SEMTECH CORP
For the period ended Jul 28, 2024. Filed Aug 28, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 28, 2024 · Filed Aug 28, 2024
SMTC$103.21+12.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-28; filed 2024-06-05.
0000088941-24-000065
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-28; filed 2024-08-28.
0000088941-24-000118
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 147 current paragraphs.
67 unchanged; 34 reworded; 38 added; 4 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 8 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
Recent Developments
Current report
Leadership Changes
Current report
Effective June 6, 2024, our board of directors (the “Board” or “Board of Directors”) appointed Hong Q. Hou, a current member of our Board, to serve as our President and Chief Executive Officer. Mr. Hou succeeded Paul Pickle as our President and Chief Executive Officer on such date.
Current report
Convertible Note Exchange
Current report
On July 11, 2024 and July 15, 2024, we entered into separate, privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of our 4.00% Convertible Senior Notes due 2028 (the “2028 Notes”). Pursuant to the Exchange Agreements, on July 24, 2024 certain holders exchanged with us approximately $188.1 million in aggregate principal amount of the 2028 Notes held by them for an aggregate of 10,378,431 shares of our common stock, which number of shares was determined over an averaging period that commenced on July 12, 2024. We accounted for these exchange transactions as a partial debt extinguishment and recognized a loss on extinguishment of debt equal to the difference between the fair value of our common stock delivered to certain holders of the 2028 Notes and the carrying value of the outstanding debt, accrued interest and third-party fees related to the Exchange Agreements. In the three and six months ended July 28, 2024, in connection with the exchange transactions, we recognized $144.7 million of loss included in "Loss on extinguishment of debt" in the Statements of Operations and $5.5 million of loss resulting from the write-off of deferred financing costs included in "Interest expense" in the Statements of Operations.
Current report
In the second quarter of fiscal year 2025, gross profit increased $4.7 million to $105.5 million from $100.7 million in the second quarter of fiscal year 2024. This increase was primarily driven by a $9.2 million increase from Signal Integrity, which experienced higher sales led by data center and 10G PON due to stronger demand, offset by pricing pressures, a $8.3 million decrease in the amortization of acquired technology intangible assets related to the acquisition of all of the issued and outstanding common shares of Sierra Wireless, Inc. on January 12, 2023 (the "Sierra Wireless Acquisition") due to impairments in the fourth quarter of fiscal year 2024, a $3.3 million decrease in amortization of inventory step-up due to the finalization of measurement period adjustments in the second quarter of fiscal year 2024 related to the Sierra Wireless Acquisition, a $2.7 million decrease for transaction and integration costs related to the Sierra Wireless Acquisition, and a $2.3 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by LoRa-enabled product due to stronger demand, offset by pricing pressures, partially offset by a $20.2 million decrease from IoT Systems and Connectivity due to lower module and router sales primarily driven by soft demand causing decreased sales volume and pricing pressures.
Current report
Goodwill Impairment
Current report
There was no goodwill impairment in the second quarter of fiscal year 2025 compared to $279.6 million of goodwill impairment in the second quarter of fiscal year 2024 due to valuation adjustments of goodwill related to the Sierra Wireless Acquisition. See Note 8, Goodwill and Intangible Assets, to our interim unaudited condensed consolidated financial statements for additional information.
Current report
Interest expense, including amortization and a write-off of deferred financing costs, was $28.6 million and $24.2 million for the second quarters of fiscal years 2025 and 2024, respectively. The increase was primarily due to a $5.5 million write-off of deferred financing costs as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock in the second quarter of fiscal year 2025.
Current report
Loss on Extinguishment of Debt
Current report
In addition to the write-off of $5.5 million of deferred financing costs as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock in the second quarter of fiscal year 2025, which was recorded in "Interest expense" in the Statements of Operations, we recognized a loss on extinguishment of debt equal to the difference between the fair value of our common stock delivered to certain holders of the 2028 Notes and the carrying value of the outstanding debt, accrued interest and third-party fees related to the Exchange Agreements. In the second quarter of fiscal year 2025, in connection with the exchange transactions, we recognized $144.7 million of loss included in "Loss on extinguishment of debt" in the Statements of Operations.
Current report
During the second quarter of fiscal year 2025, we did not record any investment impairments and credit loss reserves. During the second quarter of fiscal year 2024, investment impairments and credit loss reserves, net totaled a loss of $0.2 million due to adjustments to our credit loss reserve for our available-for-sale debt securities.
Current report
Provision for Income Taxes
Current report
During the second quarter of fiscal year 2024, we recorded a valuation allowance against our U.S. deferred tax assets of approximately $52.8 million. We are required to assess whether a valuation allowance should be recorded against our deferred tax assets ("DTAs") based on the consideration of all available evidence, using a "more likely than not" realization standard. The four sources of taxable income that must be considered in determining whether DTAs will be realized are: (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the tax law; (3) tax planning strategies; and (4)
Current report
future taxable income exclusive of reversing temporary differences and carryforwards.
Current report
After a review of the four sources of taxable income described above and in view of our three-year cumulative loss, we were not able to conclude that it is more likely than not that our DTAs will be realized. As a result, we recorded an additional valuation allowance on our DTAs, with a corresponding charge to our income tax provision, of approximately $52.8 million during the second quarter of fiscal year 2024.
Current report
Net Sales
Current report
Net sales in the first six months of fiscal year 2025, compared to the first six months of fiscal year 2024, were impacted by softer demand in the IoT Systems and Connectivity reportable segment, which contributed to lower sales volume and pricing pressures, but benefited from stronger demand in the Signal Integrity and Analog Mixed Signal and Wireless reportable segments. Net sales from Signal Integrity increased $30.7 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by a $17.3 million increase in PON sales and a $15.3 million increase in data center sales, partially offset by a $1.7 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $25.0 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by a $12.6 million increase in LoRa-enabled sales, a $9.4 million increase in TVS product sales, and a $3.3 million increase in proximity sensing sales. Net sales from IoT Systems and Connectivity decreased $109.2 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by a $89.9 million decrease in module sales and a $19.6 million decrease in router sales, partially offset by a $0.6 million increase in managed connectivity sales.
Current report
Gross Profit
Current report
Our gross margin was 48.7% in the first six months of fiscal year 2025, compared to 42.9% inthe first six months of fiscal year 2024. Gross margin from Signal Integrity was 60.8% inthe first six months of fiscal year 2025, compared to 59.9% inthe first six months of fiscal year 2024, primarily due to higher volume reducing overhead. Gross margin from Analog Mixed Signal and Wireless was 55.7% inthe first six months of fiscal year 2025, compared to 61.4% inthe first six months of fiscal year 2024, primarily due to unfavorable product mix, partially offset by higher overhead absorption. Gross margin from IoT Systems and Connectivity was 36.4% in the first six months of fiscal year 2025, compared to 39.2% in the first six months of fiscal year 2024, primarily driven by softer demand in market and pricing pressures.
Current report
Operating Expenses, net
Current report
Selling, General and Administrative Expenses
Current report
SG&A expenses decreased $9.3 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024 primarily as a result of an $11.0 million decrease in transaction and integration expenses primarily related to the Sierra Wireless Acquisition, a $1.4 million reduction in travel expenses, and a $0.5 million net decrease in staffing-related costs, which reflects lower headcount due to recent restructuring offset by an increase in share-based and other supplemental compensation, partially offset by a $3.4 million increase in depreciation.
Current report
Product Development and Engineering Expenses
Current report
Product development and engineering expenses decreased $16.3 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024 primarily as a result of an $11.1 million net decrease in staffing-related costs due to lower headcount, a decrease of $3.8 million from new product introduction expenses, a $1.7 million decrease in facilities expenses, and a $1.6 million decrease in transaction and integration expenses primarily related to the Sierra Wireless Acquisition, partially offset by a $1.6 million decrease in tax credits and a $0.4 million increase in depreciation.
Current report
Intangible Amortization
Current report
Restructuring
Current report
Goodwill Impairment
Current report
There was no goodwill impairment for the first six months of fiscal year 2025 compared to $279.6 million of goodwill impairment for the same period in fiscal year 2024 due to valuation adjustments of goodwill related to the Sierra Wireless Acquisition. See Note 8, Goodwill and Intangible Assets, to our interim unaudited condensed consolidated financial statements for additional information.
Current report
Interest expense, including amortization and write-off of deferred financing costs, was $51.8 million and $44.7 million for the first six months of fiscal years 2025 and 2024, respectively. The increase was primarily due to a $5.5 million write-off of deferred financing costs as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock in the second quarter of fiscal year 2025.
Current report
Loss on Extinguishment of Debt
Current report
In addition to the write-off of $5.5 million of deferred financing costs as a result of approximately $188.1 million of 2028 Notes extinguished in exchange for common stock in the first six months of fiscal year 2025, which was recorded in "Interest expense" in the Statements of Operations, we recognized a loss on extinguishment of debt equal to the difference between the fair value of our common stock delivered to certain holders of the 2028 Notes and the carrying value of the outstanding debt, accrued interest and third-party fees related to the Exchange Agreements. In the first six months of fiscal year 2025, in connection with the exchange transactions, we recognized $144.7 million of loss included in "Loss on extinguishment of debt" in the Statements of Operations.
Current report
Provision for Income Taxes
Current report
In the first six months of fiscal year 2025, we recorded income tax expense of $7.2 million, compared to income tax expense of $54.2 million in the first six months of fiscal year 2024. The effective tax rates for the first six months of fiscal years 2025 and 2024 were provision rates of 3.8% and 15.2%, respectively. The change in our effective tax rate for the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024 was primarily due to a regional mix of income and changes in valuation allowance. The effective tax rates in the first six months of fiscal years 2025 and 2024 differ from the statutory federal income tax rate of 21% primarily due to a regional mix of income, changes in valuation allowance, non-deductibility of goodwill impairment, impact of GILTI, R&D credits and nondeductible loss on extinguishment of debt.
Current report
During the second quarter of fiscal year 2024, we recorded a valuation allowance against our U.S. deferred tax assets of approximately $52.8 million. We are required to assess whether a valuation allowance should be recorded against our DTAs based on the consideration of all available evidence, using a "more likely than not" realization standard. The four sources of taxable income that must be considered in determining whether DTAs will be realized are: (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards.
Current report
After a review of the four sources of taxable income described above and in view of our three-year cumulative loss, we were not able to conclude that it is more likely than not that our DTAs will be realized. As a result, we recorded an additional valuation allowance on our DTAs, with a corresponding charge to our income tax provision, of approximately $52.8 million during the second quarter of fiscal year 2024.
Current report
On July 11, 2024 and July 15, 2024, we entered into the Exchange Agreements with certain holders of the 2028 Notes. Pursuant to the Exchange Agreements, certain holders of the 2028 Notes exchanged with us approximately $188.1 million in aggregate principal amount of 2028 Notes held by them for an aggregate of 10,378,431 shares of our common stock, which number of shares was determined over an averaging period that commenced on July 12, 2024. We accounted for these exchange transactions as a partial debt extinguishment and recognized a loss on extinguishment of debt equal to the difference between the fair value of our common stock delivered to certain holders of the 2028 Notes and the carrying value of the outstanding debt, accrued interest and third-party fees related to the Exchange Agreements. In the three and six months ended July 28, 2024, in connection with the exchange transactions, we recognized $144.7 million of loss included in "Loss on extinguishment of debt" in the Statements of Operations and $5.5 million of loss resulting from the write-off of deferred financing costs included in "Interest expense" in the Statements of Operations.
Current report
In the first six months of fiscal year 2025, we paid $0.8 million for deferred financing costs, compared to $11.7 million for the first six months of fiscal year 2024.
Removed paragraphs (4)
Previous report
Interest Expense
Previous report
Interest expense, including amortization of debt issuance costs, was $23.2 million and $20.5 million for the first quarters of fiscal years 2025 and 2024, respectively. The increase was primarily due to higher interest rates on the portion of our outstanding floating-rate debt that was unhedged during the period, partially offset by the impact of refinancing activities undertaken during the third quarter of fiscal year 2024.
Previous report
Provision (Benefit) for Income Taxes
Previous report
Under the Credit Agreement (as defined below), we are required to maintain a maximum consolidated leverage ratio, a minimum interest expense coverage ratio and, through January 31, 2025, minimum liquidity. In response to adverse market demand conditions, the Company has taken actions to reduce expenses and maintain compliance with its financial covenants, including entering into amendments to the Credit Agreement in February 2023, June 2023 and October 2023 to provide additional financial flexibility with respect to the financial covenants in the Credit Agreement. These amendments resulted in, among other things, an increase in the maximum leverage ratio, a decrease in the minimum interest ratio and also introduced the minimum liquidity covenant that applies through January 31, 2025. See Note 9, Long-Term Debt, to our interim unaudited condensed consolidated financial statements for additional information regarding these covenant requirements. We were in compliance with these covenants as of April 28, 2024. For additional information regarding risks related to our compliance with covenants in the Credit Agreement, see Part I, Item 1A – Risk Factors in our Annual Report on Form 10-K for the year ended January 28, 2024.
Reworded paragraphs (34)
Previous wording
Macroeconomic factors such as market volatility, inflationary pressures, elevated interest rates, geopolitical tensions and recessionary concerns have caused uncertainty in end customer demand and have resulted in elevated channel inventories. We believe that we can continue to take appropriate actions to align our inventory levels with anticipated customer demand profiles.
Current wording
In recent periods, macroeconomic factors such as market volatility, inflationary pressures, elevated interest rates, geopolitical tensions and recessionary concerns have caused uncertainty in end customer demand, which resulted in elevated channel inventories. We believe that we can continue to take appropriate actions to align our inventory levels with anticipated customer demand profiles.
Previous wording
Most of our sales to customers are made on the basis of individual customer purchase orders and many customers include cancellation provisions in their purchase orders. Net sales made through independent distributors during the first quarters of fiscal years 2025 and 2024 were 73% and 61%, respectively, of net sales and the remainder were made directly to customers. The higher percentage of distributor sales in the first quarter of fiscal year 2025 was due to customers electing to leverage the value of purchasing through distributors to better manage their supply chain.
Current wording
Most of our sales to customers are made on the basis of individual customer purchase orders and many customers include cancellation provisions in their purchase orders. We rely on orders received and shipped within the same quarter for a meaningful portion of our sales. Net sales made through independent distributors during the second quarters of fiscal years 2025 and 2024 were 74% and 64%, respectively, of net sales and the remainder were made directly to customers. The higher percentage of distributor sales in the second quarter of fiscal year 2025 was primarily due to product mix as certain of our products are shipped in higher volume to distributors.
Previous wording
We are a global business with customers and suppliers around the world. A significant amount of our third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located outside the United States, including China, Japan, and Taiwan. A significant amount of our assembly and test operations are conducted by third-party contractors located outside the United States, including China, Malaysia, Mexico, Taiwan, and Vietnam. Net sales outside the United States constituted 79% and 72% during the first quarters of fiscal years 2025 and 2024, respectively. Approximately 64% and 54% of our net sales during the first quarters of fiscal years 2025 and 2024, respectively, were to customers located in the Asia-Pacific region. We are subject to export restrictions and trade regulations, which have limited our ability to sell to certain customers in certain regions.
Current wording
We are a global business with customers and suppliers around the world. A significant amount of our third-party subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located outside the United States, including China and Taiwan. A significant amount of our assembly and test operations are conducted by third-party contractors located outside the United States, including China, Malaysia, Mexico, Taiwan and Vietnam. Net sales outside the United States constituted 80% and 77% during the second quarters of fiscal years 2025 and 2024, respectively. Approximately 65% and 62% of our net sales during the second quarters of fiscal years 2025 and 2024, respectively, were to customers located in the Asia-Pacific region. We are subject to export restrictions and trade regulations, which have limited our ability to sell to certain customers in certain regions.
Previous wording
We use several metrics as indicators of future potential growth. The indicators that we believe best correlate to potential future sales growth are design wins and new product releases. There are many factors that may cause a design win or new product release to not result in sales, including a customer decision not to go to system production, a change in a customer’s perspective regarding a product’s value or a customer’s product failing in the end market. As a result, although a design win or new product introduction is an important step towards generating future sales, it does not necessarily result in us being awarded business or receiving a purchase commitment.
Current wording
We use several metrics as indicators of future potential growth. The indicators that we believe best correlate to potential future sales growth are design wins and new product releases. There are many factors that may cause a design win or new product release to not result in sales, including a customer's decision not to go to system production, a change in a customer’s perspective regarding a product’s value or a customer’s product failing in the end market. As a result, although a design win or new product introduction is an important step towards generating future sales, it does not necessarily result in us being awarded business or receiving a purchase commitment.
Previous wording
Inflationary factors could affect our future performance if we are unable to pass higher costs on to our customers.
Current wording
Inflationary factors have in the past and could continue to affect our future performance if we are unable to pass higher costs on to our customers.
Previous wording
Our regional mix of loss before taxes and equity method income (loss) was as follows:
Current wording
Our regional mix of loss before taxes and equity method (loss) income was as follows:
Previous wording
Net sales in the first quarter of fiscal year 2025 were $206.1 million, a decrease of 12.9% compared to $236.5 million in the first quarter of fiscal year 2024, which was primarily driven by lower net sales from our industrial end market related to decreased sales volume and pricing pressures. Comparing the same periods, our infrastructure and high-end consumer end markets had stronger demand and resulting net sales. Net sales from our infrastructure end market increased $17.0 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024, primarily driven by a $10.6 million increase in PON sales and an $8.0 million increase in data center sales, partially offset by a $1.6 million decrease in TVS infrastructure product sales. Net sales from our high-end consumer end market increased $12.9 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024, primarily driven by an increase in TVS consumer product sales. Net sales from our industrial end market decreased $60.4 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024, primarily driven by a $47.4 million decrease in module sales and a $16.0 million decrease in router sales, partially offset by a $2.6 million increase in LoRa-enabled sales in industrial applications.
Current wording
Net sales in the second quarter of fiscal year 2025 were $215.4 million, a decrease of 9.7% compared to $238.4 million in the second quarter of fiscal year 2024, which was primarily driven by lower net sales from our industrial end market related to decreased sales volume and pricing pressures, offset by higher net sales in our infrastructure and high-end consumer end markets due to stronger demand. Net sales from our infrastructure end market increased $10.6 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, primarily driven by a $7.3 million increase in data center sales and a $6.7 million increase in PON sales, partially offset by a $2.9 million decrease in TVS infrastructure product sales. Net sales from our high-end consumer end market increased $3.1 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, primarily driven by an increase in TVS consumer product sales. Net sales from our industrial end market decreased $36.7 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, primarily driven by a $43.3 million decrease in module sales, a $2.8 million decrease in router sales and a $1.5 million decrease in TVS industrial product sales, partially offset by a $12.0 million increase in LoRa-enabled sales in industrial applications.
Previous wording
Net sales in the first quarter of fiscal year 2025, as compared to the first quarter of fiscal year 2024, were impacted by softer demand in the IoT Systems and Connectivity reportable segment, which contributed to lower sales volume and pricing pressures, but benefited from stronger demand in the Signal Integrity and Analog Mixed Signal and Wireless reportable segments. Net sales from Signal Integrity increased $17.4 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 primarily driven by a $10.6 million increase in PON sales and $8.0 million increase in data center sales, partially offset by a $1.1 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $15.7 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 primarily driven by a $9.9 million increase in TVS product sales, a $2.6 million increase in proximity sensing sales, and a $1.4 increase in LoRa-enabled product sales. Net sales from IoT Systems and Connectivity decreased $63.6 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 primarily driven by a $47.4 million decrease in module sales and a $16.0 million decrease in router sales.
Current wording
Net sales in the second quarter of fiscal year 2025, as compared to the second quarter of fiscal year 2024, were impacted by softer demand in the IoT Systems and Connectivity reportable segment, which contributed to lower sales volume and pricing pressures, but benefited from stronger demand in the Signal Integrity and Analog Mixed Signal and Wireless reportable segments. Net sales from Signal Integrity increased $13.3 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 primarily driven by a $7.3 million increase in data center sales and a $6.7 million increase in PON sales, partially offset by a $0.5 million decrease in wireless sales and a $0.5 million decrease in broadcast sales. Net sales from Analog Mixed Signal and Wireless increased $9.3 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024, primarily driven by a $10.3 million increase in LoRa-enabled product sales. Net sales from IoT Systems and Connectivity decreased $45.6 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 primarily driven by a $43.3 million decrease in module sales and a $2.8 million decrease in router sales, partially offset by a $0.9 million increase in managed connectivity sales.
Previous wording
Our gross margin was 48.3% in the first quarter of fiscal year 2025, compared to 43.5% inthe first quarter of fiscal year 2024. Gross margin for our Signal Integrity segment was 59.6% inthe first quarter of fiscal year 2025, compared to 59.9% inthe first quarter of fiscal year 2024, primarily due to unfavorable product mix and pricing pressures. Gross margin for our Analog Mixed Signal and Wireless segmentwas 54.0% inthe first quarter of fiscal year 2025, compared to 61.2% inthe first quarter of fiscal year 2024, primarily due to unfavorable product mix driven by higher TVSconsumer product sales, which experienced pricing pressures. Gross margin for our IoT Systems and Connectivity segment was 37.4% inthe first quarter of fiscal year 2025, compared to 39.6% inthe first quarter of fiscal year 2024, primarily due to pricing pressures.
Current wording
Our gross margin was 49.0% in the second quarter of fiscal year 2025, compared to 42.3% inthe second quarter of fiscal year 2024. Gross margin for our Signal Integrity segment was 61.9% inthe second quarter of fiscal year 2025, compared to 59.8% inthe second quarter of fiscal year 2024, primarily due to higher volume reducing overhead. Gross margin for our Analog Mixed Signal and Wireless segmentwas 57.2% inthe second quarter of fiscal year 2025, compared to 61.6% inthe second quarter of fiscal year 2024, primarily due to unfavorable product mix, partially offset by higher overhead absorption. Gross margin for our IoT Systems and Connectivity segment was 35.4% inthe second quarter of fiscal year 2025, compared to 38.7% inthe second quarter of fiscal year 2024, primarily due to pricing pressures.
Previous wording
Selling, general and administrative expenses decreased $5.5 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 primarily as a result of a $5.2 million decrease in transaction and integration costs primarily related to the Sierra Wireless Acquisition and $0.9 million lower travel costs, partially offset by $0.5 million higher staffing-related costs, which reflects an increase in share-based compensation related to our cash settled awards liability offset by lower headcount due to recent restructuring.
Current wording
Selling, general and administrative expenses decreased $3.8 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 primarily as a result of a $5.8 million decrease in transaction and integration costs primarily related to the Sierra Wireless Acquisition and $1.0 million lower net staffing-related costs, which reflects lower headcount due to recent restructuring, offset by an increase in share-based compensation, partially offset by $1.8 million higher depreciation and a $0.8 million increase in facilities expenses.
Previous wording
Product development and engineering expenses decreased $9.0 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 primarily as a result of a $4.8 million net decrease in staffing-related costs due to lower headcount, a $2.7 million decrease in new product introduction expenses, a $0.5 million decrease in transaction and integration costs primarily related to the Sierra Wireless Acquisition, a $0.4 million decrease in travel costs, and a $0.4 million decrease in depreciation. The levels of product development and engineering expenses reported in a fiscal period can be significantly impacted, and therefore experience period over period volatility, by the number of new product tape-outs and by the timing of recoveries from non-recurring engineering services, which are typically recorded as a reduction to product development and engineering expense.
Current wording
Product development and engineering expenses decreased $7.3 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 primarily as a result of a $6.3 million net decrease in staffing-related costs due to lower headcount and a $2.1 million decrease in new product introduction expenses, partially offset by a $1.4 million increase in depreciation. The levels of product development and engineering expenses reported in a fiscal period can be significantly impacted, and therefore experience period over period volatility, by the number of new product tape-outs and by the timing of recoveries from non-recurring engineering services, which are typically recorded as a reduction to product development and engineering expense.
Previous wording
Intangible amortization decreased by $4.6 million in the first quarter of fiscal year 2025 compared to the first quarter of fiscal year 2024 due to impairment of intangible assets acquired in the Sierra Wireless Acquisition related to customer relationships and trade name in the fourth quarter of fiscal year 2024. The amortization of acquired technology intangible assets is reflected in cost of sales.
Current wording
Intangible amortization decreased by $4.6 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 due to impairment of intangible assets acquired in the Sierra Wireless Acquisition related to customer relationships and trade name in the fourth quarter of fiscal year 2024. The amortization of acquired technology intangible assets is reflected in cost of sales.
Previous wording
Restructuring increased by $0.7 million to $2.3 million in the first quarter of fiscal year 2025 compared to $1.6 million in the first quarter of fiscal year 2024 primarily due to additional structural reorganization actions to reduce our workforce as a result of cost-saving measures and internal resource alignment including from the realization of synergies of the Sierra Wireless Acquisition.
Current wording
Restructuring decreased by $7.9 million in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024 due to the structural reorganization actions primarily in the prior year period to reduce our workforce as a result of cost-saving measures and internal resource alignment including from the realization of synergies of the Sierra Wireless Acquisition.
Previous wording
We recorded income tax expense of $3.0 million in the first quarter of fiscal year 2025, compared to income tax benefit of $2.4 million in the first quarter of fiscal year 2024. The effective tax rates for the first quarters of fiscal years 2025 and 2024 were a provision rate of 14.6% and a benefit rate of 7.6%, respectively. The effective tax rates in the first quarters of fiscal years 2025 and 2024 differ from the statutory federal income tax rate of 21% primarily due to a regional mix of income, changes in valuation allowance, impact of global intangible low-taxed income ("GILTI") and research and development ("R&D") credits. The Tax Cuts and Jobs Act ("Tax Act") requires R&D costs incurred for tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted. We have elected to treat GILTI as a period cost and the additional capitalization of R&D costs within GILTI increases our provision for income taxes.
Current wording
We recorded income tax expense of $4.2 million in the second quarter of fiscal year 2025, compared to income tax expense of $56.6 million in the second quarter of fiscal year 2024. The effective tax rates for the second quarters of fiscal years 2025 and 2024 were provision rates of 2.5% and 17.4%, respectively. The effective tax rates in the second quarters of fiscal years 2025 and 2024 differ from the statutory federal income tax rate of 21% primarily due to a regional mix of income, changes in valuation allowance, impact of global intangible low-taxed income ("GILTI"), research and development ("R&D") credits and nondeductible loss on extinguishment of debt. The Tax Cuts and Jobs Act ("Tax Act") requires R&D costs incurred for tax years beginning after December 31, 2021 to be capitalized and amortized ratably over five or fifteen years for tax purposes, depending on where the research activities are conducted. We have elected to treat GILTI as a period cost and the additional capitalization of R&D costs within GILTI increases our provision for income taxes.
Previous wording
In the first quarter of fiscal year 2025, gross profit decreased $3.4 million to $99.6 million from $102.9 million in the first quarter of fiscal year 2024. This decrease was primarily due to a $26.7 million decrease from IoT Systems and Connectivity due to lower module and router sales primarily driven by soft demand causing decreased sales volume and pricing pressures, partially offset by a $10.3 million increase from Signal Integrity, which experienced higher sales led by 10G PON due to stronger demand, offset by pricing pressures, an $8.6 million decrease in the amortization of acquired technology intangible assets related to the Sierra Wireless Acquisition due to impairments in the fourth quarter of fiscal year 2024, and a $4.2 million increase from Analog Mixed Signal and Wireless, which experienced higher sales led by TVS due to stronger demand, offset by pricing pressures.
Current wording
In the first six months of fiscal year 2025, gross profit increased $1.4 million to $205.1 million from $203.7 million in the first six months of fiscal year 2024. This increase was primarily driven by a $19.4 million increase from Signal Integrity, which experienced higher sales led by 10G PON and data center due to stronger demand, offset by pricing pressures, a $16.9 million decrease in the amortization of acquired technology intangible assets related to the Sierra Wireless Acquisition due to impairments in the fourth quarter of fiscal year 2024, a $6.5 million increase from Analog Mixed Signal and Wireless, which experienced higher sales due to stronger demand, particularly with TVS consumer products, a $3.3 million decrease for amortization of inventory step-up due to the finalization of measurement period adjustments in the second quarter of fiscal year 2024 related to the Sierra Wireless Acquisition, and a $2.7 million decrease for transaction and integration costs related to the Sierra Wireless Acquisition, partially offset by a $47.0 million decrease from IoT Systems and Connectivity due to lower module and router sales primarily driven by soft demand causing decreased sales volume and pricing pressures.
Previous wording
During the first quarter of fiscal year 2025, investment impairments and credit loss reserves, net totaled a loss of $1.1 million due to an other-than-temporary impairment on one of our non-marketable equity investments.
Current wording
During the first six months of fiscal year 2025, investment impairments and credit loss reserves, net totaled a loss of $1.1 million due to an other-than-temporary impairment on one of our non-marketable equity investments. During the first six months of 2024, investment impairments and credit loss reserves, net totaled a loss of $0.3 million due to adjustments to our credit loss reserve for our available-for-sale debt securities.
Previous wording
We believe that our cash on hand, cash available from future operations and available borrowing capacity under our Revolving Credit Facility (as defined below) are sufficient to meet liquidity requirements for at least the next 12 months, including funds needed for our material cash requirements. As of April 28, 2024, we had $126.8 million in cash and cash equivalents and $282.2 million of available undrawn borrowing capacity on our Revolving Credit Facility, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults. Over the longer-term, we expect to fund our business using cash flows from operating activities.
Current wording
We believe that our cash on hand, cash available from future operations and available borrowing capacity under our Revolving Credit Facility (as defined below) are sufficient to meet liquidity requirements for at least the next 12 months, including funds needed for our material cash requirements. As of July 28, 2024, we had $115.9 million in cash and cash equivalents and $282.2 million of available undrawn borrowing capacity on our Revolving Credit Facility, subject to net leverage limitations and customary conditions precedent, including the accuracy of representations and warranties and the absence of defaults. Over the longer-term, we expect to fund our business using cash flows from operating activities.
Previous wording
As of April 28, 2024, we were in compliance with the financial covenants in the Credit Agreement. In response to adverse market conditions, we have taken actions to reduce expenses and maintain compliance with the financial covenants. During the third quarter of fiscal year 2024, we entered into the Third Agreement (as defined in Note 9, Long-Term Debt, to our interim unaudited condensed consolidated financial statements). Based on our current financial projections, management believes we will maintain compliance with our financial covenants and that our existing cash, projected operating cash flows and available borrowing capacity under the Revolving Credit Facility are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying interim unaudited condensed consolidated financial statements. Our ability to comply with the financial covenants in the Credit Agreement (particularly, the maximum consolidated leverage ratio requirement) in future periods may be adversely impacted if market conditions do not improve or the actions we are taking do not sufficiently counter the softer demand environment and reduced revenue levels we are continuing to experience in our end markets.
Current wording
As of July 28, 2024, we were in compliance with the financial covenants in the Credit Agreement (as defined below). Based on our current amount of debt outstanding and financial projections, management believes we will maintain compliance with our financial covenants and that our existing cash, projected operating cash flows and available borrowing capacity under the Revolving Credit Facility are adequate to meet our operating needs, liabilities and commitments over the next twelve months from the issuance of the accompanying interim unaudited condensed consolidated financial statements.
Previous wording
A meaningful portion of our capital resources, and the liquidity they represent, are held by our subsidiaries outside of the U.S. As of April 28, 2024, our foreign subsidiaries held $107.3 million of cash and cash equivalents, compared to $104.6 million at January 28, 2024. Our liquidity may be impacted by fluctuating exchange rates. For additional information on exchange rates, see Item 3–Quantitative and Qualitative Disclosures About Market Risk.
Current wording
A meaningful portion of our capital resources, and the liquidity they represent, are held by our subsidiaries outside of the U.S. As of July 28, 2024, our foreign subsidiaries held $102.7 million of cash and cash equivalents, compared to $104.6 million at January 28, 2024. Our liquidity may be impacted by fluctuating exchange rates. For additional information on exchange rates, see Item 3–Quantitative and Qualitative Disclosures About Market Risk.
Previous wording
We have entered into interest rate swap agreements to hedge the variability of interest payments on debt outstanding under the Term Loans. See Note 9, Long-Term Debt to our interim unaudited condensed consolidated financial statements for additional information.
Current wording
We have entered into interest rate swap agreements to hedge the variability of interest payments on debt outstanding under the Term Loans. See Note 17, Derivatives and Hedging Activities, to our interim unaudited condensed consolidated financial statements for additional information.
Previous wording
On October 6, 2022 and October 21, 2022, we issued and sold $300.0 million and $19.5 million, respectively, in aggregate principal amount of 1.625% Convertible Senior Notes due 2027 (the "2027 Notes") in a private placement. The 2027 Notes were issued pursuant to an indenture dated October 12, 2022, by and among us, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2027 Notes bear interest at a rate of 1.625% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2023. The 2027 Notes will mature on November 1, 2027, unless earlier converted, redeemed or repurchased. The 2027 Notes are not currently redeemable and, as of April 28, 2024, none of the conditions allowing holders of the 2027 Notes to convert had been met. The 2027 Notes were initially issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") afforded by Section 4(a)(2) of the Securities Act.
Current wording
On October 6, 2022 and October 21, 2022, we issued and sold $300.0 million and $19.5 million, respectively, in aggregate principal amount of 1.625% Convertible Senior Notes due 2027 (the "2027 Notes") in a private placement. The 2027 Notes were issued pursuant to an indenture dated October 12, 2022, by and among us, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2027 Notes bear interest at a rate of 1.625% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2023. The 2027 Notes will mature on November 1, 2027, unless earlier converted, redeemed or repurchased. The 2027 Notes are not currently redeemable and, as of April 28, 2024, none of the conditions allowing holders of the 2027 Notes to convert had been met. The 2027 Notes were initially issued pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.
Previous wording
On October 26, 2023, we issued and sold $250.0 million in aggregate principal amount of 4.00% Convertible Senior Notes due 2028 (the "2028 Notes") in a private placement. The 2028 Notes were issued pursuant to an indenture, dated October 26, 2023, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2028 Notes bear interest at a rate of 4.00% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2024. The 2028 Notes will mature on November 1, 2028, unless earlier converted, redeemed or repurchased. The 2028 Notes were offered and sold only to eligible purchasers who are both "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act and "accredited investors" within the meaning of Rule 501(a) under the Securities Act, in reliance on Section 4(a)(2) under the Securities Act.
Current wording
On October 26, 2023, we issued and sold $250.0 million in aggregate principal amount of 2028 Notes in a private placement. The 2028 Notes were issued pursuant to an indenture, dated October 26, 2023, by and among the Company, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee. The 2028 Notes bear interest at a rate of 4.00% per year, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2024. The 2028 Notes will mature on November 1, 2028, unless earlier converted, redeemed or repurchased. As of July 28, 2024, approximately $62.0 million of the 2028 Notes remained outstanding. The 2028 Notes were offered and sold only to eligible purchasers who are both "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act and "accredited investors" within the meaning of Rule 501(a) under the Securities Act, in reliance on Section 4(a)(2) under the Securities Act.
Previous wording
The 2028 Notes are not currently redeemable. The 2028 Notes may be converted at the option of the holders at the times and under the circumstances and at the conversion rate described in Note 9, Long-Term Debt, to our interim unaudited condensed consolidated financial statements. As of April 28, 2024, one of the conditions allowing holders of the 2028 Notes to convert had been met. The trading price of our common stock remained above 130% of the applicable $20.37 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, April 28, 2024, holders of the 2028 Notes would have the right to convert their 2028 Notes beginning April 29, 2024 through July 26, 2024 (the last business day of the quarter ending July 28, 2024). If converted, we will settle in cash the aggregate principal amount of the 2028 Notes to be converted, and for the remainder of the conversion obligations in excess of the aggregate principal amount of the notes being converted, we will settle the obligations in either cash, shares of our common stock, or any combination thereof, at our option.
Current wording
The 2028 Notes are not currently redeemable. The 2028 Notes may be converted at the option of the holders at the times and under the circumstances and at the conversion rate described in Note 9, Long-Term Debt, to our interim unaudited condensed consolidated financial statements. As of July 28, 2024, one of the conditions allowing holders of the 2028 Notes to convert had been met. The trading price of our common stock remained above 130% of the applicable $20.37 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, July 26, 2024 (the last trading day of the quarter ended July 28, 2024), holders of the 2028 Notes would have the right to convert their 2028 Notes beginning July 29, 2024 through October 25, 2024 (the last trading day of the quarter ending October 27, 2024). If converted, we will settle in cash the aggregate principal amount of the 2028 Notes to be converted, and for the remainder of the conversion obligations in excess of the aggregate principal amount of the notes being converted, we will settle the obligations in either cash, shares of our common stock, or any combination thereof, at our option.
Previous wording
We currently have in effect a stock repurchase program that was initially approved by our board of directors ("Board of Directors") in March 2008. On March 11, 2021, the Board of Directors approved the expansion of the stock repurchase program by an additional $350.0 million. This program represents one of our principal efforts to return value to our stockholders. Under the program, subject to the terms of the Credit Agreement, we may repurchase our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. Our repurchases may be made through Rule 10b5-1 and/or Rule 10b-18 or other trading plans, open market purchases, privately negotiated transactions, block purchases or other transactions.
Current wording
We currently have in effect a stock repurchase program that was initially approved by our Board of Directors in March 2008. On March 11, 2021, the Board of Directors approved the expansion of the stock repurchase program by an additional $350.0 million. This program represents one of our principal efforts to return value to our stockholders. Under the program, subject to the terms of the Credit Agreement, we may repurchase our common stock at any time or from time to time, without prior notice, subject to market conditions and other considerations. Our repurchases may be made through Rule 10b5-1 and/or Rule 10b-18 or other trading plans, open market purchases, privately negotiated transactions, block purchases or other transactions.
Previous wording
We did not repurchase any shares of our common stock under the program in the first three months of fiscal year 2025 or in the first three months of fiscal year 2024. As of April 28, 2024, the remaining authorization under the program was $209.4 million. To the extent we repurchase any shares of our common stock under the program in the future, we expect to fund such repurchases from cash on hand and borrowings on our Revolving Credit Facility. We have no obligation to repurchase any shares under the program and may suspend or discontinue it at any time.
Current wording
We did not repurchase any shares of our common stock under the program in the first six months of fiscal year 2025 or in the first six months of fiscal year 2024. As of July 28, 2024, the remaining authorization under the program was $209.4 million. To the extent we repurchase any shares of our common stock under the program in the future, we expect to fund such repurchases from cash on hand and borrowings on our Revolving Credit Facility. We have no obligation to repurchase any shares under the program and may suspend or discontinue it at any time.
Previous wording
Operating cash flows for the first three months of fiscal year 2025 compared to the first three months of fiscal year 2024 were favorably impacted by a significant decrease in annual bonus payments, lower payroll costs related to reduced headcount, a decrease in income tax payments, lower transaction and integration costs primarily related to the Sierra Wireless Acquisition, and an incremental decrease in inventory spend, and were unfavorably impacted by a 12.9% decrease in net sales, higher deferred compensation distributions and higher restructuring payments related to one-time employee termination benefits.
Current wording
Operating cash flows for the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024 were favorably impacted by a significant decrease in annual bonus payments, lower payroll costs related to reduced headcount, a decrease in income tax payments, and lower transaction and integration costs primarily related to the Sierra Wireless Acquisition, and were unfavorably impacted by an 11.3% decrease in net sales, higher restructuring payments related to one-time employee termination benefits and an incremental increase in inventory spend.
Previous wording
Capital expenditures were $1.3 million for the first three months of fiscal year 2025, which were lower due to cost-saving initiatives, compared to $14.0 million for the first three months of fiscal year 2024 as we made investments to update and expand our production capabilities.
Current wording
Capital expenditures were $4.7 million for the first six months of fiscal year 2025, which were lower due to cost-saving initiatives, compared to $20.9 million for the first six months of fiscal year 2024 as we made investments to update and expand our production capabilities.
Previous wording
In the first three months of fiscal year 2025, we sold investments for proceeds of $2.7 million. In the first three months of fiscal year 2024, we paid $0.4 million for strategic investments, including investments in companies that are enabling the LoRa® and LoRaWAN® -based ecosystem.
Current wording
In the first six months of fiscal year 2025, we sold investments for proceeds of $2.7 million. In the first six months of fiscal year 2025, we paid $0.4 million for strategic investments, including investments in companies that are enabling the LoRa® and LoRaWAN® -based ecosystem, compared to $0.9 million for the first six months of fiscal year 2024.
Previous wording
Purchases of intangibles were $1.3 million for the first three months of fiscal year 2025, which included capitalized development costs and software licenses.
Current wording
Purchases of intangibles were $5.0 million for the first six months of fiscal year 2025, which included capitalized development costs and software licenses.
Previous wording
In the first three months of fiscal year 2025, we received $1.8 million of proceeds from corporate-owned life insurance, which were used to pay deferred compensation distributions.
Current wording
In the first six months of fiscal year 2025 and 2024, we received $4.8 million and $2.5 million of proceeds, respectively, from corporate-owned life insurance, which were used to pay deferred compensation distributions.
Previous wording
Net cash provided by or used in financing activities is primarily attributable to payments on our Revolving Credit Facility, deferred financing costs, payments related to employee share-based compensation payroll taxes and proceeds from the exercise of stock options.
Current wording
Net cash provided by or used in financing activities is primarily attributable to proceeds or payments on our Revolving Credit Facility, payments related to deferred financing costs, payments related to employee share-based compensation payroll taxes and proceeds from the exercise of stock options.
Previous wording
In the first three months of fiscal year 2025, we did not borrow or make payments on our Revolving Credit Facility. In the first three months of fiscal year 2024, we borrowed $40.0 million on our Revolving Credit Facility.
Current wording
In the first six months of fiscal year 2025, we did not borrow or make payments on our Revolving Credit Facility. In the first six months of fiscal year 2024, we borrowed $60.0 million on our Revolving Credit Facility.
Previous wording
In the first three months of fiscal year 2025, we paid $2.4 million for employee share-based compensation payroll taxes and received proceeds of $0.2 million from the exercise of stock options. In the first three months of fiscal year 2024, we paid $1.6 million for employee share-based compensation payroll taxes. We do not directly control the timing of the exercise of stock options. Such exercises are independent decisions made by grantees and are influenced most directly by the stock price and the expiration dates of stock option awards. Such proceeds are difficult to forecast, resulting from several factors that are outside our control. We believe that such proceeds will remain a nominal source of cash in the future.
Current wording
In the first six months of fiscal year 2025, we paid $4.2 million for employee share-based compensation payroll taxes and received proceeds of $0.6 million from the exercise of stock options. In the first six months of fiscal year 2024, we paid $2.4 million for employee share-based compensation payroll taxes. We do not directly control the timing of the exercise of stock options. Such exercises are independent decisions made by grantees and are influenced most directly by the stock price and the expiration dates of stock option awards. Such proceeds are difficult to forecast, resulting from several factors that are outside our control. We believe that such proceeds will remain a nominal source of cash in the future.
Previous wording
Our critical accounting estimates are disclosed in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024. There have been no significant changes to our policies during the three months ended April 28, 2024.
Current wording
Our critical accounting estimates are disclosed in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024. There have been no significant changes to our policies during the six months ended July 28, 2024.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
The following table summarizes our net sales by major end markets:
Current report — wording carried from elsewhere
Comparison of the Six Months Ended July 28, 2024 and July 30, 2023
Current report — wording carried from elsewhere
Net sales for the first six months of fiscal year 2025 were $421.5 million, a decrease of 11.3% compared to $474.9 million for the first six months of fiscal year 2024 primarily driven by lower net sales from our industrial end market related to decreased sales volume and pricing pressures. Comparing the same periods, our infrastructure and high-end consumer end markets had stronger demand and resulting net sales. Net sales from our infrastructure end market increased $27.6 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by a $17.3 million increase in PON sales and a $15.3 million increase in data center sales, partially offset by a $4.4 million decrease in TVS infrastructure product sales. Net sales from our high-end consumer end market increased $16.0 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by a $16.9 million increase in TVS consumer product sales and a $3.3 million increase in proximity sensing sales, partially offset by a $2.8 million decrease in LoRa-enabled sales in consumer applications. Net sales from our industrial end market decreased $97.0 million in the first six months of fiscal year 2025 compared to the first six months of fiscal year 2024, primarily driven by an $89.9 million decrease in module sales, a $19.6 million decrease in router sales and a $3.0 million decrease in TVS industrial product sales, partially offset by a $15.4 million increase in LoRa-enabled sales in industrial applications.
Current report — wording carried from elsewhere
The following table summarizes our net sales by reportable segment:
Current report — wording carried from elsewhere
The following table summarizes our gross profit and gross margin by reportable segment:
Current report — wording carried from elsewhere
Intangible amortization decreased by $9.2 million for the first six months of fiscal year 2025 compared to the same period in fiscal year 2024 due to impairment of intangible assets acquired in the Sierra Wireless Acquisition related to customer relationships and trade name in the fourth quarter of fiscal year 2024. The amortization of acquired technology intangible assets is reflected in cost of sales.
Current report — wording carried from elsewhere
Restructuring decreased by $7.2 million for the first six months of fiscal year 2025 compared to the same period in fiscal year 2024 primarily due to structural reorganization actions primarily in the prior year period to reduce our workforce as a result of cost-saving measures and internal resource alignment including from the realization of synergies of the Sierra Wireless Acquisition.
Current report — wording carried from elsewhere
Investment Impairments and Credit Loss Reserves, Net