Lattice Semiconductor Q3 2026 Earnings: Revenue More Than Doubles as FPGA Demand Accelerates

Lattice Semiconductor (NASDAQ: LSCC) reported fiscal Q3 2026 revenue of $291.0 million, up 118.3% from $133.3 million a year earlier, while GAAP diluted EPS rose to $0.08 from $0.02 and non-GAAP diluted EPS increased to $0.72 from $0.28. For the quarter ended October 3, adjusted EBITDA reached $131.0 million at a 45.0% margin, while results included AMI from its July 27 acquisition date.

Core Financial Results

Revenue growth was the dominant feature, although the year-over-year comparison is not fully like-for-like because Q3 2025 did not include AMI. Separately, FPGA revenue grew approximately 90%, showing substantial expansion in Lattice’s existing semiconductor business.

Profitability differed sharply by accounting basis. GAAP gross margin slipped 50 basis points year over year, while non-GAAP gross margin expanded 140 basis points and adjusted EBITDA margin increased 940 basis points.

Business and Product Demand

Compute and Communications demand led FPGA growth, supported by accelerating data center AI activity. Management also cited continued recovery in Industrial and Embedded applications, although the release did not provide revenue amounts for individual end markets.

Revenue from new products increased more than 70% year over year and was tracking toward 25% of FPGA revenue in 2026. AI-related server demand and the Industrial and Embedded recovery were the primary disclosed drivers.

AMI broadened Lattice’s portfolio into platform firmware, security, control, and infrastructure management. Management reported early commercial activity in security retrofits, rack boot, plug-and-play functions, and power and cooling management, but did not quantify the revenue contribution from those initiatives.

AMI Expanded Scale but Increased the GAAP–Non-GAAP Gap

The AMI transaction helped expand Lattice’s addressable business, but acquisition accounting and financing costs weighed on GAAP profitability. GAAP operating expenses reached $172.2 million, up 87.0% year over year, including $25.9 million of acquisition-related expense. The quarter also included approximately $12.9 million of acquired intangible amortization across cost of revenue and operating expenses.

The sequential comparison illustrates the impact. Revenue increased 44.7% from Q2, but GAAP operating income rose only 7.2% and GAAP net income fell 42.1% to $11.2 million. Net interest expense increased to $9.6 million from $0.1 million in Q2, while GAAP net margin declined from 9.6% to 3.9%.

Non-GAAP results showed a different operating trend because they exclude specified acquisition-related, amortization, stock-compensation, and other items. Non-GAAP operating income increased 55.1% sequentially to $119.6 million, and non-GAAP diluted EPS rose from $0.53 to $0.72.

Cash Flow and Capital Priorities

Operating cash flow was $95.0 million and free cash flow was $77.6 million. The operating cash flow margin declined 260 basis points year over year and 1,120 basis points sequentially, while the free cash flow margin increased 120 basis points year over year but fell 1,370 basis points from Q2.

Management identified free cash flow expansion and debt reduction as priorities following the AMI acquisition. The release did not provide quarter-end cash or debt balances, preventing a direct assessment of leverage reduction during the period.

Q4 2026 Guidance

Lattice expects another sequential increase in Q4. The $335 million revenue midpoint represents approximately 15% growth from Q3, while the 72.0% midpoint for non-GAAP gross margin implies about 110 basis points of sequential expansion. Management said bookings, backlog, and design wins support the outlook.

The company also expects Q4 revenue to grow approximately 130% year over year, with Industrial and Embedded revenue growth accelerating to about 70%.

Recent Insider Transactions

The supplied insider data shows 23,745 shares purchased in 13 transactions and 52,175 shares sold in nine transactions over the past six months, resulting in net sales of 28,430 shares. Reported insider holdings totaled approximately 833,720 shares, with net sales equal to 3.30% of that amount.

The ten latest entries included five sales, four derivative-security exercise or conversion transactions, and one stock grant. All were reported as direct holdings, so the list should not be treated as ten open-market purchases or sales.

Risks Investors Should Watch

• AMI integration and comparability: The 118.3% revenue increase includes AMI after July 27, while the prior-year quarter does not. The release did not quantify AMI’s revenue contribution, and expected integration benefits may take longer or cost more than anticipated.
• Acquisition financing pressure: Net interest expense and acquisition-related charges reduced GAAP earnings conversion. Debt servicing and reduction could compete with other uses of cash.
• AI and data center concentration: Compute and Communications demand was a major growth driver. Results could be affected if anticipated AI infrastructure demand is delayed or proves less durable.
• Margin, supply, and trade sensitivity: Product mix between FPGA and AMI offerings, third-party manufacturing capacity, tariffs, export controls, and trade restrictions could affect revenue, costs, and gross margin.

Summary

Lattice’s fiscal Q3 2026 marked a major increase in scale, supported by approximately 90% FPGA revenue growth and the addition of AMI. Non-GAAP earnings and adjusted EBITDA expanded faster than revenue, but acquisition costs, intangible amortization, and interest expense limited GAAP profit conversion. The main areas to monitor are execution against the Q4 growth and margin targets, AMI integration, cash flow margins, and progress reducing acquisition-related debt.