Semtech Corporation (SMTC)

Inventory turnover

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Jan 28, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Cost of revenue (ttm)	US$ in thousands	450,768	434,421	792,364	790,406	849,981	885,772	908,827	934,487	838,687	955,819	522,013	496,207	499,047	360,603	369,450	330,114	365,056	319,967	360,918	362,039
Inventory	US$ in thousands	163,600	163,451	156,011	148,541	144,992	144,992	160,586	160,586	180,231	180,231	213,234	207,704	207,704	111,083	111,083	107,628	106,901	106,901	114,003	114,003
Inventory turnover		2.76	2.66	5.08	5.32	5.86	6.11	5.66	5.82	4.65	5.30	2.45	2.39	2.40	3.25	3.33	3.07	3.41	2.99	3.17	3.18

January 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $450,768K ÷ $163,600K
= 2.76

Semtech Corporation's inventory turnover has shown fluctuations over the analyzed periods. In general, a higher inventory turnover indicates that the company is selling its inventory more quickly.

From January 30, 2022, to January 31, 2023, the inventory turnover remained relatively stable around 3.1, indicating a moderate rate of inventory turnover. However, there was a significant increase in inventory turnover in July 30, 2023, where it surged to 5.30 and continued to remain high in subsequent periods.

This spike in inventory turnover could suggest efficient inventory management or an increase in sales volume relative to the level of inventory held by the company during that period. However, a very high inventory turnover may also indicate potential issues such as stockouts or understocking, which could impact sales and customer satisfaction negatively.

It's worth noting that the inventory turnover dropped to 2.66 in October 31, 2024, and then increased slightly to 2.76 by January 31, 2025. The decrease in inventory turnover during those periods could be associated with changes in demand, production delays, or other factors affecting the company's inventory management efficiency.

Overall, the varying inventory turnover ratios reflect the dynamic nature of Semtech Corporation's inventory management processes and their ability to adapt to changing market conditions and business operations. Monitoring inventory turnover trends can provide insights into the company's operational efficiency, financial health, and overall performance in managing its inventory levels.