Earnings Sentiment

Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.

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Sentiment Distribution

   

Earnings Call Transcript Word Cloud

     

Bullish Statements during Earnings call

Statement
So to me, this is across the board, small customer set very exciting opportunity to say the least
So, the traction has been quite good
Hyperscale data center applications benefited from continued momentum of AI-driven applications and grew both sequentially and year-over-year
But overall, I'd say, infrastructure is fairly well positioned
We had record shipments in 200-gig, 400-gig, and 800-gig applications with our Tri-Edge and FiberEdgeproducts having been well received in data centers around the world
We're growing it, it's not going to be a barn burner in terms of growth rate, but it's just going to be steady pickup, good gross margin, and contribution
I still think that's probably a good number although in the short term, I think your number is probably a little bit better, but -- so, let's take the $400 million, basically $100 million of it is going to be pretty steady, very predictable connectivity business, it's recurring great visibility
So on the -- on the exclusion list front, no, we don't need Quectel, FiberCom to be officially excluded in order to benefit from this, we are benefiting from it
Connected gateways increased 3% sequentially and we are encouraged by substitutes, increases in POS for in-node products
We believe our technology solutions have meaningful advantage in AI applications offering lower cost, lower power, and lower latency
So, anything that I'd give you is not forecasted, it's in the rears, it’s in the rearview mirror, it's demand continually sequentially improving demand that we've seen over the last four quarters at least
Adoption of automotive Ethernet continues to accelerate and our leading products in this space are positioning us for future growth
So that's very encouraging for us in terms of where we sit in the recovery
If we look at it, there is, in some cases the channel is quite lean wherein we're well positioned to respond to any kind of market demand or market upside
Strength in the quarter was driven by a measurably greater protection content in current generation products at a leading North American smartphone manufacturer compared to prior generations
Design wins also grew 10% sequentially for handheld devices and wearables further validating our recent innovations in this space
And I'm saying that, of course, tongue in cheek, they're phenomenal, predominantly efficient team, but we did -- we were able to secure that capacity and delivered as a result we shipped it all and saw the correction a little bit early
So when I say we have an improving demand, it's -- it's modest sequential improving demand that has been for the most part, improving over the last four quarters
So as I kind of look out over the next several years, the massive growth that we expect to happen in AI -- AI-driven data centers is just a significant upside opportunity for us and we're well positioned to take advantage of that
Our PerSe sensors also provide the industry's best performance of minimizing end-user's exposure to RF energy
So, in terms of pushing up the speed or the availability to implement high-speed connections in both short-reach as well as mid-reach or long-reach applications both of them we're well-positioned to take advantage of
Thanks for the question, Craig, it's, we've got $74 million for next quarter and we're pretty confident in hitting that number because the actions that we need to hit that number have really been taken
But right now we're the only guy who can deliver and we're seeing upside as a result and AI is just a gift, it's phenomenal SAM expansion
IoT Connectivity Services reported net sales of $24.2 million up 1.4% sequentially highlighting the stickiness and relative stability of this recurring revenue stream
Our 200-gig single lambda devices, very well received, very well positioned and the industry does have a decision on which data center architectures they're going to implement, every Hyperscale hesitancy to do a little bit differently, but the bottom line is, it really doesn't matter what direction they go, re-timed, direct, it's all going to add up to additional SAM and growth for us even, it could be a bit more explosive, if they choose a particular route
So I think I'm remembering my comments from last earnings call, I was pretty confident on the last earnings call that we hit a bottom on the IC business, we continue to see that we're making progress in moving forward on the IC business I think even though some of our peers, maybe are not seeing that we've corrected, a little bit earlier in the cycle and we continue to see that strength
Semtech delivers product leadership in low power wide area and broadband applications and will continue to leverage these areas to return the business to grow
We did see a nice bookings increase this quarter
So, Mark, very impressive guide, decreasing OpEx by 10% quarter-on-quarter to $75 million, and it sounds from the color that you provided that that decrease is structural
So having the opportunity to do both is an advantage as well as long as you build together a bit more of a broader product offering or solution and story
       

Bearish Statements during earnings call

Statement
Our near-term headwind for our router business is government spending constraints under the current federal budget situation with traditional end-of-year public sector spend lower than trend
For the fourth quarter, we expect net sales from the high-end consumer market to be down due to the aforementioned seasonality and channel inventory digestion
Industrial, net sales were $120.2 million down 26% sequentially, but within expectations with the bulk of the decrease in the ISP modules business
We obviously do talk to them and we do hear what they're saying in terms of what their inventory levels are, but we've seen some decline in the industrial end market markets similar to what we've seen in routers, roughly 30%
We could probably see some surprises to the upside but right now, we're anticipating our revenue being a little bit softer on that channel inventory digestion for the initial launch
And then, Mark, you guided the gross margin of 48% down from over 51%
On the hardware side, I have less visibility on the module business that's seen a significant decline this past quarter
We've seen a little bit of sluggishness coming into the Fed buying season
However, if there is -- I will note that on the customer side, there's a little bit of hesitancy in terms of forecasting, just because of some market uncertainty
For the fourth quarter, we expect net sales from the infrastructure end-market to be flat to slightly down as the market further digests channel inventory
And then just a broader question on visibility, and also if you think your January revenue guide down a little bit sequentially
As stated previously, PON tenders are expected in our fiscal fourth quarter and we have seen some early channel pause in anticipation of this timing
For the fourth quarter, we expect industrial net sales to be flat to slightly down with continued inventory digestion and the aforementioned public sector headwinds, but stable net sales from our managed connectivity offerings
The high-end consumer end market is expected to be seasonally down and the infrastructure end market is expected to be flat to slightly down
If you go back a little over a year, those numbers were a little bit elevated in a frothy buying season, and the modules that has fluctuated quite a bit
At this point I don't anticipate the hardware business getting any worse
Thanks for calibrating, it sounds like the annualized run rate now was down at about $100 million
I think your guidance for both was flat to sequentially down
And so I don't anticipate it getting worse
I'm just, I guess, having a little bit of difficulty kind of reconciling the quarter-to-quarter change
   

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