Lattice Q3

Dirty30 · 2026-11-02T22:01:26.882681Z

$LSCC The semiconductor with software margins. As AI moves from the data center to end devices, there is a need for power-efficient chips that can also perform precise actions in milliseconds. Lattice solves yet another problem: the security layer in the data center. Lattice Sentry protects server firmware and the boot process. It checks whether software has been tampered with, can detect compromised firmware, and automatically restores a secure version. In addition, it uses modern post-quantum cryptography to ensure that systems remain protected against new types of attacks over the long term. SCMP (Secure Control & Management Plane) goes one step further: It is intended to become an open industry standard that can automatically identify, authenticate, and manage thousands of servers, GPUs, and racks. Instead of configuring each piece of hardware individually and programming security features separately, operators will be able to roll out many processes in a standardized and automated manner in the future. The investment thesis is therefore: Lattice not only sells FPGAs but is positioning itself as a security, control, and management layer for future AI infrastructure. ✅ Pros Record revenue: $291 million, +118% YoY. Significantly above the expected ~$256 million. 🚀 EPS skyrockets: Non-GAAP EPS of $0.72 vs. $0.28 in the prior year (+160%). AI data centers are clearly gaining momentum: FPGA revenue up 90% YoY; management explicitly cites accelerated AI server demand as the driver. Strong outlook: Q4 revenue of $325–345 million implies continued very high growth rates. Margins are rising despite growth: Non-GAAP gross margin of 70.9%, operating margin of 41.1%. Strong cash generation: $77.6 million in free cash flow for the quarter. Design wins, order backlog, and bookings are strong: Management expresses confidence through 2027 and beyond. The AMI acquisition appears to be paying off strategically: Lattice now has not only FPGA hardware, but also: rack management Firmware Security Data center control SCMP Initiative In collaboration with AMD, Arm, Intel, Microsoft, and NXP, the company is strengthening its position as a control and security layer for AI infrastructure. Post-quantum cryptography and Root-of-Trust products precisely address a future need. ❌ Cons AI Focus: Management itself points out that a portion of the demand comes from a few large customers. AMI integration still needs to be proven: So far, everything looks good, but major acquisitions always carry risks. Nearly $900 million in debt following the AMI acquisition. Assessment: Given these figures, hardly anyone will be able to claim that Lattice is a bargain. Cyclicality remains: Even though AI is currently dominating the headlines, Lattice remains, at the end of the day, part of the semiconductor industry. Strong Competition: In many areas, the company faces indirect competition from heavyweights like AMD, Intel, NXP, or specialized security providers.

$LSCC (+7,9 %) The semiconductor with software margins.

As AI moves from the data center to end devices, there is a need for power-efficient chips that can also perform precise actions in milliseconds. Lattice solves yet another problem: the security layer in the data center.

Lattice Sentry protects server firmware and the boot process. It checks whether software has been tampered with, can detect compromised firmware, and automatically restores a secure version. In addition, it uses modern post-quantum cryptography to ensure that systems remain protected against new types of attacks over the long term.

SCMP (Secure Control & Management Plane) goes one step further: It is intended to become an open industry standard that can automatically identify, authenticate, and manage thousands of servers, GPUs, and racks. Instead of configuring each piece of hardware individually and programming security features separately, operators will be able to roll out many processes in a standardized and automated manner in the future.

The investment thesis is therefore:

Lattice not only sells FPGAs but is positioning itself as a security, control, and management layer for future AI infrastructure.

✅ Pros

Record revenue: $291 million, +118% YoY. Significantly above the expected ~$256 million. 🚀
EPS skyrockets: Non-GAAP EPS of $0.72 vs. $0.28 in the prior year (+160%).
AI data centers are clearly gaining momentum: FPGA revenue up 90% YoY; management explicitly cites accelerated AI server demand as the driver.
Strong outlook: Q4 revenue of $325–345 million implies continued very high growth rates.
Margins are rising despite growth: Non-GAAP gross margin of 70.9%, operating margin of 41.1%.
Strong cash generation: $77.6 million in free cash flow for the quarter.
Design wins, order backlog, and bookings are strong: Management expresses confidence through 2027 and beyond.
The AMI acquisition appears to be paying off strategically: Lattice now has not only FPGA hardware, but also:
rack management
Firmware
Security
Data center control
SCMP Initiative In collaboration with AMD, Arm, Intel, Microsoft, and NXP, the company is strengthening its position as a control and security layer for AI infrastructure.
Post-quantum cryptography and Root-of-Trust products precisely address a future need.

❌ Cons

AI Focus: Management itself points out that a portion of the demand comes from a few large customers.
AMI integration still needs to be proven: So far, everything looks good, but major acquisitions always carry risks.
Nearly $900 million in debt following the AMI acquisition.
Assessment: Given these figures, hardly anyone will be able to claim that Lattice is a bargain.
Cyclicality remains: Even though AI is currently dominating the headlines, Lattice remains, at the end of the day, part of the semiconductor industry.
Strong Competition: In many areas, the company faces indirect competition from heavyweights like AMD, Intel, NXP, or specialized security providers.