Semiconductor designer Lattice Semiconductor (NASDAQ: LSCC) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 62.2% year on year to $201.1 million. On top of that, next quarter’s revenue guidance ($255 million at the midpoint) was surprisingly good and 31.9% above what analysts were expecting. Its non-GAAP profit of $0.53 per share was 19.1% above analysts’ consensus estimates.
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Lattice Semiconductor (LSCC) Q2 CY2026 Highlights:
- On July 27, 2026, Lattice announced the completion of its $1.65 billion acquisition of AMI, comprising approximately $1 billion in cash and $650 million in Lattice common stock, adjusted based on the trading price of Lattice’s common stock prior to the completion of the acquisition resulting in the issuance of approximately 5.2 million shares.
- Revenue: $201.1 million vs analyst estimates of $185.2 million (62.2% year-on-year growth, 8.6% beat)
- Adjusted EPS: $0.53 vs analyst estimates of $0.45 (19.1% beat)
- Adjusted EBITDA: $86.37 million vs analyst estimates of $70.27 million (43% margin, 22.9% beat)
- Revenue Guidance for Q3 CY2026 is $255 million at the midpoint, above analyst estimates of $193.4 million (guidance includes an approximate two-month contribution from AMI acquisition)
- Adjusted EPS guidance for Q3 CY2026 is $0.56 at the midpoint, above analyst estimates of $0.47 (guidance includes an approximate two-month contribution from AMI acquisition)
- Operating Margin: 11.1%, up from 3.8% in the same quarter last year
- Free Cash Flow Margin: 40.4%, up from 25.2% in the same quarter last year
- Inventory Days Outstanding: 153, up from 151 in the previous quarter
- Market Capitalization: $18.03 billion
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 decent 7.6% compounded annual growth rate. Its growth was slightly above the average semiconductor company and shows its offerings resonate with customers. 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 recent performance shows its demand has slowed as its annualized revenue growth of 1.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Lattice Semiconductor reported magnificent year-on-year revenue growth of 62.2%, and its $201.1 million of revenue beat Wall Street’s estimates by 8.6%. Beyond the beat, this marks 4 straight quarters of growth, implying that Lattice Semiconductor is in the middle of its cycle - a typical upcycle generally lasts 8-10 quarters. Company management is currently guiding for a 91.2% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 26.5% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and suggests 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’s 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 153, which is 27 days below its five-year average. These numbers show that despite the recent increase, there’s no indication of an excessive inventory buildup.
Key Takeaways from Lattice Semiconductor’s Q2 Results
It was good to see Lattice Semiconductor beat analysts’ EPS expectations this quarter. We were also excited its operating income outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. Investors were likely hoping for more, and shares traded down 3.1% to $133.64 immediately after reporting.
Big picture, is Lattice Semiconductor a buy here and now? 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).
