Semiconductor designer Lattice Semiconductor (NASDAQ: LSCC) met Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $124 million. The company expects next quarter’s revenue to be around $133 million, close to analysts’ estimates. Its non-GAAP profit of $0.24 per share was in line with analysts’ consensus estimates.
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Lattice Semiconductor (LSCC) Q2 CY2025 Highlights:
- Revenue: $124 million vs analyst estimates of $123.6 million (flat year on year, in line)
- Adjusted EPS: $0.24 vs analyst estimates of $0.24 (in line)
- Adjusted EBITDA: $42.23 million vs analyst estimates of $40.24 million (34.1% margin, 4.9% beat)
- Revenue Guidance for Q3 CY2025 is $133 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q3 CY2025 is $0.28 at the midpoint, above analyst estimates of $0.27
- Operating Margin: 3.8%, down from 18.2% in the same quarter last year
- Free Cash Flow Margin: 25.2%, up from 11.9% in the same quarter last year
- Inventory Days Outstanding: 218, down from 225 in the previous quarter
- Market Capitalization: $6.74 billion
Ford Tamer, Chief Executive Officer, said, "We delivered another strong quarter, with broad-based growth across key financial metrics and record design wins. Communications and computing markets remain solid, with normalized channel inventory and continued strength expected into 2026. Industrial and automotive markets are recovering as anticipated, with channel inventory levels showing signs of further improvement. Looking ahead, we're excited about growth driven by major design wins alongside AI accelerators in Cloud datacenter, wired communications, industrial robotics, ADAS, and other far-edge AI applications."
Company Overview
A global leader in its category, Lattice Semiconductor (NASDAQ: LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Lattice Semiconductor grew its sales at a sluggish 4% compounded annual growth rate. This was below our standard for the semiconductor sector and is a poor baseline for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Lattice Semiconductor’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 17.8% annually. 
This quarter, Lattice Semiconductor’s $124 million of revenue was flat year on year and in line with Wall Street’s estimates. Additionally, Lattice Semiconductor’s flat sales marked an inflection from its revenue decline last quarter, news that will likely give some shareholders hope. Company management is currently guiding for a 4.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 16.9% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and implies its newer products and services will catalyze better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Lattice Semiconductor’s DIO came in at 218, which is 48 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from Lattice Semiconductor’s Q2 Results
It was good to see Lattice Semiconductor improve its inventory levels, even if just slightly. We were also happy its adjusted operating income narrowly outperformed Wall Street’s estimates. As for all-important revenue and EPS, those were in line with expectations this quarter. Looking ahead, Q3 guidance for revenue and EPS were also roughly in line. Zooming out, we think this was a quarter with no major surprises but also no major sources of upside. The market seemed to be hoping for more, and the stock traded down 2.2% to $47.70 immediately following the results.
So do we think Lattice Semiconductor is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
