Lattice Semiconductor’s first quarter results were met with negative market reaction as the company’s revenue and non-GAAP profit both came in line with Wall Street expectations but reflected a double-digit year-over-year decline. Management attributed the weaker sales environment to ongoing inventory digestion and macroeconomic uncertainty, particularly in the industrial and communications end markets. CEO Ford Tamer highlighted that while the company shipped below estimated true demand to help align with customer inventory levels, improvements were seen in bookings and certain segments such as communications, computing, and industrial, which returned to sequential growth after several quarters of stagnation.
Is now the time to buy LSCC? Find out in our full research report (it’s free).
Lattice Semiconductor (LSCC) Q1 CY2025 Highlights:
- Revenue: $120.2 million vs analyst estimates of $120.1 million (14.7% year-on-year decline, in line)
- Adjusted EPS: $0.22 vs analyst estimates of $0.22 (in line)
- Adjusted EBITDA: $40.42 million vs analyst estimates of $37.25 million (33.6% margin, 8.5% beat)
- Revenue Guidance for Q2 CY2025 is $123.5 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q2 CY2025 is $0.24 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 5.8%, down from 11.8% in the same quarter last year
- Inventory Days Outstanding: 225, up from 206 in the previous quarter
- Market Capitalization: $6.74 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are 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.
Our Top 5 Analyst Questions Lattice Semiconductor’s Q1 Earnings Call
- Melissa Weathers (Deutsche Bank): Asked if the 2025 revenue outlook had changed given increased caution. CEO Ford Tamer confirmed there was no change, citing improved demand signals but continued tariff-related uncertainty.
- Srini Pajjuri (Raymond James): Inquired about potential second-half tariff impacts and which end markets might be most affected. Tamer emphasized strength in cloud and communications, with industrial showing signs of improvement, but maintained caution due to uncontrollable external risks.
- Christopher Rolland (Susquehanna): Sought updates on inventory levels and channel normalization. CFO Lorenzo Flores explained that channel inventory reduction may take a few extra quarters, with aggressive management of both internal and external inventories.
- David Williams (Benchmark Company): Asked about the durability of server and AI-related design wins. Tamer described continued expansion in server opportunities around AI, security, and connectivity, viewing these trends as durable and supportive of future growth.
- Gary Mobley (Loop Capital): Questioned the competitive landscape for low-power FPGAs and gross margin sustainability. Tamer detailed Lattice’s differentiated architecture and confidence in maintaining long-term gross margins near 70%.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace at which channel and internal inventory levels return to target, (2) sustained revenue growth from new product families such as Nexus and Avant, and (3) any shifts in customer demand or order patterns tied to the evolving global tariff environment. Progress in design win conversion and successful product launches will also serve as critical indicators of execution.
Lattice Semiconductor currently trades at $48.66, down from $53.06 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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