Lattice leads global shipments of low-power FPGAs, competing in a differentiated segment against market leaders AMD Xilinx and Intel Altera.
Lattice Q4 Earnings:
Revenue was $146M, up 24% year over year and 9% sequentially, marking the second consecutive quarter of year-over-year growth.
GAAP gross margin was 68.5%, up 7.4 percentage points year over year and 0.6 percentage points sequentially. Operating income was $1.1M, turning positive year over year and sequentially.
Non-GAAP operating income $44.8M, up 123% year over year and 16% sequentially, marking the third consecutive quarter of year-over-year growth; Non-GAAP operating margin 31%, up 12.8 percentage points year over year and 1.7 percentage points sequentially.
Non-GAAP net income $43.7M, up 117% year over year and 15% sequentially, marking the third consecutive quarter of year-over-year growth; Non-GAAP net margin 30%, up 12.8 percentage points year over year and 1.4 percentage points sequentially.
Repurchased $14.1M this quarter, the 21st consecutive quarter of buybacks; announced an additional $250M repurchase authorization.
With channel inventory now normalized, 2026 revenue should track end consumption more closely; inventory declined first in communications and compute, then in industrial and automotive.
A previously cited strength of Lattice was its gross and net margins ranking among the highest in semiconductors, which was the reason for continued coverage; the FPGA segment indeed commands high margins, and it is remarkable that gross margin can remain this elevated even at a cyclical trough.
Since 2024, the automotive semiconductor sector has seen a string of blow-ups, while Intel Altera and AMD Xilinx have faced soft FPGA demand. Lattice has not been immune, and the entire FPGA market has been in distress. However, 2025 Q2 finally marked the trough: AMD Embedded (mostly Xilinx) Q4 revenue reached $950M, up 3% year over year, ending nine consecutive quarters of year-over-year declines, with three straight quarters of sequential growth and operating margin recovering to 38%.
Although AMD Xilinx Q1 revenue guidance calls for a seasonal sequential decline, the industry recovery trend is established; led by test & simulation, aerospace & defense, and industrial vision & medical, AMD design wins continued to grow in 2025 to over $17B, up nearly 20% year over year.
By Segment Q4:
Industrial & Automotive revenue $44.1M, down 10% year over year and 12% sequentially, the seventh consecutive quarter of double-digit year-over-year declines, representing 30% of revenue; industrial and automotive expected to return to growth thereafter; Aerospace & Defense market from virtually no revenue in 2024 to expected very large growth in 2027; radiation-hardened products secured sizable design wins in aerospace & defense; revenue growing continuously in industrial robotics, AMR, and humanoid robots; 2027 humanoid opportunity massive; design win performance very strong in vision; secured two flagship design wins in motor control; 11,000 customers in Physical AI.
Communications & Compute revenue $92.6M, up 60% year over year, the fourth consecutive quarter of year-over-year growth, up 25% sequentially, representing 64% of revenue; driven primarily by data center and wired communications, with data center revenue up 85% year over year and communications revenue up 61% year over year, where wired grew faster than wireless; Communications & Compute orders now extending into 2027, with strong order visibility; seeing market share gains and expecting continued share growth.
Consumer revenue $9.1M, down 11% year over year, the sixth consecutive quarter of year-over-year decline, representing 6% of revenue.
Products:
Lattice has three main business lines: two FPGA hardware platforms and one software development platform; management previously stated the software platform generated a few million dollars per quarter, but has not updated the figure since.
In FPGAs, Lattice's small-device portfolio includes eight Nexus products and one Nexus 2 product. The Avant line introduced last year expanded the company into mid-range FPGAs with three families: E for edge, G for general purpose, and X for connectivity. Lattice expects to add another five or six Nexus SKUs in 2026.
Q4 new product revenue grew strongly; 2025 new product revenue up 70% year over year; 2026 new product revenue share expected to reach mid-20%s; management previously designated 2026 as the year of data center and 2027 as the year of major industrial & automotive recovery.
AI Exposure:
Current product AI use cases: server control/security chips, AI PC detection chips, ADAS chips; AI exposure scale: 2026 server shipments expected to grow from ~15.3M units to ~16.5M units; company attach rate in AI servers ~12%, corresponding to ~20% of company revenue; average content per server ~1.x chips in 2024, ~2.x in 2025, exceeding 3 chips in 2026; ASP rising from ~$3 to above $4.
Management previously said Lattice devices are seeing faster adoption as companion chips for data center AI accelerators, networking silicon, and edge-computing processors. Server attach-rate growth should continue to outpace industry capital spending. Large FPGAs are less suitable for this role because of their power consumption and cost. In one hyperscaler's rack architecture, a rack typically contains 40-60 servers and, depending on configuration, more than 70-130 small and mid-sized FPGAs.
Outlook:
Q1 revenue guidance midpoint $172M, up 43% year over year, the third consecutive quarter of year-over-year growth; Non-GAAP gross margin ~69.5%; Non-GAAP net income guidance midpoint $52M, up 69% year over year; net margin stabilizing above 30%.
Last quarter guided 2026 Industrial & Automotive revenue up mid-single digits to 15% year over year, Communications & Compute up 20-40% year over year, roughly a 60/40 split; this quarter management says both segments will meet or exceed the prior guidance high ends.
Expect 2026 revenue growth >20%; full-year gross margin roughly in line with Q1 guidance range; R&D driving Q1 opex increase, expect another step-up in Q2 but slower growth in H2; confident in market share and position in mid-to-low-end FPGA; design wins underpin multi-year growth, supporting at least 25% growth.
Lattice products are manufactured primarily on mature process nodes, giving the company a more efficient capital-spending profile than competitors that rely on leading-edge nodes. This should allow EPS to grow materially faster than revenue.
Lattice FPGA companion-chip functions include: boot/strap, power sequencing, security, control, I/O expansion, board- and rack-level management, leak detection, power & thermal, bridging, sensor aggregation, sensor fusion, pre-processing, and other system functions. The company positions itself as the "Switzerland" of data center and Physical AI applications (neutral and broadly adaptable).
Completed four small tuck-in acquisitions in 2025, all small-scale IP and software-related.
Previously noted that Lattice's sustained high growth in prior years kept valuation elevated, making entry difficult; the current downcycle may present an opportunity, but the industry recovery remains protracted. Compared to connectivity chips represented by Astera Labs shining in the AI era, the once-star FPGA has dimmed considerably. Management previously stated that mid-to-low-end low-power FPGAs may have more opportunities than large FPGAs in the AI semiconductor era; this quarter they emphasized doubling down on data center AI and Physical AI.
Based on current management guidance, raising 2026 revenue estimate to ~$700M and Non-GAAP net income to ~$240M; current market cap implies ~55x P/E.