Semtech Corporation (SMTC): Business Model Canvas [Dec-2025 Updated]

You're looking at a company in transition, and that's where the real opportunity often hides. Semtech Corporation is definitely moving past being just a semiconductor supplier; they are actively building a full chip-to-cloud platform, a massive pivot fueled by the Sierra Wireless acquisition and their push into AI-driven data centers. Honestly, their fiscal year 2025 revenue landed at $909.3 million, but the strategic focus is on high-margin recurring revenue, targeting over $100 million annually from their IoT Cloud services alone, while the industrial market still accounts for 57% of the top line. This Business Model Canvas breaks down exactly how they are balancing R&D for high-speed data center components with simplifying their older assets to make this new model work. It's a fascinating blueprint for a legacy tech firm remaking itself.

Semtech Corporation (SMTC) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that fuel Semtech Corporation's growth, especially as they push into high-bandwidth data center and expanded IoT markets as of late 2025. These aren't just vendor agreements; they are deep integrations that validate the technology roadmap. Here's a breakdown of the key partnerships driving the business.

Strategic Collaboration with Skylo for Unified Satellite and Terrestrial IoT Connectivity

The expanded partnership with Skylo is a major move to capture the market for seamless global IoT deployments. This collaboration delivers what Semtech Corporation calls the industry's first complete device-to-cloud terrestrial and satellite IoT solution from a single partner. This means customers use Skylo-certified HL7810 and HL7812 Low Power Wide Area (LPWA) modules, combined with Semtech's Smart Connectivity Premium SIM, for automatic switching between networks.

This integrated offering directly targets a market segment ABI Research projects to grow at over 25% annually through 2030 for IoT-NTN connections. Skylo's global Non-Terrestrial Network (NTN) provides coverage spanning 60 million square kilometers across 36 countries. Skylo also partners with satellite operators including Viasat, Terrestar Solutions, Ligado Networks, and EchoStar for spectrum and capacity.

Ecosystem Partners for LoRaWAN Standard Adoption

The LoRaWAN standard remains a cornerstone, bolstered by a diverse global ecosystem. Semtech's LoRa chipsets support a broad ecosystem servicing over 410 million end nodes as of early 2025. The success of this standard is reflected in Semtech Corporation's financial results; LoRa-enabled net sales reached $40 million in the third quarter of fiscal year 2026 (Q3'26), marking a 40% year-over-year increase.

The ecosystem includes a vast majority of nationwide LoRaWAN network service providers-over 50-and hundreds of companies trusting ThingPark™. The LoRa Alliance drives interoperability, which is critical for accelerating IoT deployments in verticals like smart cities and industrial control.

Key Hyperscaler Customers for Co-developing and Ramping High-Speed Data Center Products like ACC

The data center segment is a primary growth engine, validated by design wins with major cloud operators. Semtech Corporation has secured Linear Pluggable Optics (LPO) design wins with multiple U.S. hyperscalers for 800G optics and Active Optical Cables (AOCs). Furthermore, the CopperEdge™ Active Copper Cable (ACC) technology has secured design wins with two U.S. and one Chinese hyperscaler for next-generation interconnects.

The ACC ramp schedule is set, with a major hyperscaler planning to start incorporating ACCs in their rack by mid-2026, with cable manufacturers seeing the component ramp starting in the April quarter (likely Q1 FY2027). For 1.6T applications, Semtech's ACCs consume just 2W per cable end. This segment is delivering results: Data center revenue hit a record $56.2 million in Q3'26, a 30% year-over-year jump.

Distribution Partnerships for Cellular Networking Solutions

Channel partners are vital for deploying AirLink® solutions across industrial and public safety markets. Mobile Communications America (MCA) was recognized as Semtech Corporation's 2025 Partner of the Year, an award that reflects their 'impressive revenue contributions' alongside leadership in deal registrations and technical enablement for cellular networking solutions.

Industrial Networking Solutions (INS) was named the 2024 AirLink® Networking Solutions Partner of the Year for the U.S. Industrial Segment. INS leverages Semtech's AirLink® portfolio to deliver solutions across utilities, energy, manufacturing, and transportation sectors. The global industrial networking solutions market itself was valued at $40.01 billion in 2025, with the hardware segment holding a 61% market share.

Here's a quick look at the scale of the key revenue-driving partnerships as of Q3 Fiscal Year 2026 (ended October 26, 2025):

Partnership Focus Area	Metric Type	Value / Rate	Context / Timeframe
LoRaWAN Ecosystem	LoRa-enabled Net Sales	$40 million	Q3 FY2026
LoRaWAN Ecosystem	YoY Growth Rate	40%	Q3 FY2026
Data Center (Hyperscalers)	Record Data Center Revenue	$56.2 million	Q3 FY2026
Data Center (Hyperscalers)	Data Center Revenue YoY Growth	30%	Q3 FY2026
Data Center (ACC)	Power Consumption per Cable End	2W	1.6T Applications
IoT-NTN (Skylo)	Projected Annual Growth (IoT-NTN)	25%	Through 2030 (ABI Research)
IoT-NTN (Skylo)	Network Coverage Area	60 million square kilometers	Global NTN

The overall financial health underpinning these partnerships shows Semtech Corporation's total net sales for Q3'26 were $267.0 million, representing 13% year-over-year growth. The Signal Integrity gross margin, which benefits from the hyperscaler work, was 65.1% for the quarter.

For MCA, the recognition as 2025 Partner of the Year is based on performance across deal registrations, technical enablement, and delivery of high-quality professional services, which supports the AirLink router sales. MCA serves over 65,000 customers across public safety, commercial, education, healthcare, utilities, and government sectors.

Semtech Corporation (SMTC) - Canvas Business Model: Key Activities

You're looking at the core actions Semtech Corporation is taking to reshape its business profile, focusing on high-growth, high-margin areas while shedding the rest. It's a clear pivot, and the numbers show the intensity of that focus.

Research and development (R&D) in data center technologies like Tri-Edge and CopperEdge

Semtech Corporation is heavily indexing its R&D investment into data center technologies to accelerate future growth. The company's Research and Development Expenses for the twelve months ending July 31, 2025, totaled $0.185B, marking an 8.73% increase year-over-year. This investment supports the rollout of solutions like the CopperEdge family, which debuted in April 2025 with ICs like the GN8214, GN8224, and GN8234.

These activities are directly tied to margin expansion, as the Signal Integrity Products business, which includes data center interconnects, reported a gross margin of 65.1% in Q3 (implied latest quarter). The impact of this focus is visible in the Infrastructure end market, where data center sales surged 143% year-over-year in Q1 Fiscal Year 2026. The CopperEdge technology itself is designed for 1.6T copper cables up to 3m reach and 800G cables up to 5m reach, operating at less than 2W per cable end power consumption, which is 90% lower than comparable DSP-based AECs.

Continuous innovation of the LoRa platform, including the new fourth-generation 'LoRa Plus' chipsets

The LoRa platform remains a key driver, with worldwide connected devices surpassing 125 million units, expanding at a 25% compound annual growth rate. This activity involves pushing the platform's capabilities, exemplified by the introduction of the LR2021, the first chip in the LoRa Plus family, in March 2025. The momentum in this area is translating to the top line; LoRa-enabled solutions generated $38.9 million in net sales in Q1 Fiscal Year 2026, an 81% increase year-over-year. The largest single member network has achieved 10 million connected devices.

The scale of this activity is reflected in the reported revenue contribution:

Metric	Value
LoRa-enabled Sales (Q1 FY26)	$38.9 million
LoRa Sales YoY Growth (Q1 FY26)	81%
LoRaWAN CAGR	25%

Integration and optimization of the acquired Sierra Wireless IoT Systems and Connectivity portfolio

Semtech Corporation is actively working to optimize the portfolio acquired from Sierra Wireless, though this has presented near-term challenges. In Fiscal Year 2025, the combined IoT Systems and Connectivity segment revenue decreased by 25%. However, the overall gross margin for the company improved to 50.2% in FY2025, up from 34.1% the prior year, partly due to the mix shift away from lower-margin components. The integration process included a $7.5 million goodwill impairment in FY2025. The company is reviewing strategic alternatives for non-core assets within this segment.

Manufacturing and supply chain management for analog and mixed-signal semiconductors

Core manufacturing and supply chain management are critical to achieving the targeted margin profile. For Fiscal Year 2025, Semtech Corporation reported a GAAP gross margin of 50.2%, representing a significant 1,610 basis points increase from Fiscal Year 2024. The Non-GAAP adjusted gross margin for FY2025 was 51.5%, a 200 basis points expansion year-over-year. In the first nine months of Fiscal Year 2026, the GAAP gross margin stood at 52.1%.

The performance of the high-margin Analog Mixed Signal and Signal Integrity businesses drives this activity:

• Signal Integrity gross margin in the first nine months of FY2026 was 64.3%.
• Analog Mixed Signal and Wireless sales increased by approximately $8.9 million in Q3 FY2026 due to stronger demand led by LoRa products.

Portfolio simplification and divesting non-core, low-margin assets for margin expansion

Portfolio optimization is a stated core priority for Semtech Corporation to drive margin expansion. Management is conducting a portfolio rationalization review to align with a preferred margin profile, which includes identifying non-core assets for potential divestiture. The goal is clear: following the divestiture of the lowest margin portion of the business, the company expects to quickly approach 60% consolidated gross margins. Analysts estimate the planned IoT divestiture could involve revenue in the range of $250-300mn. This simplification is intended to compensate for near-term revenue headwinds from legacy and transitional assets.

Semtech Corporation (SMTC) - Canvas Business Model: Key Resources

You're looking at the core assets that make Semtech Corporation tick, the stuff they own or control that lets them execute their strategy. Honestly, for a semiconductor firm, this is all about the IP and the manufacturing footprint, plus the recent big moves.

Patented LoRa technology and LoRaWAN standard intellectual property (IP).

Semtech Corporation is the developer of LoRa, which is that long-range networking initiative for the Internet of Things (IoT). While Semtech exclusively supplied the LoRa chip products initially, they started authorizing the IP to other companies back in 2018 to build out a multi-supplier market. This IP is a massive resource, underpinning a significant portion of their Industrial end-market revenue.

High-performance semiconductor product lines: Signal Integrity, Protection, and Power.

The core business remains analog and mixed-signal semiconductors. You've got the established lines like Signal Integrity Products, Protection Products, and Power and High-Reliability Products. For instance, the Signal Integrity products, which include Tri-Edge and CopperEdge lines driving data center adoption, achieved a gross margin of 65.1% in the third quarter of fiscal year 2026, showing strong unit economics on those key components. The company operates across three main end markets:

• Industrial end-market: Accounted for 57% of fiscal 2025 total revenues.
• Infrastructure end market: Accounted for 27% of fiscal 2025 total revenues.
• High-End Consumer/Other: Accounted for the remaining 16% of fiscal 2025 total revenues.

Global manufacturing facilities in California, Mexico, and Switzerland.

Semtech Corporation maintains physical production and operational hubs across key geographies. These sites are critical for maintaining the supply chain for their specialized chips. You'll find facilities in:

• California: Irvine, Camarillo, and San Diego.
• Mexico: Reynosa.
• Switzerland: Neuchâtel.

IoT Systems and Cloud Connectivity platform from the Sierra Wireless acquisition.

The acquisition of Sierra Wireless, completed in January 2023 for approximately US$1.2 billion, was a major resource infusion. This move brought in nearly 30 years of cellular IoT leadership and a device-to-cloud portfolio. The deal was expected to add greater than US$100 million of high-margin IoT Cloud services recurring revenues to the top line. This combination of LoRa and cellular expertise creates that end-to-end platform you need for industrial IoT transformation.

A strong balance sheet focus, with net debt reduced to $411 million in 2025.

Managing the balance sheet is definitely a key resource focus, especially post-acquisition. Semtech Corporation executed a capital allocation priority to reduce debt. They reported that net debt as of the end of fiscal year 2025 decreased by 68% year-over-year. The stated net debt figure for 2025, reflecting this focus, stands at $411 million. Here's a quick look at some of the key financial metrics around that time, showing the scale of the business and the debt management efforts.

Metric	Value	Context/Date
Fiscal Year 2025 Total Revenue	$909.3 million	Fiscal Year Ended January 26, 2025
Net Debt	$411 million	As of End of Fiscal Year 2025
Net Debt Reduction (YoY)	68%	Year-over-year decrease by FY2025 end
Sierra Wireless Acquisition Enterprise Value	US$1.2 billion	Transaction close January 2023
Expected Recurring Revenue from Sierra Wireless	Greater than US$100 million	Post-acquisition expectation
Fiscal Year 2025 GAAP Gross Margin	50.2%	Fiscal Year Ended January 26, 2025

Finance: draft 13-week cash view by Friday.

Semtech Corporation (SMTC) - Canvas Business Model: Value Propositions

You're looking at the core value Semtech Corporation (SMTC) delivers across its diverse technology segments as of late 2025. It's a mix of foundational IoT leadership and high-speed infrastructure growth, which is key to understanding their financial trajectory.

Ultra-low power, long-range connectivity for massive IoT deployments via LoRa

The value here is scale and longevity, which translates directly to lower total cost of ownership for massive sensor networks. As of May 2025, Semtech Corporation reported that more than 450 million terminal nodes equipped with LoRa chips have been deployed globally. This installed base is protected by the backward compatibility of new LoRa Gen 4 devices, which support over 450 million existing LoRa units. The LoRa ecosystem itself is substantial, comprising over 400 core alliance members worldwide. Looking ahead, the projection is for LoRaWAN connections to hit 1.3 billion by 2030. For many battery-powered applications, the power efficiency is a prerequisite, with devices capable of operating for 5-10 years on a single battery.

Here's a snapshot of the scale and growth underpinning this value:

• Global deployed LoRa terminal nodes (as of May 2025): 450 million.
• Projected LoRaWAN connections by 2030: 1.3 billion.
• LoRa Alliance core members globally: Over 400.
• Expected battery life for LoRaWAN devices: 5-10 years.

High-speed, low-latency connectivity solutions for AI-driven data centers (e.g., 1.6T transceivers)

This is where the near-term financial acceleration is coming from. The demand for bandwidth, driven by AI, is translating into record sales in the Infrastructure segment. For the third quarter ending October 26, 2025, Semtech Corporation reported total revenue of $267 million, with the CEO citing 'record net sales' in the data center business. This follows a record data center net sales figure of $43.1 million reported in the third quarter of fiscal year 2025 (ended October 27, 2024). The company is securing design wins for 800 gig LPO (Linear Plug-and-Play) solutions with leading US hyperscalers, with revenue expected to start ramping in Q4 of calendar year 2025. The next major leap, 1.6T transceiver volume ramps, is anticipated to start early in calendar year 2026, aligning with the deployment of 1.6T switches.

The financial performance in the infrastructure area shows clear momentum:

Metric	Value / Period	Context
Data Center Net Sales (Record)	$52.2 million	Q2 (Implied later period than Q3 FY25)
Data Center Net Sales (Record)	$43.1 million	Q3 Fiscal Year 2025 (ended Oct 27, 2024)
Infrastructure Net Sales	$73.4 million	Q2, up 39% year-over-year
1.6T Transceiver Volume Ramps	Expected start early calendar year 2026	Concurrent with 1.6T switch deployment
800G LPO Revenue Ramp	Expected start Q4 calendar year 2025	Design wins secured with US hyperscalers

Comprehensive chip-to-cloud IoT platform combining LoRa, cellular, and cloud services

Semtech Corporation offers a unified approach, moving beyond just the chip. This is evident in the reported segment performance; for instance, in Q3 Fiscal Year 2026, the IoT systems and connectivity segment saw lower gross margins partly due to higher sales of cellular modules, indicating a broader connectivity offering beyond just LoRa. This platform approach helps customers manage complex IoT deployments that might require different connectivity types for different use cases.

Robust circuit protection and power management for industrial and automotive applications

The value proposition in protection is demonstrated through the performance of the TVS (Transient Voltage Suppressor) products, which fall under the broader consumer/protection umbrella. For example, net sales in consumer TVS reached $29.9 million in Q2, marking a 15% year-over-year increase. This shows continued market traction for their protection components.

Multi-protocol support in new LoRa Plus chipsets, expanding use cases beyond traditional LoRa

The newest LoRa Plus LR2021 transceiver is designed to bridge the gap between low-power, long-range needs and higher data rates for AI edge devices. This chip supports data rates up to 2.6 Mbps on both sub-GHz and 2.4 GHz bands. Furthermore, it offers multi-protocol compatibility, supporting protocols like Zigbee, Z-Wave, Wi-SUN, and wM-Bus alongside LoRaWAN. The new LR2022 also supports both sub-GHz and 2.4GHz bands.

• LoRa Plus LR2021 maximum data rate: Up to 2.6 Mbps.
• Supported frequency bands for LR2021/LR2022: Sub-GHz and 2.4GHz.
• Additional supported protocols: Zigbee, Z-Wave, Wi-SUN, wM-Bus.

Finance: review Q4 FY2026 guidance against Q3 FY2026 actuals by next Tuesday.

Semtech Corporation (SMTC) - Canvas Business Model: Customer Relationships

You're looking at how Semtech Corporation (SMTC) builds and maintains its connections with the entities buying its high-performance semiconductors and IoT systems as of late 2025. The approach is clearly segmented, focusing on deep technical integration with major cloud players while supporting broad channel distribution.

Dedicated technical enablement and professional services through channel partners.

Semtech Corporation is dedicated to empowering solution architects and application developers globally. The company's global teams focus on delivering high-quality technology solutions across infrastructure, industrial, and consumer markets. This support structure is critical for enabling partners to bring new products to market quickly.

Close, multi-generational roadmap alignment with key hyperscaler customers.

The relationship with the largest cloud providers is deeply embedded in product development. As of late 2024, the President and Chief Executive Officer, Hong Hou, stated, 'I believe we have achieved multi-generational roadmap alignment with customers.' This alignment is evident in the data center segment, which recorded net sales of $43.1 million in the third quarter of fiscal year 2025, a sequential increase of 58%. Specifically for next-generation interconnects, Semtech Corporation's Linear-drive Pluggable Optics (LPO) technology has secured design wins with two U.S. and one Chinese hyperscaler. The Infrastructure market, which includes data centers, accounted for 27% of Semtech Corporation's total net sales of $909.3 million in fiscal year 2025.

The commitment to these key customers is reflected in the product planning for 1.6T applications, with roadmap targets for LPO drivers and Transimpedance Amplifiers (TIAs) set for sampling by late 2025.

Metric	Value (as of late 2025)	Context/Period
FY 2025 Total Net Sales	$909.3 million	Fiscal Year ended January 26, 2025
Q4 FY 2025 Net Sales	$251.0 million	Quarterly result, up 6% sequentially
Data Center Net Sales (Record)	$43.1 million	Q3 FY 2025, up 58% sequentially
Infrastructure Market Revenue Share	27%	Of FY 2025 total revenues
Net Debt Reduction (Y/Y)	68%	Leading to a net debt of $411 million

Self-service design resources and software libraries for product development.

Semtech Corporation places a high importance on delivering superior design support. The company provides a wealth of tools and resources with the goal of shortening your time to revenue for new product introductions. This self-service approach helps accelerate adoption for a broad base of product developers.

Direct sales and customer roundtable engagement for product roadmap shaping.

The company aspires to become the partner of choice for key technical and product solutions it provides. Direct engagement, such as customer roundtables, helps shape the future product pipeline. The Executive Vice President and Chief Commercial Officer is listed as part of the leadership team, indicating a strong focus on direct commercial relationships.

Long-term, trusted partner relationships in critical infrastructure and public safety.

Trust is built through reliable performance in mission-critical applications. In public safety, Semtech Corporation's AirLink XR routers support dedicated 5G network slices, following the launch of T-Mobile's T-Priority in February 2025 and Verizon's Frontline Network Slice in April 2025. These routers are FirstNet Trusted®, T-Priority, and Verizon Frontline certified. The company continues to grow its customer base on the back of its BlueRiver technology, which is expanding its reach in Pro AV solutions.

The company's focus on operational efficiency is also a factor in trust; for instance, the Non-GAAP adjusted gross margin reached 53.2% in Q4 of fiscal year 2025.

Finance: review the Q4 FY2026 guidance for adjusted EPS of $0.400-0.460 against current design win projections by next Tuesday.

Semtech Corporation (SMTC) - Canvas Business Model: Channels

You're looking at how Semtech Corporation (SMTC) gets its high-performance chips and IoT solutions into the hands of customers as of late 2025. It's a mix of traditional distribution and direct engagement with the biggest names in cloud and data center infrastructure.

Global network of distributors and sales representatives for semiconductor components

The bulk of Semtech Corporation's component sales still flows through its established channel partners. For the fiscal year ended January 26, 2025, net sales made through independent distributors accounted for 72% of the total. This is a significant shift from just a few years prior, where distributor sales were 85% in fiscal year 2023. This suggests a strategic move toward more direct engagement or a change in the product mix sold through channels.

The sales structure for the fiscal year ended January 26, 2025, looks like this:

Channel Type	Percentage of Net Sales (FY2025)	Contextual Data Point
Independent Distributors	72%	Down from 85% in FY2023
Direct Sales / Other	28%	Implied from Distributor Sales

Semtech Corporation maintains direct sales personnel across North America, Europe, and Asia-Pacific to manage these representative firms and distributors. Geographically, for fiscal year 2025, the sales concentration shows where the action is:

• China (including Hong Kong) comprised 43% of net sales.
• The U.S. represented 21% of net sales.
• No other single geography outside the U.S. accounted for more than 5% of sales in fiscal year 2025.

Direct sales force targeting large enterprise and hyperscaler customers

The direct sales force is critical for landing design wins with the largest customers, especially in the high-growth data center segment. For instance, in the second quarter of fiscal year 2026 (ended July 27, 2025), data center net sales hit a record of $52.2 million, marking a 39% year-over-year increase. Management has indicated that a key hyperscaler customer provided a timeline to start ramping Semtech Corporation's ACC (Advanced Cable Components) into their racks by mid-2026. This level of engagement requires a dedicated, high-touch direct sales and engineering support team.

Value-Added Resellers (VARs) and system integrators for cellular IoT solutions (AirLink® routers)

For the AirLink® portfolio, which includes cellular gateways and routers for mission-critical infrastructure, Semtech Corporation relies heavily on specialized partners. You see this in partner recognition, such as Industrial Networking Solutions (INS) being named the 2024 AirLink® Networking Solutions Partner of the Year for the U.S. Industrial Segment in September 2025. This points to a channel built on deep vertical expertise. Anyway, this channel activity aligns with the broader System Integration Services Market, which is valued to increase by USD 198.3 billion from 2025 to 2029, growing at a 7.4% CAGR.

Cable manufacturers who integrate Semtech's linear equalizer ICs (ACC) for data center cables

The channel here is highly specific: cable manufacturers who embed Semtech Corporation's linear equalizer ICs into their data center cables for high-speed interconnects. This is a B2B manufacturing channel. The success here is reflected in the revenue figures for the segment that includes these products. Record data center net sales were $43.1 million in the third quarter of fiscal year 2025, and this segment continued to grow, reaching $52.2 million in Q2 FY2026. The Signal Integrity Products (SIP) business, which houses the data center components, reported a 65.1% gross margin in Q3 FY2025, showing the premium nature of this channel.

Online resources and developer portals for LoRa and IoT platform adoption

For the LoRa technology ecosystem, adoption is driven by developer enablement. Semtech Corporation remains the core chip supplier, and its developer resources are key to seeding the market. LoRa revenue itself is a strong indicator of channel pull-through from this developer base. In the second quarter of fiscal year 2026, LoRa revenue was $36.9 million, a 29% year-over-year increase. This is on the heels of a quarter in Q3 FY2025 where LoRa revenue was reported as over $40 million. The long-term potential is massive, with LoRaWAN connections projected to reach 1.3 billion by 2030 outside of China.

Finance: draft 13-week cash view by Friday.

Semtech Corporation (SMTC) - Canvas Business Model: Customer Segments

Semtech Corporation (SMTC) serves a diverse set of customers across its core technology areas, which are segmented for financial reporting into three major end markets.

The primary customer segment breakdown for fiscal year 2025 is detailed below, based on total net sales for that period:

Customer Segment	Percentage of Fiscal 2025 Total Net Sales	Calculated Fiscal 2025 Revenue Amount
Industrial market	57%	$518.301 million
Infrastructure market	27%	$245.511 million
High-End Consumer market	16%	$145.488 million

The total net sales for Semtech Corporation in fiscal year 2025 ending January 26, 2025, were $909.3 million.

Within these segments, specific customer types and their associated revenue figures from the third quarter of fiscal year 2025 (ending October 27, 2024) illustrate the focus areas:

• Original Equipment Manufacturers (OEMs) are a key part of the customer base, with solutions supporting sectors like automotive and medical equipment.
• Cloud and telecommunications service providers are served through specific product lines.
• Telecom (PON and Backhaul) reported third quarter net sales of $20.5 million.
• Data Center sales within the Infrastructure segment reached a record $43.1 million in the third quarter of fiscal year 2025.
• The High-End Consumer segment includes Consumer TVS sales, which were $24.5 million in the third quarter.

The company is engaging with equipment providers for US PON opportunities and supporting pilot builds with a major Chinese carrier for triple-gen 50 gig PON.

Semtech Corporation (SMTC) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Semtech Corporation's operations as of late 2025. Honestly, understanding where the money goes is half the battle in valuing these specialized semiconductor plays.

The biggest chunk of operational spending is tied up in making the actual silicon. The Cost of Goods Sold (COGS), which covers the manufacturing of their analog and mixed-signal semiconductors, was $452.76 million for the fiscal year ended January 26, 2025. This number reflects the direct costs of producing the chips that power their infrastructure, consumer, and IoT segments.

Next, you see the investment in the future, which is substantial. Semtech Corporation continues its Significant investment in Research and Development (R&D) to maintain its edge, particularly in accelerating data center growth areas. For fiscal year 2025, R&D spending totaled $170.91 million. That's a clear signal of where they are placing their bets for long-term revenue.

The overhead to run the company, which includes Sales, General, and Administrative (SG&A) expenses, was $222.37 million in fiscal year 2025. This covers everything from executive salaries to the costs of supporting the channel partners who move their products globally.

Debt management is a visible cost factor. The company has actively worked to deleverage following major investments. While the prompt mentions a reduction to $411 million in net debt, the reported Interest Expense for fiscal year 2025 was $90.1 million. This expense was lower than the prior year, partly due to extinguishing 2028 Notes and repaying principal on the Revolving Credit Facility and Term Loans in the fourth quarter of fiscal year 2025.

Operational costs related to the Sierra Wireless acquisition are also a factor, though often separated out for clarity. You'll see Transaction and integration related costs or recoveries (including costs associated with the integration of Sierra Wireless, Inc.) specifically excluded when Semtech Corporation reports its non-GAAP financial measures. This separation helps analysts see the underlying operational performance without the one-time integration noise.

Here's a quick look at the major expense categories for the fiscal year ending January 26, 2025, in thousands of USD:

Cost Category	Amount (in Thousands USD)	Context
Cost of Revenue (COGS)	$452,759	Manufacturing analog and mixed-signal semiconductors
Sales, General and Admin. (SG&A)	$222,368	Includes channel partner support
Research and Development (R&D)	$170,908	Investment to accelerate data center growth
Interest Expense	$90,067	Expense related to outstanding debt

The company's total long-term debt, net of issuance costs, was reported at $505,933 thousand as of January 26, 2025.

You should also note the following elements that impact the cost base:

• Goodwill impairment of $7.5 million for fiscal year 2025, primarily from the IoT Systems-Modules unit.
• The weighted-average effective interest rate on debt was 4.10 % as of January 26, 2025.
• The company is focused on driving margin expansion as a key priority for the new fiscal year.

Finance: draft 13-week cash view by Friday.

Semtech Corporation (SMTC) - Canvas Business Model: Revenue Streams

You're looking at how Semtech Corporation (SMTC) converts its technology into cash flow as of late 2025. It's a mix of traditional chip sales and newer recurring service revenue, which is key for valuation.

The foundation is product sales. For the fiscal year that ended January 26, 2025, Semtech Corporation booked total net sales of $909.3 million. That's the top-line number for the last full fiscal year.

The bulk of this comes from selling semiconductor products across various markets. Based on Q1 Fiscal Year 2026 results (the quarter ended May 2025), the revenue split by end market looked like this:

End Market Segment	Revenue Share (Q1 FY2026)
Industrial	57%
Infrastructure	29%
High-End Consumer	14%

Within those segments, the high-speed connectivity side, particularly data center sales, shows strong momentum. For instance, in the second quarter of fiscal year 2026 (ending July 27, 2025), data center net sales hit $52.2 million (non-GAAP). That's up 92% year-over-year, showing where some of that Signal Integrity and Power revenue growth is coming from.

Next up are the IoT Systems and connectivity solutions, which is where the LoRa technology plays a big role. LoRa-enabled solutions recorded net sales of $36.9 million in Q2 Fiscal Year 2026. Management has signaled confidence in a sustained quarterly run-rate for LoRa revenue in the $30 million to $40 million range going forward. This is the hardware and module side of the IoT business.

The recurring piece is the high-margin IoT Cloud services. When Semtech Corporation acquired Sierra Wireless in January 2023, it added approximately US$100 million of high-margin IoT Cloud services recurring revenues. You should watch this number closely; the expectation is for this stream to be greater than $100 million annually as of late 2025, reflecting the subscription and consumption-based revenue recognition model described in their filings.

Finally, there are licensing fees and royalties tied to the LoRaWAN standard adoption. While a direct licensing fee number isn't broken out separately, the strong growth in LoRa-enabled solution sales-up 29% year-over-year in Q2 FY2026-is a clear indicator of increasing platform stickiness and ecosystem adoption that supports royalty streams. Licensing revenue is definitely part of the mix, even if it's bundled.

Here's a quick look at the key revenue components we can quantify:

• Total Annual Revenue (FY2025): $909.3 million.
• LoRa Quarterly Net Sales (Q2 FY2026): $36.9 million.
• Data Center Net Sales (Q2 FY2026): $52.2 million.
• IoT Cloud Recurring Revenue Added (Initial): Approx. US$100 million.

Finance: draft 13-week cash view by Friday.