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Lattice Q1 2024: Outpacing FPGA Rivals While Battling Headwinds

Lattice Q1 2024: Outpacing FPGA Rivals While Battling Headwinds

The News: Lattice Semiconductor Corporation, the low power programmable leader, announced financial results today for the fiscal first quarter (Q1) ended March 30, 2024. Read the Lattice Semiconductor earnings press release here.

Lattice Q1 2024: Outpacing FPGA Rivals While Battling Headwinds

Analyst Take: Lattice Semiconductor reported Q1 2024 revenue of $140.8 million, with generally accepted accounting principles (GAAP) gross margin of 68.3%, and GAAP net income of $0.11 per diluted share. On a non-GAAP basis, gross margin was 69% with net income per diluted share of $0.29.

Lattice President and CEO Jim Anderson spotlighted that Q1 2024 results came in according to expectation and mirrored the near-term impact of cyclic industry headwinds. Despite such near-term headwinds, Lattice is well-positioned long term due primarily to ongoing execution on the largest product portfolio expansion in the company’s history.

Lattice Q1 2024: Outpacing FPGA Rivals While Battling Headwinds
Image Source: Lattice Semiconductor

From our perspective, Lattice Semiconductor is a disciplined competitor in the intensely competitive field-programmable gate array (FPGA) market segment. As noted, Lattice experienced a good deal of declines across the board. However, we find that many of these were to be expected due primarily to macro and industry cyclical headwinds. However, after more than 10 outstanding quarters, this is the second sequential quarter of declines, which nonetheless did narrowly beat consensus on revenue while delivering a beat on earnings per share (EPS) by $0.01.

On the positive side, it appears that Lattice is starting to see the inventory that had built up selling through, which is indicative that the end of the declining phase is probably a quarter or two on the horizon. Furthermore, the server business performed well powered by burgeoning artificial intelligence (AI) demand. Of concern, the global communications industry has been slow to bounce back and, as a result, all the numbers slipped quarter from top line and bottom line.

We find that Lattice continues to practice regimented spending to sustain its strategic investments in long-term growth as evidenced by the company returning capital to shareholders through implementation of its fourteenth quarter of share repurchases.

Lattice Semiconductor Q1 2024 Takeaway: Robust Margins and Outpacing FPGA Rivals

We still view Lattice as the FPGA player to watch in the low and mid-tier segments of the market. The company should bounce back more resolutely as the PC and data center cycles accelerate, and its diversification serves the company well as it is also in automotive and industrial applications. Also, despite the negative trends, the company is still driving 69% margins and delivered positive EPS. Other FPGA companies, such as Microchip, did not fair nearly this well.

Disclosure: The Futurum Group 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 The Futurum Group as a whole.

Other Insights from The Futurum Group:

Lattice Semiconductor Q4 and FY 2023 Earnings

An Inside Look at Lattice Semiconductor’s Latest FPGAs – Six Five in the Booth

Lattice Leveraging the AI PC Wave?

Author Information

Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.

He is a recognized authority at tracking the evolution of and identifying the key disruptive trends within the service enablement ecosystem, including a wide range of topics across software and services, infrastructure, 5G communications, Internet of Things (IoT), Artificial Intelligence (AI), analytics, security, cloud computing, revenue management, and regulatory issues.

Prior to his work with The Futurum Group, Ron worked with GlobalData Technology creating syndicated and custom research across a wide variety of technical fields. His work with Current Analysis focused on the broadband and service provider infrastructure markets.

Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.

Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.

From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.

A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.

An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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