Lattice Semiconductor(LSCC)2025-05-05 21:00Financial Data and Key Metrics Changes - The company reported revenue of 23.3 million, with a free cash flow margin of 19.4% [15] Business Line Data and Key Metrics Changes - The communications and computing segment experienced its first year-on-year growth in two years, while industrial and automotive grew 6% sequentially, marking its first quarter of sequential growth in six quarters [7][11] - Revenue from new products continued to grow at a strong double-digit pace, both sequentially and year-on-year, with expectations to achieve high teens percentage of new product revenue for the full year 2025 [9][21] Market Data and Key Metrics Changes - The company noted that approximately 80% of its revenue comes from outside the U.S., which may mitigate the potential direct impact of tariffs [18][19] - The industrial sector showed positive signs with PMI above 50 for the past four years, while automotive remained flat [32] Company Strategy and Development Direction - The company is focused on driving innovation, expanding customer engagements, and maintaining a strong product roadmap [12][21] - The management emphasized the importance of operational efficiency and cost controls to navigate macro uncertainties [5][16] - The company aims to strengthen its leadership in small and mid-range FPGA markets through targeted R&D and product innovation [17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the second half of 2025, dependent on the resolution of tariff situations and customer demand [12][20] - The company expects a U-shaped recovery in the long term, supported by improving demand signals and a better book-to-bill ratio [11][25] Other Important Information - The company repurchased approximately $25 million of common stock during the quarter, reducing dilution by 4.6% [17] - The management highlighted the importance of maintaining a strong balance sheet, being debt-free, and having access to capital for future growth [16] Q&A Session Summary Question: Update on 2025 revenue outlook - Management sees no change in the 2025 revenue outlook, citing improving demand signals and a better book-to-bill ratio [25] Question: Differences in growth rates between segments - The decline in the communications and computing segment was primarily due to client revenue decline related to older platforms, while server and wireline applications showed strength [27][28] Question: Impact of tariffs on customer positioning - Management noted strong demand from cloud customers and improvements in industrial sectors, while remaining cautious about potential tariff impacts [31][32] Question: Design win momentum and its drivers - The design win momentum is driven by the company's strategic position in small and mid-range segments, with both unit recovery and ASP improvements contributing to growth [36] Question: Inventory levels and normalization - Channel inventory is expected to take a few more quarters to normalize, while internal inventory showed a significant drop [45][48] Question: Long-term gross margin targets - The company is confident in achieving long-term gross margin targets of low 70%, driven by product mix and cost reductions [74][76] Question: Competitive landscape in low power FPGA market - The company believes its unique architecture provides sustainable advantages over competitors, despite increased competition [78][80] Question: Revenue contribution from new products - New product growth is expected to accelerate, with contributions from Nexus and Avant products layering in over the next few years [105][107]