Core Viewpoint - The company, Lattice Semiconductor, has shown signs of recovery in its Q3 financial performance, with revenue growth and improved profitability metrics, despite challenges in the broader FPGA market [3][5][9]. Financial Performance - Q3 revenue reached $133 million, marking a year-over-year increase of 4.9% and a quarter-over-quarter increase of 7.6%, ending a streak of seven consecutive quarters of year-over-year declines [3]. - GAAP gross margin was 67.9%, down 1.1 percentage points year-over-year and 0.5 percentage points quarter-over-quarter [3]. - Non-GAAP operating profit was $38.7 million, up 14.7% year-over-year and 13.6% quarter-over-quarter, with a Non-GAAP operating margin of 29% [3]. - Non-GAAP net profit was $38.2 million, reflecting a year-over-year increase of 17.2% and a quarter-over-quarter increase of 17.1%, with a Non-GAAP net margin of 28.6% [3]. - The company repurchased $15 million worth of shares in Q3, continuing a buyback program for 20 consecutive quarters [3]. Market Position and Outlook - Lattice competes in the low-power FPGA segment, holding the top position in global shipments, while facing challenges from larger competitors like AMD and Intel [3][5]. - The company anticipates continued revenue growth in Q4, with guidance of $138 to $148 million, representing a year-over-year increase of 18% to 26% [16]. - The booking rate reached a six-quarter high, with orders extending into the first half of the following year [3]. Business Segments - The industrial and automotive segment generated $50.3 million in revenue, down 7% year-over-year but up 6% quarter-over-quarter, with expectations for inventory normalization by year-end [10]. - The communications and computing segment saw revenue of $74 million, up 21% year-over-year and 8% quarter-over-quarter, driven by growth in general and AI server use cases [10]. - Consumer revenue was $9 million, down 24% year-over-year, continuing a five-quarter decline [10]. Product Development - Lattice's product lines include two FPGA hardware platforms and a software development platform, with new product revenue expected to exceed high-teens percentage by 2025 [12][14]. - The company is focusing on the Nexus series for data center applications and the Avant series for industrial and automotive markets, with significant growth anticipated in 2026 and 2027 [14]. AI Exposure - The company projects that AI-related revenue will account for a high-teens percentage by 2025 and mid-20s percentage by 2026, with products being increasingly adopted in data center applications [16]. - Management highlights the potential for low-power FPGAs to gain traction in the AI semiconductor landscape, particularly in ultra-large cloud service providers [17]. Future Projections - The new financial target model anticipates revenue growth of 15-20% over the next 3 to 4 years, with gross margins expected to reach the low 70s [18]. - The company expects to generate over $600 million in revenue by 2026, with a Non-GAAP net profit of $200 million [18][19].