Lattice Semiconductor's Q1 2025: Key Contradictions Unveiled on Inventory, Growth, and Revenue Expectations

Inventory reduction and market recovery, new product growth and contribution, inventory management and recovery timeline, revenue recovery and growth expectations, inventory normalization and new product ramps are the key contradictions discussed in Lattice Semiconductor's latest 2025Q1 earnings call.



Revenue and Financial Performance:
- Lattice Semiconductor reported revenue of $120.1 million for Q1 2025, in line with prior guidance.
- The non-GAAP gross margin was 69%, reflecting the resilience of their business despite a challenging environment.
- The growth was supported by strong execution and cost controls, with adjusted EBITDA at 33.4%.

Design Win Momentum and New Product Revenue:
- Revenue from new products continues to grow at a strong double-digit pace, both sequentially and year-on-year.
- The company remains on track to achieve high teens percentage of new product revenue for the full year 2025.
- The growth is driven by the company's strategic position in the small and mid-range FPGA segments, offering low power and small size solutions.

End Market Performance:
- The communications and computing segment delivered its first year-on-year growth in two years, while industrial and automotive grew 6% sequentially.
- The broad reach of Lattice's innovative solutions enabled expansion in areas like general purpose and AI optimized servers, as well as industrial applications.
- Growth was supported by strong demand in server AI related products and industrial applications such as factory automation.

Tariff Impact and Cautious Optimism:
- The company is actively monitoring new tariffs and their potential impact on the second half outlook.
- Despite potential indirect impacts, Lattice remains positive on the server segment due to strong cloud demand and a better book-to-bill ratio.
- The company is focused on cost controls and operational efficiency to mitigate potential impacts from tariffs.