Q2 2026 Lattice Semiconductor Corp Earnings Call Transcript
Key Points
- Lattice Semiconductor Corp (LSCC) delivered record Q2 2026 revenue of $201 million, representing 18% sequential and 62% year-over-year growth, with strength across all end markets.
- The Compute and Communications end market reached another record revenue level, growing 18% sequentially and 83% year over year, driven by continued momentum in data-center AI applications.
- The successful close of the AMI acquisition positions Lattice Semiconductor Corp (LSCC) to create the industry's most complete secure management and control platform for AI data-center infrastructure, potentially doubling its addressable market.
- Lattice Semiconductor Corp (LSCC) expects to exceed its long-term goal of $3 billion by 2030, already hitting a $1 billion annualized revenue run rate a quarter ahead of schedule, with an exit run rate of $1.2 billion expected for 2026.
- The company's non-GAAP EPS grew more than 120% year over year to $0.53, demonstrating significant operating leverage, with Q3 guidance of $0.56 EPS representing roughly 100% year-over-year growth.
- AMI is expected to grow 25% year over year in 2027, with a highly profitable business model featuring gross margins above 75% and EBITDA margins above 40%, contributing to meaningful EPS accretion starting in Q4.
- Lattice Semiconductor Corp (LSCC) has unprecedented visibility with backlog extending well into 2027, and new products are expected to exceed 25% of total revenue this year, exceeding prior guidance.
- Lattice Semiconductor Corp (LSCC) faces increasing supply chain constraints, particularly in assembly, which could potentially gate growth, though the company expects to resolve these by September.
- The company is experiencing rising costs across the industry, including expedite fees, and will need to pass some of these costs to customers, potentially impacting margins.
- Q3 combined gross margin guidance of 69.5% reflects a step-down from Q2's 71.7%, partly due to transitory issues in the AMI business, including a low-margin hardware pass-through business being divested.
- The Industrial and Embedded end market, while recovering, remains lumpy and could behave that way in the future, with a temporary slowdown noted in China.
- Lattice Semiconductor Corp (LSCC) has taken on significant debt to finance the AMI acquisition, with a $925 million term loan drawn, and plans to reduce leverage to below 2 times EBITDA only by the end of 2027.
- Revenue synergies from the AMI acquisition are not yet included in the 25% growth expectation for 2027, as the integration is still in early stages and synergies will take time to materialize.
Greetings. Welcome to the Lattice Semiconductor second-quarter 2026 earnings call.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Rick Muscha, Vice President of Investor Relations. Thank you, Rick. You may begin.
Thank you, operator. Good afternoon, everyone. With me, today, are Ford Tamer, Lattice's CEO; and Lorenzo Flores, Lattice's CFO.
We'll provide a financial and business review of the second quarter of 2026; and the outlook for the third quarter of 2026, followed by a brief overview of AMI and its business model.
If you have not yet obtained a copy of our earnings press release, it can be found at our company website, in the Investor Relations section, at latticesemi.com.
I would like to remind everyone that, during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company.
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