Lattice Semiconductor Reports 31% Revenue Decline to $509.4 Million for Fiscal Year 2024

Lattice Semiconductor Corporation reported a significant decline in its financial performance for the fiscal year ending December 28, 2024, with total revenue of $509.4 million, a decrease of 31% from $737.2 million in the previous fiscal year. The decline was primarily attributed to reduced demand in industrial and automotive applications, as well as a slowdown in telecommunications infrastructure deployments. The company's gross margin also fell to 66.8%, down from 69.8% in fiscal 2023, largely due to a one-time charge of approximately $7 million for expiring production materials.

In terms of profitability, Lattice's net income decreased to $61.1 million, or $0.44 per diluted share, compared to $259.1 million, or $1.85 per diluted share, in the prior year. The company faced increased operating expenses, which totaled $305.9 million, up from $302.4 million in fiscal 2023. Notably, restructuring costs surged to $12.3 million, reflecting the company's efforts to align resources with the lower level of business activity. Additionally, Lattice recorded an impairment charge of $13.9 million related to acquired intangible assets, further impacting its financial results.

Strategically, Lattice has focused on enhancing its product offerings and expanding its market presence. The company continues to invest in research and development, with expenses amounting to $159.3 million, representing 31.3% of total revenue. This investment is aimed at driving innovation in programmable logic products and addressing emerging trends in AI, 5G infrastructure, and industrial automation. The company also announced a new stock repurchase program, authorizing up to $100 million in share buybacks, following the completion of a previous program that repurchased 1.1 million shares for $67 million.

Operationally, Lattice's customer base remains concentrated, with distributors accounting for 89% of total revenue. The company reported a decrease in revenue from its key end markets, with Communications and Computing down 11% and Industrial and Automotive down 45%. Geographically, revenue from Asia decreased by 25%, while the Americas and Europe also saw declines due to reduced demand. As of December 28, 2024, Lattice employed approximately 1,110 individuals, reflecting its commitment to maintaining a skilled workforce amid ongoing market challenges.

Looking ahead, Lattice Semiconductor anticipates a gradual recovery in demand, particularly in AI-related applications across its end markets. The company aims to leverage its technological capabilities and strategic partnerships to capture growth opportunities in the evolving semiconductor landscape. However, Lattice remains cautious about potential macroeconomic headwinds, including inflationary pressures and geopolitical tensions, which could impact its operational performance and financial outlook in the near term.