. a on obviously, sort quick looking kind are just rate growth mean mean up, billion seems guys I I look line not new that not from And mid-XXs to kind out, top mean of goal. And out the far putting of it follow-up of run curious looks I'm $X you is the at your that far you're forward

year. curious margin do you you just at tailwind see I'm margin think on sort for $X about gross gross clarification as where And year? I'm next see you that a of I we're curious, talked next that know But or where a billion run once ASP. rate? you So then quick

Emeka Chukwu

is Emeka. this Rick, So

So driven mostly revenue. margin, in my the of being prepared before gross it's the like by I said remarks, mix

to we're contribution we drive platforms, expansion. is gross our As are seeing higher growth us -- a that helping our from margin revenue

in. will how see supply so a expectations, those just continue target and with have setting We if it supply able price see to to is like stuff wait saw, before our our in driven revenue at customers are environment, you have of we that revenue, $X billion have we you to from wait the the is margin current start But chain there going to of by going is much looking that we gross There that coming mid-XXs is be be and saw -- chain on where increases we we is terms absorb. what's right? for but at that possibility, definitely that, range to

new So sentiment headed the gross But keeping we that that revenue we've as platforms share beyond. is not sign mid-XXs talked that to But going margins point. into an we're up those about that growing something that we contributions continue continuously product and I from see this your we on. eye should the we're to maybe at for

Operator

from next is [Operator with Sandler. Harsh question Instructions] Our Piper Kumar

Harsh Kumar

curious seasonality numbers,, specific that guiding consumer specific things. to Not to one. that it interesting the in is X basically I'm your has But of seasonality. because an have? a lot small that the some had industry. a up Or demand-supply like is I but been you of demand the coming have where guys particularly, been situation are from into I like seems think of play. back you something of it do results we companies Mohan, on your you noticed have couple other are last -- just, right. reported businesses to so Yes. the to buck to company, just if and months seasonal, There's more it's A just high, so X that kind

Mohan Maheswaran

consumer, is that noticed, surprise. the as Harsh. a it's not think to Well, tied seasonality you And I

need, they prepared Some get remarks, I I my our think not is of all that, to mentioned, I parts able customers in as being the think.

playing to little bit do some here. there's of a be think So into there's it. going But seasonality that I

the demand You're is People mean, environment very strong. right, constrained. are I though.

shipping typically more trying you And trying to to not so that And We're We anything to do can that. play we do. some than we're what consumption. That's to are extent, game. strong. very will eye keep of continues channel thinking. and be the a that's and customers is demand QX close our strong, on If so very into to kind then shipping POS, be

Operator

call the question-and-answer have and to the reached and Mohan remarks. for CEO of end Maheswaran, closing the turn President, will I We session, over now

Mohan Maheswaran

smarter and record that margins, and expected a driving record we engines remain infrastructure, demand flow. planet operating long-term cash per provide growth the gross in QX share our were markets to record growth. operating net trends revenues, included: to record earnings in record closing, are performance strong mobility income, record In secular sustainable pleased deliver and The

offering diverse that, record drive we and our next forward 'XX. look of balanced going to expect updating and growing Thank Semtech you. momentum continued 'XX and into We end to strong product markets in all appreciate a your provide performance and financial support quarter. With FY FY you

Operator

participation. you This may concludes you at lines disconnect time. for your Thank today's conference, this and your

Semtech (SMTC) 2 Dec 212022 Q3 Earnings call transcript