Lattice Semiconductor Hits Q3 Targets With Strong AI Server Momentum

Lattice Semiconductor Corporation [LSCC] delivered third-quarter 2025 results that aligned squarely with market expectations, posting revenues of $133.34 million alongside earnings that matched consensus forecasts. The Hillsboro-based chipmaker’s performance underscores the robust demand within the artificial intelligence server segment, where its field-programmable gate array (FPGA) innovations continue to gain traction. The company’s lattice work in expanding its semiconductor portfolio has positioned it well to capitalize on this structural market shift.

Revenue Performance Demonstrates Resilience

The company’s top-line achievement of $133.34 million represented a 5% increase compared to the $127.09 million posted a year earlier. This expansion was primarily propelled by Communications and Computing revenues, which surged to $74 million from $61 million year-over-year, reflecting normalized inventory levels and accelerating adoption in AI server applications.

However, headwinds emerged in other segments. Industrial and Automotive revenues contracted to $50.3 million from $54.2 million due to elevated channel inventory, while Consumer revenues declined to $9 million from $11.9 million. Geographically, Asia accounted for 65% of quarterly sales, with the Americas contributing 19% and Europe/Africa capturing the remaining 16%.

Profitability Metrics Show Mixed Signals

On a Generally Accepted Accounting Principles (GAAP) basis, net income fell to $2.79 million or $0.02 per share, down from $7.19 million or $0.05 per share in the prior-year quarter. The decline stemmed from higher operating expenses that climbed to $92.1 million from $80.2 million.

The non-GAAP picture proved more favorable. Adjusted net income reached $38.15 million or $0.28 per share, compared with $32.54 million or $0.24 per share previously—both matching analyst expectations. Adjusted EBITDA improved to $47.4 million from $42.5 million, signaling underlying operational momentum despite near-term expense pressures.

Cash Generation and Balance Sheet Strength

Through the first nine months of 2025, operating cash flow totaled $117.5 million versus $95.4 million in the comparable period, demonstrating solid cash generation capability. As of late September 2025, the company maintained $117.9 million in cash reserves alongside $17.6 million in other long-term liabilities, providing a reasonable financial cushion.

Forward Guidance Points to Continued Growth

Management projected fourth-quarter revenues between $138 million and $148 million, implying continued sequential expansion. Non-GAAP gross margins are expected to range between 68.5% and 70.5%, while operating expense guidance of $54.5-$56.5 million suggests disciplined cost management. The company targets non-GAAP earnings of $0.30-$0.34 per share for the final quarter.

The combination of AI server market tailwinds and management’s innovation-focused FPGA strategy positions Lattice favorably for the coming period, though monitoring channel inventory trends and broader semiconductor demand remains critical for investors.