LSCC

It has been about a month since the last earnings report for Lattice Semiconductor (LSCC). Shares have lost about 11.3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Lattice due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Lattice Semiconductor Corporation before we dive into how investors and analysts have reacted as of late. Lattice's Q2 Earnings Top Estimates on AI Demand and Record Revenue Lattice reported strong second-quarter 2026 results, with adjusted earnings and revenues surpassing the Zacks Consensus Estimate. Robust demand for its low-power field-programmable gate arrays (FPGAs), particularly in artificial intelligence (AI) data center applications, along with improving industrial demand, drove record quarterly revenues.Non-GAAP earnings were 53 cents per share, up more than 120% year over year, beating the Zacks Consensus Estimate of 44 cents by 20.45%. Revenues climbed 62.2% year over year to a record $201.1 million, exceeding the consensus estimate of $178 million by 8.65%. Continued strength in Compute & Communications and the recovery in Industrial & Embedded remained key growth drivers. LSCC Delivers Broad-Based Revenue Growth Lattice generated record revenues of $201.1 million, up 17.7% sequentially and 62.2% from the year-ago quarter. Compute & Communications reached another record, fueled by continued AI infrastructure investments, higher FPGA attach rates and increasing demand from data center customers.Industrial & Embedded also continued its recovery, benefiting from healthy channel inventories and improving demand across industrial automation, aerospace and defense, medical, robotics and emerging physical AI applications. Management noted that multiple new design wins are beginning to ramp and expects the segment to remain an important growth contributor through the remainder of 2026.Lattice Expands Profitability Amid Operating LeverageProfitability improved at a faster pace than revenues during the quarter. Non-GAAP gross margin expanded 240 basis points year over year to 71.7%, benefiting from a favorable product and customer mix.Non-GAAP operating expenses increased 29.5% year over year to $67.1 million, primarily reflecting continued investments in research and development, along with higher performance-based bonuses and sales commissions. Despite the higher spending, non-GAAP operating income surged 126.2% year over year to $77.1 million, while adjusted EBITDA margin improved to 43% from 34.1% a year ago. Lattice's Cash Flow Supports Financial Flexibility Lattice continued to convert higher earnings into robust cash generation. Cash flow from operating activities increased to $88.3 million from $50.3 million in the prior quarter.Free cash flow reached $81.3 million, representing a free cash flow margin of 40.4% compared with 23.2% in the previous quarter. Management attributed the sequential improvement to stronger operating performance and the timing of annual bonus payments made during the first quarter.As of July 4, 2026, the company had $173.3 million in cash and cash equivalents compared with $133.9 million at the end of 2025. Long-term operating lease liabilities (net of current portion) were $32.6 million, down from $36.1 million at the end of 2025. Lattice Completes Transformational AMI Acquisition During the quarter, Lattice completed its acquisition of AMI, combining its low-power FPGA portfolio with AMI's firmware and infrastructure management software. Management believes the transaction doubles the company's addressable market and strengthens its position in AI data center infrastructure.The company expects AMI to operate at a revenue run rate exceeding $200 million by the end of 2026, with non-GAAP gross margins above 75% and EBITDA margins above 40%. Lattice also expects the acquisition to become meaningfully accretive to earnings beginning in the fourth quarter after integration-related adjustments normalize. LSCC Issues Strong Third-Quarter Outlook Management projected FPGA revenues between $210 million and $230 million for the third quarter. Including approximately two months of AMI contribution, total revenues are expected to be between $245 million and $265 million, implying a midpoint of $255 million. Non-GAAP gross margin is expected to be 69.5%, plus or minus 1%, while non-GAAP operating expenses are projected between $83 million and $90 million. Non-GAAP earnings are expected in the range of 54-58 cents per share. Management expects continued AI infrastructure demand, expanding backlog, sustained design-win momentum and the AMI acquisition to support accelerating revenue, earnings and cash flow growth. In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 14.15% due to these changes. At this time, Lattice has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock has a score of F on the value side, putting it in the bottom 20% quintile for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Lattice has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lattice Semiconductor Corporation (LSCC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Lattice Semiconductor’s second quarter results were marked by substantial growth in both revenue and profitability, but the market reacted negatively despite the company exceeding Wall Street expectations. Management attributed the strong quarter to robust demand across the Compute and Communications segment, particularly in AI data center applications, as well as ongoing recovery in the Industrial and Embedded end market. CEO Fouad Tamer noted, “Demand for Lattice solutions continue to be fueled by increasing CapEx, increasing AI content per server, expanding FPGA attach rates, rising security requirements and the shift towards more complex disaggregated architectures.” Is now the time to buy LSCC? Find out in our full research report (it’s free). Revenue: $201.1 million vs analyst estimates of $185.2 million (62.2% year-on-year growth, 8.6% beat) Adjusted EPS: $0.53 vs analyst estimates of $0.44 (19.2% beat) Adjusted EBITDA: $86.37 million vs analyst estimates of $71.21 million (43% margin, 21.3% beat) Revenue Guidance for Q3 CY2026 is $255 million at the midpoint, above analyst estimates of $193.4 million Adjusted EPS guidance for Q3 CY2026 is $0.56 at the midpoint, above analyst estimates of $0.47 Operating Margin: 11.1%, up from 3.8% in the same quarter last year Inventory Days Outstanding: 153, up from 151 in the previous quarter Market Capitalization: $18.23 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Quinn Bolton (Needham & Co.) asked about trends in FPGA attach rates and content per server. CEO Fouad Tamer explained both attach rates and average selling prices are increasing, fueled by new AI and security-related applications. Christopher Rolland (Susquehanna International Group) questioned the impact of AMI’s hardware business on margins. CFO Lorenzo Flores clarified that the hardware component is being divested and will not affect long-term margin structure, with normalization expected by Q4. Melissa Weathers (Deutsche Bank) pressed on supply-side constraints and the potential for these to limit growth. Tamer acknowledged industry-wide assembly bottlenecks but stated capacity agreements should resolve these by year-end. Kevin Garrigan (Jefferies) asked about rising supply chain costs and the ability to pass them on. Tamer responded that Lattice will absorb some increases but expects to pass a portion to customers. Srinivas Pajjuri (RBC Capital Markets) sought clarity on new product contribution and market share gains. Tamer confirmed that new products will exceed 25% of revenue this year and that Lattice’s growth outpaces industry peers due to both product innovation and share gains. In upcoming quarters, the StockStory team will be watching (1) the pace and profitability of AMI integration and the anticipated exit from non-core hardware business, (2) visibility and execution on capacity agreements to resolve assembly bottlenecks, and (3) continued expansion of new product adoption and design wins in AI and embedded markets. Monitoring supply chain cost management and the realization of joint Lattice-AMI solutions will also be crucial. Lattice Semiconductor currently trades at $131.15, down from $138 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 2:00 p.m. ET Vice President of Investor Relations - Rick Muscha Chief Executive Officer - Fouad Tamer Executive Vice President and Chief Financial Officer - Lorenzo A. Flores Chief Executive Officer of AMI - Sanjoy Maity Operator: Greetings, and welcome to Lattice Semiconductor Second Quarter 2026 Earnings Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Muscha, Vice President of Investor Relations. Thank you, Rick. You may begin. Rick Muscha: Thank you, operator, and good afternoon, everyone. With me today are Fouad Tamer, Lattice's CEO; and Lorenzo Flores, Lattice's CFO. We will provide a financial and business review of the second quarter of 2026 and the outlook for the third quarter of 2026, followed by a brief overview of AMI and its business model. If you have not yet obtained a copy of our earnings press release, it can be found at our company website in the Investor Relations section at latticesemi.com. I would like to remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to the documents that the company files with the SEC, including our 10-Ks, 10-Qs and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. This call includes and constitutes the company's official guidance for the third quarter of 2026. If at any time after this call, we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly announced conference call. We refer primarily to non-GAAP financial measures during this call. By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the company's performance and underlying trends. For historical periods, we provided reconciliations of these non-GAAP financial measures to GAAP financial measures that can be found on the Investor Relations section of our website at latticesemi.com. With that, I'll turn the call over to our CEO, Fouad Tamer. Fouad Tamer: Thank you, Rick, and welcome, everyone, to our Second Quarter Earnings Call. Lattice delivered exceptional financial results this quarter, reflecting a healthy market environment, compelling catalysts and our own strong execution. We have a focused and consistent strategy to create durable value by growing faster than the markets we serve. We do this by expanding into new applications, serving leadership customers, delivering differentiated innovation and driving sustainable shareholder value as a result. We are executing against each of these strategic elements and the results are increasingly visible across the business. Following last week's close of the AMI acquisition, Lattice is now positioned to deliver even greater value to customers and our shareholders. You will hear more about this acquisition shortly. First, let me update you on our second quarter results and outlook. Revenue for the second quarter was a record $201 million, representing 18% sequential growth and 62% year-over-year growth with strength across all our end markets. Our Compute and Communications end market reached another record revenue level, growing 18% sequentially and 83% year-over-year, driven by continued momentum in data center AI applications. Demand for Lattice solutions continue to be fueled by increasing CapEx, increasing AI content per server, expanding FPGA attach rates, rising security requirements and the shift towards more complex disaggregated architectures. We also saw a continued recovery in our Industrial and Embedded end market with revenue up 17% sequentially and 36% year-over-year. We see momentum building across a diverse set of end markets, including industrial automation, aerospace and defense, medical, robotics and other emerging physical AI applications. These applications increasingly require our Lattice differentiation in low power, small form factor, low latency and secure processing. With channel inventory at healthy levels and multiple new design wins beginning to ramp, we expect Industrial and Embedded to remain an important contributor to growth through the balance of 2026 and beyond. As we had anticipated, profitability continued to grow significantly faster than revenue with second quarter non-GAAP EPS of $0.53, representing growth of more than 120% year-over-year. This outstanding performance underscores the operating leverage we have built into the model. We expect this momentum to continue based on demand trends building across our major end markets. This is evidenced by accelerated bookings and our backlog extending well into 2027. At the same time, design win momentum remains healthy across our FPGA portfolio and end markets. As demand continues to strengthen, we remain focused on working closely with our supply chain partners to ensure that we can support our customers' growth plans. Taken together, we expect these trends to support a sustained multiyear growth outlook. Turning now to AMI. We are pleased to announce the successful close of the acquisition last week. It brings together Lattice's leadership in low-power programmable FPGA's with AMI's industry-leading firmware and infrastructure manageability portfolio, and it positions us to create the industry's most complete, secure management and control platform for AI data center infrastructure. We expect that this combination can double our addressable market. In the 3 months since the announcement of the transaction, we have engaged with about 100 hyperscalers, OEMs, ODMs and ecosystem partners, including many at Computex in Taiwan. And uniformly, they have all given us unequivocal positive feedback about the time to market and value that our joint solutions can provide. This reinforces our confidence that the acquisition can provide long-term value to our shareholders. AMI is a highly attractive business with strong profitability and durable recurring revenue characteristics. As we exit 2026, we expect the business to be operating at a revenue run rate of more than $200 million with gross margins above 75% and EBITDA margins above 40%. These metrics underscore the strength of AMI's market position, the depth of its customer relationships and the highly efficient operating model the company has built over many years. The AMI business is well balanced with approximately 60% of revenue generated from its boot firmware franchise and 40% from its infrastructure manageability solutions. Revenue includes firmware licensing, royalties and platform enablement services. This model creates strong visibility, attractive lifetime economics and durable customer engagements across long product cycles. We see multiple avenues to grow AMI over time, winning more platforms, increasing content per platform and expanding further into AI infrastructure and embedded markets. This includes new trends such as rack scale architectures, secure boot, data center manageability and remote monitoring and control. AMI will continue to operate with the same open silicon-neutral approach that has earned the trust of customers and partners across the industry for decades. We are excited to welcome the AMI team to Lattice, and we have already hit the ground running together. Looking forward to the third quarter, our revenue guidance for our FPGA business of $220 million at the midpoint represents approximately 65% year-over-year growth. When adding 2 months of AMI revenue contribution, our revenue guidance becomes $255 million at the midpoint, putting us at over $1 billion annualized revenue run rate. This strong outlook reflects our confidence in the accelerating momentum of the business and the breadth of demand across our end markets. The midpoint of our EPS outlook is $0.56, which reflects roughly 100% year-over-year growth. This highlights the powerful operating leverage in our model, the differentiated value of our products and our disciplined approach to scaling Lattice. We expect that we'll be able to consistently drive earnings growth that significantly outpaces revenue growth. Looking ahead, accelerating AI infrastructure demand, the emergence of physical AI and the addition of AMI create a powerful foundation for Lattice's next phase of growth. The secular trends fueling our business have never been stronger. We are confident that we are in the early innings of a multiyear growth cycle, and our focus is clear: deliver sustained above-market growth while converting that growth into strong earnings and cash flow to benefit you, our valued shareholders. With that, I'll turn over the call over to Lorenzo for a comprehensive review of our second quarter results and outlook. Lorenzo? Lorenzo A. Flores: Thank you, Fouad, and good afternoon, everyone. I will begin with a review of Lattice's Second Quarter 2026 Financial Performance, followed by our outlook for the third quarter. We'll then close with a brief introduction to AMI and its business model. Q2 financial performance was exceptional, exceeding the high end of our guidance. Revenue reached a record $201 million, growing 62% year-over-year and 18% quarter-over-quarter. Earnings growth continued to outpace our revenue growth and exceeded the high end of our guidance. Q2 non-GAAP EPS at $0.53 a share demonstrated significant leverage, growing more than 120% year-over-year and 29% quarter-over-quarter. Q2 non-GAAP gross margin was above expectation at 71.7%, up 170 basis points quarter-over-quarter and up 240 basis points year-over-year. Q2 gross margin benefited from favorable product and customer mix. Q2 non-GAAP operating expense was $67.1 million, up approximately 10% sequentially and 30% on a year-over-year basis. The sequential increase was primarily driven by continued R&D investment. performance-based bonuses and commissions associated with our stronger revenue and profitability also contributed. Our Q2 non-GAAP operating margin expanded 390 basis points sequentially to 38.3%, while our EBITDA margin increased 340 basis points to 43%. GAAP net cash flow from operating activities for the second quarter of 2026 was $88.3 million compared to $50.3 million in Q1. Free cash flow in Q2 was $81.3 million with a 40.4% free cash flow margin, up from $39.7 million and 23.2% in Q1. Strong financial performance and the fact that we paid out our 2025 annual bonus in Q1 were factors in the sequential improvement of cash flow. In summary, Q2 demonstrated the strength and leverage of our financial model with non-GAAP EPS growth significantly outpacing revenue growth. Now for our guidance, which will include our FPGA business and approximately 2 months of the AMI business given the closing at the end of July. Our FPGA business continues its accelerated growth trend. Revenue is expected to grow into the range of $210 million to $230 million. AMI revenue for the partial quarter is expected to be between $33 million and $37 million. In total, Lattice revenue is expected to be in the range of $245 million to $265 million. Gross margin for the FPGA business is expected to be 70%, plus or minus 1% as we continue to manage our supply chain and costs in the face of increasing pressure. Combined, Lattice Q3 corporate gross margin is expected to be 69.5%, plus or minus 1% on a non-GAAP basis. This guidance reflects transitory issues in the AMI business, and I'll discuss those in more detail shortly. We expect non-GAAP operating expense to be between $83 million and $90 million on a combined basis. Most of the growth in OpEx will be in R&D and reflects our continued disciplined investments to drive long-term sustained revenue growth. We expect income tax rate for Q3 to be between 4% and 6% on a non-GAAP basis. We expect non-GAAP EPS to be in the range of $0.54 and $0.58 per share. In summary, our Q3 outlook continues to reflect strong revenue and earnings momentum with EPS growth expected to once again significantly outpace revenue growth. This underscores the leverage in our model and our ability to scale profitably while continuing to invest in long-term growth. Earlier, Fouad provided a strategic overview of AMI in his prepared remarks. I'll provide additional color on the business model and the near-term factors that will affect comparability as we integrate AMI. I will also cover the acquisition financing. AMI brings a highly attractive business model that is closely aligned with Lattice's long-term financial framework. We expect the base revenue of greater than $200 million in 2026 will achieve significant growth in 2027. AMI has built a very profitable business with gross margins in the mid- to high 70% range and EBITDA over 40%, which should improve our already strong business model. As AMI is integrated with Lattice, we expect to see meaningful accretion to EPS starting in Q4. AMI revenue is primarily driven by firmware licensing, recurring maintenance and subscription revenue and per unit royalties that scale with customer platforms over time. AMI also provides platform enablement services that support customer adoption and help establish durable long-term royalty stream. One of the transitory issues referenced above is a low-margin hardware pass-through business that is not core to AMI's strategic value. AMI began proactively divesting this business before the acquisition. While we expect this noncore business to be fully exited by the end of 2026, Q3 and Q4 will include this revenue. Completing the exit in Q4 should structurally expand AMI's margin profile in line with our expected go-forward model. We anticipate that any other adjustments will be normalized by the end of 2026 as well. To reiterate, as we integrate AMI, we will show accretion across our business model with meaningful accretion to EPS starting in Q4 while we enable additional strategic growth opportunities. Regarding the acquisition structure, we purchased AMI for $1 billion in cash and 5.2 million shares of our stock. We funded the cash portion of the acquisition with $925 million of financing and $75 million of cash from our balance sheet. We put in place a financing structure with a $1.15 billion credit facility consisting of a $950 million term loan, drawing down only $925 million of it and a $200 million revolving credit facility. We were pleased with the strong participation from a high-quality syndicate of financial institutions, reflecting confidence in the Lattice AMI combination. Given the strong free cash flow profile of the combined company, we currently plan to reduce leverage to below 2x EBITDA by the end of 2027. In closing, this has been an incredible few months for Lattice with our record Q2 results, our closing of the transformational AMI transaction and our record Q3 guide. We are very well positioned for strong near-term growth as well as the next level of strategic growth with accelerating revenue, earnings and cash flow generation. Operator, that concludes our formal remarks. We can now open the call for questions. Operator: [Operator Instructions] Our first question is from Quinn Bolton with Needham & Co. Quinn Bolton: Congratulations on the continued strong results and outlook. I guess, Fouad, just wanted to start with the Comms and Compute business. Obviously, very strong growth in AI data centers and general purpose as well. But wondering if you could talk about trends you're seeing in terms of FPGA attach rate per server dollar content or ASP per FPGA. Have you seen those trends continue to increase sort of on a quarter-to-quarter basis here in 2026? And then I've got a follow-up. Fouad Tamer: Thank you, Quinn. A few things that are worth noting this quarter. Number one, the latest Digitimes report shows the server TAM is now up to 20 million units forecast for 2026. which is a really strong growth, much stronger than prior year. And so we're seeing the Agentic revolution still continuing, and we're seeing that drive not just the AI server, but more traditional server, networking, storage, all the cloud infrastructure that goes along with this inference and Agentic revolution. So that has helped our business because we participate in both. We participate strongly in the AI attached server and times. We also participate in the supporting infrastructure, the cloud infrastructure. So we're really happy about that. The attach rate continues to grow. The CapEx continues to grow. The new applications continue to grow. The ASP of some of the new products continue to grow because we're coming in now with further and more complex security requirements as an example. And we continue to be very positive on the characteristic of our FPGA such as low latency determinism, parallel processing connectivity, wide range I/O. These are the 1.2 to 3.3 volt I/O in the data center, connecting up to 1,200 sensor and some of these servers together. And so our FPGA continues to find use cases in numerous new applications such as, for example, power and cooling. Quinn Bolton: Excellent. And then I guess maybe for Lorenzo, as you bring AMI on board, it looks like it has gross margins in maybe the mid- to high 70s. I think you said op margins above 40% in the core FPGA business. You're already approaching a 40% op margin, and you've kind of highlighted that earnings growth will grow much faster than revenue. And so now that you've closed the AMI acquisition, can you give us some thoughts on where you think a longer-term model might be for gross margin and operating margin? Could it be in the low 70s and low 40s? Is there another range we should be thinking maybe a year or 2 out on a combined basis? Lorenzo A. Flores: Yes. So I'll try to answer your question in near term and long but we are benefiting right now in our business model from very, very strong revenue growth. But if you look underneath, we continue to invest. AMI is also a R&D heavy organization because they continue to invest for the future. So the model that you see right now is probably approximately what we'll see for the next little bit. And as we get into 2027 and our longer-term growth aspirations manifest themselves, we see a little bit better performance in our business model than we may have been expecting before. So 70-ish percent on the gross margin and a little bit sooner to 40% on the operating margin level than we had seen in the past is probably where we're taking it. But that's also -- keep in mind that's in the face of with the accelerated revenue growth we're expecting. So in that model, you'd start to see a very significant acceleration in EPS as well. Operator: Our next question is from Christopher Rolland with Susquehanna International Group. Christopher Rolland: Maybe just following up on the last question about gross margin. Lorenzo, I think you said there was a hardware business associated with AMI. How much revenue is that hardware business? Was that on top of the $200 million? Or does that take from the $200 million annual revenue? And is that the reason for margins being down in September? Lorenzo A. Flores: Yes. So this -- look, this is a really transitory issue. As we pick them up, we have a partial quarter. They have already begun to, as I said in my comments, divest the hardware part of the business while maintaining the royalty stream. So it's not -- from the Lattice perspective, overall, it's not a meaningful amount of revenue. And by Q4, it won't have an impact on our overall financials or actually even the AMI-specific financials. So it's something that we wanted to point out because it does cause a Q3 step down from what we're expecting. Christopher Rolland: Okay. And was that revenue on top of the $200 million or... Lorenzo A. Flores: The $200 million a year run rate for AMI would exclude that in the end. Christopher Rolland: Okay. Excellent. And then perhaps a follow-up. I'll talk about I&E. I think the situation with I&E is maybe they didn't understand we were in a new semiconductor cycle, and we're kind of holding back spending. Any update on bookings there? Has it accelerated? Have they finally got the message? And I think we -- back in the day, we're talking about maybe a $75 million normalized run rate for that business, but it now appears maybe to be higher, particularly with the guide for the fourth quarter, I would imagine it's higher. Can you talk about I&E and what's happening there with the channel, what a new normalized level is, and that would be great. Fouad Tamer: Yes. Thank you, Chris. Our Industrial and Embedded segment is doing great. I&E is doing good. And we have talked about the really strong sequential and year-over-year growth, and we see this continue to grow throughout the rest of the year. The PMI now is at levels -- they are very positive levels worldwide. There's a bit of a temporary slowdown in China, but continue to be very excited about the design wins, the physical AI momentum. And the recovery of that business. The channel is -- inventory is now where we need it to be. We're not focused as much on the channel inventory anymore as we focused on supply being the main focus and very positive on all the different segments, including some of the new robotics and humanoids, we're doing quite well. Some of the new autonomous vehicles, new medical application, aerospace and defense. So the list goes on, on penetrating few new market segments and accelerating the growth into 2027. Lorenzo A. Flores: Let me just add on one of the things we are not -- at Lattice, we are not impacted by automotive. This is a relatively small business for us. So that end market weakness is not having a drag on us. Fouad Tamer: The only other one -- Please go ahead. Operator: Our next question is from Melissa Weathers with Deutsche Bank. Melissa Weathers: I wanted to touch on something you just talked about the supply side. With everything seeming like it's coming back pretty hard. Can you just talk about any constraints that you're seeing on the supply side, how you're managing it? And could this actually gate your growth going into next year? Fouad Tamer: Yes. Thank you, Melissa. As I said, we are doing good on sort of the fab side at the front end and the testing side on the back end. In the middle, on the assembly side, there are constraints across the industry right now. And so us and the rest of the industry are experiencing these constraints. We are putting capacity agreement in place that -- and then qualifying new capacity that we believe will get us in line -- supply and demand in line by September, and we should be in good shape in Q4 and definitely for 2027. Melissa Weathers: Great. And then on AMI, congrats on getting the deal closed. I know you've talked about your SAM, I think, doubling with the inclusion of AMI. So can you just talk about, is there any like new kind of long-term growth rate framework that we should be thinking about for FPGAs? Is there like an adder to whatever percent growth you could have grown in the past? Just any help on how we can think about AMI layering like actually accelerating your FPGA sales, I think that would be helpful. Fouad Tamer: Yes. So Melissa, a couple of things. I'd like. Number one, from our long-term aspirational goal, we'd like to hit $3 billion by 2030. So that's the goal. We are already ahead by about a quarter. So if you look at -- we had 3 months ago said that we'll hit $1 billion run rate by Q4 and the combination of Lattice plus AMI, we just hit this in our guide in Q3, a quarter ahead. So we're seeing the benefit of this. We should exit this year at a $1.2 billion run rate. And so you could see where our growth is accelerating. Operator: Our next question is from Kevin Garrigan with Jefferies. Kevin Garrigan: Congrats on the great results. Fouad, just on the supply again. With these new negotiations that you're doing, are any of your manufacturing partners trying to negotiate higher prices? And can you pass those along to your customers? Fouad Tamer: Yes, the costs are increasing across the industry, not just cost from a supply chain point of view, but a whole bunch of expedite fees because the customers are all under pressure to get supply ASAP. So we're seeing the cost increase across the industry. And we're doing the best we can to absorb some of these costs, and we're going to have to pass some of these costs. So it's going to be a mixture of us absorbing some and passing some. Kevin Garrigan: Okay. Great. And then you continue to see strong bookings, strong backlog kind of into -- all the way into 2027. I mean has that visibility extended over the last 3 months? And how much of that backlog is noncancelable? Fouad Tamer: Very good question. The visibility is increasing daily. I mean it's really unprecedented. We've got visibility all the way to the end of 2027. 2027 is pretty much booked. And so we're seeing that to be very strong. We are putting capacity agreements in place with our supplier where we're going to have to take the capacity. And so we are, in turn, putting capacity agreements with our customers and partners to make sure that our customers provide us with the same commitments. So yes, I mean, I think you're seeing this across the whole supply chain now as with our supplier and as with our customers, putting all these agreements in place. Operator: Our next question is from Ethan Potasnick with TD Cowen. Ethan Potasnick: Congrats on the results. Just a near-term question. You guys guided the stand-alone FPGA business. But I was wondering, could you guys help us think about the sort of the relative growth rates across the various segments as we move through the second half? Fouad Tamer: Yes. So we do break down our FPGA business. We do break down our Comms and Compute and our Industrial and Embedded so those have been broken down. And you could see that the Comms and Compute has been growing very strong. So this Q2 was 83% year-on-year growth, 18% sequential. Industrial and Embedded 36% year-on-year growth, 16% sequential. We haven't broken this up for Q3. On the AMI side, we expect AMI to grow about 25% year-on-year. So that would give you all the 3 major segments. Lorenzo A. Flores: We're seeing strong demand across our end markets, though. And I'd just say the Industrial and Embedded business has been lumpy in the past and probably going to behave that way in the future, but the general trend is up. Ethan Potasnick: Okay. Okay. Great. Very helpful. And then last quarter, the team suggested AI-related revenue would sort of approach 25% of company revenue in '26. I was wondering if there was an update there and sort of how AI demand tracked during the quarter and where within that opportunity that growth is sort of coming from? Fouad Tamer: No, we're on track to meet this 25% coming from revenue and exceeded. We had a discussion, actually multiple discussions around this metric. And what's interesting is the AI and the Atech revolution is driving actually more of the traditional infrastructure. So we're seeing tremendous growth in the traditional supporting cloud infrastructure from servers to networking to storage to memory. that drives, in turn, our FPGA demand. And so it's a bit harder to just say AI, which we -- if you want to categorize AI as sort of AI with GPU or CPU or XPUs inside, this is the 25% or where, in some cases, we assist that. But the other 75% of the business is also growing very rapidly. As you could see, inside our Comms and Compute, our server business is growing even faster than Comms and Compute, which grew at 83% year-on-year. So you could see the rest of the traditional infrastructure is growing actually at the same rate, if not faster. Operator: Our next question is from Ruben Roy with Stifel. Ruben Roy: Fouad, maybe just to follow up on that last point, thinking about the server growth. We've heard a lot recently about CPU attach and CPU. You talked about agentic a little bit in the prepared remarks. I'm just wondering if you could maybe talk about where you are on the CPU side with the core processors. And is that starting to drive some of the growth that you're seeing? Or is that still on the come? How do you think about that as you think about 2027? Fouad Tamer: No, CPU has definitely been a very strong driver of growth with traditional servers. And we have not broken up our server growth, but our server growth is higher than the Comms and Compute, which was at 83%. So you could see the server has been growing very nicely year-on-year. We also feel that the AMI acquisition is going to help both the Compute and Comms and have the Embedded-- Industrial and Embedded, both segments of our FPGA business grow faster. There are some synergy at customers, and we're working together on joint solution. And so that AMI acquisition should be able to help drive a higher growth rate in both the Compute and Comms and the Industrial and Embedded. And in turn, we should be able to help them drive faster growth in AMI itself. So go ahead, Lorenzo. Lorenzo A. Flores: And just refresh what Fouad said earlier that in the traditional servers, our attach rate is growing as well. So one CPU is multiple FPGAs going with it in the infrastructure that's supporting AI. So a very healthy ecosystem for us. Ruben Roy: Yes. Got it. Maybe just a follow-up. Fouad mentioned 25% year-over-year growth for AMI. Was that for Q3 or second half? And I guess kind of the bigger question around that is I think you framed previously that AMI growth was maybe in the high teens, accelerating into '27 off of that rate. And thinking through firmware attach rates on servers, could we assume at some point that AMI grows something closer to your own server growth rate? Lorenzo A. Flores: So right now, I'll just clarify that when we said 25%, that's our expectations for 2027. I thought that would be helpful for you guys to start building your models. And we are still in the very initial period of integrating, right? We closed on the 27th of July, and we are beginning to put meat around the bones of the strategy we talked about when we were talking about the acquisition, which is developing these solutions that we'll bring to market in the future that would further accelerate that growth rate. And that we've yet to really quantify, but that is a strategic driver of this acquisition. Operator: [Operator Instructions] Our next question is from Srini Pajjuri with RBC Capital Markets. Srinivas Pajjuri: Fouad, on the new products, I think you gave us a number -- target number for this year, roughly 20% to 25%, I believe. Just wondering how that's tracking? And also, given how strong of a growth you are seeing, I just looked at one of your competitors reporting, and it looks like you grew 50% over competition. So I'm just trying to understand, is this driven by share gains for you, new products? Or is it pricing related? I know you talked about demand being very strong, but just curious to understand how the new product ramp is going. Fouad Tamer: Excellent. Good question, Srini. Thank you. Yes, we had guided to that range, and now we're going to exceed the high end of that range. So we expect new products this year to exceed the 25% of total revenue. So as you could see, our new products are doing fine and definitely contributing to that growth rate. And then the growth rate is across all our markets. So we're seeing it in Compute and Comms. We're seeing it in Industrial and Embedded, and we're going to start seeing it with AI. And so we're quite excited. The one thing, Srini, I wanted to point out is, recently, I've been reading these reports about people talking about the Rule of 60. It used to be the Rule of 40, now the Rule of 60, and the rule was like adding CAGR plus EBITDA 1% margin. And I just want to point out, we're a Rule of 105 right now. So we're above 100. We'll enjoy it for both Q2 and Q3. We're not promising to do this in the future, but 62% growth and 40% plus EBITDA gets us to about 105%. So you could see not just the revenue growth, but also EPS and profitability growing faster than revenue growth. So we're excited about that. Srinivas Pajjuri: Got it. That's very helpful. And then on the AMI, the 25%, I just want to clarify that it's 25% over $200 million because you did talk about some hardware pass-through revenue. Fouad Tamer: That's correct. It's 25% over the $200 million, yes. Srinivas Pajjuri: Got it. So my question on that Fouad or Lorenzo, is that it's a pretty solid growth. It's a very healthy environment out there. I'm just curious, I mean, I know it's early days, but does it include any of the revenue synergies that you talked about? Or is it still kind of early days? I just -- is it more of an organic? Fouad Tamer: It is early days on the revenue synergies. I do believe we're going to have revenue synergies on top of that, but we -- this does not include the revenue synergies. Lorenzo A. Flores: And it'll take a little bit of time to bring to market, Srini. Operator: Our next question is from Quinn Bolton with Needham & Co. Quinn Bolton: Just had a couple of quick clarifications or follow-ups. On AMI, will you report that as a third segment? Or going forward, do you plan to put it into Comms and Compute and Industrial and Embedded? Lorenzo A. Flores: That's a great question. What we are thinking right now is as we close the quarter and we report, we're going to talk about the FPGA business as a segment and the AMI business as a segment, and we'll provide revenue and gross margin by those. And we will -- we are working right now on how to best articulate the operating margins given that we're in the process of developing shared infrastructure and support. Quinn Bolton: Will you break out Comms and Computing and Industrial Embedded within FPGA? Lorenzo A. Flores: Sorry. Yes, I said that. We are within FPGA, we'll give you the same revenue looks we're giving you today. Quinn Bolton: Perfect. And then I don't know if I missed it, I apologize if I did, but did you say where channel inventory ended the June quarter? Was it below your 2 months target that you discussed last quarter? Lorenzo A. Flores: Yes. Here's the way we're thinking about it now because we've gone from an environment of having to manage that down to get to the right level. We got there. And what we're doing right now with the channel is using it to help us ensure supply to our customers. So I think I've said before in different forums, once we got to the 2-ish, it would probably fluctuate up and down. And that's what we're seeing, but we're staying in that range. Operator: [Operator Instructions] Our next question is from Melissa Fairbanks with Raymond James. Melissa Dailey Fairbanks: I can't argue with the Rule of 105. That's not a bad target to hit. I had... Fouad Tamer: So we can achieved Melissa that's not a target. Melissa Dailey Fairbanks: I know, I know. I know. I'm teasing, I'm teasing. But I had a follow-up question. I know that AMI helps expand your addressable market and how much you can actually address within those markets. In Industrial and Embedded, I'm assuming, especially as we get into more of like robotics or some defense applications, automotive, some of these more highly regulated applications. Is the go-to-market a little bit different even with AMI than it is in the compute segment? Fouad Tamer: Yes. I think there's going to be tremendous opportunities for AMI and Lattice to work together in Industrial and Embedded because these systems are very big on the need for platform firmware and for infrastructure manageability. And the early meetings, we've had many meetings at Computex in Taiwan. We've had many follow-on meetings with other partners on physical AI and very excited about how the integration of AMI and FPGA can offer new solutions to customers. So stay tuned. We'll have a lot more to say on that in the future calls. Operator: We have reached the end of the question-and-answer session. I would like to turn the floor back over to Rick Muscha for closing comments. Rick Muscha: Thanks, everyone, for joining us on the call today. We'll be attending the following investor events this quarter: the KeyBanc Technology Leadership Forum on August 11; the Jefferies Semiconductor, IT Hardware & Communications Technology Conference on August 26; and lastly, the Benchmark TMT 1-on-1 Conference on September 10. Thank you very much for your participation, and have a good evening. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Lattice Semiconductor (LSCC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Lattice Semiconductor (LSCC) put fresh numbers on the table on 4 August, pairing record Q2 results with new Q3 2026 revenue guidance of US$245 million to US$265 million that includes roughly two months of AMI contribution. See our latest analysis for Lattice Semiconductor. Lattice Semiconductor shares now trade at US$128.70, with a year to date share price return of 63.64% and a 1 year total shareholder return of 111.96%, which points to strong momentum following record Q2 results, updated Q3 guidance and the recent AMI acquisition. If Lattice Semiconductor's AI driven story has your attention, it can be useful to see what else is moving across the sector through 56 AI infrastructure stocks After a 1 year total return above 100% and fresh guidance tied to AI and AMI, Lattice Semiconductor now carries higher expectations. Does the current price still offer a compelling risk reward, or has most of the upside been recognised already? Compared with Lattice Semiconductor's last close at $128.70, the most followed narrative points to a fair value of $146.92, which implies a meaningful valuation gap built on detailed long term forecasts. Read the complete narrative. Read the complete narrative. Want to see what is sitting behind that fair value for Lattice Semiconductor? The narrative leans heavily on compounded revenue expansion, much higher long term margins and a richer earnings multiple. Curious which specific growth path and profitability profile are doing the heavy lifting in that model? Result: Fair Value of $146.92 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there are still clear risks for Lattice Semiconductor if competition in low and mid range FPGAs intensifies or if the integration of AMI proves more difficult than expected. Find out about the key risks to this Lattice Semiconductor narrative. The narrative model points to Lattice Semiconductor trading about 12.4% below a fair value of $146.92. However, our DCF model presents a different perspective, with an estimate of future cash flow value at $73.63, which suggests the stock is expensive on that basis. This kind of gap between narrative driven upside and a cash flow based estimate can influence how investors weigh AI potential against execution risk. Which framework do you feel better reflects how you expect Lattice Semiconductor to perform over time? Look into how the SWS DCF model arrives at its fair value. If the mix of optimism and caution around Lattice Semiconductor leaves you unsure, move quickly to review both sides of the story. Start by weighing the 2 key rewards and 2 important warning signs. If Lattice Semiconductor has sharpened your focus on quality opportunities, do not stop here. Broader idea hunting can help you keep your watchlist ready for the next move. Spot potential mispriced opportunities early and run them through your own process using the 50 high quality undervalued stocks. Strengthen your core holdings by checking companies that appear resilient in tougher conditions through the 77 resilient stocks with low risk scores. Stay ahead of the crowd by scanning companies that fewer investors follow via the screener containing 19 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSCC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Revenue: Record $201 million, up 18% sequentially and 62% year over year. Compute and Communications Revenue: Record level, up 18% sequentially and 83% year over year. Industrial and Embedded Revenue: Up 17% sequentially and 36% year over year. Non-GAAP EPS: $0.53, up more than 120% year over year and 29% sequentially. Non-GAAP Gross Margin: 71.7%, up 170 basis points sequentially and 240 basis points year over year. Non-GAAP Operating Expense: $67.1 million, up approximately 10% sequentially and 30% year over year. Non-GAAP Operating Margin: 38.3%, up 390 basis points sequentially. EBITDA Margin: 43%, up 340 basis points sequentially. GAAP Net Cash Flow from Operating Activities: $88.3 million, compared to $50.3 million in Q1. Free Cash Flow: $81.3 million, with a 40.4% free cash flow margin, up from $39.7 million and 23.2% in Q1. Q3 Revenue Guidance (FPGA business): $210 million to $230 million. Q3 Revenue Guidance (AMI partial quarter): $33 million to $37 million. Q3 Total Revenue Guidance: $245 million to $265 million. Q3 Non-GAAP Gross Margin Guidance (FPGA business): 70%, plus or minus 1%. Q3 Non-GAAP Gross Margin Guidance (Combined): 69.5%, plus or minus 1%. Q3 Non-GAAP Operating Expense Guidance: $83 million to $90 million. Q3 Non-GAAP EPS Guidance: $0.54 to $0.58 per share. Warning! GuruFocus has detected 5 Warning Signs with LSCC. Is LSCC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Lattice Semiconductor Corp (NASDAQ:LSCC) delivered record Q2 2026 revenue of $201 million, representing 18% sequential and 62% year-over-year growth, with strength across all end markets. The Compute and Communications end market reached another record revenue level, growing 18% sequentially and 83% year over year, driven by continued momentum in data-center AI applications. The successful close of the AMI acquisition positions Lattice Semiconductor Corp (NASDAQ:LSCC) to create the industry's most complete secure management and control platform for AI data-center infrastructure, potentially doubling its addressable market. Lattice Semiconductor Corp (NASDAQ:LSCC) expects to exceed its long-term goal of $3 billion by 2030, already hitting a $1 billion annualized revenue run rate a quarter ahead of schedule, with an exit run rate of $1.2 billion expected for 2026. The company's non-GAAP EPS grew more than 120% year over year to $0.53, demonstrating significant operating leverage, with Q3 guidance of $0.56 EPS representing roughly 100% year-over-year growth. AMI is expected to grow 25% year over year in 2027, with a highly profitable business model featuring gross margins above 75% and EBITDA margins above 40%, contributing to meaningful EPS accretion starting in Q4. Lattice Semiconductor Corp (NASDAQ:LSCC) has unprecedented visibility with backlog extending well into 2027, and new products are expected to exceed 25% of total revenue this year, exceeding prior guidance. Lattice Semiconductor Corp (NASDAQ:LSCC) faces increasing supply chain constraints, particularly in assembly, which could potentially gate growth, though the company expects to resolve these by September. The company is experiencing rising costs across the industry, including expedite fees, and will need to pass some of these costs to customers, potentially impacting margins. Q3 combined gross margin guidance of 69.5% reflects a step-down from Q2's 71.7%, partly due to transitory issues in the AMI business, including a low-margin hardware pass-through business being divested. The Industrial and Embedded end market, while recovering, remains lumpy and could behave that way in the future, with a temporary slowdown noted in China. Lattice Semiconductor Corp (NASDAQ:LSCC) has taken on significant debt to finance the AMI acquisition, with a $925 million term loan drawn, and plans to reduce leverage to below 2 times EBITDA only by the end of 2027. Revenue synergies from the AMI acquisition are not yet included in the 25% growth expectation for 2027, as the integration is still in early stages and synergies will take time to materialize. Q: Can you provide an update on the trends in FPGA attach rates, dollar content, and ASPs per server in the Compute and Communications market?A: Ford Tamer (CEO) stated that the server TAM is now forecast at 20 million units for 2026, driven by the agentic revolution. Lattice participates in both AI-attached servers and supporting cloud infrastructure. The attach rate, CapEx, and new applications continue to grow, and ASPs are increasing due to more complex security requirements. The company's FPGAs are finding new use cases in areas like power and cooling, connecting up to 1,200 sensors in some servers. Q: With the AMI acquisition closed, what is the longer-term model for gross margin and operating margin on a combined basis?A: Lorenzo Flores (CFO) indicated that the current model of approximately 70% gross margin and approaching 40% operating margin is expected to persist in the near term. As the company enters 2027 and its longer-term growth aspirations manifest, they expect to see better performance, potentially reaching the 40% operating margin level sooner than previously anticipated, which would lead to very significant acceleration in EPS. Q: Can you quantify the low-margin hardware pass-through business at AMI and its impact on Q3 margins?A: Lorenzo Flores (CFO) clarified that this is a transitory issue. AMI had already begun divesting this non-core hardware business before the acquisition. It is not a meaningful amount of revenue for Lattice overall, and by Q4, it will have no impact on financials. The $200 million annual revenue run rate for AMI excludes this hardware business in the end. Q: What is the current status of the Industrial and Embedded market recovery, and what is the new normalized run rate?A: Ford Tamer (CEO) stated that the Industrial and Embedded segment is performing well, with strong sequential and year-over-year growth expected to continue. PMI levels are positive worldwide, and channel inventory is at healthy levels. The focus has shifted from managing inventory to ensuring supply. Momentum is building across industrial automation, aerospace and defense, medical, robotics, and physical AI applications. Lorenzo Flores (CFO) added that Lattice is not impacted by weakness in the automotive market, as it is a relatively small business. Q: Are there any supply chain constraints that could gate growth into next year, and how are you managing them?A: Ford Tamer (CEO) acknowledged that while front-end fab and back-end testing are in good shape, there are industry-wide constraints in the assembly stage. The company is putting capacity agreements in place and qualifying new capacity, expecting supply and demand to be in line by September. They anticipate being in good shape for Q4 and 2027. Q: Are manufacturing partners negotiating higher prices, and can you pass those costs along to customers?A: Ford Tamer (CEO) confirmed that costs are increasing across the industry, including expedite fees. The company plans to absorb some of these costs while passing some along to customers, resulting in a mixture of both approaches. Q: Has the visibility of your backlog extended over the last three months, and how much of it is non-cancelable?A: Ford Tamer (CEO) stated that visibility is increasing daily and is "unprecedented." The company has visibility all the way to the end of 2027, with 2027 "pretty much booked." They are putting capacity agreements in place with suppliers and, in turn, with customers to secure mutual commitments. Q: Can you provide the relative growth rates across the various segments for the second half of the year?A: Ford Tamer (CEO) noted that Compute and Communications grew 83% year-over-year and 18% sequentially in Q2, while Industrial and Embedded grew 36% year-over-year and 16% sequentially. For AMI, they expect approximately 25% year-over-year growth. Lorenzo Flores (CFO) added that while Industrial and Embedded may remain lumpy, the general trend is upward. Q: Is the company on track to meet the target of AI-related revenue approaching 25% of company revenue in 2026?A: Ford Tamer (CEO) confirmed they are on track to meet and exceed the 25% target. He noted that the agentic revolution is also driving growth in traditional supporting cloud infrastructure, such as servers, networking, and storage. The server business is growing even faster than the overall Compute and Communications segment, which grew 83% year-over-year. Q: Is the CPU/server side starting to drive growth, and how should we think about AMI's growth rate relative to Lattice's server growth?A: Ford Tamer (CEO) confirmed that CPU has been a very strong driver of growth in traditional servers, with server growth higher than the 83% growth in Compute and Communications. The AMI acquisition is expected to help both FPGA segments grow faster through joint solutions. Lorenzo Flores (CFO) clarified that the 25% growth expectation for AMI is for 2027 and does not include potential revenue synergies, which are still in early development. Q: How is the new product ramp tracking relative to the target of 20% to 25% of revenue this year?A: Ford Tamer (CEO) stated that the company will exceed the high end of the guided range, with new products expected to exceed 25% of total revenue this year. He also highlighted the company's strong performance, noting a "Rule of 105" (62% growth plus 40%-plus EBITDA), which demonstrates profitability growing faster than revenue. Q: Will AMI be reported as a third segment, and how will you break out the financials?A: Lorenzo Flores (CFO) stated that they plan to report the FPGA business and the AMI business as separate segments, providing revenue and gross margin for each. Within the FPGA segment, they will continue to provide the same revenue breakdown of Compute and Communications and Industrial and Embedded. They are still working on how to best articulate operating margins given shared infrastructure. Q: Where did channel inventory end the June quarter, and is it below the two-month target?A: Lorenzo Flores (CFO) indicated that the company has reached its For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Lattice Semiconductor Corporation LSCC used its second-quarter fiscal 2026 earnings call to frame accelerating artificial intelligence infrastructure demand and the AMI acquisition as the foundation of its next growth phase. Management highlighted expanding FPGA content, recovering industrial demand and backlog extending into 2027 while acknowledging near-term assembly constraints and rising supply-chain costs. Chief executive officer Fouad Tamer said that Compute and Communications revenues reached a record, rising 18% sequentially and 83% year over year. Growth reflected demand across AI servers and the supporting networking, storage and cloud infrastructure. Tamer said that FPGA attachment rates and content are increasing as servers require more security, power management, cooling control and connectivity functions. Higher complexity is also supporting stronger pricing for newer products. AI-related revenues remain on track to reach or exceed 25% of 2026 revenues. Management stressed that AI spending is also lifting demand for traditional servers and related infrastructure beyond products directly attached to accelerators. Industrial and Embedded revenues rose 17% sequentially and 36% year over year, supported by industrial automation, aerospace and defense, medical, robotics and other physical AI applications. Tamer said that channel inventory had returned to the company’s targeted range, shifting management’s attention from inventory normalization toward securing sufficient supply. New design wins are beginning to ramp across several end markets. The company expects Industrial and Embedded to remain a growth contributor through the rest of 2026 and into 2027. Chief financial officer Lorenzo Flores noted that Lattice has limited automotive exposure, reducing the drag from weakness in that market. Revenues reached $201.1 million, up 62.2% year over year and surpassed the Zacks Consensus Estimate of $185.1 million. Non-GAAP earnings per share (EPS) of 53 cents beat the consensus estimate of 44 cents. Lattice Semiconductor Corporation price-consensus-eps-surprise-chart | Lattice Semiconductor Corporation Quote Non-GAAP gross margin increased 240 basis points year over year to 71.7%, aided by favorable product and customer mix. Non-GAAP operating margin expanded sequentially to 38.3%, while adjusted EBITDA margin reached 43%. Flores said that operating leverage allowed earnings to grow more than 120% year over year. Free cash flow totaled $81.3 million, representing a 40.4% margin, as profitability and cash generation strengthened faster than revenue. Tamer said that the completed AMI acquisition combines Lattice’s low-power FPGAs with platform firmware and infrastructure-management software, creating a broader management and control offering for AI data centers. AMI is expected to exit 2026 at an annual revenue run rate above $200 million, with gross margin above 75% and EBITDA margin above 40%. Its revenues are split approximately 60% between boot firmware and 40% infrastructure manageability. Management expects the combination to double Lattice’s addressable market. Tamer said that feedback from roughly 100 hyperscalers, equipment manufacturers and ecosystem partners reinforced confidence in joint customer opportunities. Lattice expects third-quarter revenues in the range of $245 million to $265 million, including approximately two months of AMI contribution. The stand-alone FPGA business is projected to generate revenues of $210 million to $230 million. Non-GAAP EPS is forecasted to be between 54 cents and 58 cents. Combined non-GAAP gross margin is expected to be 69.5%, plus or minus one percentage point, while operating expenses are projected to be in the range of $83 million to $90 million. Flores said that AMI should become meaningfully accretive to EPS beginning in the fourth quarter. The company expects to exit 2026 at a $1.2 billion annual revenue run rate, supporting its longer-term aspiration of reaching $3 billion by 2030. A Deutsche Bank analyst asked whether supply limitations could restrict growth. Tamer said that assembly capacity remained constrained, although new capacity agreements and supplier qualifications should bring supply and demand into balance by September. A Jefferies analyst questioned cost pressure. Tamer said that supplier costs and expedite fees were rising, with Lattice planning to absorb some increases and pass some through to customers. Management also clarified that AMI’s low-margin hardware pass-through activity will be exited by year-end. Flores said that the transition temporarily affects third-quarter gross margin but is not part of AMI’s expected $200 million run-rate business. Management’s tone remained confident about sustained demand, design wins and operating leverage. Backlog now extends through 2027, supported by capacity commitments with suppliers and corresponding customer agreements. The company’s priorities are integrating AMI, securing supply, investing in research and development and converting above-market revenue growth into faster earnings and cash-flow expansion. LSCC currently carries a Zacks Rank #2 (Buy). Its Growth Score of A indicates strong growth characteristics, while its Value Score of F and Momentum Score of D point to weaker valuation and price-momentum attributes. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The VGM Score of C reflects a mixed combined profile despite the favorable Growth Score. The Zacks Rank can change as analysts revise their earnings estimates following the newly reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lattice Semiconductor Corporation (LSCC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Lattice Semiconductor Corporation? Here are five stocks we like better. Record Q2 performance: Revenue reached $201 million, up 62% year over year, while non-GAAP EPS rose more than 120% to $0.53, exceeding the high end of guidance. Growth was led by AI data centers, cloud infrastructure and industrial applications. AMI acquisition expands growth opportunity: Lattice expects the acquisition to double its addressable market, with AMI contributing meaningful EPS accretion in Q4 and reaching an annual revenue run rate above $200 million by year-end 2026. Strong outlook: Q3 revenue is forecast at $245 million to $265 million, including $33 million to $37 million from AMI. Management expects to exit 2026 at a $1.2 billion annualized revenue run rate and targets $3 billion in revenue by 2030. This Expensive Chip Stock Is Up 140%, Analysts Say It's Still a Buy Lattice Semiconductor (NASDAQ:LSCC) reported record second-quarter revenue as demand from AI data centers, traditional cloud infrastructure and industrial applications lifted results, while the company also completed its acquisition of firmware and infrastructure manageability provider AMI. Revenue for the second quarter of 2026 reached $201 million, up 18% sequentially and 62% from a year earlier. Non-GAAP earnings per share were $0.53, rising more than 120% year over year and 29% sequentially. The company said its results exceeded the high end of its guidance. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control 3 AI Names With Big Buybacks: GEV, PSTG, and LSCC Signal Confidence “Lattice delivered exceptional financial results this quarter, reflecting a healthy market environment, compelling catalysts, and our own strong execution,” President and CEO Ford Tamer said during the company’s earnings call. Lattice’s compute and communications business posted record revenue, growing 18% sequentially and 83% year over year. Tamer attributed the performance to continued momentum in data-center AI applications, along with demand from supporting server, networking, storage and cloud infrastructure. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Lattice Semiconductor’s Market Reset Is Over: The Rebound Begins The company said it is benefiting from higher capital spending, rising AI content per server, increasing FPGA attach rates, growing security requirements and more complex disaggregated system architectures. Tamer said the company continues to see rising attach rates and average selling prices for certain newer products, including products supporting more complex security needs. Management also cited applications involving power and cooling systems, alongside the company’s low-latency, deterministic processing and broad I/O capabilities. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Industrial and embedded revenue increased 17% sequentially and 36% year over year. The company pointed to improving demand across industrial automation, aerospace and defense, medical, robotics and other physical AI applications. Tamer said channel inventory had returned to healthy levels and that new design wins were beginning to ramp. He added that supply availability, rather than channel inventory, had become a greater focus for the business. “We’re not focused as much on the channel inventory anymore as we’re focused on supply being the main focus,” Tamer said. The company said it is seeing assembly-side constraints across the industry, though Tamer said Lattice has capacity agreements and new capacity qualifications underway. He said management expects supply and demand to come into balance by September, with the company expecting to be in good shape in the fourth quarter and through 2027. Second-quarter non-GAAP gross margin was 71.7%, up 170 basis points from the first quarter and 240 basis points from the prior year. CFO Lorenzo Flores said favorable product and customer mix supported gross margin performance. Non-GAAP operating expenses were $67.1 million, increasing about 10% sequentially and 30% year over year, primarily due to continued research and development investment. Performance-based bonuses and commissions tied to higher revenue and profitability also contributed to the increase. Non-GAAP operating margin expanded 390 basis points sequentially to 38.3%, while EBITDA margin increased 340 basis points to 43%. GAAP operating cash flow was $88.3 million, compared with $50.3 million in the first quarter. Free cash flow was $81.3 million, compared with $39.7 million in the first quarter. Free cash flow margin reached 40.4%, up from 23.2% in the prior quarter. Flores said improved cash flow reflected the company’s financial performance as well as the payment of its 2025 annual bonus in the first quarter. Lattice closed its acquisition of AMI near the end of July. Tamer said the combination of Lattice’s low-power programmable FPGAs and AMI’s firmware and infrastructure management portfolio positions the company to build a secure management and control platform for AI data center infrastructure. The company expects the acquisition to double its addressable market. Tamer said Lattice had engaged with about 100 hyperscalers, original equipment manufacturers, original design manufacturers and ecosystem partners since announcing the transaction, receiving positive feedback on the time-to-market and value potential of joint solutions. AMI generates revenue through firmware licensing, royalties, recurring maintenance and subscription revenue, platform enablement services, and infrastructure manageability offerings. Management said roughly 60% of AMI revenue comes from boot firmware and 40% comes from infrastructure manageability solutions. Lattice expects AMI to exit 2026 at an annual revenue run rate above $200 million, excluding a noncore low-margin hardware pass-through business that AMI had already begun to divest. The company expects that business to be fully exited by the end of 2026. Management expects AMI’s ongoing gross margins to be in the mid-to-high 70% range, with EBITDA margin above 40%. Flores said AMI should begin contributing meaningful EPS accretion in the fourth quarter. The company expects AMI revenue to grow about 25% in 2027 from the more than $200 million base, excluding anticipated revenue synergies. Lattice acquired AMI for $1 billion in cash and 5.2 million shares of stock. The cash portion was funded with $925 million of financing and $75 million from the company’s balance sheet. Its credit facility includes a $950 million term loan, of which $925 million was drawn, and a $200 million revolving credit facility. The company plans to reduce leverage to below two times EBITDA by the end of 2027. For the third quarter, Lattice forecast FPGA revenue of $210 million to $230 million. The company expects approximately two months of AMI revenue to contribute $33 million to $37 million, resulting in total revenue guidance of $245 million to $265 million. At the midpoint, the total outlook implies $255 million in revenue, while the FPGA business midpoint represents approximately 65% year-over-year growth, according to Tamer. Lattice expects combined non-GAAP gross margin of 69.5%, plus or minus 1 percentage point, reflecting the temporary impact of AMI’s hardware pass-through business. It forecast non-GAAP operating expenses of $83 million to $90 million, a non-GAAP tax rate of 4% to 6%, and non-GAAP EPS of $0.54 to $0.58. Tamer said the company expects to exit 2026 at a $1.2 billion annualized revenue run rate and reiterated its longer-term aspiration of reaching $3 billion by 2030. Lattice Semiconductor Corporation is a U.S.-based semiconductor company specializing in low-power, small-footprint programmable logic devices. The company's product portfolio centers on field-programmable gate arrays (FPGAs), programmable logic devices (PLDs) and related intellectual property cores that enable customers to implement custom digital functions in applications where energy efficiency and compact size are critical. Lattice's solutions are widely used to accelerate edge computing, support video and sensor interfaces, and provide flexible I/O connectivity across a variety of end markets. The company offers a range of FPGA families, including the iCE40 series for ultra-low power mobile and consumer applications, the MachXO series for embedded control and security, and the ECP5 series for midrange performance in communications, industrial automation and automotive domains. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lattice Semiconductor Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Lattice Semiconductor (LSCC) came out with quarterly earnings of $0.53 per share, beating the Zacks Consensus Estimate of $0.44 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.46%. A quarter ago, it was expected that this chipmaker would post earnings of $0.36 per share when it actually produced earnings of $0.41, delivering a surprise of +13.89%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Lattice, which belongs to the Zacks Electronics - Semiconductors industry, posted revenues of $201.08 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.65%. This compares to year-ago revenues of $123.97 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Lattice shares have added about 72.9% since the beginning of the year versus the S&P 500's gain of 11%. While Lattice has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Lattice was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.47 on $193.66 million in revenues for the coming quarter and $1.79 on $749.72 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Semiconductors is currently in the top 17% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Alpha and Omega Semiconductor (AOSL), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This chipmaker is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of -1250%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Alpha and Omega Semiconductor's revenues are expected to be $168 million, down 4.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lattice Semiconductor Corporation (LSCC) : Free Stock Analysis Report Alpha and Omega Semiconductor Limited (AOSL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.