• Q4 2024 Revenue: $117.4 million, down 8% sequentially and 31% year-over-year.
• Full Year 2024 Revenue: $509.4 million, down 31% from 2023.
• Q4 Non-GAAP Gross Margin: 62.1%, including a $7 million onetime charge; would have been 68.1% without the charge.
• Full Year 2024 Non-GAAP Gross Margin: 67.4%; would have been 68.7% excluding the onetime charge.
• Q4 Non-GAAP Operating Expenses: $52.8 million, down 2% sequentially and 5% year-over-year.
• Full Year 2024 Non-GAAP Operating Expenses: $215.6 million, decreased 4% year-over-year.
• Q4 Non-GAAP Operating Margin: 17.1%, including the onetime charge; would have been 26.4% without the charge.
• Q4 Adjusted EBITDA Margin: 24.9%; would have been 33.2% excluding the onetime charge.
• Full Year 2024 Adjusted EBITDA Margin: 31.8%; would have been 33.2% excluding the onetime charge.
• Q4 Non-GAAP EPS: $0.15 per share; would have been $0.20 per share without the onetime charge.
• Full Year 2024 Non-GAAP EPS: $0.90; would have been $0.95 per share excluding the onetime charge.
• Q4 Cash Flow from Operations: Approximately $45.4 million.
• Q4 Free Cash Flow Margin: 34%, up from 31% in Q3.
• Q4 Share Buybacks: Approximately 367,000 shares or $20 million.
• Q1 2025 Revenue Guidance: Expected to be between $115 million and $125 million.
• Q1 2025 Gross Margin Guidance: 69% plus or minus 1% on a non-GAAP basis.
• Q1 2025 Non-GAAP EPS Guidance: Expected to be in the range of $0.20 to $0.24 per share.

• Warning! GuruFocus has detected 4 Warning Signs with SLQT.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lattice Semiconductor Corp (NASDAQ:LSCC) reported fourth quarter 2024 revenue in line with guidance at $117.4 million, indicating stable financial performance.
• The company achieved record design wins in 2024, showcasing strong market demand for its products.
• New products, including Nexus and Avant, grew double digits in 2024 compared to 2023, highlighting successful product innovation.
• The book-to-bill ratio has been over 1 for the first time in six quarters, suggesting a positive outlook for future orders.
• Lattice Semiconductor Corp (NASDAQ:LSCC) is expanding its executive leadership team with experienced industry veterans, which is expected to drive the next phase of growth.

Negative Points

• Fourth quarter revenue was down 31% year-over-year, reflecting challenges in the market.
• The communications and computing segment saw a 5% sequential decline, and industrial and automotive were down 9%, indicating sector-specific weaknesses.
• A $7 million onetime charge related to materials purchased during supply constraints impacted gross margins.
• Full year 2024 revenue decreased by 31% from 2023, showing significant year-over-year decline.
• The company implemented a 14% workforce reduction, indicating cost-cutting measures in response to market conditions.

Q & A Highlights

Q: Can you discuss which end markets are performing better and how much of this improvement is Lattice-specific versus general market trends? A: (Ford Tamer, CEO) There are three factors: progress in channel inventory reduction, market share gains, and improvements in industrial, automotive, and communication sectors. Computing remains strong, and we see recovery in other segments as well.

Q: What are the trends in the communications and computing subsegments, and what should we expect in the coming years? A: (Ford Tamer, CEO) The percentage of communications and computing is roughly the same as last quarter, with a slight increase. Industrial, auto, and consumer segments are stable, with automotive showing recovery. We expect growth in all segments into Q1.

Q: Regarding the automotive segment, where are you seeing demand, and how does Lattice fit into the electrification and ADAS markets? A: (Ford Tamer, CEO) We are involved in infotainment, display, ADAS, and charging applications. We see automotive as a long-term growth driver and are positioned well in far edge AI, where our FPGAs are the first hop from sensors, aggregating and processing data before it reaches near edge devices.

Q: How does the new R&D center in India fit into Lattice's strategy, and does it present market opportunities? A: (Ford Tamer, CEO) The center allows us to leverage AI skills and support both local and global customers. Many OEMs and Tier 1 companies are increasing their presence in India, and our center can support them directly, enhancing our R&D capabilities and customer engagement.

Q: What is Lattice's approach to acquisitions, particularly in the FPGA market? A: (Ford Tamer, CEO) We focus on the small and midrange FPGA segments, which are growing faster. We aim to broaden our portfolio in a differentiated way, not by following incumbents but by addressing segments where our low-power programmable offerings can add value.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.