Semtech Corporation (NASDAQ:SMTC) Q3 2024 Earnings Call Transcript

Scott Searle: Great. And lastly, maybe to just wrap up on the LoRa front. Thanks for calibrating, it sounds like the annualized run rate now was down at about $100 million. I’m wondering what the growth rate on that business looks like and what the composition of that is today in terms of sales outside of China. I know that’s where a lot of design activity has been going. But I’m wondering how that’s built at this point in time. And lastly, just on the asset sale front, I know you guys are reluctant to do anything essentially under pressure of the balance sheet, but now that you solved the covenant issues for the immediate future, are there some assets now that you’re starting to reevaluate that may not be part of the long-term Semtech? Thanks.

Paul Pickle: Okay. Yeah on LoRa, I will say, we will probably still reporting very strong China-based number, just because where manufacturing typically is, but if we look — if I look at where that revenue originates, we’re seeing quite a bit of adoption outside of APAC in particular. And so what would the growth rate be, I definitely expect it to be on the order of 10% to 15% in the near term. We could see some acceleration of that as a couple of technology pieces come together and it becomes a little bit easier to implement. But we’ve seen steady adoption in infrastructure applications especially outside China. We do have some China-based wins as well, but Europe definitely seeing some nice adoption there as well. So 10% to 15% I think is the long-term, our long-term growth rate that we would probably target for that and we can adjust that as time goes on.

In terms of balance sheet, we are definitely hyper-focused on getting the leverage ratio down. We will continue to be, I won’t comment on any particular asset sale but I’ll just say that all cards are on the table in terms of driving that leverage ratio down to the benefit of our shareholders.

Scott Searle: Great. Thank you.

Operator: There are no further questions at this time. And I’d like to turn the floor back over to management for any closing comments.

Paul Pickle: Thank you for joining and have a good day.

Operator: That concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.