Lattice Semiconductor Reports Record Q3 Revenue, Raises Growth Outlook

Lattice Semiconductor (NASDAQ: LSCC ) reported third-quarter financial results on Monday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Lattice Semiconductor reported record Q3 2026 revenue of $291 million, up 118% YoY, with a non-GAAP EPS of $0.72, reflecting a 155% increase YoY. For Q4 2026, Lattice Semiconductor projects revenue of $335 million at the midpoint, representing 130% YoY growth, and a non-GAAP EPS of $0.84, indicating a 160% YoY increase. The company's FPGA revenue increased by 90% YoY, driven by strong performance in compute and communications, particularly in data center AI applications. Lattice launched AI-assisted development tool Lattice Prompt and Mach N2 FPGA platform, contributing to their leadership in small and mid-range FPGAs.

The acquisition of AMI is performing above expectations, with the launch of new joint solutions like AMI Rack Manager and collaborations with industry leaders. Lattice expects 2027 revenue to grow by at least 60% YoY, with a CAGR of over 30% for the next five years, driven by strong demand in industrial, embedded, and data center markets. The company is focused on maintaining strong supply chain operations, reducing acquisition-related leverage, and exploring growth opportunities. Management emphasized their confidence in sustainable growth due to backlog visibility into 2028 and expanding market applications.

Full Transcript OPERATOR Greetings and welcome to the Lattice Semiconductor third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rick Moucha, Vice President of Investor Relations. Thank you. You may begin.

Rick Moucha (Vice President of Investor Relations) Thank you, operator, and good afternoon everyone. With me today are Ford Tamer, Lattice CEO, and Lorenzo Flores, Lattice's CFO. We'll provide a financial and business review of the third quarter of 2026 and the outlook for 4Q26. If you have not 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. We wish to caution you that such statements are predictions based on information that is currently available and that actual results may differ materially. We refer you to the documents that the company files with the SEC, including our 10-Ks, 10-Qs, and 8-Ks. 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 fourth 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 provided 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. With that, I'll turn the call over to our CEO, Ford Tamer. Ford Tamer (Chief Executive Officer) Thank you, Rick, and welcome everyone to our third quarter earnings call. Lattice delivered record third quarter revenue of $291 million, up 45% sequentially and up 118% year over year.

Non-GAAP EPS was $0.72, up more than 155% year over year and well above the high end of our guidance as we translated revenue growth into even stronger earnings growth. Our fourth quarter revenue guidance of $335 million at the midpoint represents approximately 130% year over year growth, which is an annualized revenue run rate above $1.3 billion. This exceeds the outlook we provided last quarter and reflects accelerating momentum and broad-based demand. Our Q4 non-GAAP EPS outlook midpoint of $0.84 represents 160% year over year growth, reflecting our operating leverage, differentiated customer value, and disciplined execution.

As we continue to scale, we expect EPS growth to remain meaningfully ahead of revenue growth over time. This outlook implies non-GAAP full year 2026 EPS approximately $2.50, up 140% year over year, a clear reflection of the earnings power we are building across the business. Our Q3 results and Q4 guidance are well above expectations. This is the result of our deliberate strategy of enabling the success of our customers and partners by offering them differentiated products, solutions, support, and supply.

Our commitment to you, our valued shareholders, is to tell you what we are going to do and then do what we said. This earnings call marks my two year anniversary with Lattice. We have delivered on this commitment for eight quarters in a row now and intend to continue to do so in the future. Now let me share with you the details of our FPGA business where our actual performance and outlook are much stronger today than what was expected two years ago.

Growth was broad-based across all our end markets. FPGA revenue reached $252 million, up 90% year over year. Our compute and communications segment delivered record revenue, up 132% year over year, driven by rapid adoption in data center AI applications. This growing demand reflects AI infrastructure investment, more server deployments for agentic inference, and increasing AI content per server.

We also continue to benefit from higher FPGA attach rates and new applications driven by more complex disaggregated architectures and growing security requirements. Demand for our industrial and embedded products continued to grow, with revenue increasing 35% year over year. We see the worldwide and geographic-specific PMIs at near record levels since the troughs of the latest downtime. We expect our Lattice industrial and embedded business to continue to grow faster than the overall industrial market and accelerate its growth in Q4 and into 2027.

This growth is across all sectors including factory automation, robotics, aerospace and defense, medical equipment, and autonomy. With channel inventory at healthy levels, customer engagement accelerating, and multiple new design wins ramping into production, we expect our industrial and embedded business to become an increasingly important growth engine into 2027 and beyond. During the quarter we extended our leadership in small and mid-range FPGAs. We launched Lattice Prompt, an AI-assisted development tool for Lattice FPGAs.

It allows our developers to generate and validate their FPGA applications from natural language prompts. To do so, it connects our customer-preferred large language model agentic development environment with our Lattice Radiant tools and generates tested and proven FPGA code. Lattice Prompt provides significant FPGA developer productivity benefits and represents a significant step forward for our customer base. We also introduced the Mach N2 family, our latest secure control small FPGA platform featuring integrated flash hardware root of trust, post-quantum cryptography, and enhanced connectivity, with customer sampling already on the way.

Now let me tell you about the continued expansion of Lattice into secure control and management leadership. With the successful closing of the AMI acquisition on July 27, the AMI business also delivered better than expected results in Q3, and we expect continued growth in Q4. In the three months since closing, we have engaged with hundreds of customers and partners globally, and the feedback has reinforced the strategic logic of the transaction and validated the highly complementary nature of our portfolios. Following the AMI acquisition, we launched AMI Rack Manager to simplify deployment and operations across large-scale AI data centers.

We also expanded ecosystem collaboration with SK Hynix to improve server reliability with our memory resilience technology. We held joint Lattice and AMI Tech Summits in Taipei and Shenzhen with over 700 attendees and over 20 customer and partner demos, reflecting our strong customer intimacy. Ecosystem keynotes included Advantech, InnoVance, Intel, Mitsubishi Electric, Nvidia, NXP, Panasonic, Qualcomm, and Sony, showcasing the power of our companionship and firmware strategy.

During the Lattice and AMI keynote at OCP, we introduced the Secure Control and Management Plan Initiative, or SCAMPI, with seven industry leaders—AMD, Arm, ASPEED, Intel, Jabil, Microsoft, and NXP—and since then four more industry leaders have notified us that they intend to join this exciting industry-wide effort. This shows the relevance of secure control and management for autonomous data center infrastructure and industrial and embedded applications. Finally, let me update you on the recent launch of four joint Lattice AMI solutions for streaming, rack boot, security retrofit, plug-and-play deployment, and power and cooling management.

The response to these pre-integrated and pre-validated FPGA and firmware offerings was very strong. Customers immediately recognized the benefits of rapid deployment, reduced complexity, and lower implementation risk, leading a significant number of them to advance to proof-of-concept engagements. In summary, we entered the fourth quarter with record revenue, accelerated bookings, and backlog extending well into 2027. This momentum is being fueled by normalized inventory in the channel, our leadership in small and mid-range FPGAs, and our role as companionships, firmware, and solutions for both data center and physical AI.

As a result, data center demand continues to grow, industrial and embedded is on a strong rebound, and the AMI acquisition expands the markets and applications we can serve together. These drivers support our confidence in sustained growth and expanding profitability. Turning to the medium to longer term outlook, we expect revenue growth of at least 60% year over year in 2027. We also expect revenue to continue to grow at over 30% CAGR for the next five years.

Our confidence is based on the multiple growth vectors we have just outlined. We expect that this will create a sustainable secular growth company with diversified and broad customer base and market segments. In turn, we believe this will drive robust demand for the foreseeable future, and our focus is on converting that opportunity into long-term earnings growth for you, our valued shareholders, for many years to come. With that, I'll turn the call over to Lorenzo Flores to review our third quarter results and outlook.

Lorenzo. OPERATOR Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please, while we poll for questions.

Our first question comes from the line of Sebastian Najee with William Blair. Please proceed with your question. Sebastian Najee (Analyst at William Blair) Yeah, good afternoon, and thank you for taking my questions. Congrats on the strong results here.

My first question is on the guidance for next year. So you've outlined a path to approximately $1.6 billion or more revenue in 2027. Could you maybe just help us unpack and understand what gives you the confidence in that kind of outlook this early? Ford Tamer (Chief Executive Officer) Thank you, Sebastian.

Good question. We are creating a sustainable secular growth company for not only 2027 but beyond. We do expect to grow faster than market because of the multiple growth vectors we have worked hard to develop over the past few years. What gives us the confidence in '27 is a few factors, I would say.

Number one, our backlog visibility extends well past 2027 into 2028. Number two, we see strong continued CapEx from all players across all geographies, with multi-year long-term agreements being signed with our customers. Number three, we're seeing sustained AI-driven content expansion really around business fundamentals—so unit growth, new features like security driving higher value—and we're seeing attached FPGA rates growing fast. Number four, our industrial and embedded business is now shipping to natural demand, so we're out of this inventory situation and very excited about some of these new applications like factory automation driving our growth in '27.

Number five, we've got a full year of AMI, and number six, we're seeing very strong growth in our new product revenue such as Nexus Smart FPGA. Then beyond that, we've got quite a few new growth vectors into '28 we could discuss as well. Sebastian Najee (Analyst at William Blair) Okay, great. Well, maybe this will be one of those 2028 growth vectors.

For my follow-up, I just wanted to ask about the four joint Lattice—AMI solutions that you announced a few months back: the security retrofit, rack boot, plug-and-play, and the power and cooling. Could you maybe give us a sense which of these is seeing the strongest customer engagement or traction so far, and when we can expect that to layer into the revenue? Ford Tamer (Chief Executive Officer) Yeah, absolutely. So we're seeing strong growth across all of these with tens of customers already in proof of concept.

The strongest one by far is the security retrofit that allows operators to upgrade the fleet without changing the hardware, and that will allow them to upgrade the fleet to the latest security—post-quantum cryptography—right away, and so that's going to production with the first customer actually this quarter, and with many customers going to production in '27, and we expect the revenue to inflect meaningfully in '28. Beyond that, we see the other three. The streaming rack boot is fantastic because it allows our operators to upgrade the whole firmware at once across the whole rack, the whole pod, saving substantial time and providing tremendous consistency.

We see the power and cooling with one of our major hyperscalers going to market actually very soon and contributing this solution to OCP—again taking hold and becoming a big volume contributor. And then finally, the plug-and-play is going to be very critical to allow our operators to be able to mix and match x86 with Arm, to mix and match various port management controllers in the same rack. And so we're very excited about these solutions going to market starting this quarter well into '27 and then meaningfully contributing to revenue in '28.

Beyond that, we also see incremental industrial and embedded inflection with humanoids, physically high aerospace and defense applications coming to market in 2028. Avant, our mid-range FPGA, is expected then to inflect meaningfully in '28. We also see some new AMI functionalities such as on silicon—we call it OnSil—that allows customers to emulate the firmware ahead of tape-out, and memory resilience technology which allows for extending the life of memory in the field. So very exciting growth vectors ahead, Sebastian.

Sebastian Najee (Analyst at William Blair) Great. Thank you for the detail, Ford. OPERATOR Thank you. Our next question comes from the line of Ruben Roy with Stifel.

You may proceed with your question. Ruben Roy (Analyst at Stifel) Yeah, hi, good afternoon. Hey guys. Congrats on the momentum into the year-end and thanks for the longer-term guidance.

I guess to follow up on the question around 2027, Ford, based on the run rate it seems like you're going to need around $400 million a quarter on average. Love to understand how you're looking at the linearity of that revenue as you flow through the year and how much of that 60% is already in backlog versus dependent on what you're hearing from customers around design wins ramping. Or maybe you could talk about the pricing, given how much demand there is. Thank you.

Ford Tamer (Chief Executive Officer) Yeah, thank you, Ruben. Quite a few questions in there. I'll start and then turn it over to Lorenzo. The first one on linearity, we have taken a more conservative view of the second half of the year.

So really we're probably in our 60% guide. You're probably expecting growth in Q1 and Q2 and we haven't assumed that same rate of growth in Q3, Q4 as the year develops. We do expect, as we see the Q1, Q2 number deliver, to potentially be able to take those numbers up. So we feel confident in our 60% or higher growth rate.

Number two on the pricing question, we have some cost increases coming to us from our suppliers as well as expedite fees because we've got a lot of demand from our customers and we're passing those on to customers. But really the story is not pricing. Pricing is a small piece of the equation. Really the story here is unit growth increase, a value increase because we're going to these new applications such as security, as I mentioned, and finally these new products that are commanding a higher price because they're a lot more functionality, as we go from our older product to the Nexus and Avant families.