The Six Five team discusses Lattice’s latest earnings.

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Transcript:

Daniel Newman: Let’s talk about companies that just kick ass in any economy. And this is where I always love the market takers. Let’s talk about our friend Jim Anderson, CEO of Lattice, and the performance of him and his team this quarter.

Patrick Moorhead: Yeah, just another boring record quarter, Dan.

Daniel Newman: The first Emmy company in the middle of a major glut.

Patrick Moorhead: No, exactly, exactly. I mean, it just blows my mind how well they did. So record revenue, 12 consecutive growth quarter, 70% gross margin, 70% record op bank, net income growth was amazing. Just what a yawner. Some things that came out that I like, 50% of the design wins included one of their software stacks. That’s a big deal. That to me is growth from going from a homogeneous environment and FPGAs to something that’s more of a solution. And that was one of the biggest challenges with FPGAs is, how do I program this thing? And by putting 5G, putting ORAN, putting automotive, putting industrial IoT in vision, and a lot of other stacks, that just means, that’s just more value.

And by the way, you’re competing then with ASICs, you’re competing then with microcontrollers, which increases your TAM. So, last comment, lots of room to grow. Avant? Avant hasn’t even showed up yet. So final, final comment, May 15th, Investor Day, The Six Five podcast… actually the Six is going to be there. Dan is going to be there driving. I am going international, and not going to be able to make it, but I will be there in spirit, Dan, hugs and kisses.

Daniel Newman: Yeah, I appreciate you taking half the credit and doing none of the work. Just kidding, everybody. Just kidding. We’ve gotten each other’s back in the past. Sometimes it’s me, sometimes it’s the Six, sometimes it’s the Five. And of course, since we’re expanding now, we’ve got new faces in the firm… did we mention on the show that we added an amazing new show connected with Diana Blass that’s going to be launching really soon? She’s a rockstar, and I look forward… anyways, I don’t want to have the Lattice earnings fall too far from the grace they deserve. But Pat, look, how do you beat and beat and beat and beat and raise, when every other semiconductor company is literally hanging by the thread on the chinny-chin-chin? I mean, this is a company that just does things right. And, of course, the programmability, the flexibility that they offer, and the fact that they’re often an accompanying semiconductor in many, many designs enables them to get scale.

They’ve won a lot of designs and even in the condensed or shrinking markets in OEMs, and they’re still growing, which – Pat, by the way – what does this mean for them when the trend flips and all of a sudden all the other companies are growing really fast, they’re growing right alongside. So I actually think this is a company that is in an incredibly good position. They’re aligned to 5G, they’re aligned to AI, they’re aligned to IoT, they’re aligned to a robotics, they’re aligned to server, they’re in all the right spaces, and they have a story to tell. They basically diversified themselves out of most of the complicated parts of their business and consumer. They got a little bit of exposure there and that was probably the weakest part of their report.

But also Pat, they’re expanding margin, which means they have a lot of pricing power, which means the company can continue to make more money on even less revenue. So even if growth slows down, they’re able to make more dollars out of every dollar that they sell. It’s just a very well-run company, Pat. And of course at a billion, it’s different than when you’re at 50 billion, and the ability to continue these types of growth from where they’re at now, to 5 to 10 billion a year in revenue. But you got to like their prospects Pat, and you got to like the fact that they’ve added TAM consistently, and that they’re running a really good race. So, like I said in the beginning, I’ll say it at the end, congratulations to that team, that was a great report. That was one of the best semi reports of this quarter by far.