Semtech Corporation (SMTC)

Debt-to-equity ratio

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Long-term debt	US$ in thousands	1,371,040	1,373,620	1,330,610	1,336,640	1,296,970	455,113	171,917	181,797	171,676	175,556	175,436	175,316	179,195	183,075	186,955	190,840	194,743	179,111	183,692	188,270
Total stockholders’ equity	US$ in thousands	-307,434	334,261	366,835	733,028	755,852	792,412	798,858	734,983	737,584	718,194	708,417	704,277	698,743	676,391	677,493	661,474	676,954	688,721	689,540	695,226
Debt-to-equity ratio		—	4.11	3.63	1.82	1.72	0.57	0.22	0.25	0.23	0.24	0.25	0.25	0.26	0.27	0.28	0.29	0.29	0.26	0.27	0.27

January 28, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,371,040K ÷ $-307,434K
= —

The debt-to-equity ratio of Semtech Corporation has shown variability over the past few quarters. From April 2019 to October 2021, the ratio exhibited a decreasing trend, indicating a reduction in financial leverage and a stronger equity position relative to debt. However, from July 2022 onwards, the ratio started to increase, reaching a peak of 4.11 in October 2023. This significant increase in the debt-to-equity ratio suggests a higher level of debt relative to equity, which could imply increased financial risk and potential challenges in meeting debt obligations.

It is important to note that a high debt-to-equity ratio may indicate that the company is relying more on debt financing to support its operations or growth initiatives, which can lead to higher interest payments and financial vulnerability, especially during economic downturns. Conversely, a low debt-to-equity ratio typically signifies a conservative financial structure with a lower risk of insolvency.

Overall, the fluctuation in Semtech Corporation's debt-to-equity ratio implies changing dynamics in the company's capital structure and financial risk profile, highlighting the importance of monitoring these trends for a comprehensive understanding of its financial health.