Lattice Q2 Earnings Meet Estimates Despite Lower Revenues

Core Insights - Lattice Semiconductor Corporation (LSCC) reported modest Q2 2025 results, with revenue and net income aligning with Zacks Consensus Estimates, despite macroeconomic challenges [1][3][8] - The company experienced slight revenue contraction, but strong demand in generative AI applications and a focus on expanding its FPGA portfolio provided support [1][8] Financial Performance - Net income on a GAAP basis was $2.9 million (2 cents per share), down from $22.6 million (16 cents per share) year-over-year, primarily due to increased operating expenses [2] - Non-GAAP net income for the quarter was $32.6 million (24 cents per share), slightly up from $31.4 million (23 cents per share) in the prior year, matching the consensus estimate [2] - Total revenues for the quarter were $123.97 million, a slight decline from $124.08 million year-over-year, but in line with the consensus estimate of $124 million [3] Segment Performance - Communications and Computing revenues rose to $68.7 million from $54.6 million, driven by normalized inventory and strong demand in data center infrastructure [4] - Industrial and Automotive revenues decreased to $47.3 million from $58.2 million due to higher channel inventory levels [4] - Consumer revenues fell to $8 million from $11.3 million [4] Geographic Distribution - In Q1 2025, 67% of revenue was generated from Asia, 22% from the Americas, and 11% from Europe and Africa [5] Operational Metrics - Adjusted EBITDA increased to $42.2 million from $40 million year-over-year [6] - GAAP operating expenses rose to $80 million from $62.2 million in the prior year [6] Cash Flow and Liquidity - In the first half of 2025, Lattice generated $70.4 million in cash from operating activities, up from $51.4 million in the prior-year period [7] - As of June 28, 2025, the company had $107.2 million in cash and cash equivalents, with $18.6 million in other long-term liabilities [7] Future Outlook - For Q3 2025, Lattice expects revenues between $128 million and $138 million, with a non-GAAP gross margin projected at 68.5%-70.5% [8] - Non-GAAP total operating expenses are anticipated to be in the range of $52 million to $54 million, with non-GAAP net income expected to be between 26 and 30 cents per share [9]