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LATTICE SEMICONDUCTOR CORP (LSCC)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 primary results are not yet available; Wall Street consensus implies revenue of $153.9M* and EPS of $0.35*, with gross margin ~69.7%* and EBITDA ~$56.2M*, consistent with Lattice’s structurally high margin profile and accelerating datacenter momentum into 2026.
    Estimates marked with * retrieved from S&P Global.
  • Latest actuals show sequential improvement through 2025: Q2 revenue $124.0M and non-GAAP EPS $0.24 , Q3 revenue $133.3M and non-GAAP EPS $0.28 with non-GAAP GM 69.5% . This trajectory supports consensus acceleration into Q2 2026.
  • Management guided Q4 2025 revenue to $138–$148M, non-GAAP EPS $0.30–$0.34, and non-GAAP GM 69.5%±1%, highlighting strong bookings and normalized inventory in Comms & Compute as drivers into 2026 . CFO corrected OpEx guidance on the Q3 call ($54.5–$56.5M) after a press release typo, a small but notable catalyst for near-term models .
  • Strategic themes: record design wins, accelerating AI/datacenter attach, PQC adoption, and continued Nexus ramp with Avant contribution later—management reiterated confidence in 2026 growth, driven by Comms & Compute and an industrial/auto tailwind post normalization .

What Went Well and What Went Wrong

What Went Well

  • “We delivered another strong quarter, with broad-based growth across key financial metrics and record design wins,” supported by Comms & Compute strength and improving Industrial/Auto recovery .
  • Q3 2025 set a record for Comms & Compute revenue; non-GAAP EPS rose to $0.28 and EBITDA margin reached 35.6% on bookings strength and datacenter attach expansion .
  • PQC leadership and AI companionship content expanded across servers and networking; management cited book-to-bill and order visibility into 2026 as confidence drivers .

What Went Wrong

  • Client-related compute headwinds and deliberate under-shipping in Industrial/Auto to normalize channel inventory weighed on mix and growth in 2025 .
  • GAAP profitability remained muted in Q2 2025 (GAAP EPS $0.02; GAAP NI margin 2.3%) as stock-based comp and transformation charges impacted reported margins, though non-GAAP metrics were strong .
  • Pricing pressure from suppliers and extended lead times required tight supply coordination, constraining near-term flexibility despite robust demand .

Financial Results

Note: Q2 2026 actuals are not available as of this report date. Consensus estimates are marked with * and retrieved from S&P Global.

Revenue, EPS, and Margins (Quarterly)

MetricQ1 2025Q2 2025Q3 2025Q2 2026E
Revenue ($USD Millions)$120.15 $123.97 $133.30 $153.93*
Non-GAAP Diluted EPS ($)$0.22 $0.24 $0.28 $0.35*
GAAP Diluted EPS ($)$0.04 $0.02 N/AN/A
Non-GAAP Gross Margin (%)69.0% 69.3% 69.5% 69.69%*
Non-GAAP Operating Margin (%)26.2% 27.5% 29.0% N/A
Adjusted EBITDA Margin (%)33.4% 34.1% 35.6% N/A

Estimates marked with * retrieved from S&P Global.

Segment Breakdown (Q2 2025)

End MarketRevenue ($M)Mix
Communications & Computing$68.7 55%
Industrial & Automotive$47.3 38%
Consumer$8.0 7%

KPIs (Operational)

KPIQ1 2025Q2 2025
DSO (Days)76 63
DIO (Days)236 218
Revenue by Geography (%) – Asia67% 67%
Revenue by Geography (%) – Americas25% 22%
Revenue by Geography (%) – Europe/Africa10% 11%
Revenue by Channel (%) – Distribution79% 84%
Revenue by Channel (%) – Direct21% 16%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q3 2025$128–$138 Actual delivered $133.3 Achieved within range
Non-GAAP GM (%)Q3 202569.5% ± 1% Actual 69.5% Maintained
Non-GAAP OpEx ($M)Q3 2025$52–$54 Actual $53.9 Within
Non-GAAP Tax Rate (%)Q3 20255–6 N/AN/A
Non-GAAP EPS ($)Q3 2025$0.26–$0.30 Actual $0.28 Within
Revenue ($M)Q4 2025N/A$138–$148 Initiated
Non-GAAP GM (%)Q4 2025N/A69.5% ± 1% Initiated
Non-GAAP OpEx ($M)Q4 2025$54–$55 (PR) $54.5–$56.5 (Call correction) Raised/Corrected
Non-GAAP Tax Rate (%)Q4 2025N/A3–5 Initiated
Non-GAAP EPS ($)Q4 2025N/A$0.30–$0.34 Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/datacenter CapEx & attachCloud/server + wireline strength; client decline offset; 2026 CapEx viewed higher Record Comms & Compute; server up >80% YTD; bookings visibility into 2026; grow faster than CapEx Improving
Inventory normalizationUnder-shipping Industrial/Auto; channel normalization expected over several quarters Industrial/Auto normalization by YE25; Comms/Compute normalized; $15–$20M/qtr under-ship now a tailwind in 2026 Normalizing
PQC/securityEmerging PQC adoption noted; security wins at events PQC leadership and CNSA compliance driving adoption across hyperscalers and OEMs Accelerating
Product roadmap (Nexus/Avant)New product growth mid-teens to high-teens; Avant layering 2026–27 2026 “year of Nexus,” Avant bigger in 2027; multiple new Nexus SKUs in 2025–26 Nexus ramp accelerating
Tariffs/macroMonitoring potential indirect impacts; supply chain outside U.S. mitigates direct effects No disruptions; focus on pricing-to-value; supplier pressures managed Managed
Pricing/marginsNon-GAAP GM ~69%; path to low-70% LT intact Non-GAAP GM 69.5%; mix and scale sustain margins near current levels Stable high margins
Regional/autoChina auto stronger; auto small portion of revenue Auto strength only in China; broader auto flat; industrial pockets (A&D) strong Mixed

Management Commentary

  • CEO (Q2 2025 PR): “Communications and computing markets remain solid… Industrial and automotive markets are recovering… growth driven by major design wins alongside AI accelerators in Cloud datacenter… and far-edge AI applications.”
  • CFO (Q2 2025 PR): “We grew revenue, gross margin and profitability sequentially… adjusted EBITDA at 34.1%.”
  • CEO (Q3 2025 call): “We are well-positioned to capitalize on the ever-expanding investments in AI and data center infrastructure… record design wins in 2025.”
  • CFO (Q3 2025 call): “Strongest booking patterns in at least six quarters… non-GAAP EPS $0.28… free cash flow margin 25.5%.”

Q&A Highlights

  • AI/datacenter momentum: Lattice expects to grow faster than hyperscaler CapEx due to rising attach rates and expanding footprint across servers and networking; AI usage share rising to mid-20% in 2026 .
  • Inventory strategy: Under-shipping Industrial/Auto ~$15–$20M per quarter through 2025, normalizing by YE25; becomes a tailwind in 2026 .
  • Nexus/Avant ramp: Multiple new Nexus SKUs (2025–26); Avant contributes more in 2027; both families winning socket share across end markets .
  • Margins and pricing: Non-GAAP GM ~69.5% sustained; pricing-to-value approach amid supplier pressures; portfolio mix management to maintain margins .
  • Regional dynamics: Auto small overall; only China shows strength; client compute headwinds offset by servers and wireline comms .

Estimates Context

  • Q2 2026 consensus: Revenue $153.9M*, EPS $0.35*, Gross Margin 69.69%, EBITDA $56.2M, EBIT $50.1M*, FCF $50.9M*. These imply healthy YoY growth versus Q2 2025 actuals ($124.0M revenue, $0.24 non-GAAP EPS, 69.3% non-GAAP GM) with margin stability in line with management’s datacenter momentum narrative .
    Estimates marked with * retrieved from S&P Global.
  • With Q3/Q4 2025 guidance pointing to accelerating revenue and sustained ~69.5% GM, models likely bias upward for 1H26 Comms & Compute; watch for Industrial/Auto tailwind post inventory normalization .

Key Takeaways for Investors

  • Datacenter AI attach and PQC/security content are durable catalysts; trajectory through Q3/Q4 2025 supports Q2 2026 consensus acceleration in revenue and EPS* .
  • Mix normalization away from client headwinds and toward servers/wireline should sustain ~69–70% GM and rising EBITDA margin, underpinning free cash flow conversion .
  • Inventory policy turns from headwind to tailwind in 2026 as Industrial/Auto shifts to “ship to natural demand” .
  • Watch OpEx run-rate into 2026 (PRSU accruals and growth investments); Q4 guidance correction to $54.5–$56.5M signals disciplined scaling .
  • Near-term trading: Positive sentiment tied to bookings strength and Q4 guidance; any supply/lead-time tightness or macro/tariff surprises could create volatility .
  • Medium-term thesis: Nexus leadership in small FPGAs plus Avant ramp broadens TAM; model 2026 revenue growth skewed to Comms & Compute with Industrial/Auto recovery pacing 2027 .

Note on document availability: As of this report date, Q2 2026 8‑K 2.02 and the Q2 2026 earnings call transcript are not yet available; latest primary sources used were Q2 2025 press release and Q3 2025 call, plus company guidance and disclosures for Q3/Q4 2025 –. Estimates marked with * retrieved from S&P Global.