Executive Summary

Q1 2025 revenue was $120.1M, non-GAAP gross margin 69.0%, and non-GAAP diluted EPS $0.22; adjusted EBITDA margin reached 33.4%, reflecting disciplined OpEx and resilient mix . Versus S&P Global consensus, revenue was essentially in line (120.1M vs 120.1M*) and EPS matched ($0.22 vs $0.22*). Values retrieved from S&P Global.
Management flagged “record level of design wins,” sequential revenue growth, and sustained margin leadership; Communications & Computing delivered its first YoY growth in two years, while Industrial & Automotive grew 6% sequentially .
Q2 2025 guidance implies steady sequential growth: revenue $118.5M–$128.5M, non-GAAP GM ~69% (+/−1%), OpEx $50.5M–$52.5M, and non-GAAP EPS $0.22–$0.26 (raised vs Q1 guidance) .
Stock-relevant catalysts: accelerating server AI content and attach in top-10 OEMs, expanding PQC security deployments, and continued new product mix shift (Nexus/Avant) targeting mid-20% growth in 2026; tempered by tariff uncertainty and a longer channel inventory normalization timeline .

What Went Well and What Went Wrong

What Went Well

“First quarter of 2025 developed as expected, with sequential revenue growth, a record level of design wins, and a further expansion of our operating margins.” (CEO) .
Communications & Computing delivered first YoY growth in two years; Industrial & Automotive up 6% sequentially, supported by wireline and factory automation/robotics exposure (prepared remarks) .
New products revenue continues to grow at strong double-digit rates QoQ and YoY, with a path to “high teens” mix of new product revenue in FY25 (CEO prepared remarks) .

What Went Wrong

Client PC subsegment dragged Communications & Computing sequentially due to older platforms; server and wireline remained strong (Q&A) .
Channel inventory normalization will likely take “a couple of few quarters longer” than mid-year target; company continues to ship under consumption to reduce disti levels (CFO, Q&A) .
Tariffs pose indirect macro risk despite limited expected direct impact given supply chain localization and non-U.S. revenue mix; management remains cautious on 2H outlook (prepared remarks) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$127.1	$117.4	$120.1
GAAP Gross Margin %	69.0%	61.1%	68.0%
Non-GAAP Gross Margin %	69.0%	62.1%	69.0%
Non-GAAP Operating Margin %	26.6%	17.1%	26.2%
Adjusted EBITDA Margin %	33.7% (call)	24.8%	33.4%
GAAP Diluted EPS ($)	$0.05	$0.12	$0.04
Non-GAAP Diluted EPS ($)	$0.24	$0.15	$0.22

Segment breakdown (Revenue $USD Millions):

End Market	Q3 2024	Q4 2024	Q1 2025
Communications & Computing	$61.0	$58.0	$57.4
Industrial & Automotive	$54.2	$49.2	$52.2
Consumer	$11.9	$10.2	$10.6

KPIs and mix:

KPI	Q3 2024	Q4 2024	Q1 2025
Distribution (%)	95%	84%	79%
Direct (%)	5%	16%	21%
Asia (%)	63%	66%	65%
Americas (%)	15%	23%	25%
Europe (%)	22%	11%	10%
DSO (days)	66	63	64
DIO (days)	242	207	225

Consensus vs Actual (Q1 2025) – S&P Global:

Metric	Consensus	Actual	Delta
Revenue ($USD)	$120.0847M*	$120.1500M	+$0.0653M*
EPS Normalized ($)	$0.22083*	$0.22	$0.00083*

Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	$115M–$125M	—	—
Revenue	Q2 2025	—	$118.5M–$128.5M	Raised vs Q1 midpoint
Non-GAAP Gross Margin %	Q1 2025	69% ±1%	—	—
Non-GAAP Gross Margin %	Q2 2025	—	69% ±1%	Maintained level
Non-GAAP OpEx ($M)	Q1 2025	$50–$52	—	—
Non-GAAP OpEx ($M)	Q2 2025	—	$50.5–$52.5	Slightly higher midpoint
Non-GAAP Tax Rate (%)	Q1 2025	5%–6%	—	—
Non-GAAP Tax Rate (%)	Q2 2025	—	5%–6%	Maintained
Non-GAAP EPS ($)	Q1 2025	$0.20–$0.24	—	—
Non-GAAP EPS ($)	Q2 2025	—	$0.22–$0.26	Raised range
FY 2025 Revenue Growth	FY 2025	Low single-digit (Q4 call)	“No change” (Q1 Q&A)	Maintained narrative

Note: Q1 2025 guidance from prior quarter; Q2 2025 guidance provided in Q1 release and 8-K .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
AI/Technology initiatives	Strong attach in servers; >50 FPGAs per rack at OCP; client AI features ramping (Dell XPS); focus on Edge AI stacks/tools	Generative AI in datacenter, far-edge AI, AR/VR; continued record design wins; new product revenue strong double-digit growth	Improving
Supply chain/tariffs/macro	U-shaped recovery expected in 2025; shipping under consumption; book-to-bill trending up; one-time material liability cleaned up in Q4	Limited direct tariff impact expected; proactive mitigation; caution on 2H outlook	Cautious
Product performance/mix	New products Nexus/Avant mid-teens mix exit 2024; Avant ramp accelerating; Q3/Q4 margins resilient despite mix	New product revenue growing both QoQ and YoY; aiming for high-teens mix in FY25	Improving
Channel inventory & bookings	Target mid-year 2025 normalization; book-to-bill >1 in late Q4	Normalization may take “a couple of few quarters longer”; still shipping under consumption; bookings improving	Normalizing slower
Regional trends (China)	Ship-to China/HK larger than local consumption; mix shifting from comms to industrial/auto; share gains vs larger peers	China ship-to ~$57M comment (10-Q context); limited tariff exposure by COO and OSAT geography	Mixed/stable
Security/PQC	PQC highlighted as unique differentiator; Microsoft keynote (Caliptra) and rapid adoption	PQC continues as a core growth driver in security sockets	Strengthening
R&D execution	Workforce and OpEx reductions; new R&D center in Pune; expansion of tools (Radiant/Propel)	Continued disciplined OpEx; investing in engineering/operations projects; capital returns	Balanced investment

Management Commentary

“Revenue, gross margin, and improved profitability… were all in line with our outlook for the first quarter of 2025.” (CFO) .
“Revenue and design win growth are being led by new applications, notably in generative AI in the datacenter… security, including post-quantum cryptography, and far edge AI for lower power applications.” (CEO) .
“Communications and Computing delivered its first year-on-year growth in two years. And Industrial and Automotive grew 6% sequentially…” (CEO) .
“We continue to expect a U-shaped recovery… Q2 guidance reflects our expectation for steady growth in both revenue and profitability.” (CEO) .
“Based on available information, we expect the direct impact of tariffs on our business to be limited, but we are highly aware of potential indirect impacts.” (CFO) .

Q&A Highlights

2025 trajectory: Management reiterated low single-digit FY25 revenue growth and maintained caution due to tariffs; bookings and backlog improving (book-to-bill >1) .
Segment dynamics: Client PC decline weighed on Comms & Compute, while server and wireline applications (NICs/switches/security appliances/routers) are strong .
Channel inventory: Normalization may take “a couple of few quarters longer” than mid-year, with the company still under-shipping consumption; Lattice-owned inventory fell ~$8M QoQ .
Server content: Content gains of ~50% generation-over-generation support secular attach into AI/general-purpose servers .
New products: New product growth expected to accelerate into 2026; Avant variants layering into revenue through ’25–’27; Nexus/Avant mix rising .
Tariffs exposure: ~80% of revenue outside U.S.; wafer fabs in Taiwan/Korea/Japan and assembly/test in Malaysia/Taiwan; direct U.S. tariff exposure limited .

Estimates Context

Q1 2025: Revenue of $120.1M essentially matched consensus ($120.1M*), and non-GAAP EPS of $0.22 was in line with consensus ($0.22083*). Values retrieved from S&P Global. Actuals per earnings release and 8-K .
Implications: With estimates largely in line, revisions likely hinge on Q2 guide and narrative (server AI, PQC, bookings up), versus macro/tariff caution and elongated channel normalization .

Key Takeaways for Investors

Margins resilient: Non-GAAP GM held at 69% and EBITDA margin rebounded to 33.4% despite mixed end markets and ongoing inventory digestion, underscoring durability of the model .
Sequential growth supported by server AI: Strong server/wireline content and attach, with ~50% content gains gen-over-gen, should underpin Comms & Compute trajectory into 2H as inventory normalizes .
PQC/security differentiation: Unique PQC offering and accelerating adoption across Tier-1 OEMs represent a structural competitive edge and potential share gains in networking/security sockets .
New product mix shift: Nexus/Avant ramp continues, aiming for high-teens mix in FY25 and accelerating into FY26, supporting margin and ASP uplift over time .
Guidance trend constructive: Q2 non-GAAP EPS range ($0.22–$0.26) is higher than Q1 guide, and revenue guide implies steady sequential growth; maintain awareness of potential tariff-induced volatility .
Channel inventory: Expect normalization to take longer than previously anticipated; company continues shipping under consumption to reduce disti levels—watch POS/BTB vs reported revenue gap in the near term .
Watch catalysts: Continued AI server deployments, PQC wins, and Avant variant rollouts could prompt positive estimate revisions if macro/tariff impacts remain limited and bookings momentum persists .

Additional Q1 2025 Press Releases (Context)

Lattice showcased advanced Edge AI and vision solutions at New-Tech 2025 and scheduled/investor events in early May, reinforcing visibility in industrial/automotive and AI ecosystems .

LATTICE SEMICONDUCTOR CORP (LSCC)·Q1 2025 Earnings Summary