SMTC - Earnings call transcript Q2 2025

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Operator

Greetings, and welcome to the 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.

Mark Lin

Thank you, operator. welcome. and everyone, day, Good year I'm and website pleased and released Hong President various future presentation of today unaudited with about posted an remarks earnings which investors.semtech.com. Today's be Executive Officer. Today, call comprise joined call forward-looking Fiscal Quarter Chief Second we our for by which after statements. are results along prospects, investor Hou, to the to plans XXXX, at market our include expectations, close, will release and presentation call. Unless press from Slide net X risk Please that financial earnings today's refer on our otherwise materially see of the items than statement-related sales. to measures for factors this to all those made differ on will information noted, other actual be could cause results non-GAAP today's Slide presentation. Please presentation on press the earnings recording see important financial our non-GAAP release of and for X information notes refer to turn and Hong. our The measures. With that, press reconciliations include release will of call also and presentation financial non-GAAP will the over GAAP earnings I to

Hong Hou

to this Directors leaders thank the as me me. Thank Call. you, opportunity to Semtech CEO given of warm thank welcome at the Semtech and first for Board for our and global pivotal giving for President all to to my host and I'm you Earnings and us the thank time today. would a joining moment excited like lead take to Mark. I all Good employees they afternoon, have

few of role during the my in initial near-term since miss a especially the the comments up I priorities. them serving visited months, leadership I our in their talking taking operations many you people see global and our have share to a team, our transition. And and hearing not and execution like to in also what know my feedback. of two and and getting and past pleasure Semtech as did locations I to person, the of new customers great Over with Semtech's the of proud suppliers taking I'm customers, bit needs many

expenses and we us on of There's capturing First, trends course, favorable and look with more still our to have to given alignment allowed this made foundation. opportunities I and growth financial our to progress forward offense stabilize rationalizing significant market in core do, competencies. go solid but

tenure have by we and refined Officer in world-leading over and a in LoRa with outstanding and Semtech. WAN mixed technologies analog Mike XX decades signal Chief Second, our and mission-critical developed this products Wilson, Technology and years efforts an at cellular ILT helped reputation R&D superb systems the design, almost

world-class record honed and operations Operating XX our Chief this processes on-time great the have systems company balance enable for semiconductor XX customers. and his innovative and I and their years to Semtech's consistently over proven a tenure and our by management industry and and time success core Asaf we were a Silberstein, key refined track that with and years Third, global methods excellence, of in This Officer are win deliveries delivering high-quality priorities as business. Building value asking near-term follows: foundational them our our the my our element, in to and portfolio core focus on in our partnership collaborative solutions on believe customers driving for innovations. strategy, They sheet. can team. Fourth, grow improve rationalize our first, view technologies almost

management proceeds asset committed are of and are sharpened. Both our sale our on our maximize and I the to fully transaction further priority. Until public respectfully our core the focus and to We Board will is capital debt. debt not reduce the the and that remain support on focused in To sheet can improvements customers. assets limit potential be to values, long-term our sale continue to to believe Using our both portfolio enhance through to however, occurred, in a balance some we comments allocation reduction invest continue will value strategy, topic. business, potential

assets process. and status of timing what instance, the the and the For

disciplined margin expansion. markets our we develop solid to technology expansion, that and critical are portfolio investment, for doing, us, even discussions driving solutions world-class that customers. moving margin growth towards with and needs numerous target underpin more market services. Through growth, very differentiated expenses. revenue accelerate In up Second, customer my drive innovation the and we efficiency demand and it's SAM and gains senior expect business so of Semtech's our customers share of achieve will executives, In product, clear organic

our more. but our and leadership, committed culture. winning have talented can impressed our people elevate energize and Third, do we with and workforce I been hugely

around We will mindset culture. people results focused to with accelerate imperatives in strategic our winning and high-performance and aligned invest a vision clear a

quarter second forecast of I acceleration growth. by our our well third business has with that of our units demonstrated strategy established quarter to Semtech each financial revenue the to executed performance the Moving sequential results. second solid believe results the favorable our quarter outlook as for across and

and data well demand for PAMX product sales our and net for Tri-Edge for XXX-gig at XXX-gig XX% cables. Infrastructure applications, by strong net than second year-over-year. center FiberEdge For last Drivers Laser more up supported net and optical year Transimpedance and data active million, In XXX-gig TIA XXX-gig over and $XX.X quarter, sales XX% $XX.X up hyperscale were center were in of with the XX sales optical Amplifier million sequentially and or active modules doubled gig

noted data us. CapEx are incrementally the AI targets by center and moving We reported hyperscalers towards markets increasing have

linear by belief in ecosystem latency the are that system solutions greater opportunities. provide as data transport lower reduction lower depth embedded our on the low computing. Delivering greater intention this for Pat. transport and a center and power team we far edge bids to as application, allocation low-latency power solutions for solutions. My within optimization of have time significantly of joining considerations the where and low-power, Lower for analog our compared analog and well Our has delivering equalizers of opportunities value AI low-power, through and continues with rec memory consumption well-documented data cables will expertise. Semtech's as allow to partnered power latency to Blackwell since NVIDIA [indiscernible] chief has a states, DSP power greatest key and with engagement center my confirms Semtech the on CEO on implement latency cart retimed active every top substantially architects meetings compute customer ACC

ACC is this a in millions nominal re-drivers, allows have and the quarter the the For those innovation and specific third SAM. platform increase, believe received single the start floor at said, front, such in our beyond bodies to of direct at ACC the is and is AI and create backwards cables lens on a promote center estimate signal in their approve limited cable currently standard direct integrity estimate we XXXG That optimized data with of and provided data pace the place ACC purpose-built quarter. in deploy the cables ramp shipments our to schedule, opportunities copper our to last cables Semtech's single this currently customer. We a be case deck to we or time quantities, purchase extend per engaged will will copper exceeds customers for us we a extend time we Semtech specific with our tens to passive. in to to cable a represent deploy. We manufacturers challenges. platform fraction of and quarter acceleration towards us deck number and This linear ecosystem moving there compatibility, small rates on substantial opportunities. On to in of from market solution a Semtech's address while currently of year. Qualifications from Hyperscalers next meet the fourth centers Indeed, and just MSAs develop have to orders And deck their engagement fiscal to we a replacement year. believe Semtech's fiscal interoperability are the market are only ACC top of data opportunities in in deck increase requirements. The companies the progression expect a end cable cables inevitably single and standards annual expect natural to with

active We on highly these line operating the in growth leverage in process investment, is this allows partners, based cost-conscious I at our that growth. well prior organic a with adopt returns and growing linear direct our approach. I right to environment the accelerate at key copper to optics deploy number expansion engagement my XX is Semtech's a informed this must In a shareholders. investments time units. prior in TIA low-power well choice as moment LPO the with in are at my organic prudent uncertain of Semtech the disease-making market will believe revenue EMS line business a path product the fits requirement. a the meaningful top shipments optical silicon converting latter world-class of knowledge LPO a to having an portion LPO FY TIA to have in have approximately substantial opportunity we a by my fraction company. to to I Semtech's believe optical key SAM TIA selected photonics 'XX. Similar a A Semtech. A this represent deployment support expectation to as as It situation experience and we annual disciplined successful top engagement enhance represents first LPO low-latency, transceiver consumption for pluggable absolutely solutions to space supplier investments. My of firsthand deliver prioritizing million to expect and to while cables,

Our is patients requirements. well meet class-leading well. where TIA there performance we receiving customers' are end as And recognize positions us suited to potential opportunities LRO the on for interoperability LRO

first the increased up remains we XX% the this sales were on total on business a robust demand, with PON. year-over-year. looking global horizon, gig to XX level. XX% XX Net million, Moving and the within following consumption year-over-year. and quarter is strong are expectation a PON $XX.X expand gig to especially

There within other are wireless net remained our market, wireless, but with infrastructure sequential grew Regarding Tri-Edge sequential other and FiberEdge net this sequentially. we're and in Signal resulting for partners Ericsson center and are Nokia, in small XG the actively decline and the process but engaging X% advanced sales expectations. In rebounds. in qualification sales products segment platforms end ready declines declined like data then few key wireless when each Integrity with continuing which market a

of what up sales sequential of increase XX% year-over-year. year-over-year, consumer high-end X% high-end Moving million, we to in sequentially be expect XX% TVS Net increased million, end sales X% up a seasonally and ahead $XX.X and sequentially grew up or strong market. up POS to year-over-year. ticked to QX. Net $XX were consumer X% our

in share the on threat Our platforms environment rate we increases importance and increasing. available Higher at high-performance and is yet Semtech this compared market technological a to amount been on is silicon as search TVS the us. expand of broad-based operational off-chip This pleased consumer are performance and winning year, very protection ESD has are of estate This example double-digit reduces overall performance. last I'm towards believe real another on-chip we we how applications. The dissipate trend offers. markets expensive grew to moving energy. of

We grow well. as in great Indeed, for not key and consumer where our this market Semtech. continue is shares. in a customers' in to at and engagement in result result American how example of Korea largest customer only automotive and the their consumer direct increased companies space winning world's in markets design our other a SAM number the customer is reasonably solving problems across North of industrial engagement This company, but approach is Korean our TVS electronics shares wins

a wins is smartphone use to features a requirements sensitivity auto-feed design PerSe customer and with meeting class-leading for XD Korean while are customers substantial sensing case key and or is end absorption our product. continue control smart a rate PerSe. Gesture controls in specific to class-leading source this proximity for Our for demand variables, audio great PerSe standards at well manufacturer mobile sensing meet gesture of products exceeding allowing glasses. perform

in million, and quarter, the utilities advocate in facilities. On over LoRaWAN as grow, cost momentum Their characterized LoRa Industrial to just applications great second SINS conference from ecosystem proliferation. of automation I'm accelerate the LoRa's X% excited the prior had at $XXX.X industrial in his $XX.X gives democratize and smart implementation sequentially. a sequential the path they were strategize automotive pleased success to Mercedes health year. LoRa continue XX% a are the increase enormous on me LoRa and customer LoRaWAN our solutions in to attend resulted of to standard continued at to broad enabled when factory that event For net innovation city story up applications use company's Amsterdam and in deployment to savings. one from Semtech with consumption healthy cases net to smart expert pleasure is sales with the XX% what leaders Benz million, recent fully a reason presented September and in live range over sales June. to increase committed end and a meet why demonstrate expansion. I as It I'm its LoRa the LoRa plan Mercedes and future becomes why and ecosystem and late in care,

equipment in Semtech's on Our sales business our are consistent and some our network In X% due across customers customer demand inventory has bookings first had performance. Geopolitical believe, with of consideration quarter has we bedrock fronts, a of of customers, number levels business, IoT net that grew a systems renewed normalized sequentially quarter a second overall quarter engagement channels recorded growth reached second number uptime with million, tailwind and perfect and there. Also, a core for the wins, red had business this remains we a that in trust reached levels. to last module quarter. cap near and Bookings continued from the up business and analysis of product healthy matters. the a these we sequential design experiencing the demonstrating number $XX.X

in constitute risks, are users market. after Our government tracked this benefited asset-tracking end more on the especially applications meaningful their with being educated of users has portion security-related components. especially geopolitically-sensitive at vehicle business and realizing are a fleets Government becoming a

government with local and Service, a which users. are data system of a The market We adjacent for particularly is cellular launched natural solutions. which instance safety is to important Semtech's have business AirLink pleased public requirements residency Canadian meets government-related Management

opportunities. of started allows our our production we in as to facility we federal Qualified pursue for aggressively increased us better support Lastly, own and Facility This demand to TAA continuity U.S. TAA-compliant serve to support supply products. elevate

service. We Console services sleep design were connectivity note, collaborated Second Semtech's quarter leading remote we $XX.X in net expand health connected wins noteworthy platform sales moving this our business service address and are coverage industrial factories ESD believe AirVantage best-in-class with environment with solutions us. the for of to quality. In a collaboration million network required This network a increasingly across the as is APAC Also underscores tracking monitoring, to for care. region automate. Connect, increasingly as where offer are towards to harsh commitment TVS, markets

address our expand critical with needs. portfolio solutions product We innovative continue customer to to

Mark. the me call let Now, turn back to

Mark Lin

Hong. you, Thank

points net sales of million, the on by second the sequentially. end geographic earnings presentation. Gross sales For up trend quarter, market, we X% recorded and net is points segment $XXX.X income reportable Net region included and of Slide margin million in sequentially $XX.X sequentially up XX XX million, million was was XX.X%, and expenses recorded spending. Operating earnings $XX were year-over-year. basis per points points XXX up EBITDA reflecting up reduction. sequentially points X% mix This points expense basis $X.XX margin in XX.X%, We operating $XX.X and and of year-over-year was basis based of XXX up up million favorable overhead year-over-year, a basis and XX.X%, on operating resulted control an XX EBITDA year-over-year. Net XX cost share XXX basis of adjusted up of share basis XX.X diluted interest Adjusted $XX.X was million, with count and guidance. shares. the margin line

$X.X for year-over-year. Principal goods in sold. the cost to capital $X.X orders second the the Inventories bank the to normal part sheet. wafer $XXX.X X% our with Free support a amount draw corresponding XX% million cash, and quarter equitization cable revenue completed $X.X quarter primarily and an second a of largely million billion, on second not reflective Moving carry of of on capital the of higher to cash million expected use balance flow at balance working quarter. or copper revolver. supporting but changes working was reflected cash of did the ended with was and quarter are of outstanding end active increased down shipments we debt changes, our third sequentially, We to

Now, expect of turning plus minus or $X million. million, to net third We quarter currently sales $XXX guidance.

the net sequentially to center leading near-term We growth. Infrastructure end infrastructure applications expect with tailwind. expected provide the to from sales increase strongest to is market data

We expect seasonality in the net be market sales market. with consumer up to benefiting this end high from typical

as $X to levels, which from At net expected second XXX-basis resulting activity the and basis are million, expenses result industrial sequential midpoint margin expected Based minus to plus guidance, sales is sequential expected booking plus mix quarter. the carried up be improvement. Operating the in expect net improvement. midpoint recovering or of this of gross into first be XX.X%, XX XX% a We a will operating be in the margin on would XXX-basis be product minus quarter slightly sales at points. point to or point million, $XX

be in debt operator We expected million, based is to that, the These net tax shares. Adjusted share count a like gross, sales, or net to basis $X.XX, I'd $XX.X call expect $X.XX resulting net $XX.X million, and plus at share. With and EBITDA equate per XX%. average for at of reduction of per contemplates million, earnings XX.X%, higher diluted to adjusted interest $X.X back and increase minus now to EBITDA expense be are a of the of to XX.X Q&A. which earnings turn operating XXX plus EBITDA midpoint expected in on million would margins sequential share points. minus rate amounts in over result improving the a weighted margin to growth the midpoint reflective a at or Guidance

Operator

Acree first Instructions] with is Cody question Our from Company. [Operator The Benchmark

Cody Grant Acree

good Hong, out welcome. copper expectations. and can Maybe cable active your about gate, the the on of quarter if talk you Congrats first

given was that go TAM that's or by ASP than You total through maybe the was a just whether departure, mentioned you available before and would volume calculation, the if addressable basis a market Paul of unit be great. can that that his elements TAM TAM larger

Hong Hou

Cody, you much. very thank

we I So, in in expected share specific and remarks floor thank ASP last expanded this exciting about recognizing we our use will on availability ACC opportunities that have engagement opportunity have customers. And from market then, above role opportunities. And the very several case our discussing now, our guided. the you ACC a are for opportunities. with expand. and total number in gave continue beyond right excited we is recs as the the floor for total we us customers case customer. Since of with very And And prepared a a the position to allocation and based we we mentioned on quarter, this see case specific and the

As that higher lot there deck the installation know a extended, as copper you and is of base, data rate today, a as data tens of million cable goes its are goes, lens it might to be cables the X going integrity the And, center connection millions. challenge. in passive be

is the to progression going that So, or from cable inevitable. ACC progression ACC be to from

So, from opportunities. guided start contribution very And excited there. revenue about seeing ramping let's from we will and QX we'll some the then be see, we as

Operator

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

Quinn Bolton

on you that. $XXX Hong, sneak that million as factor at ACC engagements ACC guess, to you to a were strong very opportunities? could sounds of talking my I exceeds clarify first just I in I to some you're try I customer, for second said north a $XXX clarify like single a opportunity about had start these Cody's TAM. It of outlook. offer if I clarify that platform, Or then could beyond seeing me and I that saying if question, follow just question, you're Let think And now single want to of customer a and on that. So, other in. the you you really great million. quarter XKs congratulations wanted a you're up just that to TAM

Hong Hou

Sure. much. Quinn, thank Yes. you very

floor the prepared higher first actual is single single me be I the with customer let I to Now, mentioned TAM remarks the in case. going to is clarify, than our situation. respect that feel the platform, opportunities

in with the to of I what opportunities in not purpose the In would reach increased And accounted floor the customers ecosystem that, low-power connectivity similar we're are applications. engaging multiple extended case. addition compared similar say, to opportunity low-latency, for AI those

Quinn Bolton

was had I about question The LPOs.

the Or go you shipments sort you in mentioned You opportunity 'XX. of could LPOs you before an see script of for see begin see for fiscal switch being Wondering adopted? into applications perhaps that see are Is that if you or LPOs case that other you the potentially for the use to end Do there networks in AI where LPOs? back-end GPUs in accelerators? general infrastructure?

Hong Hou

you, Thank Quinn.

can power. LPO over out, be similar be extended the low ACC shared So, latency characteristic to when consume as LPO need IC scale to to the fiber up low Because consumption as and electrical used But conversion are optical you they the through incremental the is the conversion. That power cables, other end same more conversion than and used and can scale it power to well. latency, really optical ACC. transmit amount reach, go to you electrical consumption only and versatile of

year, of to So, is be the you the well. And Ethernet can transceivers But about is a the used even can based market, a when be DSP the to chip XX right retime in know, can optical replace used the scale to fraction If opportunity retimed on you be that tremendous. million the largely now, up, as that transceivers consumed industry solutions. as the million meantime, LPO of LPO out need going DSP-based scale XX to LPL cluster. units every away the

in the that that's opportunities in the quantities and into We XXX for entered FY industry latter the ecosystem will the still as be performance very 'XX about LPO why commonly next near extended in functionality well. And, hope provide excited term that we're been will So, considered And the production gigabit we partners the the re-driver as with and very of the the part very with best refinement is our the engaging needs. our I'm LPO. the I confident closely have the of TIA limited mentioned, industry.

Operator

Tore Stifel. from is with Our next Svanberg question

Tore Svanberg

of LoRa Integrity I a more recovery like in sounds lot Welcome interest actually strong by but Signal was on is onboard the I the the is business, It here. Hong, results continue in your revenue. there, going recognize strong to the surprised momentum congrats forward. in It going very was there's quarter. do and the

So, last just LoRa? inventory big some this few Or Is basically from little what's years? a programs elaborate bit new on going are adopting replenishment seeing actually on could you more there? the you

Hong Hou

Tore, Yes, thank the the very I good of much. the of all, and channels. after a demand say that's you question. both in would is inventory the resuming industry first depletion

the decreases very reported, we inventory increases the back. that the As natural from PLS in the and channel this last is it's quarter, bouncing and demand market

executives and level, utilizing my the the current excited Amsterdam, entire The the the like lined and about in, I out in development one the unique of same to I lower system design. And are Mercedes with really days savings got cases of conference into the our cases our the attending ecosystem Mercedes I'm finding Benz use capability up as new revenues in and in reason enhancement second current mobilize one can of believe creating very key and offer. for and the to why capability is the translate Benz the the [indiscernible], it systems, the because and I lower more beyond the use case pace. tremendous talked that's this functionality that can partners And use even meet to

for opportunity great a for growth. is that been and it has our a us, engine good So,

Operator

Our next question Christopher with is from Rolland Susquehanna.

Christopher Rolland

you LPO as on well. and mentioned Welcome LRO was also question also actually Hong. My

LRO do high-grade it's I opportunity think these this TIA. know a I just you what also copper? a you the But so, in bigger? how much assume to opportunity than was, be could opportunities ACCs larger for So, together, or wanted And if putting

Hong Hou

great that's question. Yes, Chris, and very much, you thank a

have transmitting So, that And the from industry, side. concern certainly enough transport it the need there Service them side been the will when center. from multisource want that on CSPs by don't supplier. be data primary of choose the on transceivers LPO different different analog and budget a the the or and deploy lot they They solution benefiting be a they then silicones they is of lot the providing locked if for is Cloud over LPO. Their optical transceivers to some in need optimality just They link new on especially switch is choose because receiving to last on side optical the concerns decades agreement and on the one switches. Providers a side. And

concern. them, recognized allow tremendous savings. the side, and talk some That's LRO. higher can that we that consumption, you we transmitting lower when this to side, just that for into I have many key do we been architects the And case, power the So, and sure of receiving all they worst in provide low agreement. say, do But DSP-based the translated the Xx to value. They option pretty latency, know sure low what, are the power that that. transmitting on the that solution still side. That's denial has not no primary cost, multisource will but have budget exercise they LPOs them even it's And linked on

both. I For they way choose would us, tend to LPO, this us point either when the Semtech for will is they from do best-in-class benefit product. because winning LRO that a or at product say, TIA

your it's gigabit is X cable. yes, XXX When really it ACC, to the going opportunity As to second a XXX maintain be for bigger gig, cable line per read even the opportunity can and integrity replace the needed. to the I cannot distance that connection the an increased meters re-timer replace, opportunity. But deck as good LPO believe, is an is representing ACC? part second question, I out for there said, of DSP, than exceeding

great So, era both has are many years connectivity products AI-based in rate this and opportunities of run

Operator

Sandler. Harsh Our Kumar with next Piper question is from

Harsh Kumar

the to understand customer you question get then around as this one well. large this just my is is, Are me mentioned? And sort the Semtech needed help you to of stay question competitive provider, first into My in maybe the goods same technology the think change. of do guide this the game? get part us you on do that Could on you sort as sole other the you the of leader ACC. to the to business? evolves. you of Are example, or Congratulations And size What in scope technology? of this for think help using This could ACC. market look the other front stay you what's is in people generation has of technological and

Hong Hou

XX%- you for question. applications, of Great. your we X importantly, to to and every sources, of this X differentiation much are certainly, guidance our thank Thank time, you, and on point the first XX% operations at the technologies and exercise address as have but the have understand critical the your provided at part intention think our multi-source question, is I for based I this use excellence. of Harsh, such point. And To we allocation the we customers very more

really performance, to provide Semtech. observation on quality, the delivery initial lead of what time, of operations. I on-time So, comments shorter and that differentiation the hallmark the made better That's has better a with of been customers the

we hope earning we our allocation will be more fair than this. So, in share

very looks it far, promising. so And

validation product now, it integrated but the right process already but you and have really ecosystem performance, good be for second as finishing sure behind part think into product, we deliver integrity that system that's how deliver the of the performance the the when do able real really, the and engagement, of ACC qualification. I not the are this of As beginning the signal to of And stimulated, we the was question, performance real us. sells part, as needed. Simulation from in may IC not will stay your looking we competitive? the good

are ramp. we to preparing ourselves So,

I to hand the do As that we operations. over that,

push with can spot And get in next-generation is latency a How continue will requirement. us. a count industry, Our R&D per I we power the lower like all team we low to to moving XXX the gigabit channel. do rate, the requirements, on do higher this already And data forward we that? market is and product started think sweet towards

the we at the innovate, the I customers to continue provide aggressive As believe the is they need the development for position to they time engagement solutions best the the need. do with defense and

that confidence area continue high the to have I in a this we'll for So, while. lead

Operator

with Capital Partners. Scott Our next from Searle is question ROTH

Scott Searle

when the some wondering opportunity number. fits opportunity, design. But you're And lower for the versus the I DAC. quickly, equation wondering I to into little And in if quarter commercialize as the you I about expectations little Hong given the and you and the ramping on a sounds NVIDIA line on where these Mark, I'm AEC bit the missed of conversation a other them Hong, repeat thought Blackwell lot would the like with well. of wondering I'm if it current maybe congrats that. path. bit then you the timeline Mark, ACC outlook. could opportunities, expect and could to been of talk a ahead around real But has the was

Hong Hou

on So, the wanted LoRa numbers? to Mark, you first go

Mark Lin

prior LoRa The Sure. for That's quarter million. $XX.X number, sequentially, sales the Scott, over net up year. XX% XX% up was

believe nice healthy and that we very is rebound, So, it sustainable.

Hong Hou

ACC Then the product mentioned And and about the now, up the I days question ramp. timing system your qualification. address, as are I we're finishing the volume Scott, of production. can last Those that right before validation the X

not is quantities, gated going the expected be time shipment we the far to a QX, limited by in there demand, but from way. in the cycle So,

BI about the build have right. got you're PLX wafer year and our XXXX on be bank and anticipated pretty and the AEC, throughout and based FY, to then is ramp demand but then in mentioned we beforehand forecast. And bank meaningful QX We real you fiscal expect we healthy that, the going the QX, current already

then signal cables a latency. And probably the will reduce having in the will deck the ACC T backplane be ports. XXX and the service gigabit the encroach switch, into switch deployed, foremost first new but where a market, and the the requirement on that's XXX AEC lot integrity they reduced power ACC provides of and So, the and

point out, lot Ethernet scale need the -- cable, consumption even would will need of need. is low provide will integrity the become port, the ACC So, they a they imagine I back they gig connectivities signal power XXX the which and the

Scott Searle

you've But, a Hong, achieved then the customer? with just system-level verification for clarification, current

Hong Hou

Yes.

above piece, system and the connectivity other is connectivity. way just yes. involved But, the in for So, course, yes, beyond of things their many

to So, is that value a there base be.

Operator

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

Craig Ellis

the with the and the the if help on of your XX-year the echo to strength you on the businesses identified. sizing I'll wanted well that I one could Hong, in guide. congratulations started get see print I

to how how next point mentioned doing scope give that directed. the look on bigger years, these we Active be that out big then be. I at lead some be you than they're for your that If in you could great some And up be your it's with much was look how business with X of how your we're what's it Cable it framed year? prepared customer big So, exercise business as the Copper in and the script, can if as will you other well to us we we that could were possible engagements to #X could you next customers X look expertise strategy businesses hoping year? where on at

Hong Hou

much. Great your to Yes, you. for talking Craig, Thanks very question. you thank

So, we high-value about customer, challenges is point. on the the the engagement of beyond riding problems. We the we're ACC. in stage the at they present we are this customers, provide the their our engagement solutions the beyond with platform, can specific of the on But ACC that the excited and early specific ally think

one our have the going we'll and alley, in I on what still are expand ACC beyond we one in about opportunity customer. in understanding the X, the going quantify might my give for early think a X And future the and contact very continue the idea number the years, maybe and with and that. And too better their to platform, have directionally, you reach We're earnings of opportunities next for industries. really next to be is be. extensive opportunities me the it I connections So, little the to of a to excited stage in engagement call, a I'm But industry. the a requirements

Operator

Richard Capital. next with Our from is question Gus Northland

Auguste Richard

Congratulations see there's on companies of DSP about on just of the I'm want similar you capability coming I in Clearly, high-speed the you on competitive up to side I ask to environment. results. type interfaces. Is a think as the mentioned? competitive there else trying analog And environment. the guys anybody anybody the just that can beyond I these competitors with Inphi, get MACOM, a better analog. handle versus

Hong Hou

Thank your Gus, for you, question.

Those well. sure are there for the a It first are to the the while is things say, I'm got analog on I from to about tier, other you companies, new up-and-comers, in I establish excited capability takes design this the the think would X it. ecosystem. the many as they opportunities a expertise, testing to

So, enormous the kind as companies right opportunities here and you both it landscape, us. like But ahead never to right take of And in got we capture competitive of another the I the and are for thing operations think easy. very we time, formidable point, right the of place are it is right. can think the I at and

So, ourselves I comfortably and performance, by to get to into fair way paranoid team, the the need share run our technology to the in be continue told tell only to operations. we fast in my is super and and performance unfair

Operator

further would There back at like floor the comments. are to hand questions this time. no Mark any for I to closing over Lin

Mark Lin

where investors.semtech.com right. list conferences Have upcoming a everybody, a of be for at day. and in attendance. please joining, investor website Semtech great you, Thank for All visit financial our will

Operator

conference call. This concludes today's

may Thank lines. your you You disconnect participation. for now your

Semtech (SMTC) 27 Aug 242025 Q2 Earnings call transcript