Lattice (LSCC) beats estimates with strong Q3 earnings and Q4 growth
Key Points
- Revenue: $133.3M (vs est. $133.01M)
- Non-GAAP EPS: $0.28 (vs est. $0.28)
- GAAP EPS: $0.02
- GAAP Gross Margin: 67.9%
- Non-GAAP Gross Margin: 69.5%
- Operating Cash Flow: $47.0M (35.3% margin)
- Free Cash Flow: $34.0M (25.5% margin)
- Adjusted EBITDA: $47.4M (35.6% margin)
Quarter Highlights
Revenue grew 7.6% sequentially and 4.9% YoY, driven by record Communications and Computing segment revenue ($74M, +21% YoY).
Industrial and Automotive markets continued to recover, with management noting inventory normalization expected by year-end.
Non-GAAP EPS rose 17% sequentially, supported by margin expansion and operating leverage.
However, GAAP operating income turned negative due to higher stock-based compensation and R&D investment.
CEO and CFO Commentary
CEO Ford Tamer highlighted broad-based growth and strong execution, with non-GAAP earnings up 17% QoQ and sustained strength in AI-related computing demand.
CFO Lorenzo Flores noted improved profitability and margin expansion, while reaffirming focus on cost control and investment in small and mid-range FPGA leadership.
Guidance (Q4 FY25)
- Revenue: $138M–$148M (+22% YoY at midpoint)
- Non-GAAP Gross Margin: ~69.5% ±1%
- Non-GAAP EPS: $0.30–$0.34
- Non-GAAP OpEx: $54M–$55M
Recent Highlights
- Launched Industry’s First PQC-Ready FPGA: MachXO5-NX TDQ family supports post-quantum cryptography (CNSA 2.0 compliant).
- AI Momentum: Increased demand at the OCP Global Summit for datacenter and hyperscaler applications.
- Share Repurchases: $85M in the first nine months of 2025.
- Top Workplace Recognition: Named a 2025 Top Workplace in Oregon & SW Washington.
Financial Summary
| Metric | Q3 2025 | Q2 2025 | Q3 2024 | YoY Change |
|---|---|---|---|---|
| Revenue | $133.3M | $124.0M | $127.1M | +4.9% |
| Non-GAAP EPS | $0.28 | $0.24 | $0.24 | +17% |
| GAAP EPS | $0.02 | $0.02 | $0.05 | –60% |
| Non-GAAP Op Margin | 29.0% | 27.5% | 26.6% | +240 bps |
| Adj. EBITDA Margin | 35.6% | 34.1% | 33.5% | +210 bps |
What Stood Out
- Record Communications & Computing revenue confirms rising FPGA demand in AI, server, and networking applications.
- Margins remain best-in-class in the FPGA space (~70% non-GAAP gross margin).
- GAAP profit compressed due to rising R&D and stock-based pay, reflecting investment-heavy transition.
- Free cash flow consistency despite higher opex signals solid cost discipline.
- The Q4 outlook calls for strong sequential growth and expanding profitability — signaling confidence in demand momentum across end markets.
Key Takeaways
Lattice delivered another quarter of solid execution — steady growth, record AI-related revenue, and robust cash flow.
Though GAAP margins narrowed, the company’s focus on AI-driven, low-power FPGAs continues to pay off.
Guidance implies accelerating revenue and EPS momentum heading into FY26.