Lattice Semiconductor Corporation

ladies and gentlemen greetings and welcome to the lattice semiconductor first quarter 2026 earnings conference call at this time all participants are in the listen only mode a brief question and answer session will follow the formal presentation if anyone requires operator assistance during the conference please signal an operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Mr. Rick Moushey, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. With me today are Ford Tamer, Lattice's CEO, Lorenzo Flores, Lattice's CFO, and Sanjoy Maite, AMI CEO. We'll provide a financial and business review of the first quarter of 2026, an overview of the AMI acquisition, and the business outlook for the second quarter of 2026. Both a copy of our earnings press release and the press release announcing our planned acquisition of AMI can be found at our company website in the investor relations section at latticemi.com. I would like to remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are predictions based on information that is currently available and the actual results may differ materially. We refer you to the documents that the company files with the SEC, including our 10-Ks, 10-Qs, and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. This call includes and constitutes the company's official guidance for the second quarter of 2026. If at any time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum, such as a press release or publicly announced conference call. We will refer primarily to non-GAAP financial measures during this call. By disclosing certain non-GAAP information, management intends to provide investors with additional information to permit further analysis of the company's performance and underlying trends. For historical periods, we provided reconciliations of these non-GAAP financial measures to GAAP financial measures that can be found on the Investor Relations section of our website at latticefemi.com. Lastly, we've streamlined our financial reporting to better align with our strategic focus. Beginning this quarter, we'll break out revenue across two primary markets, compute and communications, and industrial and embedded. Our consumer business is now included within the industrial and embedded end market. For comparability, we've recast all prior period results so you can make a direct apples-to-apples comparison. With that, I'll turn the call over to our CEO, Ward Tamer.

Thank you, Rick, and welcome everyone to our first quarter earnings call. That has delivered an excellent start to 2026, with results that underscore both strong market tailwinds and our disciplined execution against a clear strategy. Our first quarter performance exceeded expectations, and our second quarter outlook reflects our expected continued momentum across the business. This is the seventh earning score since I joined Lattice, and I hope we have now demonstrated that we consistently say what we do and do what we say. And these positive factors, in aggregate, provide the foundation for our proposed acquisition of AMI. This acquisition positions Lattice to create the industry's most comprehensive secure management and control platform. and enables us to deepen our customer relationships and expand our long-term growth opportunity. Now turning to our results and outlook. Revenue for the first quarter was $170.9 million, representing 42% year-over-year growth, with strengths across all end markets. Our compute and communications end market achieved record revenue driven by continuous momentum and data center AI application. In Q1, 62% of our revenue came from compute and communications products with expanding opportunities ahead. As Rick highlighted in the safe harbor, we have now merged our industrial and automotive end market with our consumer end market into what we now term industrial and embedded. The revenue from our industrial and embedded end market grew more than 20% sequentially, reflecting improving market conditions and expanding adoption of lavish solutions. As importantly, along with increased consumption, channel inventory reduced from three months last quarter to close to two months of inventory on hand. And we expect the trend to continue to under two months in Q2. As we anticipated, profitability grew faster than revenue, with EPS up 86% year over year. These results demonstrate the operating leverage in our model and our ability to scale efficiently as revenue accelerates. The main trends continue to build across AI servers, networking, industrial automation, and emerging physical AI applications. We are seeing accelerated bookings, which now support a strong backlog that extends well into 2027. We're also witnessing improved customer visibility and healthy design wind momentum across our FPGA portfolio. Taken together, we're confident that we're in the early innings of a multi-year growth cycle and in our ability to deliver sustained above-market growth for the foreseeable future. Our results also highlight the progress we've made in evolving Lidus into a system-level solutions company. Customers increasingly value Lidus not just for low-power programmable hardware, but for complete solutions spanning connectivity, security, management, and control. As system complexity increases, particularly in AI-driven and advanced computing architectures, our customers are giving their highest priority to platforms that reduce integration risk, shorten development cycles, and enable faster deployment at scale. These trends continue to expand Navis' role within customer systems, increase attach rate, and drive higher value per design. We also continue to benefit from our everywhere companionship strategy, positioning lattice broadly across the ecosystem. Rather than competing with CPUs, GPUs, or other processors, our low power FPGAs enable and enhance them, providing secure boot, power sequencing, platform management, IO aggregation, sensor bridging and control. This approach allows Lattice to participate across hyperscale data centers, communication infrastructure, industrial automation, aerospace and defense, automotive, medical, and emerging physical AI applications, while remaining silicon agnostic and ecosystem neutral. Looking to the second quarter, our revenue guidance of $185 million at the midpoint. represent nearly 50% year-over-year growth. This underscores our confidence in the accelerating momentum of the business. Our midpoint EPS outlook of 44 cents reflects roughly 80% year-over-year growth. It highlights the powerful operating leverage in our model and differentiated products we bring to market. We maintain a disciplined capital strategy and believe we'll be able to consistently drive earnings growth that significantly outpaces revenue growth. And we are committed to continue to do so. Turning now to the planned acquisition of AMI we announced earlier today. We are excited to have signed a definitive agreement to acquire AMI, a leader in firmware, orchestration, and system-level manageability. The combination of Lattice's low-power programmable hardware with AMI's industry-leading solutions, including BIOS, VMC, and platform security, create the industry's most complete secure management and control platform. Together, we enable customers to accelerate development, simplify system integration, and bring increasingly complex platforms to market faster across AI servers, advanced compute, communication infrastructure, and industrial applications. Strategically, this acquisition represents a pivotal milestone in advancing Lattice's long-term growth strategy. AMI's framework is expected to remain processor and silicon agnostic, preserving open ecosystems and customer choice, while lattice FPGAs provide a complementary hardware foundation, reinforcing our everywhere companion chip strategy. We expect this transaction to be accretive to gross margin, free cash flow, and EPS on a non-GAAP basis. It also supports our trajectory toward exceeding a $1 billion annual revenue run rate by the end of 2026. We look forward to welcoming the talented AMI team to Lydus and expect this combination to strengthen our system-level roadmap and long-term growth profile significantly. Looking forward, we're encouraged by the continued durability of demand across our end markets the depth of customer engagement, and the expanding role Lattice plays in next-generation systems. With a differentiated strategy, a scalable financial model, and an increasingly complete platform spanning hardware, firmware, security, manageability, and control, we are confident that Lattice is exceptionally well-positioned for the future. With that, I'll turn over the call to Lorenzo for a comprehensive review of our first quarter results. Lorenzo?