Lattice Semiconductor(US:LSCC)2022-02-16 00:39Financial Data and Key Metrics Changes - Annual revenue grew by 26% in 2021, with double-digit growth in each of the three market segments [9][27] - Non-GAAP gross margin expanded by 220 basis points year-over-year to a record 63.2% for the full year [10][28] - Non-GAAP net income grew 54% year-over-year in 2021, with a 65% year-over-year increase in Q4 [10][31] - Q4 revenue was $141.8 million, up 32% year-over-year and 7.5% sequentially [27] - Non-GAAP operating margin increased to a record 32.9% in Q4, up 630 basis points year-over-year [30] Business Line Data and Key Metrics Changes - Communications and computing market revenue increased 31% year-over-year, driven by Data Center Servers, Client Computing, and 5G infrastructure [12] - Industrial and automotive market revenue was up 32% year-over-year, with growth in industrial automation and automotive applications [15][16] - Consumer market revenue increased 18% year-over-year, primarily driven by new applications leveraging the FPGA portfolio [17] Market Data and Key Metrics Changes - Revenue from the Americas increased significantly due to investments in sales and application engineering teams [92][94] - The company expects continued growth in North America, Europe, and APAC due to a strong product portfolio and roadmap [95] Company Strategy and Development Direction - The company is focused on expanding its product portfolio, including the upcoming launch of the Lattice Avant platform, which will double the addressable market [19][24] - The acquisition of Mirametrix enhances the software capabilities, providing an end-to-end AI and computer vision solution [21][33] - The company aims to maintain strong growth in 2022, driven by momentum in customer engagement and new product cycles [24][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing strong demand across key segments and healthy supply expectations for 2022 [61] - The company anticipates continued gross margin expansion driven by pricing optimization and product cost efficiencies [57][101] Other Important Information - The company generated a record $168 million in cash from operations in 2021, representing an 83% increase compared to 2020 [32] - The acquisition of Mirametrix was completed for $68.5 million and is expected to contribute positively to gross margin and earnings per share [33] Q&A Session Summary Question: Drivers of growth acceleration in recent quarters - Management noted that growth was driven by the communications and computing, and industrial and automotive segments, both growing over 30% year-over-year in Q4 [39][42] Question: Limiting factors to growth in 2022 - Management indicated that while they expect strong growth, new product cycles and supply constraints could influence growth rates [58][61] Question: Contribution of Mirametrix to Q1 gross margin - Management confirmed that Mirametrix will contribute a full quarter of revenue in Q1, enhancing overall gross margin [66] Question: Competitive dynamics with the launch of Avant - Management believes the competitive landscape remains favorable and sees significant market opportunity in mid-range FPGA applications [82][84] Question: Impact of supply chain constraints on business - Management reported an acceleration in customers shifting from competitors to Lattice devices due to supply chain issues and strong product offerings [106][108] Question: Monetization strategy for Mirametrix - Management stated that Mirametrix will both lead sales and be integrated into existing customer accounts, enhancing overall revenue opportunities [114][117]