Analyst(s): Olivier Blanchard
Publication Date: May 8, 2025
Lattice Semiconductor’s Q1 FY 2025 earnings showcase solid margin execution and record design win momentum across AI, industrial, and automotive end-markets. Despite a YoY revenue decline, strong uptake of Lattice’s next-gen products and expanding backlog point to improving demand visibility heading into FY 2026.
What is Covered in this Article:
- Lattice’s Q1 FY 2025 financial results
- Growth in AI servers, automotive, and industrial segments
- Record design win momentum across data center, robotics, and security
- Geographic and end-market diversification limiting China’s exposure
- FY 2025 outlook and tariff-related risks to H2 FY 2025 visibility
The News: Lattice Semiconductor Corporation (NASDAQ: LSCC) reported its Q1 FY 2025 financial results, with revenue of $120.2 million (at par with consensus estimates), down 14.7% year-on-year (YoY) and up 2.3% sequentially. Non-GAAP gross margin remained steady YoY at 69.0%. Non-GAAP operating income declined 25.3% YoY to $31.5 million (-1% below consensus estimates). The non-GAAP operating margin contracted to 26.2% from 30.0% in Q1 FY 2024. Non-GAAP net income was $30.7 million (at par with consensus estimates), down 23.6% YoY. Non-GAAP diluted earnings per share (EPS) stood at $0.22 (in line with consensus estimates), compared to $0.29 in the year-ago quarter.
“Revenue and design win growth are being led by new applications, notably in generative AI in the data center, robotics in industrial, in-cabin and ADAS in automotive, AR/VR in consumer, security, including post-quantum cryptography, and far edge AI for lower power applications,” said Ford Tamer, CEO of Lattice Semiconductor. “While we are encouraged by our progress, we are monitoring the market environment, along with the broader industry, as it could have an impact on our outlook.”
Lattice Delivers Q1 FY 2025 Results With Record Design Win Momentum
Analyst Take: Lattice’s Q1 FY 2025 performance delivered on expectations despite some softness in the end market. While revenue declined YoY due to slow channel inventory digestion and macroeconomic pressures, profitability held firm, thanks to a combination of gross margin resilience, disciplined cost control, and accelerating traction for design wins across key verticals. Overall, the company remains focused on executing its long-term product-led recovery.
Expansion in AI Server and Industrial Segments Positions Lattice for Durable Upside
Lattice saw sequential growth in the industrial and automotive end markets (+6% QoQ combined), led by broad-based demand and new product ramps. Communications and compute posted their first YoY growth in eight quarters, showing strength in wireline infrastructure and AI-optimized servers.
Management noted that industrial PMI remained above 50, suggesting expansionary trends. Another highlight was increased customer interest in embedded AI, particularly for factory automation and robotics. This supports our broader ecosystem theory that the IIOT segment is ramping up for AI-driven growth starting this year.
Additionally, record design wins in mid- and low-density FPGA applications also continue to support gains in market share. Despite macroeconomic pressures and tariff uncertainty, Cloud customers are still expected to increase capital expenditure (CapEx) in FY 2026, which could further boost demand.
In summary, Lattice looks fairly well-positioned for an inflection in H2 FY 2025 with a stronger product portfolio and improving end-market signals.
Record Design Win Pipeline Highlights Long-Term Growth Visibility
One of the quarter’s highlights is Lattice’s design win momentum, which follows a demand pipeline driven by increasingly critical use cases: generative AI in data centers, robotics in the industrial segment, in-cabin and ADAS in automotive, AR/VR in the consumer segment, and post-quantum cryptography in security.
Management also noted sustained growth in the Nexus and Avant families, with new product revenue rising at a strong double-digit pace both sequentially and YoY. The company expects new products to contribute a high-teens percentage of FY 2025 revenue, reflecting deepening customer traction.
China Risk Manageable Amid Geographic and End-Market Diversification
Because approximately 80% of Lattice Semiconductor’s revenue is generated outside the United States, Lattice should be fairly well shielded from potential tariff impacts.
Equally importantly, Lattice has strategically pivoted its Chinese business away from communications and toward industrial and automotive end-markets, which are historically less sensitive to hostile regulatory action.
On supply chain resiliency, Management highlighted that its manufacturing footprint, which spans Japan, Korea, Taiwan, and Malaysia, ensures minimal reliance on US-China cross-border flows. The company believes this positioning enables it to sustain regional growth while navigating macroeconomic risk without significant business disruption.
Guidance and Final Thoughts: Stable FY 2025 Outlook with Tariff-Linked Uncertainty in H2
For Q2 FY 2025, revenue is guided between $118.5 and $128.5 million, gross margin at ~69% (±1%), and non-GAAP EPS between $0.22 and $0.26. Full-year revenue growth guidance remains unchanged (low-single-digit growth), supported by a stronger backlog, an above 1x book-to-bill ratio, and improved customer consumption.
Management did, however, flag geopolitical and tariff uncertainty as potential headwinds to H2 FY 2025 visibility. Looking ahead, as macro conditions normalize, the company appears well-placed to sustain profitable growth and capitalize on accelerating embedded AI adoption.
See the full press release on Lattice Semiconductor’s Q1 FY 2025 financial results on the Lattice Semiconductor website.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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Author Information
Research Director Olivier Blanchard covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
