Lattice Semiconductor(US:LSCC)2024-07-30 01:18Financial Data and Key Metrics Changes - Q2 2024 revenue was $124.1 million, down 12% sequentially and down 35% year-over-year, attributed to inventory normalization in industrial and automotive segments [6][11] - Non-GAAP gross margin for Q2 was 69%, consistent with prior quarters, indicating stability despite cyclic softness [6][10] - Q3 2024 revenue is expected to be between $117 million and $137 million, with gross margin projected at 69% plus or minus 1% [11] Business Line Data and Key Metrics Changes - The industrial and automotive market segments continue to experience inventory normalization, impacting overall revenue [6][10] - New product launches, including the seventh Nexus device and two Avant devices, are expected to drive future revenue growth [14][42] Market Data and Key Metrics Changes - The company is seeing a normalization in customer inventory, with some product lines achieving normalization while others still have excess inventory [36][37] - The server and data center networking segments showed strength, contributing to flat quarter-over-quarter performance in the compute market [71] Company Strategy and Development Direction - The company is focused on expanding its product portfolio and enhancing customer relationships, with a strong emphasis on AI-related applications [3][4] - Management is committed to a gross margin expansion strategy, having improved gross margin by 1,200 basis points over six years [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2024, citing signs of improvement in bookings and backlog, indicating a potential return to growth [43][59] - The company remains well-positioned for long-term growth, particularly in the industrial market, targeting double-digit growth rates [85][109] Other Important Information - The search for a permanent CEO is ongoing, with both internal and external candidates being considered [3] - The company has seen record design activity over the last two quarters, indicating strong customer engagement [34][91] Q&A Session Summary Question: What are the signs of improvement in inventory normalization? - Management noted that there has been improvement in inventory normalization, but it varies by customer and product line [36][37] Question: How is the pricing environment affecting margins? - The pricing is durable, with customers willing to pay more for differentiated products, contributing to margin stability [38][39] Question: What is the outlook for the server business? - The attach rate for servers has increased significantly, and management is confident in maintaining their market position [44][45] Question: How is the company addressing inventory normalization? - The company is under-shipping to true demand to facilitate inventory digestion, which is expected to continue into the second half of the year [37][72] Question: What is the expected growth rate for the industrial segment? - The industrial segment is expected to achieve healthy double-digit growth, supported by differentiated products and strong customer relationships [85][109]