Lattice Semiconductor(LSCC) - 2020 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fourth quarter revenue was $107.2 million, up 4% sequentially and up 6.9% year-over-year [26] - Full year 2020 revenue was $408.1 million, up 1% from 2019 [27] - Non-GAAP gross margin for Q4 was 61.6%, up 200 basis points year-over-year [27] - Non-GAAP net income increased 20% year-over-year [13] - GAAP operating expenses for Q4 were $47.5 million, down from $49.5 million in the prior quarter [29] - Full year 2020 GAAP EPS was $0.35 per basic share, up from $0.33 in 2019 [33] Business Line Data and Key Metrics Changes - Communications and computing market revenue increased 12% year-over-year, driven by growth in servers, client computing, and 5G infrastructure [15] - Industrial and automotive market revenue increased 11% year-over-year, with growth in industrial automation and robotics [17] - Consumer market revenue declined 40% year-over-year due to weaker demand from the pandemic [18] Market Data and Key Metrics Changes - Communications and computing accounted for approximately 85% of total revenue in Q4 [45] - Industrial automation and robotics saw increased adoption due to the pandemic, driving growth in the industrial segment [117] Company Strategy and Development Direction - The company is focused on accelerating revenue growth and expanding profitability while investing in product portfolio expansion [36] - The launch of new products based on the Nexus platform is a key part of the strategy, with expectations for continued growth in communications and computing as well as industrial and automotive markets [20][23] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply chain challenges, having built inventory strategically in previous quarters [40][42] - The company anticipates strong customer engagement across all markets as it enters 2021 [23] - Management expects continued growth in communications and computing and industrial and automotive segments, despite challenges in the consumer segment [50][70] Other Important Information - The company ended 2020 with a net cash position for the first time in six years [25] - A virtual Investor Day is scheduled for May, where further details on strategy and product roadmap will be shared [10] Q&A Session Summary Question: Impact of supply constraints on business - Management indicated that the supply chain team has effectively supported customer demand despite overall industry tightness [40][42] Question: Growth in FPGA market despite consumer segment decline - Management noted strong performance in communications and computing, with specific growth drivers in servers and 5G infrastructure [45][50] Question: Initial revenue contribution from Nexus products - Management confirmed initial production shipments of Nexus products and expects them to contribute to growth in 2021 [55][57] Question: Future gross margin expectations with Nexus products - Management expects gross margin improvements primarily from pricing optimization and product cost reductions, with Nexus products contributing in the following years [83] Question: Visibility in the consumer segment moving forward - Management indicated that consumer revenue has stabilized and is expected to be more reliable moving forward, with a focus on higher value applications [70] Question: Sequential demand expectations for Q1 - Management expects growth in communications and computing and industrial and automotive segments, while consumer revenue is expected to stabilize [121]