Financial Data and Key Metrics Changes - The company reported Q2 revenue of $124 million, which is up 3% from Q1 and flat compared to the same period last year [6][15] - Non-GAAP gross margin remained strong at 69.3%, with adjusted EBITDA expanding to 34.1% [7][16] - Non-GAAP EPS was $0.24, up from $0.22 in Q1 and $0.23 in the year-ago period [17] - GAAP net cash flow from operating activities increased to $38.5 million, up from $31.9 million in Q1 [17] - Free cash flow in Q2 was $31.3 million, with a free cash flow margin of 25.2%, up from $23.3 million and 19.4% in Q1 [17] Business Line Data and Key Metrics Changes - The communications and computing segment grew 20% sequentially and 26% year-over-year, with the server segment showing an 85% year-over-year growth [10][25] - Industrial and automotive segments declined sequentially, but the company expects to normalize channel inventory by year-end [11][12] - Total revenue from new products continues to grow at a strong rate, on track to exceed 2025 goals [12] Market Data and Key Metrics Changes - The company noted strong demand in communications and computing, driven by data center infrastructure [10] - Industrial and automotive segments are expected to recover, with significant growth anticipated in 2026 [11][40] - The company reported record design wins across all segments, indicating strong future demand [54] Company Strategy and Development Direction - The company continues to execute its long-term strategy, focusing on innovation and deepening customer engagements [13] - The management emphasized the importance of being a companion to AI accelerators and other advanced applications [9][97] - The company is committed to returning capital to shareholders while investing in growth opportunities [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market environment, citing strong demand in communications and computing [7][8] - The company is confident in its ability to navigate macro uncertainties and invest for future growth [19] - Management expects continued growth in revenue and profitability for Q3, with guidance of $133 million in revenue [12][20] Other Important Information - The company is debt-free and has access to capital for future investments [19] - Management highlighted the importance of maintaining strong gross margins and operational efficiency [16][31] Q&A Session Summary Question: Insights on companionship opportunities and data center infrastructure - Management believes the company is well-positioned to benefit from increased AI infrastructure spending as it exits 2025 and into 2026 [24][25] Question: Update on new products versus core products - The company is on track to exceed its forecast for new product revenue, expecting significant growth in 2026 [28] Question: Confidence in the business model and future opportunities - Management expressed strong confidence in the durability of the business model and the potential for growth in various sectors [35][36] Question: Revenue growth target for 2026 - The company confirmed that the 15% to 20% revenue growth target for 2026 remains viable [38][39] Question: Changes in customer order patterns in China - Management has not observed significant changes in order patterns despite geopolitical volatility [88][89] Question: Growth drivers in the AI infrastructure market - The company is seeing strong growth in AI-related revenue, with expectations for continued expansion [94][95] Question: Impact of tariffs on business - Management indicated that existing country-specific tariffs would supersede any new tariffs, minimizing potential impacts [102][104]

Financial Data and Key Metrics Changes - Q2 revenue was $124 million, up 3% from Q1 and flat year-over-year [5][14] - Non-GAAP gross margin was 69.3%, a 30 basis point increase quarter-over-quarter and year-over-year [6][15] - Adjusted EBITDA margin expanded to 34.1% [6][15] - Non-GAAP EPS was $0.24, up from $0.22 in Q1 and $0.23 year-over-year [16] - Free cash flow in Q2 was $31.3 million, with a free cash flow margin of 25.2%, up from $23.3 million and 19.4% in Q1 [16][17] Business Line Data and Key Metrics Changes - Communications and computing segment grew 20% sequentially and 26% year-over-year, with the server segment growing 85% year-over-year [10][24] - Industrial and automotive segment declined sequentially but is expected to normalize by year-end [11][12] - Total revenue from new products continues to grow strongly, on track to exceed 2025 goals [12] Market Data and Key Metrics Changes - Communications and computing segment growth driven by data center infrastructure, including network interface cards and security appliances [10] - Industrial and automotive segment is recovering, with expectations for strong growth in 2026 [11][39] - Record design wins across all segments, particularly in hyperscalers and robotics [54] Company Strategy and Development Direction - Company continues to execute long-term strategy, focusing on innovation and customer engagement [5][13] - Emphasis on small to mid-range FPGAs as a growth area, positioning as a companion to AI accelerators and other chips [96] - Anticipation of increased revenue from AI-related applications, targeting high teens in 2025 and mid-20s in 2026 [93] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about market conditions improving compared to Q1, with strong demand in communications and computing [6][12] - Confidence in recovering industrial and automotive segments, with expectations for normalized inventory levels by year-end [11][39] - Management highlighted strong backlog and design wins as indicators of future growth [103] Other Important Information - Company remains debt-free with strong cash flow, allowing for capital return strategies [18] - Ongoing share repurchase program, with $46 million repurchased in the quarter [18] Q&A Session Summary Question: Insights on companionship opportunities and data center infrastructure - Management believes Lattice is well-positioned to benefit from AI infrastructure spending growth, with strong growth in the server segment [24][25] Question: Update on new products versus core products - New products are expected to exceed high teens growth in 2025, with a significant contribution from the server segment [27][30] Question: Confidence in business model and future opportunities - Management expressed confidence in the durability of the FPGA business model and strong revenue growth potential [34][35] Question: Revenue growth target for 2026 - Management confirmed that the 15% to 20% revenue growth target for 2026 remains viable [37][38] Question: Impact of tariffs and geopolitical factors - Management indicated that current supply chain structures mitigate potential tariff impacts, with no significant direct effects observed [73][75] Question: Growth drivers in communications and computing - Management identified several growth drivers, including increased CapEx from hyperscalers and record design wins [80][82] Question: Recovery in industrial and automotive segments - Management expects industrial and automotive segments to normalize and grow in line with demand [83] Question: New product growth tied to communications and computing - Management anticipates growth across both communications and computing as well as industrial and automotive segments [90]

Company Overview - Lattice Semiconductor is the world's largest volume supplier of FPGA [14] - The company has been innovating for over 40 years [14] - Lattice's solutions enable secure control, flexible connectivity, and low power compute acceleration [14] - The company serves three primary markets: Communications & Computing (45%), Industrial & Automotive (46%), and Consumer (9%) [14] Products & Solutions - Lattice offers a portfolio of FPGA platforms including CrossLink-NX, Certus-NX, MachXO5-NX, and Avant [26] - The company provides software solution stacks for low power edge AI, embedded vision, cyber resilient root of trust, factory automation, ORAN deployment, and adaptable automotive design [34, 36, 38, 40, 42, 44, 46] - Lattice provides easy-to-use software tools for FPGA design, embedded system design, and advanced computer vision [47, 49, 51, 53] Financial Performance - Lattice reported Q2 2025 revenue of $124 million [96] - The company achieved a gross margin of 69.3% in Q2 2025 [96] - Operating profit for Q2 2025 was $34.1 million, representing an operating margin of 27.5% [105]

Core Insights - Lattice Semiconductor reported Q2 FY2025 GAAP revenue of $124.0 million, exceeding analyst expectations by 0.3% and maintaining flat revenue compared to the same period last year [1][5] - Non-GAAP earnings per share were $0.24, aligning with market consensus, while gross margins improved to 69.3% [1][2][7] - The company experienced a mixed performance across segments, with communications and computing revenue increasing, while industrial and automotive revenue declined [5][6] Financial Performance - Q2 FY2025 non-GAAP EPS was $0.24, a 4.3% increase from $0.23 in Q2 FY2024 [2] - GAAP operating cash flow rose to $38.5 million from $31.9 million in Q1 FY2025, and free cash flow margin improved to 25.2% from 11.9% year-over-year [1][8] - Adjusted EBITDA margin increased to 34.1% from 32.3% year-over-year, indicating enhanced core operating profitability [2][7] Business Overview - Lattice Semiconductor specializes in low-power FPGAs used across various industries, including AI, automotive, and industrial applications [3] - The company focuses on expanding its presence in communications, computing, industrial, and automotive segments, emphasizing design wins and R&D investment [4] Key Developments - The company reported record design win activity, particularly in cloud datacenter, AI edge, and industrial automation [6] - A new partnership with Mitsubishi Electric aims to enhance next-generation factory automation capabilities [6] Guidance and Future Outlook - For Q3 FY2025, management projects revenue between $128 million and $138 million, indicating approximately 7% sequential growth [9] - Non-GAAP gross margin is expected to be around 69.5%, with slight increases in operating expenses anticipated [9] - The company remains focused on trends in communications and computing demand, as well as inventory normalization [10]

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) This section provides an overview of Lattice Semiconductor's Q2 2025 financial performance and strategic insights from management [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Lattice Semiconductor reported Q2 2025 financial results with GAAP revenue of **$124 million** and GAAP diluted net income per share of **$0.02**, alongside strong non-GAAP metrics | Metric | Amount (Million USD) | Ratio (%) | | :-------------------------------- | :------------------- | :-------- | | **GAAP Financial Data:** | | | | Revenue | 124.0 | | | Gross Margin | | 68.4 | | Diluted Net Income Per Share | 0.02 | | | Net Income | 2.9 | 2.3 | | Operating Cash Flow | 38.5 | 31.1 | | Free Cash Flow | 31.3 | 25.2 | | **Non-GAAP Financial Data:** | | | | Gross Margin | | 69.3 | | Diluted Net Income Per Share | 0.24 | | | Adjusted EBITDA | 42.2 | 34.1 | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Ford Tamer highlighted strong quarterly performance, broad-based growth, and record design wins, while CFO Lorenzo Flores emphasized sequential growth and commitment to product roadmap investments - CEO Ford Tamer stated the company achieved another strong quarter with broad-based growth in key financial metrics and record design wins. Communications and computing markets remain solid with channel inventory normalization, expected to continue strong into 2026. Industrial and automotive markets are recovering as anticipated, with channel inventory levels showing further improvement. Future growth will be driven by key design wins in cloud data centers, wired communications, industrial robotics, ADAS, and other far-edge AI applications, as well as AI accelerators[4](index=4&type=chunk) - CFO Lorenzo Flores noted sequential growth in revenue, gross margin, and profitability, with adjusted EBITDA reaching **34.1%**. The company remains focused on driving business growth and expanding shareholder value through disciplined investments in its product roadmap, revenue generation, and customer support[4](index=4&type=chunk) [Detailed Financial Performance (Q2 2025)](index=2&type=section&id=Detailed%20Financial%20Performance%20(Q2%202025)) This section provides a detailed breakdown of Lattice Semiconductor's GAAP and non-GAAP financial results for the second quarter of 2025 [GAAP Financial Results](index=2&type=section&id=GAAP%20Financial%20Results) Q2 2025 GAAP revenue was **$124 million**, showing sequential growth but a slight year-over-year decline, while operating expenses significantly increased, leading to a substantial drop in operating and net income year-over-year | Metric | Q2 2025 (Million USD) | Q1 2025 (Million USD) | Q2 2024 (Million USD) | Q/Q Change | Y/Y Change | | :----------------------- | :-------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Revenue | 123.971 | 120.150 | 124.076 | 3.2% | (0.1)% | | Gross Margin % | 68.4% | 68.0% | 68.3% | 40 bps | 10 bps | | R&D Expenses % | 35.1% | 34.4% | 31.2% | 70 bps | 390 bps | | Sales, G&A Expenses % | 28.1% | 27.6% | 16.1% | 50 bps | 1200 bps | | Total Operating Expenses | 80.045 | 74.754 | 62.186 | 7.1% | 28.7% | | Operating Income | 4.706 | 6.974 | 22.565 | (32.5)% | (79.1)% | | Net Income | 2.913 | 5.022 | 22.631 | (42.0)% | (87.1)% | | Diluted Net Income Per Share | 0.02 | 0.04 | 0.16 | $(0.02) | $(0.14) | | Net Income Margin | 2.3% | 4.2% | 18.2% | (190) bps | (1590) bps | | Operating Cash Flow Margin | 31.1% | 26.5% | 17.7% | 460 bps | 1340 bps | [Non-GAAP Financial Results](index=2&type=section&id=Non-GAAP%20Financial%20Results) Q2 2025 non-GAAP revenue aligned with GAAP, with gross margin and operating income showing sequential and year-over-year growth, alongside improved non-GAAP net income, diluted EPS, adjusted EBITDA margin, and free cash flow margin | Metric | Q2 2025 (Million USD) | Q1 2025 (Million USD) | Q2 2024 (Million USD) | Q/Q Change | Y/Y Change | | :----------------------- | :-------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Revenue (GAAP) | 123.971 | 120.150 | 124.076 | 3.2% | (0.1)% | | Gross Margin % | 69.3% | 69.0% | 69.0% | 30 bps | 30 bps | | R&D Expenses % | 26.3% | 25.8% | 26.7% | 50 bps | (40) bps | | Sales, G&A Expenses % | 16.8% | 18.4% | 17.9% | (160) bps | (110) bps | | Total Operating Expenses | 51.834 | 51.408 | 54.030 | 0.8% | (4.1)% | | Operating Income | 34.084 | 31.539 | 31.526 | 8.1% | 8.1% | | Net Income | 32.597 | 30.746 | 31.432 | 6.0% | 3.7% | | Diluted Net Income Per Share | 0.24 | 0.22 | 0.23 | $0.02 | $0.01 | | Adjusted EBITDA Margin | 34.1% | 33.4% | 32.3% | 70 bps | 180 bps | | Free Cash Flow Margin | 25.2% | 19.4% | 11.9% | 580 bps | 1330 bps | [Business Updates](index=2&type=section&id=Business%20Updates) Lattice Semiconductor achieved several business milestones and industry recognitions in Q2 2025, including strategic partnerships, product portfolio expansion, and capital allocation initiatives [Recent Highlights](index=2&type=section&id=Recent%20Highlights) Lattice Semiconductor announced a partnership with Mitsubishi Electric, expanded its FPGA product portfolio, continued common stock repurchases, and received multiple industry awards - Partnered with Mitsubishi Electric to power next-generation factory automation with CertusPro™-NX FPGAs, enabling energy-efficient and reliable CNC solutions[6](index=6&type=chunk) - Launched new high I/O density Lattice Certus™-NX and Lattice MachXO5™-NX FPGA devices, designed for power-constrained AI, industrial, communications, server, and automotive applications[6](index=6&type=chunk) - Repurchased **$71 million** of common stock in the first six months of 2025, equivalent to **100%** of its operating cash flow[6](index=6&type=chunk) - Recognized as "AI Edge Solution of the Year" at the 2025 AI Breakthrough Awards and named to TIME's 2025 list of America's Best Midsize Companies[6](index=6&type=chunk) [Outlook](index=3&type=section&id=Outlook) This section outlines Lattice Semiconductor's financial guidance for Q3 2025 and provides an explanation of its non-GAAP financial measures [Third Quarter 2025 Business Outlook](index=3&type=section&id=Third%20Quarter%202025%20Business%20Outlook) The company projects Q3 2025 non-GAAP revenue between **$128 million** and **$138 million**, with a non-GAAP gross margin of approximately **69.5% ± 1%**, total non-GAAP operating expenses between **$52 million** and **$54 million**, a non-GAAP income tax rate of **5% to 6%**, and non-GAAP diluted net income per share between **$0.26** and **$0.30** | Metric | Q3 2025 Outlook (Non-GAAP) | | :----------------------- | :------------------------- | | Revenue | $128 million - $138 million | | Gross Margin % | 69.5% ± 1% | | Total Operating Expenses | $52 million - $54 million | | Income Tax Rate | 5% - 6% | | Net Income Per Share | $0.26 - $0.30 | [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) The company utilizes non-GAAP financial measures to supplement GAAP information, offering a more comprehensive understanding of performance by excluding specific non-recurring or non-cash items - Non-GAAP metrics exclude stock-based compensation and related payroll tax impacts, annual incentive plan accruals related to equity settlement, unusual legal fees, acquisition-related intangible asset amortization, restructuring and other charges, impairments, and the estimated tax impact of these items, non-cash changes in net deferred income taxes, tax law changes, and other tax adjustments; as well as depreciation and other amortization[14](index=14&type=chunk) - Management believes non-GAAP financial measures provide additional useful perspectives, which, when combined with GAAP results, offer a more complete understanding of the various factors and trends affecting the company's ongoing financial performance and operating results[15](index=15&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Lattice Semiconductor's consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) In Q2 2025, GAAP revenue was **$124 million** with a gross profit of **$84.751 million**, but total operating expenses of **$80.045 million** led to significantly reduced operating income of **$4.706 million** and net income of **$2.913 million** compared to the prior year | Metric (Thousand USD) | June 28, 2025 (3 Months) | March 29, 2025 (3 Months) | June 29, 2024 (3 Months) | June 28, 2025 (6 Months) | June 29, 2024 (6 Months) | | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Revenue | 123,971 | 120,150 | 124,076 | 244,121 | 264,891 | | Cost of Sales | 39,220 | 38,422 | 39,325 | 77,642 | 83,932 | | Gross Profit | 84,751 | 81,728 | 84,751 | 166,479 | 180,959 | | R&D Expenses | 43,530 | 41,387 | 38,733 | 84,917 | 79,324 | | Sales, G&A Expenses | 34,811 | 33,126 | 20,005 | 67,937 | 56,474 | | Total Operating Expenses | 80,045 | 74,754 | 62,186 | 154,799 | 141,820 | | Operating Income | 4,706 | 6,974 | 22,565 | 11,680 | 39,139 | | Net Income | 2,913 | 5,022 | 22,631 | 7,935 | 37,427 | | Diluted Net Income Per Share | 0.02 | 0.04 | 0.16 | 0.06 | 0.27 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, total assets decreased to **$808.552 million** from **$843.903 million** at December 28, 2024, reflecting changes in cash, receivables, and inventory, with corresponding adjustments in total liabilities and shareholders' equity | Metric (Thousand USD) | June 28, 2025 | December 28, 2024 | | :----------------------- | :------------ | :---------------- | | **Assets:** | | | | Cash and Cash Equivalents | 107,156 | 136,291 | | Accounts Receivable, Net | 85,659 | 81,060 | | Inventories, Net | 93,832 | 103,410 | | Total Current Assets | 322,426 | 364,834 | | Property and Equipment, Net | 62,972 | 52,988 | | Goodwill | 315,358 | 315,358 | | Total Assets | 808,552 | 843,903 | | **Liabilities and Stockholders' Equity:** | | | | Accounts Payable | 33,805 | 36,828 | | Accrued Liabilities | 33,552 | 45,638 | | Total Current Liabilities | 86,882 | 99,622 | | Total Liabilities | 121,504 | 132,971 | | Stockholders' Equity | 687,048 | 710,932 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 28, 2025, net cash provided by operating activities increased to **$70.423 million** from **$51.442 million** in the prior year, while both investing and financing activities resulted in net cash outflows, primarily due to common stock repurchases | Metric (Thousand USD) | June 28, 2025 (6 Months) | June 29, 2024 (6 Months) | | :----------------------- | :----------------------- | :----------------------- | | Net Income | 7,935 | 37,427 | | Net Cash Provided by Operating Activities | 70,423 | 51,442 | | Net Cash Used in Investing Activities | (23,628) | (18,188) | | Net Cash Used in Financing Activities | (76,584) | (51,733) | | Net Increase (Decrease) in Cash and Cash Equivalents | (29,135) | (19,101) | | Cash and Cash Equivalents, End of Period | 107,156 | 109,216 | | Common Stock Repurchases | (70,855) | (29,999) | [Supplemental Financial Data](index=8&type=section&id=Supplemental%20Financial%20Data) This section provides additional operational metrics and revenue segmentation details for Lattice Semiconductor [Key Operational Metrics](index=8&type=section&id=Key%20Operational%20Metrics) The company improved operational efficiency in Q2 2025, with decreases in Days Sales Outstanding (DSO) and Days Inventory Outstanding (DIO), indicating faster cash recovery and better inventory management | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------- | :------ | :------ | :------ | | Days Sales Outstanding (DSO) | 63 | 64 | 76 | | Days Inventory Outstanding (DIO) | 218 | 225 | 236 | [Revenue Segmentation](index=8&type=section&id=Revenue%20Segmentation) In Q2 2025, Asia contributed **67%** of revenue, with communications and computing emerging as the largest end market at **55%** of revenue, and distribution remaining the primary sales channel | Revenue Percentage (by Geography) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Asia | 67% | 65% | 67% | | Americas | 22% | 25% | 19% | | Europe (incl. Africa) | 11% | 10% | 14% | | Revenue Percentage (by End Market) | Q2 2025 | Q1 2025 | Q2 2024 | | :------------------------ | :------ | :------ | :------ | | Communications and Computing | 55% | 48% | 44% | | Industrial and Automotive | 38% | 43% | 47% | | Consumer | 7% | 9% | 9% | | Revenue (Million USD, by End Market) | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------------- | :------ | :------ | :------ | | Communications and Computing | 68.7 | 57.4 | 54.6 | | Industrial and Automotive | 47.3 | 52.2 | 58.2 | | Consumer | 8.0 | 10.6 | 11.3 | | Revenue Percentage (by Channel) | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------- | :------ | :------ | :------ | | Distribution | 84% | 79% | 91% | | Direct | 16% | 21% | 9% | [GAAP to Non-GAAP Reconciliations](index=9&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations between GAAP and non-GAAP financial measures for various key performance indicators [Gross Margin Reconciliation](index=9&type=section&id=Gross%20Margin%20Reconciliation) GAAP gross margin is adjusted to non-GAAP gross margin by excluding items such as stock-based compensation and equity-settled incentive compensation, resulting in a higher non-GAAP gross margin of **69.3%** in Q2 2025 compared to GAAP's **68.4%** | Metric (Thousand USD) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | GAAP Gross Profit | 84,751 | 81,728 | 84,751 | | Stock-Based Compensation - Gross Profit | 1,105 | 1,143 | 805 | | Equity-Settled Incentive Compensation - Gross Profit | 62 | 76 | — | | Non-GAAP Gross Profit | 85,918 | 82,947 | 85,556 | | GAAP Gross Margin % | 68.4% | 68.0% | 68.3% | | Non-GAAP Gross Margin % | 69.3% | 69.0% | 69.0% | [Operating Expenses & Income from Operations Reconciliation](index=9&type=section&id=Operating%20Expenses%20%26%20Income%20from%20Operations%20Reconciliation) Non-GAAP operating expenses are derived by excluding stock-based compensation, equity-settled incentive compensation, legal fees, acquisition-related intangible asset amortization, and restructuring and transformation charges from GAAP operating expenses, significantly elevating operating income to non-GAAP levels | Metric (Thousand USD) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | GAAP Operating Expenses | 80,045 | 74,754 | 62,186 | | Stock-Based Compensation - Operating | (23,036) | (19,413) | (2,343) | | Equity-Settled Incentive Compensation - Operating | (1,212) | (1,452) | — | | Legal Fees | (568) | (533) | (1,065) | | Acquisition-Related Intangible Asset Amortization | (13) | — | (869) | | Restructuring, Transformation & Other | (3,382) | (1,948) | (3,879) | | Non-GAAP Operating Expenses | 51,834 | 51,408 | 54,030 | | GAAP Income from Operations | 4,706 | 6,974 | 22,565 | | Non-GAAP Income from Operations | 34,084 | 31,539 | 31,526 | [Income Tax & Net Income Reconciliation](index=10&type=section&id=Income%20Tax%20%26%20Net%20Income%20Reconciliation) Non-GAAP income tax expense is calculated by adjusting GAAP income tax expense for the estimated tax impact of non-GAAP adjustments, non-cash changes in net deferred income taxes, and tax law changes, which also significantly impacts net income, making non-GAAP net income substantially higher than GAAP net income | Metric (Thousand USD) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | GAAP Income Tax Expense (Benefit) | 2,169 | 2,959 | 1,121 | | Estimated Tax Impact of Non-GAAP Adjustments | 2,158 | 2,086 | 5,649 | | Non-Cash Changes in Net Deferred Income Taxes | (1,723) | (2,307) | (1,090) | | Tax Law Changes | (741) | (938) | (4,399) | | Non-GAAP Income Tax Expense | 1,863 | 1,800 | 1,281 | | GAAP Net Income | 2,913 | 5,022 | 22,631 | | Non-GAAP Net Income | 32,597 | 30,746 | 31,432 | [Net Income Per Share Reconciliation](index=11&type=section&id=Net%20Income%20Per%20Share%20Reconciliation) Non-GAAP diluted net income per share is derived by incorporating the cumulative impact of non-GAAP adjustments into GAAP diluted net income per share, resulting in **$0.24** for Q2 2025, significantly higher than GAAP's **$0.02** | Metric | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | GAAP Diluted Net Income Per Share | 0.02 | 0.04 | 0.16 | | Cumulative Impact of Non-GAAP Adjustments | 0.22 | 0.18 | 0.07 | | Non-GAAP Diluted Net Income Per Share | 0.24 | 0.22 | 0.23 | [Adjusted EBITDA Reconciliation](index=11&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA is calculated by adding back interest, taxes, amortization, depreciation, stock-based compensation, equity-settled incentive compensation, legal fees, and restructuring and transformation charges to GAAP net income, reaching **$42.226 million** with a **34.1%** margin in Q2 2025 | Metric (Thousand USD) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | GAAP Net Income | 2,913 | 5,022 | 22,631 | | Interest (Income) Expense, Net | (614) | (1,052) | (933) | | Income Tax Expense (Benefit) | 2,169 | 2,959 | 1,121 | | Acquisition-Related Intangible Asset Amortization | 13 | — | 869 | | Depreciation and Other Amortization | 8,380 | 8,586 | 8,239 | | Stock-Based Compensation | 24,141 | 20,556 | 3,148 | | Equity-Settled Incentive Compensation | 1,274 | 1,528 | — | | Legal Fees | 568 | 533 | 1,065 | | Restructuring, Transformation & Other | 3,382 | 1,948 | 3,879 | | Adjusted EBITDA | 42,226 | 40,080 | 40,019 | | Adjusted EBITDA Margin | 34.1% | 33.4% | 32.3% | [Free Cash Flow Reconciliation](index=11&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free cash flow is derived by subtracting capital expenditures from net cash provided by GAAP operating activities, reaching **$31.301 million** with a **25.2%** margin in Q2 2025, a significant increase year-over-year | Metric (Thousand USD) | June 28, 2025 | March 29, 2025 | June 29, 2024 | | :----------------------- | :------------ | :------------- | :------------ | | Net Cash Provided by GAAP Operating Activities | 38,531 | 31,892 | 21,931 | | Operating Cash Flow Margin | 31.1% | 26.5% | 17.7% | | Capital Expenditures | (7,230) | (8,616) | (7,155) | | Free Cash Flow | 31,301 | 23,276 | 14,776 | | Free Cash Flow Margin | 25.2% | 19.4% | 11.9% | [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides details on investor relations, forward-looking statements, and an overview of Lattice Semiconductor Corporation [Investor Relations](index=3&type=section&id=Investor%20Relations) Lattice Semiconductor will host an investor conference call/webcast on Monday, August 4, 2025, at 5:00 PM ET to discuss Q2 2025 financial results and business outlook - The investor conference call/webcast will be held on Monday, August 4, 2025, at 5:00 PM ET[8](index=8&type=chunk) - Dial-in numbers are 1-877-407-3982 or 1-201-493-6780, with conference ID 13754801. The webcast will be available on the company's investor relations website at www.latticesemi.com[8](index=8&type=chunk) [Forward-Looking Statements Notice](index=3&type=section&id=Forward-Looking%20Statements%20Notice) This press release contains forward-looking statements subject to risks and uncertainties, where actual results may differ materially from expectations - Forward-looking statements include, but are not limited to, those regarding revenue growth, continued strong financial performance in 2026, design win growth and drivers, market recovery and improvement, inventory levels, and statements under "Third Quarter 2025 Business Outlook"[9](index=9&type=chunk) - Estimates of future revenue and other financial and operational results are inherently uncertain and subject to factors such as global economic conditions, semiconductor industry cyclicality, pricing and inflationary pressures, competitive actions, and international trade disputes and sanctions[10](index=10&type=chunk) - The company does not intend to and undertakes no obligation to update or revise any forward-looking statements, whether as a result of events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events[13](index=13&type=chunk) [About Lattice Semiconductor Corporation](index=4&type=section&id=About%20Lattice%20Semiconductor%20Corporation) Lattice Semiconductor (Nasdaq: LSCC) is a leader in low-power programmable solutions, addressing customer challenges from the edge to the cloud across communications, computing, industrial, automotive, and consumer markets - Lattice Semiconductor is a leader in low-power programmable solutions, dedicated to solving customer problems from the edge to the cloud in communications, computing, industrial, automotive, and consumer markets[16](index=16&type=chunk) - The company empowers customers to quickly and easily unleash innovation, creating a smart, secure, and connected world through its technology, long-standing relationships, and world-class support[16](index=16&type=chunk)

Group 1 - Lattice Semiconductor Corporation (NASDAQ: LSCC) is set to report Q2'25 earnings on August 4, 2025, after market close with mixed expectations from analysts [1] - Analysts have adjusted EPS estimates for Lattice Semiconductor, increasing them 4 times and decreasing them 2 times over the past 90 days [1]

Core Insights - The FPGA market is projected to grow from $11.14 billion in 2025 to $18.76 billion by 2030, with a CAGR of 10.98% during this period [2] - AMD and Lattice Semiconductor (LSCC) are key players in this market, with AMD benefiting from its acquisition of Xilinx and LSCC focusing on low-power FPGA solutions [1][7] AMD Insights - AMD's acquisition of Xilinx has allowed it to expand into various embedded markets, including CPUs, GPUs, and FPGAs [3] - The latest VP1902 adaptive SoC from AMD features 18.5 million logic cells, doubling the programmable logic density compared to the previous generation [4] - In Q1 2025, AMD launched a high-performance 5G core powered by the Virtex UltraScale+ XCVU5P FPGA and completed initial shipments of cost-optimized Spartan UltraScale Plus FPGAs [5] - AMD is enhancing partnerships with major cloud providers like AWS, which launched FPGA-accelerated instances powered by AMD's EPYC processors and Xilinx Virtex FPGAs [6] LSCC Insights - LSCC is experiencing strong demand for its small and mid-range FPGA solutions, particularly with its Nexus and Avant product families [7] - The company is targeting high-growth applications such as AI, data centers, and advanced driver-assistance systems in automotive [8] - In February 2025, LSCC validated Everspin Technologies' MRAM for use across its FPGAs, enhancing suitability for mission-critical applications [9] Performance and Valuation - Year-to-date, AMD shares have decreased by 6.9%, while LSCC shares have fallen by 1.4% due to a challenging macroeconomic environment [10] - Both AMD and LSCC shares are currently considered overvalued, with AMD trading at a forward Price/Sales ratio of 5.41X and LSCC at 13.91X [13] - The Zacks Consensus Estimate for AMD's 2025 earnings is $4.09 per share, reflecting a 23.56% year-over-year increase, while LSCC's estimate is $1.05 per share, indicating a 16.67% increase [16] - AMD has consistently beaten earnings estimates, while LSCC has missed estimates in two of the last four quarters [17] Conclusion - AMD's portfolio expansion and partnerships position it for significant growth in the FPGA market, while LSCC's focus on low-power solutions captures emerging opportunities [18] - AMD is rated higher than LSCC, with a Zacks Rank of 3 (Hold) compared to LSCC's 4 (Sell) [18]

Summary of Lattice Semiconductor Conference Call Company Overview - **Company**: Lattice Semiconductor - **Industry**: FPGA (Field-Programmable Gate Array) market Key Points and Arguments 1. **FPGA Market Positioning**: Lattice operates in the FPGA market, positioned between ASICs (Application-Specific Integrated Circuits) and microcontrollers, offering higher performance than microcontrollers while being more flexible than ASICs [3][4][5] 2. **Market Size and Share**: The current FPGA market is approximately $7.5 billion, with Lattice holding a market share of about $500 million. Major competitors include Xilinx ($4.5 billion), Altera ($1.5 billion), and Microchip ($0.5 billion) [9][10] 3. **Growth Projections**: Lattice anticipates significant growth in the small and mid-range FPGA markets, with inflection points expected in 2026 for small FPGAs and 2027 for mid-range FPGAs [10][11] 4. **Revenue Breakdown**: Revenue is derived from four major markets: industrial and automotive (45%), communications and compute (45%), and consumer (9%) [11][12] 5. **Product Lines**: Key product lines include Nexus (small FPGA) and Avant (mid-range FPGA), with a focus on enhancing customer programming ease through silicon, tools, IP, and solutions [11][27] 6. **Software Strategy**: Lattice is investing in software solutions to enhance ease of use for customers, with six unique solutions aimed at various applications, including security and industrial automation [27][30] 7. **AI and Compute Market**: Lattice sees significant opportunities in AI servers, with an estimated content opportunity of $300 to $500 per rack, and has established partnerships with major players like NVIDIA [13][14] 8. **Supply Chain Management**: The company is diversifying its supply chain to mitigate risks associated with tariffs and geopolitical tensions, maintaining a non-China, non-Taiwan supply chain [39][42] 9. **Gross Margin Trends**: Lattice has maintained resilient gross margins, with a focus on balancing growth and margin improvement through disciplined investment in R&D and sales support [50][51] 10. **Market Recovery**: The company is experiencing a U-shaped recovery, with expectations for continued growth in the communications and compute sectors, while industrial and automotive markets are expected to regain strength [59][60] Additional Important Insights - **Motion Control Opportunities**: Lattice has identified motion control as a key area for growth, leveraging its FPGA technology for parallel processing advantages, which enhances performance and reduces latency [63][64] - **Management Team Alignment**: The CEO and CFO emphasize a shared vision for driving shareholder value and disciplined growth strategies, focusing on customer needs rather than competition [18][21][32] - **Inorganic Growth Opportunities**: Lattice is open to exploring inorganic growth opportunities in areas such as security, vision, and edge AI, while maintaining a disciplined approach to acquisitions [46][47] This summary encapsulates the essential insights from the conference call, highlighting Lattice Semiconductor's strategic positioning, market dynamics, and growth prospects within the FPGA industry.

Company Overview - Lattice Semiconductor Corporation (NASDAQ: LSCC) is positioned at the intersection of several rapidly growing trends in the semiconductor industry, including edge AI, 5G, robotics, industrial automation, and automotive applications [1]. Product Offering - The company offers an ultra-low power small FPGA (Field-Programmable Gate Array) portfolio that is well-suited for the aforementioned applications, highlighting its adaptability and relevance in the current market [1]. Market Trends - The demand for field-programmable chips is increasing due to their reconfigurability, which allows for flexibility in various technological applications [1].

Core Viewpoint - Lattice Semiconductor reported its first-quarter results, showing a mixed performance with earnings meeting expectations but revenue declining year-over-year, leading to a drop in stock price. Financial Performance - The company reported quarterly earnings of 22 cents per share, aligning with analyst consensus estimates [1] - Quarterly revenue was $120.15 million, down from $140.81 million year-over-year, but slightly beating the analyst consensus estimate of $120.13 million [1] - For the second quarter, adjusted earnings are expected to be between 22 cents and 26 cents per share, with revenue projected at $118.5 million to $128.5 million [1] Analyst Ratings - Following the quarterly report, Rosenblatt analyst Kevin Garrigan maintained a Buy rating on Lattice Semiconductor with a price forecast of $72 [2] Market Dynamics - Growth in Industrial & Automotive and Consumer end-markets contributed to a sequential revenue increase, while Communications & Computing saw a slight decline [3] - The adjusted gross margin was 69%, which is an increase of 700 basis points quarter-over-quarter but flat year-over-year, slightly below the consensus estimate of 70.1% [3] Management Insights - The company continues to ship below true demand in the near term but is encouraged by improvements in bookings and a decrease in channel inventory [4] - Management does not foresee any material impact from tariffs, although they are cautious about potential effects in the second half of 2025 [4] - Approximately 80% of Lattice's revenue comes from outside the US, supported by a diversified global supply chain [4] Future Outlook - Management anticipates continued recoveries in Industrial & Automotive markets and growth in Communications & Computing [5] - Garrigan projects second-quarter revenue of $123.5 million and earnings per share of $0.24 [5] - The stock closed lower by 12.7% at $45.82 following the earnings report [5]