Lattice Semiconductor (LSCC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $127.1 million, up 2% sequentially but down 34% year-over-year, reflecting inventory normalization and disciplined execution.

• Gross margin remained strong at 69%, demonstrating business resilience despite market softness.

• A 14% workforce and non-headcount OpEx reduction was implemented, incurring a $6.5M one-time GAAP charge.

• Dr. Ford Tamer was appointed CEO, and the company continued to expand its product portfolio, including Nexus and Avant.

• Net income for Q3 2024 was $7.2 million, down from $53.8 million in Q3 2023.

Financial highlights

• Q3 non-GAAP operating expenses were $54 million, flat sequentially and down 7% year-over-year; GAAP operating expenses rose due to restructuring.

• Q3 non-GAAP operating margin was 26.6%; GAAP operating margin was 5.9%.

• Q3 non-GAAP EPS was $0.24, up from $0.23 in Q2; GAAP EPS was $0.05.

• Operating cash flow more than doubled sequentially to $44 million; free cash flow margin increased to 31%.

• Cash and cash equivalents at quarter-end were $124.3 million.

Outlook and guidance

• Q4 2024 revenue expected between $112 million and $122 million.

• Q4 non-GAAP gross margin projected at 68% ±1%; OpEx between $52 million and $54 million.

• Q4 non-GAAP EPS expected in the range of $0.15–$0.23.

• 2025 revenue growth anticipated in the low single digits, with a return to 15%-20% long-term growth in 2026.

• Annual earnings expansion in the low double-digit range expected for 2025, driven by cost reductions and revenue growth.