Lattice Semiconductor Reports Record Communications & Computing Revenue in Third Quarter 2025

HILLSBORO, Ore.--( BUSINESS WIRE)--Lattice Semiconductor Corporation (Nasdaq: LSCC), the low power programmable leader, announced financial results today for the fiscal third quarter ended September 27, 2025.

Revenue for the third quarter of 2025 was $133.3 million, with GAAP gross margin of 67.9%, and GAAP net income of $0.02 per diluted share. On a non-GAAP basis, gross margin was 69.5%, with net income per diluted share of $0.28. GAAP net income and GAAP net income margin for the third quarter of 2025 were $2.8 million and 2.1%, respectively, with adjusted EBITDA of $47.4 million, which is a 35.6% adjusted EBITDA margin for the third quarter of 2025. GAAP net cash flow from operating activities for the third quarter of 2025 was $47.0 million, which is a GAAP operating cash flow margin of 35.3%, and free cash flow and free cash flow margin of $34.0 million and 25.5%, respectively.

Ford Tamer, Chief Executive Officer, said, "We delivered a strong quarter, with broad-based growth across our end markets, and grew non-GAAP earnings 17% quarter over quarter. Our Communications and Computing business achieved record revenue, and we are expecting continued growth into the fourth quarter and beyond. We continue to drive operating leverage and expand profitability, with significant revenue and non-GAAP EPS growth of 13% and 29%, respectively, expected in the second half of 2025 compared to the first half of 2025."

Lorenzo Flores, Chief Financial Officer, said, "We grew revenue, non-GAAP gross margin, and non-GAAP profitability both sequentially and on a year-on-year basis. Our Industrial and Automotive markets continue to recover, with inventory levels expected to be normalized by the end of the year, as discussed at the start of 2025. We remain focused on executing our strategy, including making investments to strengthen our leadership in Small and Mid-Range FPGAs."

Selected Third Quarter 2025 Financial Results and Comparisons (in thousands, except per share data)

GAAP Financial Results (unaudited)

Q3 2025

Q2 2025

Q3 2024

Q/Q

Y/Y

Revenue

133,349

123,971

127,091

7.6%

4.9%

Gross Margin %

67.9

68.4

69.0

(50) bps

(110) bps

R&D Expense %

37.2

35.1

32.6

210 bps

460 bps

SG&A Expense %

31.0

28.1

24.4

290 bps

660 bps

Operating Expenses

92,061

80,045

80,161

15.0%

14.8%

Income (loss) from Operations

(1,534

)

4,706

7,527

(132.6)%

(120.4)%

Net Income

2,794

2,913

7,190

(4.1)%

(61.1)%

Net Income per Share - Basic

0.02

0.05

$ (0.03)

Net Income per Share - Diluted

0.02

0.05

$ (0.03)

Net Income Margin

2.1

2.3

5.7

(20) bps

(360) bps

Operating Cash Flow Margin

35.3

31.1

34.6

420 bps

70 bps

Non-GAAP* Financial Results (unaudited)

Q3 2025

Q2 2025

Q3 2024

Q/Q

Y/Y

Revenue (GAAP)

133,349

123,971

127,091

7.6%

4.9%

Gross Margin %

69.5

69.3

69.0

20 bps

50 bps

R&D Expense %

24.2

25.1

25.5

(90) bps

(130) bps

SG&A Expense %

16.2

16.8

17.4

(60) bps

(120) bps

Operating Expenses

53,900

51,834

53,875

4.0%

0.0%

Income from Operations

38,733

34,084

33,756

13.6%

14.7%

Net Income

38,157

32,597

32,544

17.1%

17.2%

Net Income per Share - Basic

0.28

0.24

$ 0.04

Net Income per Share - Diluted

0.28

0.24

$ 0.04

Adjusted EBITDA Margin

35.6

34.1

33.5

150 bps

210 bps

Free Cash Flow Margin

25.5

25.2

31.0

30 bps

(550) bps

* GAAP represents U.S. Generally Accepted Accounting Principles. Non-GAAP represents GAAP excluding the impact of certain activities which the Company's management excludes in analyzing the Company's operating results and in understanding trends in the Company's earnings. Additional information relating to these measures is included below in “Non-GAAP Financial Measures.” For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."

Recent Highlights:

Business Outlook - Fourth Quarter of 2025:

Non-GAAP Financial Measures: In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release makes reference to non-GAAP financial measures. With respect to the outlook for the fourth quarter of 2025, certain items that affect reconciliation of non-GAAP financial measures for non-GAAP gross margin percentage, non-GAAP total operating expenses, non-GAAP income tax rate, and non-GAAP net income are not available on a forward-looking basis because such items cannot be reasonably calculated without unreasonable efforts due to the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP financial measures, including certain large and/or unpredictable charges such as stock-based compensation expense; performance-based equity expense; legal expense outside the ordinary course of business; restructuring; and impairment. Consequently, the Company is unable to calculate the most directly comparable GAAP measure to non-GAAP gross margin percentage, non-GAAP total operating expenses, non-GAAP income tax rate, and non-GAAP net income for the Company’s fourth quarter 2025 quarterly guidance.

Investor Conference Call / Webcast Details:

Lattice Semiconductor will review the Company's financial results for the fiscal third quarter 2025, and business outlook on Monday, November 3 at 5:00 p.m. Eastern Time. The dial-in number for the live audio call is 1-877-407-3982 or 1-201-493-6780 with conference identification number 13756249. A live webcast of the conference call will also be available on the investor relations section of www.latticesemi.com. The Company's financial guidance will be limited to the comments on its public quarterly earnings call and the public business outlook statements contained in this press release.

Forward-Looking Statements Notice:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve estimates, assumptions, risks and uncertainties. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are neither historical facts nor assurances of future performance and may be forward-looking. Such forward-looking statements include, but are not limited to, statements relating to our revenue and EPS growth, future financial performance and related drivers, our expectations related to market recovery and improvement; and the statements under the heading “Business Outlook - Fourth Quarter of 2025.” Other forward-looking statements may be indicated by words such as “will,” “could,” “should,” “would,” “may,” “expect,” “plan,” “project,” “anticipate,” “intend,” “forecast,” “future,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms or other comparable terminology.

Estimates of future revenue and other financial and operational outcomes are inherently uncertain due to factors such as global economic conditions which may affect customer demand, the cyclical nature of the semiconductor industry, pricing and inflationary pressures, competitive actions, international trade disputes and sanctions, the potential impact of global pandemics, the impact of tariffs, license requirements or similar actions on our suppliers and customers, including the impact on the costs of our products, the products into which they are integrated, and the impact on demand due to costs and uncertainty; and other significant risks and uncertainties that are beyond our ability to predict or control. Actual gross margin percentage and operating expenses could vary from the estimates on the basis of, among other things, changes in revenue levels, changes in product pricing and mix, changes in wafer, assembly, test and other costs, variations in manufacturing yields, the failure to sustain operational improvements, and the actual amount of compensation charges due to stock price changes.

Actual income tax rate and actual net income on a per share basis may differ from our expectations. Actual results may differ materially from our expectations and are subject to risks and uncertainties that relate more broadly to our overall business, including those described in our filings with the Securities and Exchange Commission, including Lattice’s most recent Annual Report on Form 10-K, especially those under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations”, all of which are expressly incorporated herein by reference.

Lattice believes these and other risks and uncertainties could cause actual results to differ materially from the forward-looking statements. New risk factors emerge from time to time and it is not possible for the Company to predict all risk factors. You should not rely on forward-looking statements because actual results could differ materially from those expressed in any forward-looking statements. In addition, any forward-looking statement applies only as of the date on which it is made. The Company does not intend to and undertakes no obligation to update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Non-GAAP Financial Measures:

Included within this press release and the accompanying tables and notes are certain non-GAAP financial measures that supplement the Company's consolidated financial information prepared in accordance with U.S. GAAP, including non-GAAP gross margin, gross margin percentage, R&D expense, SG&A expense, operating expenses, income from operations, income tax expense, net income, net income per share – basic, and net income per share – diluted, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and free cash flow margin. The non-GAAP measures presented exclude charges and adjustments primarily related to stock-based compensation and related payroll tax effects; accruals related to the portion of our annual incentive plan that we intend to settle in shares of our common stock; legal expense outside the ordinary course of business; amortization of acquired intangible assets; restructuring plans, transformation activities, and other charges; impairments; and the estimated tax effect of these items, non-cash changes in net deferred income taxes, change in tax law and other tax adjustments; and depreciation and other amortization. These charges and adjustments are a result of periodic or non-core operating activities of the Company. The Company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release.

The Company's management believes that these non-GAAP financial measures provide an additional and useful way of viewing aspects of our performance that, when viewed in conjunction with our GAAP results, provide a more comprehensive understanding of the various factors and trends affecting our ongoing financial performance and operating results than GAAP measures alone. Management also uses these non-GAAP measures for strategic and business decision-making, internal budgeting, forecasting, and resource allocation processes and believes that investors should have access to similar data. The non-GAAP financial information used by the Company may differ from that used by other companies. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP and should be considered together with the consolidated financial information located in the tables attached to this press release.

About Lattice Semiconductor Corporation:

Lattice Semiconductor (Nasdaq: LSCC) is the low power programmable leader. We solve customer problems across the network, from the Edge to the Cloud, in the growing communications, computing, industrial, automotive and consumer markets. Our technology, long-standing relationships, and commitment to world-class support let our customers quickly and easily unleash their innovation to create a smart, secure, and connected world.

For more information about Lattice, please visit www.latticesemi.com. You can also follow us via LinkedIn, X, Facebook, YouTube, WeChat, or Weibo.

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 27,

June 28,

September 28,

September 27,

September 28,

2025

2024

2025

2024

Revenue

133,349

123,971

127,091

377,470

391,982

Cost of sales

42,822

39,220

39,403

120,464

123,335

Gross margin

90,527

84,751

87,688

257,006

268,647

Operating expenses:

Research and development

49,633

43,530

41,398

134,550

120,722

Selling, general, and administrative

41,402

34,811

30,994

109,339

87,468

Amortization of acquired intangible assets

870

2,609

Restructuring and other

1,006

1,691

6,899

2,938

11,182

Total operating expenses

92,061

80,045

80,161

246,860

221,981

Income (loss) from operations

(1,534

)

4,706

7,527

10,146

46,666

Interest income (expense), net

602

614

936

2,268

3,176

Other income (expense), net

(22

)

(238

)

(249

)

(305

)

(41

)

Income (loss) before income taxes

(954

)

5,082

8,214

12,109

49,801

Income tax expense (benefit)

(3,748

)

2,169

1,024

1,380

5,184

Net income

2,794

2,913

7,190

10,729

44,617

Net income per share:

Basic

0.02

0.05

0.08

0.32

Diluted

0.02

0.05

0.08

0.32

Shares used in per share calculations:

Basic

136,877

137,112

137,709

137,224

137,577

Diluted

138,103

137,596

137,894

138,069

138,274

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 27,

December 28,

2025

2024

Assets

Current assets:

Cash and cash equivalents

117,910

136,291

Accounts receivable, net

95,492

81,060

Inventories, net

90,716

103,410

Other current assets

38,107

44,073

Total current assets

342,225

364,834

Property and equipment, net

72,132

52,988

Operating lease right-of-use assets

18,965

13,870

Intangible assets, net

4,729

4,587

Goodwill

315,358

Deferred income taxes

68,985

66,980

Other long-term assets

21,962

25,286

844,356

843,903

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

47,714

36,828

Accrued liabilities

32,086

45,638

Accrued payroll obligations

25,978

17,156

Total current liabilities

105,778

99,622

Long-term operating lease liabilities, net of current portion

14,577

9,433

Other long-term liabilities

17,601

23,916

Total liabilities

137,956

132,971

Stockholders' equity

706,400

710,932

844,356

843,903

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Nine Months Ended

September 27,

September 28,

2025

2024

Cash flows from operating activities:

Net income

10,729

44,617

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Stock-based compensation expense

80,233

38,311

Depreciation and amortization

26,567

28,421

Change in deferred income tax provision

(1,731

)

Other non-cash adjustments

5,982

6,275

Net changes in assets and liabilities

(4,257

)

(22,262

)

Net cash provided by (used in) operating activities

117,523

95,455

Cash flows from investing activities:

Capital expenditures

(28,920

)

(15,231

)

Other investing activities

(12,213

)

(12,492

)

Net cash provided by (used in) investing activities

(41,133

)

(27,723

)

Cash flows from financing activities:

Repurchase of common stock

(85,855

)

(46,999

)

Net cash flows related to stock compensation exercises

(9,431

)

(24,589

)

Net cash provided by (used in) financing activities

(95,286

)

(71,588

)

Effect of exchange rate change on cash

515

(178

)

Net increase (decrease) in cash and cash equivalents

(18,381

)

(4,034

)

Beginning cash and cash equivalents

136,291

128,317

Ending cash and cash equivalents

117,910

124,283

Supplemental disclosure of cash flow information and non-cash investing and financing activities:

Income taxes paid, net of refunds

5,294

6,031

Operating lease payments

5,971

6,972

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

Three Months Ended

September 27,

June 28,

September 28,

2025

2024

Balance Sheet Information

A/R Days Revenue Outstanding (DSO)

Inventory Days (DIO)

193

218

242

Revenue % (by Geography)

Asia

Americas

Europe (incl. Africa)

Revenue % (by End Market)

Communications and Computing

Industrial and Automotive

Consumer

Revenue $M (by End Market)

Communications and Computing

74.0

68.7

61.0

Industrial and Automotive

50.3

47.3

54.2

Consumer

9.0

8.0

11.9

Revenue % (by Channel)

Distribution

Direct

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

Three Months Ended

September 27,

June 28,

September 28,

2025

2024

Gross Margin Reconciliation

GAAP Gross margin

90,527

84,751

87,688

Stock-based compensation - gross margin (1)

1,980

1,105

(57

)

Incentive compensation to be settled in equity - gross margin (2)

126

—

Non-GAAP Gross margin

92,633

85,918

87,631

Gross Margin % Reconciliation

GAAP Gross margin %

67.9

68.4

69.0

Stock-based compensation - gross margin (1)

1.5

0.8

0.0

Incentive compensation to be settled in equity - gross margin (2)

0.1

—

Non-GAAP Gross margin %

69.5

69.3

69.0

Research and Development Expense % (R&D Expense %) Reconciliation

GAAP R&D Expense %

37.2

35.1

32.6

Stock-based compensation - R&D (1)

(11.4

(8.3

(6.4

Incentive compensation to be settled in equity - R&D (2)

(0.6

(0.5

—

Transformation charges

(1.0

(1.2

(0.7

Non-GAAP R&D Expense %

24.2

25.1

25.5

Selling, General, and Administrative Expense % (SG&A Expense %) Reconciliation

GAAP SG&A Expense %

31.0

28.1

24.4

Stock-based compensation - SG&A (1)

(14.1

(10.3

(6.9

Incentive compensation to be settled in equity - SG&A (2)

(0.7

(0.5

—

Legal expenses (3)

0.0

(0.5

(0.1

Non-GAAP SG&A Expense %

16.2

16.8

17.4

Operating Expenses Reconciliation

GAAP Operating expenses

92,061

80,045

80,161

Stock-based compensation - operations (1)

(33,998

)

(23,036

(16,767

)

Incentive compensation to be settled in equity - operations (2)

(1,770

)

(1,212

—

Transformation charges

(1,347

)

(1,541

(927

)

Legal expenses (3)

)

(568

(170

)

Amortization of acquired intangible assets

(20

)

(13

(870

)

Restructuring and other

(1,020

)

(1,841

(7,552

)

Non-GAAP Operating expenses

53,900

51,834

53,875

Income from Operations Reconciliation

GAAP Income (loss) from operations

(1,534

)

4,706

7,527

Stock-based compensation (1)

35,978

24,141

16,710

Incentive compensation to be settled in equity (2)

1,896

1,274

—

Transformation charges

1,347

1,541

927

Legal expenses (3)

568

170

Amortization of acquired intangible assets

870

Restructuring and other

1,020

1,841

7,552

Non-GAAP Income from operations

38,733

34,084

33,756

Includes stock-based compensation and related payroll tax expenses.

(2)

Includes accruals for the portion of our annual incentive plan that we intend to settle in equity.

(3)

Includes legal expenses outside the ordinary course of business, including those incurred defending against claims brought against the Company by Steven A.W. De Jaray, Perienne De Jaray and Darrell R. Oswalde.

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

Three Months Ended

September 27,

June 28,

September 28,

2025

2024

Income from Operations % Reconciliation

GAAP Income (loss) from operations %

(1.2

3.8

5.9

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

30.2

23.7

20.7

Non-GAAP Income from operations %

29.0

27.5

26.6

Income Tax Expense (Benefit) Reconciliation

GAAP Income tax expense (benefit)

(3,748

2,169

1,024

Estimated tax effect of non-GAAP adjustments

1,693

2,158

1,695

Non-cash changes in net deferred income taxes (4)

1,532

(1,723

)

402

Change in tax law (5)

1,679

(741

)

(1,222

)

Non-GAAP Income tax expense

1,156

1,863

1,899

Net Income Reconciliation

GAAP Net income

2,794

2,913

7,190

Stock-based compensation (1)

35,978

24,141

16,710

Incentive compensation to be settled in equity (2)

1,896

1,274

—

Transformation charges

1,347

1,541

927

Legal expenses (3)

568

170

Amortization of acquired intangible assets

870

Restructuring and other

1,020

1,841

7,552

Estimated tax effect of non-GAAP adjustments

(1,693

(2,158

)

(1,695

)

Non-cash changes in net deferred income taxes (4)

(1,532

1,723

(402

)

Change in tax law (5)

(1,679

741

1,222

Non-GAAP Net income

38,157

32,597

32,544

(1)

Includes stock-based compensation and related payroll tax expenses.

(2)

Includes accruals for the portion of our annual incentive plan that we intend to settle in equity.

(3)

(4)

Includes non-cash changes in net deferred income taxes associated with $4.9 million of certain tax matters related to prior fiscal periods in the third quarter of fiscal 2025.

(5)

Includes an increase in our provision for U.S. tax on foreign operations resulting from The 2017 Tax Cuts and Jobs Act and is related to the capitalization and subsequent amortization of R&D costs for tax purposes which was made permanent in the 2025 Tax Act in the third quarter of fiscal 2025.

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

Three Months Ended

September 27,

June 28,

September 28,

2025

2024

Net Income Per Share Reconciliation

GAAP Net income per share - basic

0.02

0.05

Cumulative effect of Non-GAAP adjustments

0.26

0.22

0.19

Non-GAAP Net income per share - basic

0.28

0.24

GAAP Net income per share - diluted

0.02

0.05

Cumulative effect of Non-GAAP adjustments

0.26

0.22

0.19

Non-GAAP Net income per share - diluted

0.28

0.24

Shares used in per share calculations:

Basic

136,877

137,112

137,709

Diluted

138,103

137,596

137,894

Reconciliation of Net income to Adjusted EBITDA

GAAP Net income

2,794

2,913

7,190

Interest (income) expense, net

(602

(614

(936

)

Income tax expense (benefit)

(3,748

2,169

1,024

Amortization of acquired intangible assets

870

Depreciation and other amortization

8,734

8,380

9,036

Stock-based compensation (1)

35,978

24,141

16,710

Incentive compensation to be settled in equity (2)

1,896

1,274

—

Transformation charges

1,347

1,541

927

Legal expenses (3)

568

170

Restructuring and other

1,020

1,841

7,552

Adjusted EBITDA

47,445

42,226

42,543

Reconciliation of Net income margin to Adjusted EBITDA margin

GAAP Net income margin

2.1

2.3

5.7

Cumulative effect of EBITDA adjustments

33.5

31.8

27.8

Adjusted EBITDA margin

35.6

34.1

33.5

Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow

GAAP Net cash provided by operating activities

47,100

38,531

44,013

Operating cash flow margin

35.3

31.1

34.6

Capital expenditures

(13,074

)

(7,230

)

(4,650

)

Free cash flow

34,026

31,301

39,363

Free cash flow margin

25.5

25.2

31.0

Includes stock-based compensation and related payroll tax expenses.

(2)

Includes accruals for the portion of our annual incentive plan that we intend to settle in equity.

(3)