Financial Data and Key Metrics Changes - Fourth quarter 2024 revenue was $117.4 million, down 8% sequentially and down 31% year-over-year, reflecting continued inventory normalization and macroeconomic softness [35][22] - Full year 2024 revenue was $509.4 million, down 31% from 2023, with a strong EBITDA margin of 31.8% [24][35] - Non-GAAP gross margin for Q4 was 62.1%, which would have been 68.1% without a $7 million one-time charge [36] - Non-GAAP operating expenses for Q4 were $52.8 million, down 2% sequentially and down 5% year-over-year [37] - Non-GAAP EPS for Q4 was $0.15, which would have been $0.20 without the one-time charge [40] Business Line Data and Key Metrics Changes - The computing subsegment grew in 2024, while communications and industrial automotive segments declined by double digits [35][24] - Revenue from new products, including Nexus and Avant, grew double digits in 2024 compared to 2023 [25] Market Data and Key Metrics Changes - Communications and computing markets saw a 5% sequential decline, while industrial automotive was down 9% [22] - The book-to-bill ratio has been over one for the past few weeks, indicating improvement in customer consumption [21] Company Strategy and Development Direction - The company is focusing on leveraging trends such as AI, increasing ASIC and ASSP development costs, and the need for programmability in emerging applications like post-quantum cryptography [15][16][17] - The company aims for long-term revenue growth targets of 15% to 20% in 2026 and beyond, supported by new product launches and design wins [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a U-shaped recovery in 2025, with expectations for low single-digit revenue growth compared to 2024 [28][30] - The company is encouraged by improvements in customer consumption and a stronger backlog, indicating positive trends for the coming quarters [20][21] Other Important Information - The company announced a $100 million share buyback for 2025, continuing its commitment to return capital to shareholders [43] - The new R&D center in Pune, India, is expected to enhance the company's capabilities and support local and global customers [66][68] Q&A Session Summary Question: Are there particular end-markets performing better than others? - Management noted improvements in industrial automotive and communications sectors, with expectations for all segments to grow into Q1 [50][54] Question: What are the trends in communications and computing segments? - Management indicated that communications showed slight strength in Q4 compared to Q3, while computing remained strong [56][54] Question: Where is demand picking up in the automotive segment? - Demand is increasing across various applications, including infotainment, ADAS, and electrification [60] Question: What is the outlook for inventory levels? - Management expects to bring inventory down to the midpoint of the target range by mid-year 2025, with positive trends in consumption and demand [98][99] Question: How much of the server and computing business is driven by content gains? - Management reported a 50% increase in content from one generation to the next, indicating strong growth in the server segment [114] Question: What is the company's strategy regarding post-quantum cryptography? - The company is the only one with a solution for post-quantum cryptography and is seeing rapid adoption among major Tier 1 OEMs [138][140] Question: How does the company plan to balance OpEx and R&D spending? - Management is focused on maintaining financial discipline while ramping up R&D in lower-cost geographies to capture market opportunities [145][144]

Lattice Semiconductor (LSCC) came out with quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.45 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -21.05%. A quarter ago, it was expected that this chipmaker would post earnings of $0.24 per share when it actually produced earnings of $0.24, delivering no surprise.Over the last four quarters, the company ...

Financial Performance - Fourth quarter 2024 revenue was $117.4 million, a decrease of 31.2% year-over-year[4] - Full year 2024 revenue totaled $509.4 million, down 30.9% compared to 2023[5] - Revenue for the three months ended December 28, 2024, was $117.419 million, a decrease of 7.1% from $127.091 million in the previous quarter[24] - Net income for the year ended December 28, 2024, was $61.131 million, down from $259.061 million in the previous year, reflecting a significant decline[24] - GAAP net income for Q4 2024 was $16,514 thousand, compared to $7,190 thousand in Q3 2024, and $98,706 thousand for the year ended December 30, 2023[41] - Non-GAAP net income for Q4 2024 was $20,181 thousand, with a year-to-date total of $124,415 thousand, reflecting a significant increase from $62,801 thousand in the previous year[41] Margins and Expenses - GAAP gross margin for the fourth quarter was 61.1%, while non-GAAP gross margin was 62.1%[4] - Projected gross margin for Q1 2025 is expected to be 69.0% plus or minus 1% on a non-GAAP basis[13] - Gross margin for the same period was $71.753 million, resulting in a gross margin percentage of approximately 61%[24] - The company incurred stock-based compensation expenses of $13.7 million in Q4 2024, impacting both gross and operating margins[36] - Total operating expenses for the year ended December 28, 2024, were $305.9 million, with non-GAAP operating expenses at $215.6 million[36] Cash Flow and Assets - The company achieved a free cash flow margin of 33.8% in the fourth quarter of 2024[6] - Cash and cash equivalents increased to $136.291 million from $128.317 million year-over-year, showing a positive cash flow trend[26] - The company reported a net cash provided by operating activities of $140.876 million for the year ended December 28, 2024, compared to $269.588 million in the previous year[29] - The company reported a GAAP net cash provided by operating activities of $45,421 thousand for Q4 2024, with an operating cash flow margin of 38.7%[46] Research and Development - Research and development expenses for the three months ended December 28, 2024, were $38.580 million, compared to $41.398 million in the previous quarter, indicating a reduction in R&D spending[24] - The company’s R&D expense as a percentage of revenue was 32.9% for Q4 2024, compared to 32.6% in Q3 2024[33] Shareholder Actions - The board authorized an additional $100 million for share repurchases, reducing dilution by over 4.3% since Q4 2020[8] Awards and Recognition - Lattice received over 20 industry awards in 2024, including recognition as the Most Respected Semiconductor Company for five consecutive years[8] Operational Metrics - The company reported a DSO (Days Sales Outstanding) of 63 days for Q4 2024, an improvement from 66 days in Q3 2024[33] - The company’s inventory days (DIO) decreased to 207 days in Q4 2024, down from 242 days in Q3 2024[33] - Revenue from the Communications and Computing segment was $58.0 million, accounting for 49% of total revenue for the quarter[33] - The company’s revenue from Asia increased to 66% in Q4 2024, up from 63% in Q3 2024[33] - The Americas contributed 23% to total revenue in Q4 2024, a significant increase from 15% in Q3 2024[33] Financial Health - Total current assets as of December 28, 2024, were $364.834 million, slightly down from $367.946 million as of December 30, 2023[26] - Total liabilities decreased to $132.971 million as of December 28, 2024, from $148.874 million a year earlier, indicating improved financial health[26] - The company incurred an impairment of acquired intangible assets amounting to $13.929 million during the year ended December 28, 2024[29] - The company recognized an impairment of acquired intangible assets of $13,929 thousand in Q4 2024[46] Future Outlook - The company expects first quarter 2025 revenue to be between $115 million and $125 million[13]

Core Insights - Lattice Semiconductor Corporation (NASDAQ: LSCC) is scheduled to report Q4 '24 earnings on February 10, 2025, after market close [1] - The semiconductor market, particularly non-AI-related segments, is experiencing a slower-than-expected recovery, impacting Lattice's performance [1] Company Overview - Lattice Semiconductor operates in the semiconductor industry, which is currently facing challenges in recovery, particularly outside of AI applications [1] Analyst Background - Michael Del Monte, a buy-side equity analyst with over 5 years of experience, provides insights into the semiconductor market dynamics and Lattice's positioning [1]

Core Insights - Lattice Semiconductor reported Q3'24 earnings on November 4, 2024, with net revenue of $127.1 million and an EPS of $0.24 per share, aligning closely with consensus estimates [1] Financial Performance - The company's net revenue for Q3'24 was $127.1 million, which is consistent with market expectations [1] - Earnings per share (EPS) for the quarter stood at $0.24, also in line with consensus estimates [1] Leadership - The earnings call was led by Lattice's new CEO, Ford, indicating a potential shift in company strategy or focus under new leadership [1]

Financial Data and Key Metrics - Q3 2024 revenue was $127.1 million, in line with guidance, up 2% sequentially but down 34% year-over-year due to inventory normalization [10][21] - Gross margin remained stable at 69% despite market softness [10][22] - Non-GAAP operating margin improved to 26.6% from 25.4% in the prior quarter, driven by disciplined expense management [23] - EBITDA margin increased to 33.7%, up 160 basis points sequentially [23] - Cash flow from operations more than doubled sequentially to $44 million, with free cash flow margin rising to 31% [24] - Q4 2024 revenue guidance is $112 million to $122 million, with gross margin expected to be 68% ±1% [25] Business Line Performance - Communications and computing revenue grew 12% sequentially, driven by strength in AI and general-purpose servers [10][21] - Industrial and automotive revenue declined 7% sequentially due to broader market demand softness and inventory normalization [10][21] - New product revenue continued to grow year-over-year, with strong design momentum and a robust backlog [11] Market Performance - The company outperformed peers in the small FPGA market segment, gaining market share [10] - Strong traction in Edge AI applications across servers, laptops, and industrial/automotive sectors, with design wins in top LiDAR companies and industrial vision panels [17] Strategy and Industry Competition - The company is focusing on low-power, small-size FPGA offerings, leveraging its leadership in the small to mid-range FPGA market [13] - A 14% workforce reduction was implemented to align resources with business needs and improve efficiency, with no impact on the product roadmap [14] - The company aims to achieve $1 billion in revenue by leveraging its addressable market and market opportunities [13] - Lattice is well-positioned in Edge AI, with applications in data center servers, AI-enabled clients, and industrial/automotive systems [17] Management Commentary on Operating Environment and Outlook - The company expects a U-shaped recovery in 2025, with low single-digit revenue growth and a return to 15%-20% growth targets by 2026 [12][58] - Management remains confident in the company's strategic plan, product differentiation, and market leadership [12] - The company anticipates double-digit earnings expansion in 2025, supported by cost reductions and revenue growth [15] Other Important Information - The company will host a Developers Conference in San Jose on December 10-11, showcasing its next-gen FPGA platforms and software tools [18] - Share buybacks continued in Q3, with $17 million repurchased, marking the 16th consecutive quarter of buybacks [24] Q&A Summary Question: Nexus product lifecycle and potential successor [27] - Nexus and Avant are driving strong revenue growth, with the company doubling down on both small and mid-range FPGA segments [28] Question: AI traction and sustainability [29] - AI-related revenue is estimated at around $100 million, with growing traction in servers, clients, and industrial/automotive applications [30] Question: U-shaped recovery and inventory normalization [32] - The company expects a U-shaped recovery, with inventory normalization expected by mid-2025 and revenue growth returning to 15%-20% by 2026 [33] Question: FPGA role in AI and networking [37] - Lattice FPGAs are used in various AI applications, including data center servers, IoT, and automotive, with a focus on low-power, small-size solutions [38] Question: Competitor performance comparison [41] - Lattice has outperformed competitors over the long term, gaining market share in the small to mid-range FPGA segment [42] Question: Workforce reduction impact [49] - The 14% workforce reduction is expected to benefit 2025 results, with high single-digit OpEx reduction and low double-digit EPS expansion [50] Question: Avant product rollout [52] - Avant remains on track, with strong design wins and expected revenue growth in 2025 [53] Question: Communications market outlook [54] - Communications revenue is expected to normalize and grow in the second half of 2025 [55] Question: Long-term growth targets [57] - The company reaffirmed its 15%-20% long-term revenue growth target, expecting to return to this range by 2026 [58] Question: Inventory visibility [59] - The company has good visibility into distributor inventory and expects it to normalize by mid-2025 [60][61] Question: Server content expansion [67] - Server content growth continues, with Lattice FPGAs designed into top server makers and increased demand expected in 2025 [67] Question: Design win pipeline [70] - The company has a strong pipeline of design wins across various applications, with no significant delays in product launches [71] Question: Workforce reduction details [73] - The workforce reduction was focused on optimizing resources across geographies, with no impact on the product roadmap [73]

Core Insights - Lattice Semiconductor (LSCC) shares have declined by 29% year to date, underperforming the broader Zacks Computer and Technology sector, which has returned 25% [1] - The company has faced challenges due to weak demand in the Automotive and Industrial end markets, leading to inventory reductions by customers [3] - LSCC's revenue for the first half of 2024 was reported at $265 million, a 41% decrease from the previous year, primarily due to weaker telecommunications infrastructure demand [4] Financial Performance - In the trailing four quarters, LSCC's earnings have shown mixed results, beating estimates once, missing once, and matching twice, with an average negative surprise of 0.56% [2] - For Q3 2024, LSCC expects revenues between $117 million and $137 million, with a Zacks Estimate of $127 million indicating a year-over-year decline of 33.89% [5] - The Zacks Consensus Estimate for earnings in Q3 2024 is 24 cents per share, reflecting a year-over-year decline of 54.72% [6] Market Challenges - The company is experiencing ongoing inventory normalization and cyclic corrections, negatively impacting top-line growth [3][5] - Weakness in the Wireless Communication sector has also contributed to LSCC's underperformance [3] Product Development and Opportunities - Recent product launches, including the Lattice Avant-E FPGA and the MachXO5-NX family of FPGAs, are expected to enhance LSCC's market prospects [7][8] - The introduction of new products aimed at AI applications, such as those used in AI-optimized servers and robotics, may provide growth opportunities [9][10] Valuation and Market Position - LSCC currently reflects a stretched valuation with a Value score of F, trading at a forward Price/Sales ratio of 11.51X compared to the industry's 6.92X [11] - The company holds a Zacks Rank of 3 (Hold), suggesting that investors should wait for a more favorable entry point [11]

Investors were disappointed with Lattice's declining revenue and earnings. Disappointing second-quarter results Management tried to highlight the "durability" of Lattice's business model by pointing to the fact that the gross margin was relatively stable in the quarter, dipping slightly to 68.3% from 69.7% in the year-ago quarter. Lattice's management issued a third-quarter revenue outlook of $117 million to $137 million, which represents a 33.8% decline from Q3 2023 sales at the midpoint of guidance. Reven ...

Core Insights - Lattice Semiconductor's stock declined following a disappointing second-quarter earnings report, with revenue and profit falling below analyst expectations [1][4] - The company experienced a significant drop in sales within its automotive and industrial segments, which fell nearly 50% year-over-year [3][4] - A CEO change occurred during the quarter, with Jim Anderson leaving for a competitor, contributing to market volatility [1][6] Financial Performance - Revenue decreased by 35% year-over-year to $124.1 million, missing the consensus estimate of $130.2 million [4] - Net income plummeted 55% to $22.6 million, although analysts had anticipated an even steeper decline to $12.2 million [2] Market Reaction - Following the earnings report, Jefferies analysts revised their price target for Lattice from $88 to $65, citing previous expectations as "too high" and indicating a longer growth trajectory [5] - Shares of Lattice Semiconductor fell 8% to $50.55, marking a significant decline since the CEO's departure [6]

Core Viewpoint - Lattice Semiconductor reported disappointing second-quarter financial results and provided weak guidance for third-quarter revenue, leading to a decline in share price [4][5]. Financial Performance - Lattice Semiconductor reported quarterly earnings of 23 cents per share, missing the analyst consensus estimate of 24 cents per share [2]. - Quarterly sales were $124.076 million, which also fell short of the analyst consensus estimate of $130.172 million [2]. - The company expects third-quarter revenue to be between $117 million and $137 million, with a gross margin of 69%, plus or minus 1% [1]. Market Reaction - Following the announcement of the financial results and guidance, Lattice Semiconductor shares fell by 8.1%, trading at $50.50 [5]. Industry Context - The second-quarter results reflect the impact of cyclic industry headwinds, with ongoing inventory normalization observed in the industry [6]. - Despite current challenges, there are signs of improvement, and the company is focused on product portfolio expansion for long-term growth [6].