The News: Lattice Semiconductor’s revenue rose to a new record of $190.08 million for the second quarter of fiscal year 2023, up 18% YoY from $161.4 million and marking the thirteenth consecutive quarter of record revenue gains for the low-power programmable FPGA maker. Lattice reported its latest earnings figures on July 31 for the period ending July 1, 2023. Read the full press release on the Lattice Semiconductor investor website.
Lattice Semiconductor Q2 2023 Revenue Hits $190.08 Million, Up 18% YoY
Analyst Take: Lattice Semiconductor’s record revenue rise of 18% in Q2 is even more impressive because it continues its 13 consecutive quarter streak of revenue gains, which was again fueled by continuing strength in its industrial and automotive market segments.
Lattice continues to be one of the most rock-solid performers throughout the last year and it did it again in Q2 by expanding its margin by more than 70% and increasing its per-share earnings by 24%.
Here are Lattice Semiconductor’s fiscal Q2 2023 earnings results by the numbers:
- Q2 2023 revenue of $190.08 million, up 18% from $161.4 million YoY. The Q2 revenue figure topped analyst consensus estimates of $188.08 million from Investing.com.
- Q2 2023 non-GAAP net income of $72.5 million, up 36.2% from $59.1 million YoY.
- Q2 2023 non-GAAP earnings per diluted share (EPS) of $0.52 per share, up from $0.42 per share YoY. The EPS beat analyst consensus estimates of $0.51 per diluted share from Investing.com.
- Q2 2023 non-GAAP gross margin of $133.99 million, up 20% from $111.5 million YoY.
- Q2 2023 non-GAAP gross margin percentage of 70.5%, up from 69.1% YoY.
This was another solid quarter for Lattice Semiconductor, and it is even more notable because it comes as challenging post-pandemic macroeconomic conditions continue for many other tech and consumer companies around the globe.
Fortunately for Lattice, the field-programmable gate array (FPGA) market has stayed hot. FPGAs are versatile, specialized semiconductor chips that can be used in devices across a wide range of market segments, including IoT, edge computing, AI, home security, robotics, consumer robots, toys, vehicle infotainment and advanced driving systems, and more.
The advantage of FPGAs is that they can be reprogrammed again and again in devices whenever a manufacturer’s design needs change, instead having to swap out a new static chip assembly. This reprogramming capability gives broad flexibility to update and extend the lives of products for manufacturers and device users, which is an important part of why this market is growing.
And with Lattice’s continuously-growing lineup of FPGA models, we believe that this chipmaker is moving in the right direction to grow its sales and product portfolio even more in the future. Lattice’s strength in the industrial and automotive markets has helped the company get through what continues to be a challenging global PC marketplace.
In addition, the capabilities of Lattice’s FPGAs to provide AI acceleration make sense for workload-specific cases at the edge with lower power requirements, which will continue to be more important as AI volume grows outside of data centers.
Lattice Semiconductor is providing a good AI story today with a unique value proposition that is improving on its larger total addressable market for low power FPGAs, all of which bolsters its prospects in this important segment.
Lattice’s first FPGAs were focused on the low- to mid-tier FPGA business segment, but it continues to branch out to more powerful FPGAs. Earlier in 2023 it unveiled its Lattice MachXO5T-NX Advanced System Control FPGAs for IoT devices and factory automation tasks, which require deeper levels of direct system controls. In December 2022, the company launched its Lattice Avant FPGA products, which aim to double the vendor’s sales opportunities and give it products that can be used in markets where it does not have a major sales presence. As we have said before, both new product lines are smart moves to bolster the company’s future sales and performance.
Lattice Semiconductor Revenue by Markets
In Q2, 63% of Lattice’s business was in Asia, down from 73% YoY. Seventeen percent of the company’s business was in the Americas, up from 14% YoY, while 20% of its business was in Europe and Africa, up from 13% YoY.
By segment, Lattice saw $64.2 million in revenue come in from its communications and computing sales in Q2, down 11.5% from $72.6 million YoY, while its industrial and automotive unit brought in $115.5 million, up 55% from $74.5 million YoY. Its consumer unit brought in $10.4 million in revenue in Q2, down 27% from $14.3 million YoY.
Lattice Semiconductor’s Q2 2023 revenue by end market totaled 34% in communications and computing, down from 45% YoY, and 61% in industrial and automotive, up from 46% YoY. The company’s revenue in the consumer market totaled 5% in Q2, down from 9% YoY.
Lattice Semiconductor Revenue Guidance for Q3 FY2023
As part of its Q2 earnings report, Lattice Semiconductor provided earnings guidance for the third quarter of FY2023.
Lattice said it expects Q3 2023 revenue to be between $187 million to $197 million, with a non-GAAP gross margin percentage of 70.5%, plus or minus 1%. The company said it also expects Q2 2023 non-GAAP total operating expenses between $58 million to $60 million.
Lattice Semiconductor Revenue Overview
Thirteen consecutive quarters of record revenue growth are impressive enough for Lattice Semiconductor. But we are most impressed because the company’s rise has come while other semiconductor companies have been down in a global market that remains challenging. Jim Anderson, Lattice’s president and CEO, and the rest of his executive team are continuing to provide prudent leadership amid a constantly changing market by pushing a successful mix of product diversification and sustained engineering prowess.
And for the FPGA market, this growth could just be the beginning as more semiconductors are being integrated into the newest cars and trucks – both gasoline-powered and electric vehicles – as the segment continues to grow in importance and market share for Lattice. The company’s FPGAs are seeing expanding in-vehicle markets for systems including autonomous driving components, infotainment, telematics, and sensing equipment in the automotive space. We do not expect this to change anytime soon.
This continuing journey for Lattice will be interesting to follow as the company and its leadership team continue to respond to market challenges in the future. We here at The Futurum Group remain bullish on the company and its prospects and technologies in this growing and compelling market segment.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed Lattice Semiconductor’s earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
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:
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Author Information
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.
