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Earnings analysis · 10-Q

LSCC earnings analysis

Filed August 4, 2026 · Our reading of the company's report

The latest report

Lattice delivered Q2 revenue of $201.079 million, up 62.2% year over year and 17.7% sequentially, with both end-market groups expanding and gross margin reaching 70.3%. GAAP operating margin improved sharply from 3.8% a…

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Lattice delivered Q2 revenue of $201.079 million, up 62.2% year over year and 17.7% sequentially, with both end-market groups expanding and gross margin reaching 70.3%. GAAP operating margin improved sharply from 3.8% a year ago to 11.1%, though it declined from the implied 15.3% Q1 level as operating expenses and $4.429 million of acquisition costs increased. Operating cash flow strengthened to $138.6 million in the first half, but the AMI transaction introduces material integration risk and $925 million of new term-loan debt after quarter-end.

Read the original on SEC.gov

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $30 Operating expenses $59 Left as operating profit $11

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

Where revenue came from

The business segments reported by the company.

Compute and Communications 62.6% Industrial and Embedded 37.4%

Shares of the segments disclosed in this filing, largest first.

What stood out

  • Revenue accelerated to $201.1 million

    Q2 revenue was $201.079 million, up 62.2% from $123.971 million in Q2 2025 and 17.7% sequentially from the implied Q1 2026 level of $170.897 million ($371.976 million six-month revenue less $201.079 million Q2 revenue).

  • Year-over-year margin expansion

    Gross margin expanded 190 basis points year over year to 70.3% from 68.4%, while operating margin rose 730 basis points to 11.1% from 3.8%. Operating margin was nevertheless below the implied Q1 2026 level of 15.3%.

  • Both end markets posted strong growth

    Compute and Communications revenue rose 83% year over year to $125.944 million, driven by data-center general-purpose and AI servers and wireline networking. Industrial and Embedded increased 36% to $75.135 million on recovering industrial and aerospace demand.

  • Operating cash flow and cash balance improved

    First-half operating cash flow was $138.6 million, up $68.2 million from $70.4 million a year earlier. Cash and equivalents increased $39.419 million from year-end to $173.305 million despite $42.7 million of investing cash outflows.

  • Adjusted EBITDA margin expanded 890 bps

    Adjusted EBITDA increased to $86.366 million, or 43.0% of revenue, from $42.226 million, or 34.1%, in Q2 2025. The increase reflected higher revenue, partially offset by higher headcount costs and mask-set and prototype expense.

What to watch

  • AMI acquisition integration is a new execution risk

    This quarter adds an AMI integration risk factor: Lattice completed the AMI acquisition in July 2026 and incurred $4.429 million of acquisition-related expense in Q2. Management states that expected benefits, synergies, and cost savings may not be realized on the anticipated timetable or at all.

  • New $925 million debt raises leverage risk

    The updated risk factors add substantial post-quarter-end leverage: Lattice borrowed $925 million of delayed-draw term loans on July 27, 2026 for AMI. The 2026 Credit Agreement permits up to $200 million of revolver borrowings and the term loans mature June 30, 2031.

  • Inventory and receivables built with growth

    Working-capital needs are rising with demand: receivables increased $17.747 million, or 17.4%, to $120.024 million and inventory increased $11.299 million, or 12.7%, to $100.501 million since January 3, 2026. Management cites tariffs, inflation, interest-rate changes, recession concerns and geopolitical tension as potential liquidity and working-capital pressures.

Management's outlook

The 10-Q contains no explicit quantitative revenue or EPS guidance. Management expects AI-related revenue to grow over the next few years, and expects R&D and SG&A expense to increase in dollars but decline as a percentage of revenue.

Earlier filings 1

10-Q · May 4, 2026

Lattice Semiconductor Corporation (LSCC) demonstrated strong financial performance in Q1 2026 with revenue of $170.9 million, a significant increase of 42% year-over-year compared to $120.2 million in Q1 2025. The…

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.