Core Viewpoint - Lattice Semiconductor (LSCC) reported modest first-quarter 2025 results, with revenues and adjusted earnings meeting Zacks Consensus Estimates, despite year-over-year revenue contraction due to weak demand and macroeconomic challenges [1] Financial Performance - The company reported a GAAP net income of $5.02 million or 4 cents per share, down from $14.8 million or 11 cents per share in the prior year [2] - Non-GAAP net income was $30.7 million or 22 cents per share, compared to $40.3 million or 29 cents per share in the previous year, matching the Zacks Consensus Estimate [3] - Revenues declined to $120.1 million from $140.8 million year-over-year, but matched the consensus estimate of $120 million [3] Revenue Breakdown - Communications and Computing revenues grew year-over-year for the first time in two years, reaching $57.4 million [4] - Industrial and Automotive revenues fell to $52.2 million from $75.3 million in the prior year [4] - Total Consumer revenues were $10.6 million, a decrease of 2.83% year-over-year [4] Geographic Revenue Distribution - 65% of revenue was generated from Asia, while 25% came from the Americas, and Europe and Africa contributed 10% [5] Operational Metrics - Adjusted EBITDA decreased to $40.1 million from $50.3 million in the prior year [6] - GAAP operating expenses declined to $74.8 million from $79.6 million year-over-year [6] Cash Flow and Liquidity - The company generated $31.9 million in cash from operating activities, up from $29.5 million in the previous year [7] - As of March 29, 2025, Lattice had $127.6 million in cash and cash equivalents, with $21.1 million in other long-term liabilities [7] Outlook - For Q2 2025, Lattice expects revenues between $118.5 million and $128.5 million, with a non-GAAP gross margin anticipated to be between 68% and 70% [8] - Non-GAAP total operating expenses are projected to be between $50.5 million and $52.5 million, with a non-GAAP income tax rate expected between 5% and 6% [8] - Management forecasts non-GAAP net income to be between 22 and 26 cents per share [8] Zacks Rank - Lattice currently holds a Zacks Rank 3 (Hold) [9]

Core Insights - Lattice Semiconductor reported quarterly earnings of $0.22 per share, matching the Zacks Consensus Estimate, but down from $0.29 per share a year ago [1] - The company generated revenues of $120.15 million for the quarter ended March 2025, slightly exceeding the Zacks Consensus Estimate by 0.13%, but down from $140.82 million year-over-year [2] - Lattice shares have declined approximately 8.4% year-to-date, compared to a 3.3% decline in the S&P 500 [3] Earnings Performance - The company has not surpassed consensus EPS estimates in the last four quarters, with a previous quarter's earnings surprise of -21.05% [1][3] - Current consensus EPS estimate for the upcoming quarter is $0.24, with expected revenues of $122.66 million, and for the current fiscal year, the estimate is $1.09 on revenues of $520.5 million [7] Industry Context - The Electronics - Semiconductors industry ranks in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and earnings estimate revisions, which can impact Lattice's stock performance [5][6] Future Outlook - The company's earnings outlook will be influenced by management's commentary during the earnings call and any revisions to earnings estimates following the recent report [3][4] - Lattice currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - The company reported revenue of $120.1 million for Q1 2025, reflecting a 2% increase compared to Q4 and a 15% decline year-over-year [15][8] - Non-GAAP gross margin was 69%, up 690 basis points from Q4, indicating resilience despite lower revenue levels [16][8] - Non-GAAP operating margin was 26.2%, and adjusted EBITDA margin was 33.4%, demonstrating financial discipline [17][8] - Free cash flow for Q1 was $23.3 million, with a free cash flow margin of 19.4% [17][8] Business Line Data and Key Metrics Changes - The communications and computing segment experienced its first year-on-year growth in two years, while industrial and automotive grew 6% sequentially, marking its first quarter of sequential growth in six quarters [9][10] - Revenue from new products continued to grow at a strong double-digit pace, both sequentially and year-on-year [10][12] Market Data and Key Metrics Changes - The company noted improvements in bookings across various end markets, particularly in cloud and AI-related sectors [33][34] - The industrial sector showed positive trends with PMI above 50 for the past four years, while automotive remained flat [34][35] Company Strategy and Development Direction - The company is focused on cost controls, operational efficiency, and delivering value to shareholders while navigating macroeconomic uncertainties [7][8] - There is a strong emphasis on expanding design win rates in small and mid-range FPGAs, with a goal of achieving high teens percentage of new product revenue for the full year 2025 [10][12] - The company is committed to driving innovation and expanding customer engagements, with a strong belief in sustainable growth [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the second half of 2025, closely monitoring the impact of tariffs and customer demand [13][20] - The company expects a U-shaped recovery in the long term, supported by improving demand signals and a strong backlog [12][13] - Management remains confident in the strength of their product portfolio and market position, despite potential macroeconomic challenges [12][34] Other Important Information - The company repurchased approximately $25 million of common stock during the quarter, reducing dilution by 4.6% [19][20] - The balance sheet remains strong, with no debt and ready access to capital for future growth investments [18][19] Q&A Session Summary Question: Update on 2025 revenue outlook - Management sees no change in the 2025 revenue outlook, citing improving demand signals and a better book-to-bill ratio [26] Question: Differences in growth rates between segments - The decline in the communications and computing segment was primarily due to client revenue decline related to older platforms, while server and communication businesses have shown growth [28] Question: Impact of tariffs on customer positioning - Management noted strong demand from cloud customers and improvements in industrial sectors, while remaining cautious about potential tariff impacts [34][35] Question: Design win momentum and growth drivers - Design win momentum remains strong, driven by differentiation in product attributes, with both unit recovery and ASP improvements contributing to growth [37] Question: Inventory levels and normalization - Channel inventory is expected to take longer to normalize than initially anticipated, but internal inventory has seen significant reductions [46][48] Question: Competitive landscape in low power, small size FPGAs - The company remains confident in its unique architecture and product advantages, despite increased competition from larger players [80] Question: New product growth expectations - New product growth is expected to accelerate, with contributions from Nexus and Avant products layering in over the next few years [108][110]

May 2025 1 | Lattice Semiconductor (NASDAQ: LSCC) Click to edit Master title style Safe Harbor Statement Forward Looking Statements ▪ Click to edit Master text styles ▪ Second level ▪ Third level ▪ Fourth level ▪ Fifth level This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of ...

Financial Data and Key Metrics Changes - The company reported revenue of $120.1 million for Q1 2025, reflecting a 2% increase compared to Q4 2024 but a 15% decline year-over-year [13][14] - Non-GAAP gross margin was 69%, up 690 basis points from Q4 2024, demonstrating resilience despite lower revenue levels [14] - Non-GAAP operating margin was 26.2%, and adjusted EBITDA margin was 33.4%, indicating strong financial discipline [15] - Free cash flow for Q1 was $23.3 million, with a free cash flow margin of 19.4% [15] Business Line Data and Key Metrics Changes - The communications and computing segment experienced its first year-on-year growth in two years, while industrial and automotive grew 6% sequentially, marking its first quarter of sequential growth in six quarters [7][11] - Revenue from new products continued to grow at a strong double-digit pace, both sequentially and year-on-year, with expectations to achieve high teens percentage of new product revenue for the full year 2025 [9][21] Market Data and Key Metrics Changes - The company noted that approximately 80% of its revenue comes from outside the U.S., which may mitigate the potential direct impact of tariffs [18][19] - The industrial sector showed positive signs with PMI above 50 for the past four years, while automotive remained flat [32] Company Strategy and Development Direction - The company is focused on driving innovation, expanding customer engagements, and maintaining a strong product roadmap [12][21] - The management emphasized the importance of operational efficiency and cost controls to navigate macro uncertainties [5][16] - The company aims to strengthen its leadership in small and mid-range FPGA markets through targeted R&D and product innovation [17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the second half of 2025, dependent on the resolution of tariff situations and customer demand [12][20] - The company expects a U-shaped recovery in the long term, supported by improving demand signals and a better book-to-bill ratio [11][25] Other Important Information - The company repurchased approximately $25 million of common stock during the quarter, reducing dilution by 4.6% [17] - The management highlighted the importance of maintaining a strong balance sheet, being debt-free, and having access to capital for future growth [16] Q&A Session Summary Question: Update on 2025 revenue outlook - Management sees no change in the 2025 revenue outlook, citing improving demand signals and a better book-to-bill ratio [25] Question: Differences in growth rates between segments - The decline in the communications and computing segment was primarily due to client revenue decline related to older platforms, while server and wireline applications showed strength [27][28] Question: Impact of tariffs on customer positioning - Management noted strong demand from cloud customers and improvements in industrial sectors, while remaining cautious about potential tariff impacts [31][32] Question: Design win momentum and its drivers - The design win momentum is driven by the company's strategic position in small and mid-range segments, with both unit recovery and ASP improvements contributing to growth [36] Question: Inventory levels and normalization - Channel inventory is expected to take a few more quarters to normalize, while internal inventory showed a significant drop [45][48] Question: Long-term gross margin targets - The company is confident in achieving long-term gross margin targets of low 70%, driven by product mix and cost reductions [74][76] Question: Competitive landscape in low power FPGA market - The company believes its unique architecture provides sustainable advantages over competitors, despite increased competition [78][80] Question: Revenue contribution from new products - New product growth is expected to accelerate, with contributions from Nexus and Avant products layering in over the next few years [105][107]

Revenue Performance - Revenue for Q1 2025 was $120.1 million, representing a 2.3% increase from Q4 2024 but a 14.7% decrease year-over-year[5]. - Revenue for the three months ended March 29, 2025, was $120.15 million, a 2% increase from $117.42 million in the previous quarter but a 15% decrease from $140.82 million year-over-year[19]. - Revenue by geography showed 65% from Asia, 25% from the Americas, and 10% from Europe, with a slight shift in the Americas' contribution compared to the previous quarter[25]. Profitability Metrics - GAAP gross margin for Q1 2025 was 68.0%, up 690 basis points from Q4 2024, while non-GAAP gross margin was 69.0%[3][5]. - Gross margin for the same period was $81.73 million, representing a gross margin percentage of 68.0%, compared to 61.1% in the previous quarter and 68.3% year-over-year[27]. - Net income for Q1 2025 was $5.0 million, a decline of 69.6% compared to Q4 2024, with a net income margin of 4.2%[5]. - Net income for Q1 2025 was $5.02 million, a significant decrease of 70% from $16.51 million in the previous quarter and a 66% decrease from $14.80 million year-over-year[19]. - Non-GAAP net income for the same period was $30,746,000, up from $20,181,000 in the previous quarter and down from $40,258,000 a year ago[30]. - GAAP net income margin for the three months ended March 29, 2025, was 4.2%, down from 14.1% in the previous quarter and 10.5% year-over-year[35]. Operating Expenses - Total operating expenses for Q2 2025 are projected to be between $50.5 million and $52.5 million on a non-GAAP basis[7]. - Operating expenses totaled $74.75 million, down from $83.96 million in the previous quarter, with R&D expenses increasing to $41.39 million from $38.58 million[19]. - R&D expenses as a percentage of revenue increased to 34.4% in Q1 2025, compared to 32.9% in Q4 2024[5]. - The company is maintaining disciplined control over operating expenses while focusing on execution and monitoring market conditions[4]. Cash Flow and Shareholder Returns - The company reported a GAAP net cash flow from operating activities of $31.9 million for Q1 2025, with a free cash flow of $23.3 million[3]. - Cash flows from operating activities were $31.89 million, an increase from $29.51 million in the previous year[23]. - The company repurchased $25 million in common stock during the quarter, compared to $20 million in the previous quarter[23]. - Free cash flow for the quarter was $23,276,000, down from $39,667,000 in the previous quarter and up from $26,085,000 year-over-year[35]. Adjusted Metrics - Adjusted EBITDA for Q1 2025 was $40.1 million, resulting in an adjusted EBITDA margin of 33.4%[3][5]. - Adjusted EBITDA for the three months ended March 29, 2025, was $40,080,000, compared to $29,116,000 for December 28, 2024, and $50,288,000 for March 30, 2024[35]. - Non-GAAP income from operations was $31.54 million, compared to $20.10 million in the previous quarter[27]. - Non-GAAP income from operations margin increased to 26.2% from 17.1% in the previous quarter and decreased from 30.0% year-over-year[30]. Market and Business Highlights - The company achieved a record level of design wins, driven by applications in generative AI, robotics, automotive, and security[4]. - The communications and computing segment accounted for 48% of total revenue, while industrial and automotive contributed 43%[25]. Share Performance - GAAP net income per share - basic was $0.04, compared to $0.12 for the previous quarter and $0.11 for the same quarter last year[35]. - Non-GAAP net income per share - basic increased to $0.22 from $0.15 in the previous quarter and decreased from $0.29 year-over-year[35]. Stock-Based Compensation - The cumulative effect of non-GAAP adjustments for stock-based compensation was $20,556,000 for the current quarter, compared to $14,855,000 in the previous quarter[35]. Inventory and Receivables - Accounts receivable days outstanding (DSO) remained stable at 64 days, while inventory days outstanding (DIO) increased to 225 days from 207 days in the previous quarter[25].

Group 1 - Lattice Semiconductor (LSCC) has recently reached a key level of support and has overtaken the 20-day moving average, indicating a short-term bullish trend [1] - The 20-day simple moving average is a popular trading tool that helps smooth out price fluctuations and provides trend reversal signals, with a price above this average considered positive [2] - LSCC shares have increased by 9.3% over the past four weeks, and the company holds a Zacks Rank 2 (Buy), suggesting potential for continued growth [3] Group 2 - Positive earnings estimate revisions for LSCC strengthen the bullish outlook, with no estimates decreasing in the past two months and four estimates increasing [3] - Investors are encouraged to consider adding LSCC to their watchlist due to the important technical indicators and favorable earnings revisions [4]

Revenue Performance - Revenue for fiscal 2024 decreased by $227.8 million, or 31%, to $509.4 million compared to $737.2 million in fiscal 2023, primarily due to softer demand in industrial and automotive applications and inventory normalization by customers [185]. - Total revenue for fiscal 2024 was $509,401,000, a decrease of 30.9% compared to $737,154,000 in fiscal 2023 [193]. - Revenue from the Communications and Computing end market decreased by 11% in fiscal 2024, primarily due to softer demand in telecommunications infrastructure [190]. - Revenue from the Industrial and Automotive end market decreased by 45% in fiscal 2024, primarily due to reduced demand and inventory normalization [191]. - Revenue from Asia decreased in fiscal 2024 compared to fiscal 2023, primarily due to the macroeconomic environment in the region [192]. - Revenue from distributors accounted for 89% of total revenue for the year ended December 28, 2024, up from 87% in 2023 [254]. - Revenue from the China market was $206.380 million, representing 40% of total revenue, compared to 32% in 2023 [288]. Profitability and Margins - Gross margin for fiscal 2024 was 66.8%, down from 69.8% in fiscal 2023, reflecting the impact of decreased revenue and increased costs [184]. - Income from operations for fiscal 2024 was $34.5 million, or 6.8% of revenue, down from $212.3 million, or 28.8% of revenue, in fiscal 2023 [184]. - The GAAP net income for fiscal 2024 was $61.1 million, representing a net income margin of 12.0%, down from 35.1% in 2023 [240]. - Adjusted EBITDA for fiscal 2024 was $162.0 million, with an adjusted EBITDA margin of 31.8%, compared to $324.7 million and 44.0% in 2023 [240]. - Net income for the year ended December 28, 2024, was $61,131,000, a decrease of 76.4% compared to $259,061,000 in 2023 [242]. Expenses - Research and development expenses increased to $159.3 million, representing 31.3% of revenue in fiscal 2024, compared to 21.7% in fiscal 2023 [184]. - Selling, general and administrative expenses were $116.9 million, or 23.0% of revenue, in fiscal 2024, compared to 18.6% in fiscal 2023 [184]. - Restructuring costs increased significantly to $12,291,000, representing 2.4% of total revenue, compared to $1,908,000 in fiscal 2023 [203]. - Total operating expenses increased slightly to $305.943 million from $302.400 million in 2023, marking a rise of 0.5% [358]. Cash Flow and Liquidity - Cash provided by operating activities decreased to $140.9 million in fiscal 2024 from $269.6 million in fiscal 2023, a decline of $128.7 million [224]. - The company had cash and cash equivalents of $136.3 million as of December 28, 2024, a 6.2% increase from $128.3 million in 2023 [223]. - The company had no outstanding long-term debt as of December 28, 2024, compared to $130.0 million in discretionary payments made in fiscal 2023 [226]. - Operating cash flow for 2024 was $140,876,000, down from $269,588,000 in 2023, a decline of 47.8% [246]. Assets and Liabilities - Total assets increased slightly to $843,903,000 in 2024 from $840,894,000 in 2023, reflecting a growth of 0.1% [244]. - Total liabilities decreased to $132,971,000 in 2024 from $148,874,000 in 2023, a reduction of 10.7% [244]. - Stockholders' equity increased to $710,932,000 in 2024, up from $692,020,000 in 2023, representing a growth of 2.9% [244]. Stock and Equity - The company issued 1,509,000 shares in connection with employee equity incentive plans in 2024 [248]. - The company repurchased 1,145,000 shares of common stock in 2024, totaling $66,806,000 [248]. - The company announced a new stock repurchase program on December 9, 2024, allowing for an additional $100 million in repurchases through December 31, 2025 [338]. Tax and Deferred Tax Assets - The income tax benefit for fiscal 2024 was $(24,902,000), a decrease of 43.7% compared to $(44,205,000) in fiscal 2023, influenced by various tax benefits [209]. - Total deferred tax assets increased to $152.3 million in 2024 from $139.7 million in 2023, while the valuation allowance rose to $82.7 million from $79.1 million [343]. Audit and Compliance - The financial statements were audited and presented fairly in accordance with U.S. generally accepted accounting principles [360]. - The Company has been under audit by Ernst & Young LLP since 2020, with the latest report dated February 14, 2025 [368].

Core Viewpoint - Lattice Semiconductor (LSCC) shows a significantly improving earnings outlook, making it a solid investment choice as analysts continue to raise earnings estimates for the company [1][2]. Earnings Estimate Revisions - Analysts' optimism regarding Lattice's earnings prospects is leading to higher estimates, which is expected to positively impact the stock price [2]. - The earnings estimate for the current quarter is $0.22 per share, reflecting a decrease of 24.14% from the previous year, but the Zacks Consensus Estimate has increased by 44.52% over the last 30 days with no negative revisions [4]. - For the full year, the earnings estimate is $1.10 per share, representing a 22.22% increase from the previous year, with a 14.74% boost in the consensus estimate and four upward revisions compared to no negative changes [5]. Zacks Rank - Lattice currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions, and historically, stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have outperformed the S&P 500 [6]. - The Zacks Rank system has shown an impressive track record, with Zacks 1 Ranked stocks generating an average annual return of +25% since 2008 [3]. Stock Performance - Lattice shares have increased by 12.4% over the past four weeks, indicating investor confidence in the company's earnings growth prospects [7].

Lattice Semiconductor (LSCC) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Indi ...