On July 29, 2024, Lattice Semiconductor Corp (LSCC, Financial) released its 8-K filing for the fiscal second quarter ended June 29, 2024. The company reported revenue of $124.1 million, falling short of the analyst estimate of $130.17 million. Additionally, the GAAP net income per diluted share was $0.16, above the estimated earnings per share of $0.09.
Company Overview
Lattice Semiconductor Corp is a developer of semiconductor technology that it distributes through products, solutions, and licenses. The company reaches its customers through consumer, communications, and industrial markets. The company has one operating segment, namely the core Lattice business, which includes silicon-based and silicon-enabling products, evaluation boards, development hardware, and related intellectual property licensing, services, and sales. The products of the company are offered globally, with the majority of sales derived from customers in Asia.
Performance and Challenges
The second quarter of 2024 saw Lattice Semiconductor Corp grappling with cyclic industry headwinds, leading to a revenue decline of 11.9% quarter-over-quarter and 34.7% year-over-year. The company’s gross margin remained stable at 68.3% on a GAAP basis, but the revenue shortfall highlights the ongoing challenges in the semiconductor industry, particularly inventory normalization.
Esam Elashmawi, Interim Chief Executive Officer & Chief Strategy and Marketing Officer, commented, "Second quarter 2024 results reflect the impact of cyclic industry headwinds. While the industry continues to go through a period of inventory normalization, we are starting to see signs of improvement."
Financial Achievements
Despite the revenue decline, Lattice Semiconductor Corp maintained a stable gross margin, which underscores the durability of its business model. The company also continued its disciplined spending and prioritized cash flow, executing share repurchases for the fifteenth consecutive quarter.
Sherri Luther, Chief Financial Officer, stated, "Our gross margin remained stable, highlighting the durability of our business model. We maintained disciplined spending, prioritized cash flow, and continued to return capital to shareholders by executing share repurchases for the fifteenth consecutive quarter."
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 | Q/Q Change | Y/Y Change |
|---|---|---|---|---|---|
| Revenue | $124.1M | $140.8M | $190.1M | (11.9)% | (34.7)% |
| Gross Margin % (GAAP) | 68.3% | 68.3% | 69.7% | (140) bps | (140) bps |
| Net Income (GAAP) | $22.6M | $14.8M | $50.6M | 53.0% | (55.3)% |
| Net Income per Share - Diluted (GAAP) | $0.16 | $0.11 | $0.36 | $0.05 | $(0.20) |
Analysis
The financial results for Q2 2024 indicate that Lattice Semiconductor Corp is navigating through a challenging period marked by industry-wide inventory adjustments. The company's ability to maintain a stable gross margin amidst declining revenues is a positive sign of its operational resilience. However, the significant year-over-year revenue drop and the shortfall against analyst estimates highlight the need for strategic adjustments to counteract the cyclical downturn.
Looking ahead, Lattice Semiconductor Corp's focus on expanding its product portfolio and maintaining disciplined financial management will be crucial for sustaining long-term growth. The company's ongoing efforts to innovate and adapt to market conditions will be key determinants of its future performance.
Explore the complete 8-K earnings release (here) from Lattice Semiconductor Corp for further details.
