Semtech’s QQ4 2025 results reflect a diversified, multi-segment technology portfolio leaning into a favorable data center CapEx cycle, a stronger LoRa IoT adoption, and ongoing margin expansion driven by disciplined cost management and portfolio optimization. Reported net sales of $251 million in Q4 2025 marked a sequential increase of 6% and a year-over-year rise of roughly 30%, underscored by a gross margin of about 52% and an adjusted gross margin near 53% as management highlighted a sustained trajectory of margin expansion throughout FY2025. The company delivered solid operating leverage with an adjusted operating margin of 19.9% and adjusted EBITDA margin of 23.0%, supported by disciplined R&D investment and ongoing balance-sheet improvement. Semtech ended FY2025 with net debt of approximately $411 million (down ~68% from FY2024), delivering meaningful annual cash savings of about $40 million from debt reduction and freeing up capital for core growth engines. Management signaled continued, but quarter-by-quarter, progress on portfolio optimization and higher-R&D spend to accelerate opportunities in data center optics (400/800G), FiberEdge/LPO/LRO, LoRa IoT, and select IoT sensing applications, while acknowledging CopperEdge remains a near-term headwind due to rack-design timing. Looking ahead, the Q1 FY2026 guide suggests a revenue target of $250 million +/- $5 million with an adjusted gross margin of approximately 53% and an adjusted EBITDA margin near 21.3%, implying a continued margin-driven growth trajectory despite near-term CopperEdge volatility. Investors should monitor: (1) CopperEdge ramp timing and content in next-generation rack designs, (2) continued data center demand and mix between FiberEdge, CopperEdge, and LPO/LRO, (3) LoRa IoT adoption across smart metering, industrial automation, and edge devices, (4) potential portfolio optimization outcomes and any strategic divestitures, and (5) the effect of leverage, interest savings, and tax normalization on free cash flow and earnings quality.