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Net sales: It reported $192.9 million in the fourth quarter and $868.8 million in fiscal 2024. Analysts expected revenue for the quarter compared to $257.18 million.
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Gross profit: GAAP gross margin for the fourth quarter was (0.2)%, impacted by impairment charges, resulting in non-GAAP gross margin of 48.9%.
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Diluted EPS: GAAP diluted loss per share for the fourth quarter was $9.98, while non-GAAP diluted loss per share was $0.06, matching analysts' EPS estimates of $0.0199.
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Operating cash flow: Fourth quarter operating cash flow was $13.9 million and free cash flow was positive $12.2 million.
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Impairment expense: Goodwill impairment of $755.6 million and intangible impairment of $131.4 million in 2024 reflect current market conditions.
Semtech Corp (NASDAQ:SMTC), a leading provider of high-performance semiconductors and advanced algorithms for the Internet of Things, announced its fourth quarter and fiscal year 2024 financial results on March 28, 2024. The company specializes in signal integrity, advanced protection, and services. Sensing and IoT Systems reported fourth-quarter net sales of $192.9 million, below analyst expectations of $257.18 million. The company's GAAP gross margin took a significant hit, primarily due to goodwill and intangible asset impairment charges, reported at (0.2)% for the quarter. However, Non-GAAP gross margin was a healthy 48.9%, indicating the fundamental strength of the business. The company's GAAP diluted loss per share was $9.98 and non-GAAP diluted loss per share was $0.06, in line with analyst estimates of earnings per share of $0.0199. Semtech's full-year 2024 net sales amounted to $868.8 million, with GAAP gross margin of 34.1% and non-GAAP gross margin of 49.5%. The company also reported positive operating cash flow and free cash flow in the fourth quarter of $13.9 million and $12.2 million, respectively. Semtech's financial results reflected challenges posed by current macroeconomic conditions, including lower revenue forecasts and a rising interest rate environment, with goodwill impairment of $755.6 million and intangible impairment of $131.4 million was greatly influenced by. For more information on filing an 8-K, please visit the SEC's website.
Financial performance and market position
Despite challenging market conditions, Semtech President and CEO Paul H. Pickle expressed optimism about the company's positioning for near-term growth trends, particularly in the infrastructure end market. Mark Lin, the company's executive vice president and chief financial officer, highlighted working capital improvements and the completion of optional principal prepayments on the credit facility as positive financial actions. The introduction of a single ERP system is expected to further improve operational efficiency and internal control.
For the future
Semtech expects first quarter fiscal 2025 net sales to be approximately $200 million and non-GAAP gross margin to be approximately 49.5%. The company expects to maintain a normalized income tax rate of 12% and expects diluted earnings per share to be $0.00, with a potential change of +/- $0.04. Adjusted EBITDA is expected to be $27.8 million ± $3.0 million.
Semtech is focused on innovation and strategic market positioning, along with the ability to generate positive cash flow, highlighting the cyclical nature of the semiconductor industry and its resilience in navigating current economic pressures . As the company continues to adapt to market demands and optimize its operations, investors and stakeholders will be watching closely to see how these efforts translate into financial performance in the coming quarters.
For more detailed analysis and updates on Semtech Corp (NASDAQ:SMTC) and other influential companies in the semiconductor industry, visit GuruFocus.com.
For more information, see Semtech Corp's full 8-K earnings release here.
This article first appeared on GuruFocus.
