Semtech at Roth Conference: Data Center Growth Leads Strategy

On Monday, 23 March 2026, Semtech Corporation (NASDAQ:SMTC) took center stage at The 38th Annual Roth Conference. The company reported robust financial performance and strategic expansion in key sectors, while also addressing challenges in its cellular module business. The discussion highlighted strong revenue growth and an optimistic outlook for the data center and LoRa markets.

For more detailed information, readers are encouraged to refer to the full transcript of the conference call.

Scott, Analyst, Roth: I’m the communications AIoT and edge compute analyst at Roth. Over the two days of the 30th annual Roth event, we will have 135 fireside chats, 50 panels. There are over 500 companies presenting here, and they’re available for one-on-one meetings. If you have not booked meetings, you can go to the one-on-one desk that’s upstairs. Please do that at your convenience. Panels and track lineups are electronically displayed, you know, throughout the venue. If you don’t know where something is, it should be listed. If not, just please ask someone who’s wearing a Roth shirt, they’ll help you out. We’d also like to give a special acknowledgement to our conference sponsors and the track sponsor for the promenade here for their technology track, Loeb & Loeb. Thank you.

Thank you for making the trip out to Orange County. We do have a couple of other housekeeping items, and then we’re gonna get underway. These events right now are being live-streamed. You can see them in the portal or on the app. The one-on-one meetings are subject to change, so it should be updating in your app. Again, you can go to the one-on-one desk. Just keep paying attention. Things do tend to move around based on a myriad of factors. Our evening events do require wristbands and IDs, so make sure you don’t lose your tag. If you lose your tag, you can get another one. Please try and keep that on you when you’re headed over to the events this evening. Wi-Fi is available as well.

Once again, welcome for coming to the ROTH Conference. With that, we’re gonna kick off in 30 seconds. Thank you. Am I on time? Also, can we start this countdown? All right, here we go. Hey, good morning. Thank you so much for joining us to kick off the conference of the 30th annual ROTH annual event. This is the first fireside chat of the day, so thank you for joining us here early, 8:00 A.M. on the West Coast time. We got a lot to cover today. Typically, from a fireside chat standpoint, we try and put companies in front of you that there’s something different, right? There’s something compelling about the story, there’s something transformational, and really address some of those topics.

With that in mind, very, very excited to kick off the conference with Semtech. Presenting on behalf of the company is Mark Lin. Mark, thank you so much for joining us.

Mark Lin, Semtech: Hi. What a great introduction, Scott. Thank you, everybody, for joining.

Scott, Analyst, Roth: Real quickly, right? In terms of Semtech, why we’ve been excited, it’s the data center opportunity. It’s still early days, and you’re just starting to see some of that emerge. We’re gonna dive into that. We’re gonna talk a little bit about some other product lines like LoRa, capital structure and some divestitures. There’s a lot of ground to cover, and it’s really been a dramatic transformation over the past couple of years from a balance sheet perspective, and again, what we’re seeing ramp up now from a data center perspective. So Mark, with that, last week was an incredibly busy week for you guys. You had your fourth quarter earnings and results, which had some very, very strong, powerful numbers in there. You also had OFC. A lot going on with you guys.

Why don’t we start with the fourth quarter? Give us a quick summary and overview about what happened, what the highlight from the quarter.

Mark Lin, Semtech: Yeah, last week we had our earnings release for our fiscal year, FY 2026, and our fourth quarter of FY 2026. For the fiscal year, we reported revenue of $1.05 billion, up 15.5%. EPS was $1.71, up 94%, so pretty good leverage there. For the fourth quarter, we recorded our eighth consecutive quarter of revenue growth. Nice, steady top line revenue growth along with, you know, EPS and operating margins and gross margins above the midpoint of our guidance range. Pretty strong results. You mentioned transformative, Scott.

One of the areas, you know, I’d like to highlight is in addition to very strong and steady growing P&L results, we also had operating cash flows in the fourth quarter of $61.5 million, free cash flow of $59.1 million in the fourth quarter. That fourth quarter number in FY 2026 exceeded the full amounts, the total amounts recorded in FY 2025. Yes, it was a transformational year. Strong P&L along with strong cash flow generation. I think that makes for a very good foundation for future growth.

Scott, Analyst, Roth: Certainly building some momentum. There was one number that really caught my attention in terms of the outlook. You had good results for the data center in the fourth quarter, but looking out to fiscal 2027, the current fiscal year, you’re talking about 50%+ growth in data center. Take us through that. That is a huge number, and it’s an acceleration from what you guys have been experiencing.

Mark Lin, Semtech: Yeah. This, you know, we’re forecasting data center to grow 12% sequentially going into our fiscal Q1. Maybe just coming out of OFC, Optical Fiber Communications conference last week in Los Angeles. The level of customer engagement and the level of incremental orders, the bookings that we received last week, it was quite encouraging. We have growth vectors over you know multiple opportunities. Along with 800 gig optical, 1.6 T copper, our CopperEdge linear equalizers that should be shipping in Q1, 1.6 T optical. I believe we have multiple paths to achieve a 50% year-over-year growth organically in our data center business.

In addition to that kind of over 50% growth, we also had a tuck-in acquisition, a company called HieFo Corporation that closed in our just a few weeks ago. That would be incremental in terms of data center revenue as we ramp that particular facility.

Scott, Analyst, Roth: Maybe to dig in a little bit more on that front, then we’re gonna get into data center in some more details. Also wanna highlight another item that kinda caught my attention. You got 50% organic growth that you’re looking for in data center, and we’ll dive into that. Also, you’re investing a little bit more in OpEx because of the high ROI in terms of that data center investment. Can you just take us through what you’re seeing there, some of the thought process for that, and when we start to see some of that returns as we get into, I guess, fiscal 2028 at this point in time?

Mark Lin, Semtech: Sure. Our Q4 of FY 2026 to Q1 FY 2027, we guided OpEx up. That’s all R&D. I believe, you know, as we increase our R&D spend, we also increase the rigor in which we monitor our R&D spend. Scott, you mentioned high ROI. I think investing in data center right now is a fantastic opportunity. What I like to see is R&D investment. You know, we have our internal ROI metrics, but another area is customer engagement in terms of when we decide how much and where to invest in our R&D expense, R&D expenditures. What I like to see is customer engagement, and we can see that in a few fronts.

In the data center area, what I like to see is that our customers are also investing in our R&D in a program. We’re part of a program for, let’s say, an implementation. We’re spending money, our partners are spending money, and our customers are spending money. That leads to my belief in a greater chance of success right, a stronger chance of a great return. The other area is in our LoRa business, where it’s also customer engagement, but direct customer engagement and through the LoRa Alliance, we get feedback for what customers want to see within LoRa for that development.

Again, if you get very clear customer indications, you know, we, our R&D projects, I mean, it’s science, but it’s not just a science project without a very clear return.

Scott, Analyst, Roth: We’ll come back to data center in a minute because we want to dive in on OFC and some of the new product cycles. Since you hit on LoRa, that was one of the other numbers that caught my attention, talking about 20% growth, and more recently, you’ve been talking more 15% plus. Can you take us through the dynamic there of what you’re seeing both from a product standpoint, customer demand standpoint, what’s driving that opportunity for LoRa right now?

Mark Lin, Semtech: Yeah. LoRa is a great proof point of near-term returns on our R&D investment over the last just couple of years. Within LoRa, we have a few developments. One is LoRa Gen 4, which offers dual band, so 2.4 gigahertz plus sub-gigahertz. What that allows is additional data throughput. Another area is multi-protocol, so LoRa Plus. LoRa Plus, let’s say, Bluetooth or LoRa Plus Z-Wave. What that allows is additional expansion into smart home, smart building. Really, those verticals are where I think the customers are demanding some additional features, additional products, and we’re really delivering. In dual band, you know, the unmanned aerial vehicle market, so commercial and industrial drones, has seen quite a ramp. LoRa is addressing that market. Smart home, smart building, you know, we’re seeing increased automation.

LoRa with dual protocols, multiple protocols. You know, you may control, let’s for example, a local door lock using Z-Wave, but in order to communicate remotely from a you know another building, you would use the LoRa protocol. What we provided just recently is that we’re working with another company to provide software and silicon integrated into it into one offering.

Scott, Analyst, Roth: Let’s shift back then to data center, right? It’s become a relatively large chunk of reven