Lattice Semiconductor (LSCC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $120.1M–$120.2M, up 2–2.3% sequentially but down 14.7–15% year-over-year, in line with guidance and reflecting industry headwinds and inventory normalization.

• Non-GAAP gross margin was 69%, with GAAP gross margin at 68%, showing resilience amid macro volatility.

• Adjusted EBITDA margin was 33.4%, and non-GAAP EPS was $0.22, both matching guidance.

• Net income declined to $5.0M (GAAP), with EPS at $0.04, reflecting softer demand.

• Record design wins and expanding product pipeline, especially in AI, robotics, automotive, AR/VR, and security.

Financial highlights

• Q1 non-GAAP operating expense was $51.4M, down 3% sequentially and 6% year-over-year.

• Non-GAAP operating margin was 26.2%; GAAP operating cash flow was $31.9M (26.5% margin).

• Free cash flow was $23.3M (19.4% margin); cash and equivalents ended at $127.6M, down $8.7M sequentially.

• Adjusted EBITDA was $40.1M (33.4% margin), down from $50.3M (35.7%) in Q1 2024.

• Inventory decreased by $8–8.5M to $94.9M, reflecting reduced wafer purchases.

Outlook and guidance

• Q2 2025 revenue expected between $118.5M–$128.5M; non-GAAP gross margin at 69% ±1%.

• Q2 non-GAAP OpEx projected at $50.5M–$52.5M; non-GAAP EPS expected at $0.22–$0.26.

• 2025 revenue outlook remains for low single-digit growth, with a U-shaped recovery anticipated.

• New product revenue expected to reach high teens percentage of total revenue for 2025, accelerating to mid-20% in 2026.

• Management remains cautious on 2H 2025 market conditions due to macroeconomic uncertainty.