Lattice Semiconductor(US:LSCC)2022-08-02 02:11Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $161.4 million, representing a 28% year-over-year growth and a 7% sequential increase [23][9] - Non-GAAP gross margin expanded by 700 basis points year-over-year to a record 69.1% and increased by 140 basis points sequentially [24][11] - Non-GAAP operating margin reached a record 38.1%, up 900 basis points year-over-year and 180 basis points sequentially [26][11] - Non-GAAP earnings per diluted share were $0.42, a 68% increase from $0.25 in the same quarter last year [27] Business Line Data and Key Metrics Changes - In the communications and computing market, revenue increased 35% year-over-year and 13% sequentially, with strong growth in data centers and 5G infrastructure [12][10] - The industrial and automotive market saw a 30% year-over-year growth and a 7% sequential increase, driven by new customer platforms [14][10] - Consumer market revenue declined 1% year-over-year and 17% sequentially, but this segment represents less than 10% of total revenue [15][23] Market Data and Key Metrics Changes - The company is experiencing strong demand in strategic markets such as communications, computing, industrial, and automotive, while facing softness in the consumer electronics market [10][15] - The attach rate in data centers is now well over 1x, indicating increased content per server [13][34] Company Strategy and Development Direction - The company is focused on expanding its product portfolio, with recent launches including the MachXO5-NX device and the Lattice 5G ORAN solution stack [11][20] - The upcoming Lattice Avant platform is expected to double the addressable market and enhance capabilities in mid-range FPGA applications [17][18] - Continued investment in software solutions is aimed at increasing customer adoption and enhancing product stickiness [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic pressures but remains optimistic about growth drivers in strategic markets and new product cycles [39][55] - The company anticipates a strong second half of the year, supported by healthy customer engagement and momentum [21][30] Other Important Information - The company ended the quarter with $118 million in cash after repurchasing approximately 735,000 shares [28] - The third quarter revenue guidance is expected to be between $161 million and $171 million, with gross margin projected at 69% [29] Q&A Session Summary Question: What is driving the strength in the current environment? - Management noted that growth is driven by strategic market segments, particularly communications and computing, and industrial and automotive [33][34] Question: How is the company managing macro pressures? - Management is monitoring demand signals closely while remaining optimistic about specific growth drivers [55][56] Question: What are the growth opportunities in greenfield markets? - Management highlighted automotive and PC markets as significant growth areas, with increasing electronic content expected [62][66] Question: How is the company addressing supply chain challenges? - Management indicated that while the supply chain remains tight, they have seen some improvement and have been able to support customers effectively [76][78] Question: What is the contribution of software to overall revenue? - Management stated that software attached to hardware generally results in higher ASPs, but specific quantification was not provided [120][122] Question: Will the company disclose revenue contributions from Nexus products? - Management indicated that they may consider disclosing this information in the future as Nexus ramps up [125][126]