Earnings call transcript: Lattice Semiconductor Q1 2026 earnings beat forecasts

Lattice Semiconductor Corporation reported strong financial results for Q1 2026, surpassing analysts’ expectations. The company posted a non-GAAP earnings per share (EPS) of $0.41, beating the forecast of $0.37, and generated revenue of $170.9 million, exceeding the projected $164.89 million. Following the announcement, Lattice’s stock rose by 3.81% in aftermarket trading, reaching $122.01.

Lattice Semiconductor demonstrated significant growth in Q1 2026, with a 42% year-over-year increase in revenue and an 86% rise in EPS. The company’s performance was buoyed by strong demand in its Compute and Communications segment, which accounted for 62% of total revenue. This growth was primarily driven by AI applications and data center demand.

Lattice Semiconductor’s Q1 2026 results exceeded expectations with an EPS surprise of 10.81% and a revenue surprise of 3.64%. This performance marks a continuation of the company’s trend of surpassing analyst forecasts, driven by strategic market positioning and product innovations.

Following the earnings announcement, Lattice Semiconductor’s stock price rose by 3.81% in aftermarket trading. The stock’s performance reflects investor confidence in the company’s growth trajectory and its ability to capitalize on market opportunities in AI and data centers. The stock is now trading near its 52-week high of $127.95, capping an impressive run that has delivered a 142% return over the past year and a 98.6% gain in the last six months alone. The company now commands a market capitalization of $17.19 billion. According to InvestingPro analysis, the stock currently appears overvalued relative to its Fair Value—a metric that investors can track alongside other undervalued opportunities on the platform’s Most Overvalued list.

For Q2 2026, Lattice projects revenue between $175 million and $195 million, with a midpoint growth of nearly 50% year-over-year. The company expects non-GAAP EPS to be between $0.42 and $0.46. These projections indicate continued strong performance and market demand for Lattice’s solutions.

CEO Jim Anderson highlighted the company’s strategic shift towards system-level solutions, stating, "Our focus on providing differentiated FPGA solutions for AI and data centers has positioned us well for sustained growth." Anderson also emphasized the importance of maintaining operational efficiency and expanding market opportunities.

During the earnings call, analysts questioned the sustainability of Lattice’s growth in the AI segment and its ability to manage supply chain challenges. Executives reassured stakeholders of their strategic partnerships and supply chain resilience, highlighting ongoing efforts to diversify suppliers and manage costs effectively.

The stock’s premium valuation is reflected in its Price-to-Book ratio of 23.19, though InvestingPro Tips indicate that analysts anticipate sales growth in the current year and expect net income to grow. For investors seeking deeper insights, Lattice is one of 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence through intuitive visuals and expert analysis. Access these reports and 18+ additional ProTips for LSCC on the InvestingPro platform.

Operator: Ladies and gentlemen, greetings and welcome to the Lattice Semiconductor first quarter 2026 earnings conference call. At this time, all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal an operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Mr. Rick Muscha, Vice President of Investor Relations. Please go ahead.

Rick Muscha, Vice President of Investor Relations, Lattice Semiconductor: Thank you, operator, and good afternoon, everyone. With me today are Jim Anderson, Lattice’s CEO, Sherri Luther, Lattice’s CFO, and Sanjoy Maity, AMI’s CEO. We’ll provide a financial and business review of the first quarter of 2026, an overview of the AMI acquisition, and the business outlook for the second quarter of 2026. Both a copy of our earnings press release and the press release announcing our planned acquisition of AMI 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 Avant or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that’s currently available and that actual results may differ materially.

We refer you to the documents that the company files with the SEC, including our Form 10-K, Form 10-Q, and Form 8-K. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. This call includes and constitutes the company’s official guidance for the second quarter of 2026. If at any time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly announced conference call. We will refer primarily to non-GAAP financial measures during this call. By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the company’s performance and underlying trends.

For historical periods, we provide reconciliations of these non-GAAP financial measures to GAAP financial measures that can be found on the investor relations section of our website at latticesemi.com. Lastly, we streamlined our financial reporting to better align with our strategic focus. Beginning this quarter, we’ll break out revenue across two primary markets, Compute and Communications and Industrial and Embedded. Our consumer business is now included within the Industrial and Embedded end market. For comparability, we’ve recapped all prior period results so you can make a direct apples to apples comparison. With that, I’ll turn the call over to our CEO, Jim Anderson.

Jim Anderson, Chief Executive Officer, Lattice Semiconductor: Thank you, Rick, and welcome everyone to our first quarter earnings call. Lattice delivered an excellent start to 2026, with results that underscore both strong market tailwinds and our disciplined execution against a clear strategy. Our first quarter performance exceeded expectations. Our second quarter outlook reflects our expected continued momentum across the business. This is the seventh earnings call since I joined Lattice. I hope we have now demonstrated that we consistently say what we do and do what we say. These positive factors in aggregate provide the foundation for our proposed acquisition of AMI. This acquisition positions Lattice to create the industry’s most comprehensive, secure management and control platform and enables us to deepen our customer relationships and expand our long-term growth opportunities. Now turning to our results and outlook.

Revenue for the first quarter was $170.9 million, representing 42% year-over-year growth with strength across all end markets. Our Compute and Communications end market achieved record revenue, driven by continued momentum in data center AI applications. In Q1, 62% of our revenue came from Compute and Communications products with expanding opportunities ahead. As Rick highlighted in the Safe Harbor, we have now merged our Industrial and Automotive end market with our Consumer end market into what we now term Industrial and Embedded. The revenue from our Industrial and Embedded end market grew more than 20% sequentially, reflecting improving market conditions and expanding adoption of Lattice solutions.

As importantly, along with increased consumption, channel inventory reduced from 3 months last quarter to close to 2 months of inventory on hand, and we expect this trend to continue to under 2 months in Q2. As we anticipated, profitability grew faster than revenue, with EPS up 86% year-over-year. These results demonstrate the operating leverage in our model and our ability to scale efficiently as revenue accelerates. Demand trends continue to build across AI servers, networking, industrial automation, and emerging physical AI applications. We are seeing accelerated bookings, which now support a strong backlog that extends well into 2027. We’re also witnessing improved customer visibility and healthy design win momentum across our FPGA portfolio. Taken together, we’re confident that we’re in the early innings of a multi-year growth cycle and in our ability to deliver sustained above-market growth for the foreseeable future.

Our results also highlight the progress we’ve made in evolving Lattice into a system-level solutions company. Customers increasingly value Lattice not just for low-power programmable hardware, but for complete solutions spanning connectivity, security, management, and control. As system complexity increases, particularly in AI-driven and advanced computing architectures, our customers are giving their highest priority to platforms that reduce integration risk, shorten development cycles, and enable faster deployment at scale. These trends continue to expand Lattice’s role within customer systems, increase attach rates, and drive higher value per design. We also continue to benefit from our everywhere companion chip strategy, positioning Lattice broadly across the ecosystem. Rather than competing with CPUs, GPUs, or other processors, our low-power FPGAs enable and enhance them, providing Secure Boot, power sequencing, platform management, IO aggregation, sensor bridging, and control.

This approach allows Lattic